Sitting of 9 November 1982

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
Oral Answers to Questions
  EDUCATION AND SCIENCE

    Curriculum Opportunity
    Miss Joan Lestorasked the Secretary of State for Education and Science whether he is satisfied that equal curriculum opportunity is genuinely available to girls and boys.
    The Under-Secretary of State for Education and Science (Mr. William Shelton): We have made it clear that equal curricular opportunities should be available to boys and girls. I accept that there is still some way to go. I urge local education authorities and schools always to give boys and girls a genuine choice in deciding what they are going to study.
    Miss Lestor: I thank the Minister for that reply and agree with the sentiments expressed within it. Does he agree that the Schools Council has done a great deal of work in promoting the idea through the sex roles differentiation project? Does he recognise that the threatened closure of the council means that the project may be discontinued? May we have an assurance that he will give consideration to ensuring that its work continues?
    Mr. Shelton: We take every opportunity to preach the message in the hon. Lady's question. I am aware of her interest in the matter. I assure her that we are doing everything that we can and taking every opportunity available to us to ensure that boys and girls are treated equally. I draw her attention to the Department's publication entitled "Science in Schools", which was published in June 1982. If she wishes, I shall send her a copy. I think that she will find it encouraging.
    Mr. Dobson: Does the Minister agree that if equality of opportunity is to be given to boys and girls it will be necessary to initiate a considerable expansion of classes and opportunities in schools? Equality cannot be achieved without that expansion. How does he reconcile this with the existing cuts and the statement of his right hon. and learned Friend the Chancellor of the Exchequer yesterday that local education authorities are already overspending by £700 million?
    Mr. Shelton: I think that the hon. Gentleman has taken hold of the wrong end of the stick. I do not think that an
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    expansion of classes is necessary. The classes are available. It is really a matter of attitudes. No one can be happy when 50 per cent. of boys but only 15 per cent. of girls take 0-level or CSE physics. That has nothing to do with the number of classes available; it has to do with the attitudes in the schools and in the home.

    Education Act 1980 (Appeals Procedure)
    Mr. Haselhurstasked the Secretary of State for Education and Science what has been the result of the first year of operation of the new appeals procedure under the Education Act 1980; and if he will make a statement.
    The Secretary of State for Education and Science (Sir Keith Joseph): The new school admission arrangements, of which the appeals procedure is only part, are administered locally. The Department is currently consulting local education authorities about the first year's experience. From the greatly reduced number of complaints, it would seem that parents have welcomed the new arrangements.
    Mr. Haselhurst: Does my right hon. Friend believe it would be helpful to have a detailed report from all local education authorities on their experiences of the working of the new procedure? Does he accept that in rural areas it is genuinely more difficult to give full effect to parental choice?
    Sir Keith Joseph: The answer to the first part of my hon. Friend's question is "Yes". Such a survey is now going on. In considering the results I shall certainly take into account my hon. Friend's observations in the second part of his question.
    Mr. Wellbeloved: In view of the widespread dissatisfaction with the way that the appeals procedure is being operated in the London borough of Bexley and the fact that many parents feel that they have been unfairly treated, will the Secretary of State at least consult the London borough of Bexley to satisfy himself that the procedures adopted there are fair and that an attempt is being made to operate the Government's intention of improving parental choice?
    Sir Keith Joseph: A general survey is going on. I shall certainly interest myself in Bexley. It must be expected that, when a number of parents prefer a popular school, there must be some limit to the expansion of that school and that some parents will be disappointed.
    Mr. Madel: In relation to the new appeals procedure, will my right hon. Friend ask the Bedfordshire education authority why it is trying to force children out of Dunstable into a school over the border against parental choice and wishes? Should not the education authority pull itself together and reach a sensible settlement with the parents?
    Sir Keith Joseph: I am aware, through my hon. Friend, of the anxieties in the Dunstable area. The local education authority is trying its best to put right any errors that may have occurred earlier. I am watching developments there.

    Schools (Provision)
    Mr. Dobsonasked the Secretary of State for Education and Science whether he is satisfied with the standards of provision in schools.
    Sir Keith Joseph: There is always scope for improvement, and that is the objective of our educational policies.
    Mr. Dobson: Will the Secretary of State confirm that there is wide scope for improvement? Will he also confirm that Her Majesty's Inspectorate said that it was satisfied with the educational provision by in only five out of 96 educational authorities?
    Sir Keith Joseph: I can certainly confirm that there is ample scope for improvement, but it does not follow that putting extra money into any place will necessarily improve the quality of education.
    Mr. George Cunningham: Would it not be conducive to the quality of education if more importance were attached to reports by inspectors and if more publicity were given to reports by inspectors in particular and in general?
    Sir Keith Joseph: Yes, Sir. I have said publicly that I regard extra publicity as desirable.
    Mr. Chapman: Does my right hon. Friend agree that a significant factor in the standards of provision in schools is the amount of expenditure per pupil? Has that increased in recent years, particularly in real terms?
    Sir Keith Joseph: Yes, Sir, it is one of the relevant factors. In real terms the expenditure per pupil this year is at a record level. If local education authorities keep their costs under control, and in particular if teachers are content with 3½ per cent. or less, there will be a further improvement next year in real spending per pupil.
    Mr. Christopher Price: What mechanisms does the Secretary of State suggest for maintaining existing standards of provision? Will he allow Her Majesty's Inspectorate to produce a report in the coming 12 months in the same form as he allowed it to produce a report last year?
    Sir Keith Joseph: Many factors are relevant to improving standards—above all, the policies of local education athorities and the skill and character of head teachers and teachers. I intend no change in the format of the annual report of Her Majesty's Inspectorate for this year.

    Educational Standards
    Mr. Greville Jannerasked the Secretary of State for Education and Science whether he will now institute a survey of the educational standards in city schools, particularly with regard to size in relation to the nature of the catchment areas served.
    The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): No, Sir. The Department's circular 2/81 contains advice on school sizes which applies to all areas. That advice drew upon the judgments of Her Majesty's Inspectorate based on all forms of inspection, including its national surveys of primary and secondary education.
    Mr. Janner: Does the Minister accept that the reduction in the number of children of school age is becoming the signal for the destruction of far too many excellent schools in city areas which have specific advantages because of their experience in dealing with
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    particular children in special areas? Does he put Westcotes school in my constituency into that category? Is it not regrettable that that school, among others, is to be destroyed so soon?
    Dr. Boyson: The fall in the school population is real. Between 1979 and 1983 the number of pupils in our schools will fall by 1 million. If school rolls fall to such a level, one cannot have economic teaching groups or a spread of subjects. The children inside those schools are educationally disadvantaged, whatever the social advantage of small schools may be.
    Mr. Peter Bottomley: Instead of instituting a new survey, will my hon. Friend draw the attention of those in education to Professor Michael Rutter's book "Fifteen Thousand Hours"? The book showed that, between matched schools, the poorest 25 per cent. of children in academic ability were doing better than the top 25 per cent. in a neighbouring school.
    Dr. Boyson: I am grateful to my hon. Friend for drawing Professor Rutter's book to the attention of the House. Professor Rutter makes it clear that, with the same resources and teaching formula, the difference in achievement between schools with the same intake is tremendous, according to the commitment to the school of the head teacher and the staff and their agreement on the methods to be used.
    Mr. Kinnock: In view of the copious leaks in The Daily Telegraph yesterday and in The Times today about the Government's consideration of the voucher system, will the Minister explain how he believes a voucher system or any of the other proposals of the leaked Think Tank report could be of assistance in overcoming the problems encountered by schools, including city schools, especially as we know that inner city poverty levels are greater than in practically every other environment?
    Dr. Boyson: The Conservative Party and the Conservative Government are concerned to increase parental choice and to look at all measures to achieve it.
    There are questions on the Order Paper to my right hon. Friend about vouchers. I assure the House that we shall take no action that will not extend parental choice, with the agreement of the mass of the British people.
    Mr. Farr: Is my hon. Friend aware that the size of schools applies not only to city areas? Is he further aware that in many county areas people are mystified by the Government's policy, which seems to tend towards the large schools of 1,000 or more while at the same time closing down perfectly viable and valuable village schools?
    Dr. Boyson: My right hon. Friend and I examine carefully all the recommendations that we receive from local authorities. We assess them according to the circumstances in their areas. We also said in circular 2/81 that we realise that we reach a point where we cannot shut village schools without destroying an area. Therefore, authorities should look at the possibility of closing schools in towns where they are nearer together.
    Mr. Marks: Has the Minister examined the report from the city of Manchester, which has compared results in CSE and GCE this year with the academic qualifications, for example, in verbal reasoning, of the same children five years ago? Spurley Hey school, which

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    the Minister referred to as a sink school, showed good results. Does parental choice make any difference here? Will the Minister examine the Manchester report in his anxiety for the publication of examination results?
    Dr. Boyson: I know of the hon. Gentleman's concern about education in Manchester. He referred to Spurley Hey school. The very fact that I chastised it verbally five years ago, because of the results it achieved, has caused that degree of improvement. The hon. Gentleman must pay tribute to the service I have done to the Manchester area. I have not seen the report to which he referred, but I shall be delighted to read it and to discuss it with him.

    Teacher Training
    Mr. McNallyasked the Secretary of State for Education and Science what representations he has received concerning proposed changes to the initial teacher training scheme and the closure of a number of teacher training colleges; and if he will make a statement.
    Mr. Whiteheadasked the Secretary of State for Education and Science when he expects to announce the revised list of closures for institutions providing initial teacher training.
    Sir Keith Joseph: About 3,000 letters have been received. In addition, my hon. Friend the Under-Secretary of State and officials received deputations from hon. Members, institutions and other interests. I announced my final decisions yesterday in response to a question from my hon. and learned Friend the Member for Burton. (Mr. Lawrence).
    Mr. McNally: I congratulate the Secretary of State on saving a number of institutions from himself. However, it has not gone unnoticed in the North-West that more than half the institutions that he will attack are in the North-West, including the butchery of De la Salle college. The timing of that original announcement was an insult to the House. Does he accept that the period of so-called consultation has been a farce, because he has ignored the recommendations of his own advisory body and of the Catholic hierarchy?
    Sir Keith Joseph: I reject all those allegations. We felt it our duty to make a decision as quickly as possible so that the institutions would know where they stood. We received the recommendations of the advisory committee in the spring of this year. The consultation period was at an awkward time, but I pay tribute to all the institutions that wanted to give evidence for the admirable evidence they gave us.
    Mr. Whitehead: Does the Secretary of State accept that the maladroit exercise that he attempted to carry out during the summer vacation has now led to 10 institutions being closed without any reason whatever being given? The reasons for this whole exercise have not been explained to the House. Will he allow time for a debate and say why he has still gone far above the ACSET limit in the closures that he is proposing and why he has hit some institutions that have invested in courses that are in short supply and which we should be expanding?
    Sir Keith Joseph: Ministers face an invidious decision in applying what they regard to be the right reductions. We must take into account a number of factors, including the quality of the different institutions, the primary age range
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    that we wanted to encourage, the advice of ACSET, the recruiting record of the institutions, regional factors and others, together with the skills covered by the different institutions. All those matters had to be reconciled to produce an answer that was bound to be invidious, whatever the list may have been. The hon. Gentleman understands that very well, and he is trying to make mischief out of pretending otherwise.
    Mr. Stokes: Is my right hon. Friend aware that his decision not to close Newman college in Birmingham has caused great satisfaction throughout the West Midlands?
    Sir Keith Joseph: I am grateful to my hon. Friend. I was convinced by the arguments of the Roman Catholic Church that I had been a little too sharp in the provisional decisions arrived at.
    Mr. Beith: As the right hon. Gentleman's decision includes further college closures in the North-East, in addition to the closure of both the colleges in Northumberland in earlier years, how does he intend to achieve the objective he has accepted of setting up a major teacher training centre in the North-East?
    Sir Keith Joseph: The hon. Gentleman must remember that the colleges that we are closing in the North-East have been recruiting at less than 50 per cent. of the places established. We shall be taking the advice of the national advisory body in trying to build a strong teacher training centre in the North-East.
    Mr. Andrew F. Bennett: Is the right hon. Gentleman aware of the great bitterness in Greater Manchester about the proposal to cut teacher training at De la Salle college? Is he aware that that college did all it could to develop a new role, which he is now sabotaging? Is he confident that enough teachers will be trained in Catholic schools even to teach religious instruction by the 1990s?
    Sir Keith Joseph: We do our best to make sure that, taking into account the actual recruiting by the Catholic colleges and the use of Catholic teachers in Catholic schools and elsewhere, we shall keep pace. As to the first part of the hon. Gentleman's question, equally sincere arguments could be advanced for each institution.
    Mr. Kenneth Carlisle: Is my right hon. Friend aware that in Lincolnshire we are thankful that the Bishop Grosseteste college will remain open? We are grateful that he listened with an open mind to our arguments and recognised the quality of the teachers produced by that college as well as its contribution to life in Lincolnshire.
    Sir Keith Joseph: I am glad that my hon. Friend and his neighbours are pleased, but we shall have to look carefully at how the college recruits over the next few years and how it responds to the opportunities with which it is now presented for development and innovation.

    Student Grants
    Mr. Foulkesasked the Secretary of State for Education and Science what representations he has received from the National Union of Students on the level of student grants.
    Mr. Maxtonasked the Secretary of State for Education and Science if he will meet the National Union of Students to discuss the level of mandatory awards.
    The Under-Secretary of State for Education and Science (Mr. William Waldegrave): I have received a detailed submission from the National Union of Students concerning, among other things, the level of student grants. I shall be meeting representatives tomorrow to discuss it.
    Mr. Foulkes: As the Government have now announced an increase in the level of student grants, albeit totally inadequate to meet the increase in students' cost of living, does that mean that they have taken the wise and sensible decision not to introduce a system of student loans which would militate against working-class entry into the universities?
    Mr. Waldegrave: The Government have taken no decision one way or the other on student loans.
    Mr. Maxton: Is the Minister aware that the reported 4 per cent. offer to students would mean an extra 27p per day to students on the main grant? As a result, many students will fall into debt, as has already been shown by surveys in Sheffield, Glasgow and Stirling universities, and will militate against working-class students taking up places at universities.
    Mr. Waldegrave: As the participation rate in higher education last year was the highest for a number of years, it does not seem to have militated very strongly.
    Mr. Marlow: As most students at university are over the age of 18 and, therefore, independent adults, and as the Chancellor of the Exchequer will apparently be able to reduce taxation in the next Budget, will my hon. Friend ask him to do away at once with the iniquitous parental contribution which divides students into two classes—those who get the full grant and those whose parents who for one reason or another either cannot or will not pay the parental contribution?
    Mr. Waldegrave: The objective of both Labour and Conservative Governments has been to do away with the perental contribution, but it is expensive. One of the advantages of introducing some element of loan might be a diminution of the parental contribution.
    Mr. George Cunningham: Given that so large a part of a student's outgoings are represented by rent for halls of residence or their equivalent, and that the increase in that has been far more than 4 per cent. in recent years and is likely to be so in the next year, how can the Minister possibly justify raising the grant by only 4 per cent.?
    Mr. Waldegrave: Like other aspects of public expenditure, the student grant must relate to what we can afford. I admit that in the past year the increase in hall fees and other things in some institutions has been more than 4 per cent., but in others it has been near it. Next year we hope that few will find it necessary to increase hall fees by much more than 4 per cent.
    Mr. Kinnock: Does the Minister recall describing the system of post-school student support as a tangle? Will he acknowledge that he has made the system much more tangled by failing to consult the National Union of Students at any time in the process of determining this grant settlement? There will still be 350,000 further education students—against a background of record youth unemployment—without any grant support at all. The settlement now made for students means that the most they
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    can expect is an additional £63 a year, which apparently is rather less than the Chancellor leaves in change in his trousers.
    Mr. Waldegrave: I am not sure whether this tangle would have been sorted out by a meeting with the NUS. Many longer term and expensive options are involved, which the hon. Gentleman finds it easier to pay for while he is in Opposition, which is where he will remain.

    Primary School Buildings (NUT Report)
    Mr. Flanneryasked the Secretary of State for Education and Science if he has received and studied a copy of the National Union of Teachers' pamphlet on the condition of many of the United Kingdom's primary school buildings.
    Dr. Boyson: My right hon. Friend is examining the report, which he received last week, in order to judge whether it adds to the information already available to him in the national expenditure statistics collected by his Department and the annual survey of the effect of local authority expenditure policies undertaken by Her Majesty's Inspectorate.
    Mr. Flannery: If the Under-Secretary's right hon. Friend is now reading the report, why did the Under-Secretary jump in immediately the report was published and attack it when it was clear that he had not read it? Does he not realise that when such a report is published about conditions in many primary schools and when, according to the HM1 report, the cuts are having a deleterious effect on schools generally, it must be regarded as a serious report that shows that the fabric of those schools is in a parlous condition? Is he aware that he is beginning to earn the name Mr. Squeers, because he is reducing some of these schools to the level of Dotheboys Hall?
    Dr. Boyson: The hon. Gentleman, who is an expert in instant indignation, accuses me of being such an expert by attacking the report. I read that report in the newspapers, because the NUT did not have the courtesy to send a copy to the Department of Education and Science, and I felt that the record had to be put straight.
    I remind the hon. Gentleman that between 1965 and now expenditure per pupil on teaching staff in primary schools increased by 43 per cent. in real terms, whereas over the same period expenditure on non-teaching staff, including classroom assistants, rose by 153 per cent. in real terms. That represents an enormous improvement in service. If particular schools out of 27,000 have not been painted for 25 years, that is not the responsibility of the Government.
    Mr. Greenway: Does my hon. Friend agree that it is important to keep a sense of proportion? Does he further agree that while none of us want children to be educated in nasty buildings, the quality of education that goes on inside them is the important thing? Finally, does he agree that such education is often not affected by whether a building is new or old, whether lavatories are inside or outside, or by the factors that have been mentioned in the NUT report?
    Dr. Boyson: I always try to maintain an objective view of those factors. I agree that education is better inside than outside a school. I also agree that the calibre of staff, their commitment to what they are teaching, and the curriculum are decisive—not one or two improvements on the outside.
    Mr. Dobson: Does the Minister agree that the NUT report confirms Her Majesty's Inspectorate's report on school provision, to which he had access before the rest of us? Will he confirm that that report stated that no fewer than 63 of the 96 education authorities mentioned had inadequate buildings? Does he further agree that if, as I believe, the standard of education is greatly dependent on the standard and commitment of teachers, rundown buildings and his vicious, unpleasant and hypocritical remarks about teachers are damaging teacher morale and therefore damaging the standard of education?
    Dr. Boyson: It is interesting to note that the Government published Her Majesty's Inspectorate's report. When the Labour Party was in Government, it kept the report secret. We are prepared to have our actions judged by the public. We are spending more per child than ever before. To talk in terms of cuts is to indulge in hyperbole beyond imagination.

    Croxteth Comprehensive School
    Mr. Parryasked the Secretary of State for Education and Science if he will make a statement on Croxteth comprehensive school.
    Dr. Boyson: As a result of statutory proposals published by the Liverpool education authority and approved by my right hon. Friend, Croxteth comprehensive school closed in August 1982 and a new school was established at Ellergreen in September 1982 to serve the needs of the Croxteth and Ellergreen communities. The premises of the former Croxteth school are now unlawfully occupied.
    Mr. Parry: Is the Minister aware that about 180 youngsters are attending Croxteth school and being taught by voluntary teachers? As the level of youth unemployment in that area is one of the highest in Britain, and as there is a complete lack of facilities for the largest housing estate in the area, will the Minister reconsider his decision, which is causing anguish to both parents and pupils?
    Dr. Boyson: To be fair to the Government, we did not close the school. The local education authority proposed section 12 action to us and we agreed. The hon. Gentleman understands that. We agreed to the closure because if one added together the pupils at Croxteth and Ellergreen schools last year they would have constituted only a five-stream school. Moreover, the population of the schools was continuing to fall. It was obvious that Ellergreen school was more popular—it has a sports hall and a sixth form centre—so we agreed to the closure.
    Mr. Allan Roberts: Is the Minister aware that not only school provision but community provision is at stake in Croxteth? Is he further aware that the Liverpool Liberals, who are now supported by the Secretary of State, are destroying a community asset, which will lead to a breakdown of law and order in the area?
    Dr. Boyson: Liverpool council intended to use the Croxteth school building for community purposes. It is unfortunate that it is being occupied. It would have been used for youth training, adult education classes, a library and day care for the elderly. If some schools in Liverpool are not closed the rest will be only half full within the next four or five years.
    Mr. Christopher Price: Does the Minister believe in parental choice, or does he not?
    Dr. Boyson: I am delighted—[HON. MEMBERS: "Answer."] I shall answer. I am glad that the hon. Gentleman raised that point. It is interesting to note that one-third of the children in the Croxteth area contracted to go to schools outside that area with their parents' consent and only one child from outside chose to come in.

    Student Grants
    Mr. John Fraserasked the Secretary of State for Education and Science if he will revise the regulations about mandatory student grants in the light of recent decisions of the courts about what constitutes ordinary residence in the United Kingdom.
    Mr. R. C. Mitchellasked the Secretary of State for Education and Science whether he will amend the three-year normal residence rule in relation to statutory educational grants.
    Mr. Waldegrave: A number of cases concerning the ordinary residence requirement of the mandatory awards regulations were recently considered by an Appeal Committee of the House of Lords. My right hon. Friend will consider whether any amendment to the regulations is necessary in the light of the forthcoming judgment.
    Mr. Fraser: What possible justification is there for a person who spends four years in the United Kingdom on a work permit, pays British taxes, and then spends another two years in the United Kingdom without any conditions being imposed on his stay here, being treated as a foreign student? Does the Minister agree that that smacks of a vendetta against foreign students? If the House of Lords judgment goes in what I believe to be the wrong way, will the Minister change the regulations?
    Mr. WaldegraveI am aware of the hon. Gentleman's interesting constituency case. In so far as the matter relates to the House of Lords decision, I cannot talk about it now. Nevertheless, the issue will be reviewed in the light of that judgment.
    Mr. Mitchell: Is the definition of what constitutes ordinary residence a matter for the DES and therefore a uniform standard that is applied throughout the country, or is it a matter for each education authority to interpret in whichever way it wishes? Is the Minister aware that a harsh interpretation of what constitutes normal residence may be discriminatory, especially against the immigrant community?
    Mr. Waldegrave: Although the DES gives guidelines, it is for the institutions and local authorities to make judgments. We are aware of variations. The matter will be subject to review.

    Secondary Training Places
    Mr. Woolmerasked the Secretary of State for Education and Science whether he agrees with the view of the advisory committee for the supply and education of teachers that by 1990 a major expansion in secondary training places will be needed.
    Mr. Waldegrave: We agree with the advisory committee in projecting an increase in the demand for newly trained secondary teachers in the early 1990s. The committees recognise that it is impossible to assess the need for additional training places to meet that demand until nearer the time.
    Mr. Woolmer: Why, in the meantime, has the Secretary of State treated the advisory committee's recommendations so frivolously? Why have 10 teacher training colleges, especially those that specialise in developmental work, been shut? What scope does he envisage for ensuring that special needs of groups such as the 16 to 19-year-olds will be met in the meantime?
    Mr. Waldegrave: At the lowest point we shall be training 7,000 new secondary teachers, for a demand of 4,700. It would be a frivolous misleading of those students' expectations to train more for jobs that will not exist.
    Mr. Jim Callaghan: Does the Minister agree that by closing the initial training scheme at De la Salle training college, he will be closing the college permanently?
    Mr. Waldegrave: Yes, Sir.
    Mr. Whitehead: Does the Minister agree that it is scandalous that these proposals were announced the day before Education Question Time and with no debate in the House? What guarantee do we have that the proposals will be debated and some amendment be possible?
    Mr. Waldegrave: I am sure that if we had announced the proposals the day after Education Question Time the hon. Gentleman would have said that that was another type of trick. He must pursue the channels that are open to him for a debate.
    Mr. Chapman: As school rolls are falling, and as expenditure per pupil is increasing in real terms, does my hon. Friend agree that there is some point in the criticism that, marginally, we have been allocating too much to the provision of teacher training and too little to new school building or the restoration of many of the older schools? Will he bear that in mind when allocating money for the next five years?
    Mr. Waldegrave: I agree with my hon. Friend's underlying argument. It would be foolish to allow teacher training more than a reasonable share of resources. Resources should go to over-subscribed courses. Many of these are substantially under-subscribed.

    Salford University
    Mr. Frank Allaunasked the Secretary of State for Education and Science how many students were at Salford university in the last educational year; and by how many they will be reduced following the 44 per cent. cut in cash grants from the Government.
    Mr. Waldegrave: I understand that there were 3,812 full-time and sandwich students paying home fees at the University of Salford in the 1981–82 academic year. The University Grants Committee has given the university a target for 1984–85 of 2,750 students.
    Mr. Allaun: Is not the country crying out for technological growth? Are not the four universities most savagely hit by the cuts precisely those that are preeminent in this field? I refer to Salford, Bradford, Aston and Brunel. Will the Minister reverse these cuts without further delay?
    Mr. Waldegrave: The hon. Gentleman has been a little carried away. To say that those four universities are pre-eminent when among the competition are such places
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    as Strathclyde and Imperial College would be foolish. Equally, the two universities that have done best were also former colleges of advanced technology.
    Mr. Whitehead: Will the Minister discuss with the University Grants Committee why it asked Salford to raise its intake of part-time students by 75 per cent. and at the same time asked it to raise the fees for those same students by 150 per cent? What is the logic of that? How can Salford do even the things that the UGC now asks?
    Mr. Waldegrave: I am impressed by the fact that Salford is doing what has been asked of it. It is raising money from outside and building new connections with industry. I have no doubt that it will meet its targets.

    Health Education
    Mr. Majorasked the Secretary of State for Education and Science if he will make a statement on health education in schools.
    Dr. Boyson: As we said in our guidance document "The School Curriculum", health education should give pupils a basic knowledge and understanding of health matters both as they affect themselves and as they affect others. It should also help them to become aware of those moral issues and value judgments which are inseperable from such choices. There should be the closest possible co-operation between parents and schools when dealing with sensitive topics such as sex education.
    Mr. Major: I am grateful to my hon. Friend for that reply. Is he entirely satisfied with the quantity, quality and nature of health education currently offered in schools? Does he have plans to include this subject in basic teacher training? Will the Department issue guidelines on the instruction of this most sensitive subject?
    Dr. Boyson: I am sure that the training colleges, the colleges of education and the institutes of education will bear in mind this important subject of health education. As for schools, we in the Department have published a booklet entitled "Health Education in Schools", which covers diseases, accidents, dental health, drug and alcohol misuse, smoking and also sex education. I would only add that the school day is limited. It is the one thing that has not changed since 1939. The more one puts in, the more something else will have to come out.
    Mr. Kinnock: In connection with our interest in health education and the health of pupils, will the Under-Secretary say why he has disregarded the intelligent report on school meals by the Select Committee? What is his response to the report of the National Union of Teachers, which says that health regulations are clearly being flouted in a number of local education authorities?
    Dr. Boyson: If health regulations are being flouted, that is a question for local authorities. The Education Act 1980 places the responsibility for school meals back on the local authorities, which are democratically elected bodies.

    Universities (Expenditure Cuts)
    Mr. Beithasked the Secretary of State for Education and Science what reply he has given to the letter sent to him on 4 October by the Committee of Vice-Chancellors and Principals about the effect of cuts on universities.
    Sir Keith Joseph: My reply agreed to a meeting with representatives of the Committee of Vice-Chancellors and Principles, as it requested. This took place on 2 November.
    Mr. Beith: Do not all the announcements that the Minister made in written answers yesterday about resources for universities hinge on the unrealistic expectation that a 3½ per cent. pay settlement will be reasonable for university teachers, in the face of what they have received in the past few years?
    Sir Keith Joseph: I do not think that it is unrealistic in the light of falling inflation. University teachers would be wrong to think that extra money will be provided for settlements that exceed 3½ per cent.
    Mr. Maxwell-Hyslop: Will my right hon. Friend keep an eye on the situation of which he was earlier made aware, and ensure that universities such as Exeter, which the University Grants Committee agrees has been under-funded, do not suffer as a result of over-expenditure by other universities?
    Sir Keith Joseph: I think I can assure my hon. Friend that that is most improbable, but I shall look at the matter.
    Mr. Hooley: Will the Secretary of State say how many academic and non-academic staff have been made unemployed as a result of these cuts?
    Sir Keith Joseph: Not without notice.

    Expenditure and Academic Results
    Mr. Bowen Wellsasked the Secretary of State for Education and Science whether any correlation exists between a local authority's expenditure upon education and the academic results achieved in that authority's schools.
    Sir Keith Joseph: The academic results of a school depend on many factors, in particular the abilities and aptitudes of the pupils, their home background, the resources available to the school and the skill with which it uses them. Satisfactory results require a minimum level of resources. Beyond that, other factors become increasingly important.
    Mr. Wells: I thank my right hon. Friend for that reply. Is it not true that higher than average spending in the county of Hertfordshire has achieved significantly better results for schools in public examinations? Will my right hon. Friend make certain that Hertfordshire county council is not so starved of funds that it will have to reduce the resources needed to achieve those results?
    Sir Keith Joseph: I congratulate the people of Hertfordshire and their authority on the results. It does not follow that extra expenditure always produces higher academic achievements.

  PRIME MINISTER

    Child Benefit and Retirement Pension
    Mr. Peter Bottomleyasked the Prime Minister what has been the decrease and increase in the real values of child benefit and the State retirement pension since May 1979.
    The Prime Minister (Mrs. Margaret Thatcher): The real value of these benefits at the uprating later this month
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    will not be known until later in December when the retail price index figures up to November will be published. But if we assume, for illustrative purposes, that inflation to November is further reduced to 6·5 per cent. then the real value of child benefit at the uprating will have decreased by about 4 per cent. since April 1979, and the State retirement pensions will have increased by about 4·5 per cent. since November 1978 in real terms.
    Mr. Bottomley: I should like to pass on the thanks of pensioners for the increased reduction in the rate of inflation, which is of great advantage to them. Does my right hon. Friend agree that between now and the Budget it will be well worth the Government considering possible adjustment to the real value of the pension? Is she aware that the reduction in the retail price index includes the drop in mortgage interest, which does not affect pensioners, who also find their income from building societies reduced? Does my right hon. Friend agree that an increase in child benefit plays an important part in achieving lower pay settlements, which will determine the rate of inflation in the future?
    The Prime Minister: A reduction in inflation is good news for us all, as my hon. Friend recognises. There are perhaps some misunderstandings about the pensioners' price index. If the pensioners' price index had been used as the basis for uprating pensions since the Government took office, the current pension would now be between 3 and 4 per cent. less than the actual rate. Food price increases have been very much less under this Government than under the previous Government.
    There is no evidence that wage demands would be reduced if there were a substantial increase in child benefit. A substantial number of wage earners are not eligible for child benefit. I shall, however, bear in mind what my hon. Friend says.
    Mr. Foot: Is the right hon. Lady aware that her reply shows that great injury has been done to child benefit by this Government? There cannot be any dispute about that. Can the right hon. Lady explain why she thinks the pension is too high? [Interruption.] How can she justify cutting it next year? Will she say how much money the Treasury intends to recoup by cutting the pension next year? How much extra will the pensioners have to contribute?
    The Prime Minister: No one is cutting the pension. If, in the last Budget, we had not over-estimated inflation, the pension for a married couple would have gone up this month to £51·60. In fact, it is going up to £52·55, nearly £1 a week more. That means that this year pensioners will have a bonus of over £50. Next November the pensioners will keep this extra £1 a week, plus whatever further increase is necessary to maintain the value of their pension over the lifetime of the Parliament, as we promised. How the right hon. Gentleman can refer to a bonus of £50 extra this year as a cut is a mystery.
    Mr. Foot: The right hon. Lady has not even attempted to answer my question, because if she did she would expose the falsity of her argument. How much money does the Treasury hope to recoup from the clawback? It will be money taken from the pensioners. Will the right hon. Lady recognise that the Government's proposals are an outrage? Will she undertake to put this matter at the top of the Cabinet's agenda on Thursday and to allow the pensioners to gain some advantage from the fall in inflation?
    The Prime Minister: I shall repeat my remarks, because the right hon. Gentleman clearly did not hear. This year—[Interruption.] I shall answer the question my own way, with figures that will doubtless be unwelcome to Opposition Members. This year pensioners will receive a bonus of £1 a week—which is nearly £52 for the whole year—over and above the amount that would have been necessary to protect the pension from price increases. They will keep that amount next year. It will not be clawed back. They will keep that amount next year and there will be an extra sum added to it for further increases in prices, which, over the period of a Parliament, will protect the pension from prices. That is an advance and a bonus of £50 for this year which would not have taken place if we had stuck to strict price increases.
    Mr. Foot: The simple question is: how much will the Treasury get from the pensioners as a result of the clawback?
    The Prime Minister: For the whole year, a married couple this year—
    Hon. Members: Answer the question.
    Mr. Speaker: Order. The Prime Minister must be allowed to answer the question.
    The Prime Minister: For the whole year, this year, a pensioner married couple will be £1 a week better off as a result of the uprating than they would have been if the uprating had gone hand in hand with price increases. That is a bonus. A bonus does not give the Government money, but puts more money into the pensioner's pocket. That money is paid for not by Government, but by the working population of our country, who have had their national insurance contributions put up to pay for it.
    Mr. McCrindle: To put it more simply—[Interruption]—does my hon. Friend agree that if the clawback next year—[Horn. MEMBERS: "Ah!"]—is less than the overshoot this year, that is another way of saying that there has been an increase in the standard of living for pensioners and other beneficiaries?
    The Prime Minister: I note that my hon. Friend prefaced his remarks with "To put it more simply". I must say that I did not find that promise maintained in his question. There is nothing that I can usefully add. It is remarkable that when many people have not received wage increases of anything more than 4 per cent. or 5 per cent.—and some have received less—the great working population of Britain is providing an 11 per cent. increase in pensions and other benefits. We should thank them and congratulate them on that.

    Engagements
    Mr. Joseph Deanasked the Prime Minister if she will list her official engagements for Tuesday 9 November.
    The Prime Minister: This morning I had meetings with ministerial colleagues and others. 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. Dean: Will the Prime Minister reflect today on the statement made yesterday in the House by the Chancellor of the Exchequer and explain why the three most
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    disadvantaged groups in our society—the old-age pensioners, the sick and disabled, and the unemployed—are apparently being called upon to make the most substantial financial contributions or sacrifices to pay for the Falkland Islands exercise?
    The Prime Minister: An increase in those benefits of 11 per cent. at a time when many of the working population are obtaining much less means that those groups in our society are receiving preferential treatment, paid for by the working people. I note that the hon. Gentleman wants to put his hand deeper into the pockets of the working population.
    Mr. Roy Jenkins: On what basis of economic logic or whatever does the Prime Minister disclaim responsibility for unemployment and take full credit for the decline in inflation?
    The Prime Minister: The decline in inflation can in large measure be governed by what Governments do about the money supply and by what they pay to their employees. The level of unemployment largely depends on the type of goods that are produced by our factories and whether they are of a design and price that will ensure that they are bought by the working population. I am amazed that the right hon. Gentleman should even ask that question.
    Sir Charles Fletcher-Cooke: Is my right hon. Friend aware that in only a few weeks' time the law of the sea treaty is due to be signed in Jamaica and that we still do not know whether the Government will sign it on behalf of the United Kingdom? Will my right hon. Friend ensure that one of her colleagues makes an early statement on this important subject, because divided views are held and there will be serious results whichever way the decision goes?
    The Prime Minister: I am well aware of some of the clauses in that treaty. There is no doubt that the clauses on mining the sea bed would be very disadvantageous to this country, although there are other clauses, such as those concerning freedom of navigation, that would help us. We must consider carefully the balance of advantage before deciding whether to sign the treaty. At the last meeting, we did not vote for it.
    Mrs. Renée Short: Is the Prime Minister aware that the Minister for Health recently told me that he intended to see a report about the proposed closure of the breast cancer screening clinic at the Royal Marsden hospital? Will she make it her business to see the report and give an undertaking to ensure that the comparatively small amount of money—about £100,000 per annum—that is needed to keep the clinic going will be provided, so that many women can be cured of breast cancer and so that even more can be relieved of anxiety?
    The Prime Minister: I am not privy to the conversations between my hon. and learned Friend the Minister for Health and the hon. Member for Wolverhampton, North-East (Mrs. Short). I know of the problem of that hospital and it is under consideration at the Department of Health and Social Security.
    Dr. Mawhinneyasked the Prime Minister if she will list her official engagements for 9 November.
    The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.
    Dr. Mawhinney: Has my right hon. Friend seen the report in today's edition of The Times, saying that members of the National and Local Government Officers Association are threatening mass resignations against the union's hard-line unilateral nuclear disarmament policy? Does that not once again confirm that the British people want their Government to work vigorously for world peace, but on the basis of multilateral disarmament?
    The Prime Minister: I wholly agree with my hon. Friend. One-sided disarmament by this country would be an extremely dangerous step. It would imperil peace and jeopardise the freedom and justice that are essential to our way of life. This Government will never enter into one-sided disarmament. They require disarmament to be multilateral, as that is the only way of gaining peace and security.
    Mr. Stoddart: In the light of the American vote in the United Nations on the Falkland Islands, and of the CIA's gun-running activities with the IRA, does the right hon. Lady really consider the United States, of America to be so reliable an ally that we should have cruise missiles in Britain from the end of 1983? Will she now cancel the programme?
    The Prime Minister: I understand that there is no truth in the assertions about the CIA and the gun-running activities. With regard to the United States' vote on the United Nations resolution, I have made clear my views and
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    disappointment at the action that they took, but it would be a mistake to fail to recognise that the United States is the final guarantor of peace and freedom and justice on our Continent of Europe. That peace and freedom and justice are safeguarded by the NATO alliance as a whole.
    Later—
    Mr. Allen McKay: On a point of order, Mr. Speaker. I listened carefully to the Prime Minister's reply to the question of my right hon. Friend the Member for Ebbw Vale (Mr. Foot) about pensioners. Is it right that the Prime Minister should—
    Mr. Speaker: Order. The hon. Gentleman knows that he must not involve me in arguments between the two sides of the House on matters of policy.

    Britoil
    Dr. J. Dickson Mabon: On a point of order, Mr. Speaker. In relation to written question No. 84 and the statement by the Secretary of State for Energy last week that he would make a statement soon, may we take it that there will be a statement made to the House, rather than in the form of a written answer, either today or later this week?
    Mr. Speaker: I have had notice from the right hon. Member for Leeds, South (Mr. Rees) that he wishes to raise a point of order on that matter after the statements.

National Health Service (Pay Dispute)
3.30 pm
The Secretary of State for Social Services (Mr. Norman Fowler): With permission, I should like to make a statement about the pay dispute in the National Health Service.
As I have reported to the House, revised proposals on Health Service pay were put to all the staff organisations on 16 September as a basis for discussion. They envisaged discussions about improved pay determination arrangements for all non-medical National Health Service staff groups, together with a two-year pay agreement to cover the period until 31 March 1984. I proposed that the financial basis of the two-year agreement should be the offer for this year of 7½ per cent. to nurses and midwives and professions allied to medicine and 6 to 6½ per cent. for other groups, together with an additional 4 per cent. for next year. The proposals made it clear that there could be no more money for this year.
As a result of this initiative, there have been lengthy exploratory discussions with the professional organisations representing nurses, midwives and health visitors. There have also been discussions with representatives of the professions allied to medicine. I am glad to say that in the past few days talks have been taking place with the Health Service unions affiliated to the TUC.
Following the Government's consideration of the outcome of the discussions with the professional nursing bodies and the TUC health services committee, I have authorised the management sides of the Whitley councils which negotiate the pay of nurses and midwives, and of the professions allied to medicine, to make revised pay offers covering the period until 31 March 1984. The financial resources that I have made available to them are on the general basis envisaged in the proposals put forward on 16 September, but the Government have agreed that, in formulating appropriate pay offers, these management sides may proceed on the basis that the money available for 1983–84 will be increased to allow average pay increases for that year of 4½ per cent. The distribution of the pay offers within the cash limits set by Government is for negotiation within the Whitley councils.
If this revised pay offer is accepted, the Government believe that better permanent pay arrangements should be established for nurses and other professions. As the House is aware, the Government are firmly committed to seeking improvements in the arrangements for determining nurses' pay. We put forward proposals as a basis of discussion as long ago as August 1980. Talks began in March this year, but the discussions have not shown the progress that we would want.
We should remember that we are dealing here with a group of dedicated and skilled staff who do not take strike action, because of the consequences of such action on patients. The Government believe that it is time that we settled upon more satisfactory arrangements. We have, therefore, decided to propose the establishment of a review body, which will have the task of making recommendations to Government about the pay of nurses, midwives and health visitors. We propose that it should have the further remit of making recommendations about the pay of the professions allied to medicine, such as physiotherapists and radiographers.
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I shall shortly be launching consultations relating to the composition, terms of reference, coverage and method of work of the new review body. Like other review bodies, it would, in looking at levels of pay, need to take account of all relevant factors, including, for example, economic and financial considerations and service needs. It is intended that its first report should relate to the period beginning 1 April 1984, at the end of the two-year pay agreement now proposed.
I believe that this decision will give the professions concerned a much better basis for determining their pay and that it will be warmly welcomed by them. The Government regard their position as wholly exceptional. There can be no general extension of the review body principle to other staff groups.
This is an important step forward for the nurses and the other professional groups and, therefore, for the Health Service. The proposals that we have made offer a fair settlement for pay over two years, followed by the establishment of a review body. They provide an opportunity for stability in the National Health Service to make the service improvements that we all want and to recover from the damaging effect of the industrial action which has taken place this year.
On the pay of other Health Service staff, discussions with the health services committee are continuing. The aim must be to secure a resumption of negotiations in the relevant Whitley councils. That is the way forward and the proposals that I have announced today are a significant step in that direction.
Mrs. Gwyneth Dunwoody: The whole House will welcome the Secretary of State's conversion to the principle of the Clegg commission, but it is clear that the offer of a review body is to be restricted to the nurses, midwives and health visitors Whitley council. Does the right hon. Gentleman intend to renege on the offer that he made earlier this year to other NHS workers of suitable machinery for negotiating their pay?
Are negotiations continuing with the TUC health services committee? Is it the right hon. Gentleman's intention to continue to try to divide one Health Service worker from another? Is it not clear that the negotiations could have been resumed much earlier and that it is only because the right hon. Gentleman has been prepared to go back to ACAS that there have been any grounds for negotiation?
Surely the Government will now accept that the actions of Ministers and their direct assaults upon groups of Health Service workers have been nothing but counter-productive since the beginning of the dispute and that if they had been prepared to take the advice of the Opposition and return to negotiations there would have been a much earlier end to this unhappy affair.
Mr. Fowler: That was a typically churlish and unworthy response from the hon. Lady. I remind her that one of the most disreputable actions of the Opposition has been to support industrial action throughout the dispute.
Let me make it absolutely clear that, contrary to what the hon. Lady appears to think, the review body is not in any sense based on the Clegg commission. That commission was based solely on comparability and was wholly inflationary, and no one was better off in the end. If the hon. Lady wants confirmation of that, I suggest that she asks the nurses for their views on the Clegg commission. They certainly do not want it.

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Talks are continuing with the TUC and the Health Service unions. I suggest that the whole House would want them to be successful. In relation to the hon. Lady's question about the longer term, the offer stands that we made on 16 September to have talks on the long-term arrangements for others in the Health Service. The talks will involve factors such as comparability, recruitment and retention of staff and what the nation can afford.
Finally, I remind the hon. Lady that the Government offers were put forward on 16 September and we have been having talks and negotiations with the professional organisations since then. Those offers are the basis of what is now coming forward. There is no truth in the hon. Lady's comments about the Government having gone to ACAS. The Government did not go to ACAS. The Health Service unions went to ACAS and as a result of that the talks continued. I stress, however, that the talks and the offer date from 16 September.
Mr. John Peyton: Does my right hon. Friend agree that the term "review body" is not one to set the heart racing or cause great enthusiasm? Does he agree that, historically, such bodies have been the repositories for difficult decisions that other people do not want to take rather than successful solvers of any problems?
Mr. Fowler: No, I do not agree with that—certainly in view of the experience of the doctors and dentists review body, which is the nearest comparison. The new review body recognises the special position of nurses and other professional groups who do not take industrial action and on whom we have relied heavily in the past six months. The professions have always wanted better permanent arrangements and the review body will ensure that they have them. The fact that these groups do not take industrial action has now been adequately recognised.
Mr. Clement Freud: Would it be convenient for the Secretary of State to give the House a guideline as to how long an industrial dispute must go on before the position is wholly exceptional?
Mr. Fowler: That is a rather foolish question. If the hon. Gentleman takes the trouble to study these matters, he will see that my offer was made on 16 September.
Mrs. Jill Knight: Is my right hon. Friend aware that many people in the House and outside wish to congratulate him on his firmness, his realism and his patience, and particularly on his determination to ensure that the differentials between the pay of nurses and other Health Service workers are maintained, especially as they are always careful not to make their patients suffer in the pursuit of more money? Will my right hon. Friend also never fail to recognise that there are substantial savings to be made within the Health Service which could lead to more money being available for the deserving sections of it?
Mr. Fowler: I am grateful to my hon. Friend. The differential of 1½ per cent. for nurses has been preserved and it is absolutely correct that that should be so. I am sure that many people in the nursing profession will greatly welcome this step. It is precisely what they have been fighting for year after year and it is right that we should recognise that.
Mr. Freud: Why has it taken you so long?
Mr. Fowler: I announced some weeks ago that we intended to take action on manpower and I shall have more to say about the manpower management inquiry in the next few weeks.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to allow questions on this statement to run until 4 pm and then to take the second statement.
Mr. Reg Race: Will the Secretary of State clarify the position for the nurses and the professions supplementary to medicine? If the proposed review body makes a recommendation that the Government do not like, will the Government implement the award or will they retain a power of veto? Is he aware that offering an additional ½ per cent. to the one million Health Service workers next year is an insult that will not solve the problem of low pay and will deeply shock many Health Service workers who believe that they do a decent job for the community?
Mr. Fowler: There is no truth in the hon. Gentleman's charge. The offer means that there is now more than £660 million on the table for the nurses and other professional groups. That shows the Government's commitment to the nursing profession.
Mrs. Sheila Faith: Is my right hon. Friend aware that the current issue of the magazine Marxism Today shows a picture of two pretty nurses with the caption, "The New Shock Troops"? Will he hasten the setting up of the review body so that nurses are not put in this reprehensible position in the future?
Mr. Fowler: We shall do our best to make progress in setting up the review body. We intend to make the consultation process as short as possible so that the review body can be established as early as possible in 1983 and can present its first report in time for the 1984 settlement.
Mr. Bob Cryer (Keithley): Why has it taken the Government so long to conclude that the Clegg commission or something like it has some role to play? Is it not typical of the Government's intransigent, hardhearted attitude that the Royal College of Nursing, for example, has been closer to strike action than ever before in its history, and that only the tolerance and good will of the unions has saved the day? Does the Secretary of State agree that his statement that the unions and not the Government went to ACAS shows the willingness of the trade union movement at all times to enter into meaningful negotiations?
Mr. Fowler: That is an interesting rewriting of history, but it bears little relation to the facts. We made proposals for long-term arrangements as long ago as August 1980 and we have been having talks since March this year. There has been no delay by the Government. We have tried to make progress. As no progress was possible, we have taken this initiative, which I believe will be widely welcomed.
Mr. Mike Thomas: Although we welcome the review body, do we take it that there is now no question but that the Government will strong-arm the rest of the Health Service workers into submission in pursuance of his "divide and rule" policy? Is the right hon. Gentleman aware that he must still face the question why the industrial action was necessary and

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the extent to which he is to blame for not sending the matter to arbitration before all the bitterness and argument occurred? Does he appreciate that if he had done that on the basis of the first offer the settlement would have been no different from the one that he has now obtained?
Mr. Fowler: The hon. Gentleman at least welcomes the review body. With regard to his comments about a "divide and rule" policy, I remind him that the offer of 16 September was carefully worked out and was made specifically not only to the professional organisations but to the Health Service unions as well. It was to avoid exactly that kind of charge that the offer was made.
Sir William Clark: May I congratulate my right hon. Friend on the resumption of talks in the dispute? Does he agree that the Clegg commission had damaging effects on the economy? Will he give an assurance that the new review body will not become like that commission so that the Government of the day lose their flexibility in paying the wages of the public sector?
Mr. Fowler: I assure my hon. Friend that the new review body will certainly not be like the Clegg commission—first, because the Government have no intention that it should be so, and secondly, because the nurses themselves would not want it to be that way. As I have said, I think that the comparison is with the doctors and dentists review body. The Government have lost no flexibility there. The DDRB is regarded as fair and Government policy has in no way suffered as a result.
Mr. Doug Hoyle: Will the Secretary of State accept some responsibility for the prolonged dispute? Does he accept that it has been largely due to the small-minded and parsimonious way in which he has handled matters when he could have gone to arbitration at any time? Will he also clarify the Government's intentions? If the review body comes up with a recommendation that is not acceptable to the Government, will the Government accept it and not stand in the way? That is what we want to know.
Mr. Fowler: We should not be setting up the review body if our purpose were to ignore its findings. That is clear. Obviously, we must reserve the right not to accept recommendations in response to compelling national reasons. That is the normal position with review bodies and the assurance that my hon. Friend the hon. Member for Croydon, South (Sir W. Clark) sought. I am not prepared to take lectures from the hon. Gentleman on industrial action when over the last month he has supported industrial action, and many of his colleagues have appeared on the picket line.
Mr. Anthony Nelson: Does the Minister accept that there will be widespread recognition of the restraint and the responsibility that he has shown in these negotiations, as any excessive wage offer can only be at the expense of medical facilities for patients? Will my right hon. Friend clarify one aspect of his statement? I understood him to say that the cash limit would be revised to accommodate the increased offer. If this is the case, can he give an undertaking that all local health authorities will be underwritten in any extra marginal costs that they may
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have to meet in paying these extra wages, or will they have to make futher economies to accommodate this incremental increase?
Mr. Fowler: Yes, I assure my hon. Friend that no further increases will be made for this year, and I have made that clear. Next year the amount is allowed for in the public expenditure figures that we have put forward. Therefore we shall not be requiring a contribution from the health authorities.
Mr. Ioan Evans: Is the Secretary of State happy with offering only 6 per cent. to Health Service workers, some of whom have a take-home pay that is less than £2,500, while his Government offer judges on over £40,000 a year an 18 per cent. increase? Is the Government's policy to be generous to the well-off while being mean and Scrooge-like to the low paid?
Mr. Fowler: Our policy is to seek to be fair within the Health Service resources to all those working in it. With regard to the TUC Health Service unions, I repeat that negotiations are continuing.
Mr. Peter Bottomley: Will my right hon. Friend accept my good wishes for the settlement of the whole of the dispute? Does he accept that if the 4½ per cent. is accepted by NHS workers for the following year, other groups who are higher paid should accept that or less, so that the noises made to the lower paid have some meaning? Will my right hon. Friend add his voice to mine in talking the Prime Minister into trying to get an increase in child benefit so that the lower paid with family responsibilities can accept continuing low pay settlements?
Mr. Fowler: I hear what my hon. Friend says about child benefit. However, he will know that decisions on that are made at the time of the Budget.
Mr. William Hamilton: Is the Minister aware that, even if these figures are acceptable, the nurses and other skilled and dedicated people, as he described them, will have suffered a considerable reduction in their standard of living over the years? Will the Minister give an assurance that if, as is likely, the rate of inflation increases beyond the 5 per cent. anticipated by the Government at the beginning of next year, that 4½ per cent. will be increased pari passu?
Mr. Fowler: The hon. Gentleman is wrong in the premise that he uses. If he takes the staff nurse as an example of what this 7½ per cent. and 4½ per cent. will mean taken together, there will be an increase of between £12·33 and £15 a week. That is what it means, and that cannot, in any fair sense, be described as a cut.
Mr. Anthony Beaumont-Dark: Is my right hon. Friend aware that a peaceful settlement will be widely welcomed? However, is it not true that one of the reasons why he did not offer the Health Service more before was that it was rightly said that the country could not afford to pay more? If we have a review body, how will it arrive at a different formula as to what the country can afford? If the settlement is to mean anything, the review body has to know what that means.
Mr. Fowler: The review body will arrive at a formula in the same way as the doctors and dentists review body in the light of the evidence and the ground covered. We shall be able to give it evidence of the national economic

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and financial position, on NHS resources, recruitment and any changes in terms of services. Therefore, it will be done in the same way as the DDRB.
Mr. John Maxton: If the Minister believes that the establishment of a review body will improve industrial relations in the NHS for nurses and professional bodies, why does he not extend that belief to the other workers in the NHS who should equally be covered by the review body? Secondly, does the right hon. Gentleman agree that the best thing that he could do for industrial relations in the NHS would be to get rid of his provocative friend, the Under-Secretary of State, who has made so many outspoken remarks about the Health Service workers and caused further problems in this dispute?
Mr. Fowler: The hon. Gentleman is calling for the resignation of the wrong person. [Laughter.] I have absolute confidence in the Minister for Health, to whom I think the hon. Gentleman was referring. The review body is intended to recognise the fact that nurses and the other professional bodies do not take industrial action. We rely upon their commitment and we wish to devise a fair means by which their pay is determined.
Mr. Geoffrey Dickens: Will my right hon. Friend reaffirm that this Government, unlike all previous Governments, are determined that there shall be a proper wage structure throughout the nursing profession which reflects the fact that nurses and midwives do not strike and give their dedication to the nation?
Mr. Fowler: That is what we are trying to do in setting up the review body. It is something that many of those inside the nursing profession have pressed for and wanted over many years. It will be recognised and welcomed by the nursing profession, and will be seen as a step forward.
Mr. Kenneth Marks: The Minister seems to think that the Health Service workers enjoy striking, but they do not. What offer would he make to them in return for no-strike pledges?
Mr. Fowler: If the unions wish to give that pledge, we are willing to talk on the point. Talks are continuing. I pay tribute to all staff who have not taken strike action. That includes managers and ancillary workers as well as nurses. That is why it is so surprising and reprehensible that the Labour Party has not at any time in the dispute condemned industrial action.
Mr. Michael English: Why do the Government think that the Health Service differs from other services of the State? Why do we need another pay quango? We already have the top salaries review body, which deals with civil servants other than in the Health Service, judges and army officers. Why can it not deal with top people in the Health Service, such as regional officers? We already have a Health Service quango for doctors and dentists. Why cannot that body deal with the rest of the Health Service? Why can we not have one system of pay in the Health Service as we have for all three Armed Services?
Mr. Fowler: The response of the official Opposition was to welcome the setting up of the review body. The
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hon. Gentleman appears to be going on a course of his own. The comparison, which I think that the hon. Gentleman has missed, is the most obvious one between the doctors and dentists review body. The link there is something that we shall be examining in the consultations.
Mr. Leslie Spriggs: Is the right hon. Gentleman aware that the answer that he has given today to my right hon. and hon. Friends, that he is prepared to talk and talk again, is useless until he puts some real money on the table?
Mr. Fowler: There is over £1,100 million on the table already. I am not sure what the hon. Gentleman's definition of real money is.
Mr. Robert Parry: The offer to the ancillary workers is a miserable offer to the lowest-paid workers in the NHS. Is the Secretary of State aware that I have the wage slip of a NUPE member, who is a caretaker in a health centre in Liverpool which shows that after five and a half days' work on split duties, this person takes home less than £40 a week? Is this not disgraceful, when the judges and the generals received an increase of between 18 and 19 per cent.?
Mr. Fowler: The ancillary workers' pay is one matter being negotiated.
Mr. D. N. Campbell-Savours: This November, will not 350,000 Health Service workers be earning a gross wage lower than the eligibility level for family income supplement? Will the Minister give an undertaking that, whatever final arrangements are made, that number will be substantially reduced, and in the statement that he finally makes on the dispute will he tell us how many Health Service employees still remain below that level of eligibility?
Mr. Fowler: I will certainly do the latter. In his first question the hon. Gentleman was using the April figures before the increase. The situation is not as he states.
Mr. Stanley Cohen: Have not successive Governments, and particularly this one, traded on the dedication and commitment of the nurses and ancillary staff in the hospital service? Will the Minister assure us that the review body's recommendation will be implemented?
Mr. Fowler: The purpose of the review body is to ensure that no one trades on the loyalty of the nursing profession. We are trying to find a fair way to determine their pay so that there is no question of industrial muscle being used.
Mrs. Dunwoody: Will the Secretary of State now give an unequivocal undertaking that he will regard the review body's finding as binding in the same way as this Government regarded the findings of machinery set up to determine police pay?
Mr. Fowler: We cannot give such an undertaking. We must reserve the right, if there are compelling national reasons, not to accept the findings. That is the normal situation with review bodies.

Fisheries Council
4.1 pm
The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): With permission, Mr. Speaker, I should like to make a statement on the meeting of the Council of Fisheries Ministers held in Brussels on 8 November. I represented the United Kingdom, accompanied by my right hon. Friends the Secretary of State for Scotland and the Minister of State.
The Danish Minister told the Council that his Government were unable to accept the package of measures which had been proposed by the Commission and agreed by nine member States at the Council on 25–26 October, and specifically informed the Council that they required licences in the north of Scotland box, quotas of west coast mackerel and improvements in their quotas of cod, haddock and saithe in the North Sea. The United Kingdom and eight other member States informed the Danish Minister that there would be no way in which they would agree to change the agreement of 25–26 October. The Commission suggested talks with the Danish Minister on any matters outside the agreement that could enable the Danish Minister to approve the package.
At the conclusion of many hours of talks the Danish Minister informed the Council that no suggestions had been made that would enable the Danish Government to give their agreement. The Commission and all the nine other member States expressed their strong disappointment and disapproval at the Danish Government's attitude. Following these expressions of disapproval, the Danish Deputy Prime Minister, who presided at the Council, proposed a suspension to enable the Danish Government to consider their position further. The Danish Minister then informed the Council that his Government would consider approval of the package at a meeting tomorrow, 10 November, and would then tell the Commission whether they could approve the package agreed by the other nine member States.
I hope that the Danish Government will approve the package, but if they do not the Council agreed to resume discussions before the end of the month to consider what national measures would be necessary to implement so far as possible the package agreed by nine member States to conserve Community fishing stocks and to allocate them fairly between member States.
Mr. Norman Buchan: Two weeks ago we discussed the British Government's surrender, which is no longer in dispute. If the Minister does not accept what I say, let him read the chorus of disapproval from every British fishery organisation.
Mr. David Myles: Rubbish!
Mr. Buchan: That includes Austen Laing of the British Fishing Federation. We must now deal with the effects of that surrender.
Unfortunately, the statement is brief and leaves much unsaid. If the Danes continue to refuse to agree, precisely who will legally be involved in taking the necessary national measures? Will they be implemented by the other nine member States? Will the procedure be the equivalent of a majority vote, or will individual member countries undertake to police national measures?
The Minister said that if the Danish Government did not approve the package the Council would
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"consider what national measures would be necessary to implement so far as possible the package agreed".
What is the significance of "so far as possible"? Does it mean that the Minister is not capable of taking the practical and logistical steps to protect our fishermen? Why did he tell them two weeks ago that he could not protect them if they did not accept the deal? If he is talking about legal problems, will he spell them out?
May I assure the Minister that if he brings measures before the House to give our fishermen full protection, even under the inadequate deal that he has secured, he will have our full support?
What does
"talks with the Danish Minister on any matters outside the agreement"
mean? Were futher concessions suggested? If so, were they perhaps related to third country waters, or did they involve matters other than fishing?
The Minister mentioned the Danish Government's attitude. May I remind him that, unlike our Government's attitude, it is determined by the right of that Parliament to see Common Market measures before implementing them? To ensure that the contingency plans to protect our waters—about which he will presumably shortly be telling us—are made known to the Danes and others, do we not need an early debate in Government time?
Mr. Walker: This is not a case for a majority vote. As has frequently happened under a Labour Government and under this Government, national fishery measures are approved by the Commission. The measures for Danish territorial waters cannot be imposed on the Danish Government in those waters. Labour and Conservative Governments have always believed it right to adhere to the Luxembourg compromise. I would not participate in a vote on the issue.
I understand that the measures discussed by the Commission with the Danish Government outside the agreement included measures within the marketing regulation, for which the Commission has a management right, for example, on providing a penetration premium on mackerel, which would be of advantage to the Danish industry and also to our mackerel fishermen. For 1982 alone there was also an offer by the Norwegian Government of 2,000 tonnes of cod. Those matters could not in any way affect the principles of the package agreed to by the Nine.
Because of the views of our fishing organisations, I am sorry that the Labour Party is not doing more to suggest that it is correct for the Danish Government to agree to the package. If it did so, that would be in the interests of Danish and British fishermen.
The hon. Gentleman says that there is a lack of support from the fishing organisations for our efforts. I have spent the past 24 hours with the leaders of those organisations and have no doubt about their deep desire that agreement should be reached. I remind the hon. Gentleman of the resentment expressed by the president of one organisation about his—the hon. Gentleman's—performance. He stated:
"Our decision was not influenced by the promise of money but was made after carefully weighing the facts and assessing the consequences of alternative actions. To suggest otherwise"—
which the hon. Gentleman did—
"is a slur on the integrity of myself and my colleagues and is deeply resented."
Mr. Buchan: I was expecting that. I shall now quote what the director of the British Fishing Federation, Austen Laing, said about the deal:
"We have come out extremely badly indeed. … Our only real hope in distant waters is to expand the quotas available, but it is an extremely poor outlook."
He summed up the deal by saying that there was
"Nothing in it for deepsea men and there had not been all the way along."
Will the Minister tell us what contingency measures he is prepared to take? He has still not told us, and fishermen need to know. He will have read the letter from the Shetland council, which demands that the protection should be based on Shetland waters and not left to the capitals of the nine member countries of Western Europe.
Mr. Walker: As the hon. Gentleman wishes to quote Mr. Austen Laing, I am only too happy to do so. After the agreement he said:
"None of them should be allowed to obscure the great skill and nice judgment that Peter Walker and his ministerial colleagues have exercised."
He went on to say, accurately:
"The hand which he was obliged to pick up when he assumed office was a yarborough.
I hope that the hon. Gentleman will reflect carefully upon Austen Laing's words.
Mr. J. Enoch Powell: With regard to the national measures, as there will be no common fisheries policy, and presumably no Community legislation, will this country be legally entitled to modify those measures, as it thinks fit, in accordance with the interests of our fishing industry?
Mr. Walker: We have reached agreement with the nine member countries on the pattern of fishing that we think is sensible to conserve and therefore enhance fishing stocks and to provide British fishermen with fair quotas and access provisions.
We believe that the Commission and the nine member countries will agree to national measures that will enable us to keep to the spirit of that agreement.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to allow 20 minutes for questions. If hon. Members are succinct, we should get everyone in.
Sir Patrick Wall: Have we not been generous to the Danes already? If they do not accept the agreement and we have to take national measures, is it intended that they should be allowed to fish up to the quotas already allocated, or will they be banned from our waters altogether?
Mr. Walker: That is something that must be discussed at the next Council of Ministers. My view is that they should be allowed to fish within our waters the quotas that have sensibly been allocated to them. I have no desire to have hostilities or war of any description with Denmark over fishing.
My hon. Friend says that we have been generous to the Danes. My view and that of the Commission and the other eight member States is that what is on offer to Denmark is a fair reflection of its historic fishing pattern. I am certain that the acceptance of such a package would be to the benefit of Danish fishermen and that its rejection would be to their disadvantage.
Mr. J. Grimond: Is the Minister aware that there is some anxiety in my constituency about licences? People are worried about the size and number of boats to be licensed. Will the Minister make a statement about the number and size of boats that will be allowed to fish in the Shetland box?
I understood the Minister to say in his last statement that the measures agreed by the Nine would be enforceable against the Danes and that Danish fishing vessels transgressing would be liable to arrest. Will the Minister confirm that that is still the case?
Mr. Walker: There will be enforcement on Danish fishermen in all the European waters of the eight other member States. The measures would not be enforceable in Danish territorial waters.
The right hon. Gentleman knows better than anyone in the House that 80 per cent. of the fishing catch of the Shetland fishermen is within the 12-mile zone, which, except for one small area, remains exclusive under this arrangement. The Shetland area is the only area in Europe where there will be special licensing arrangements to conserve the fishing stocks of that area.
My right hon. Friend the Secretary of State for Scotland has already had considerable discussions with the Shetland people, and I know that he is only too willing to continue to do so and to provide all the facts and details required.
Mr. Robert Hughes: Does the Minister recall that in his last statement he said that the proposed agreement was intended to run for 20 years? Since we have no agreement, but only a number of national decisions, what is to stop other countries from ganging up against us next year, as we appear to have ganged up against Denmark?
Mr. Walker: I hope that at tomorrow's meeting of the Danish Government the package will be agreed to. They received a firm message from the nine member States and the Commission that that is what is hoped and expected. In the interests of our fishing industry, and of all those of Europe, I hope that there will be agreement shortly. If there is not and national measures have to be undertaken, they will be undertaken by the nine member States and the Commission in agreement. That is a much safer and more secure position than would have obtained previously. However, it is obviously not as safe or as good as having an agreement that will last for 20 years. That is why we are seeking an agreement.
Mr. David Myles: Will my right hon. Friend reaffirm that the package agreed by the Nine will be inviolable? If the Danes refuse to agree, will he ask our right hon. Friend the Prime Minister to raise the subject at the summit meeting later in the year?
Mr. Walker: Not only the United Kingdom Government, but the eight other member Governments, made it clear yesterday, both at the beginning and end of the meeting, that there was no possibility of undoing the package agreed by nine countries. Those nine countries have made considerable efforts to reach an understanding, and I do not believe that any of them would find it possible to change the principle and detail of the package.
We made it clear at the beginning of the meeting that there was no possibility of Denmark's having a quota for mackerel on the west coast or licences in the north of Scotland box, because it has never had any historical right to either of those.

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It was made clear to the Danish Government by the member States around the Council table that if the Danes blocked such an agreement it would almost certainly become one of the major issues at the Copenhagen summit at the beginning of December.
Mr. Donald Stewart: In the light of the Minister's self-satisfaction about the agreement, may I ask whether he has read last week's issue of Fishing News, where one sees the contrast between the two columns of what we wanted and what we got? Is he aware of the report that the Danes are fishing in areas that have not been allocated to them? Will he confirm that and say what action he will take?
Mr. Walker: Having recently read Fishing News, when the whole of its front page described a meeting that I had with the National Federation of Fishermens Organisations and gave great detail of what happened, though the subjects that it mentioned were in fact not even discussed, I do not place too much reliance on what I read in Fishing News.
Having spent the whole of yesterday with the leaders of the Scottish fishing industry, and having read the comments about the statesmanlike qualities with which they supported the agreement, I am only too happy—for purely party political reasons—that the right hon. Gentleman's views on the subject are so different from those of the fishing industry.
Mr. James Johnson: Is the Minister telling the House that there is no possibility of what many of us term "the CFP charade" fading out at the end of the calendar year? If it does, the Minister will need a much larger fisheries protection squadron. In that event, will he consider converting and using along our coasts some of the vessels that are lying in Hull?
Mr. Walker: Irrespective of what happens at the end of this year, we have obtained a Community enforcement procedure which comes into force on 1 January. That will apply whether or not there is full agreement, because the Danes have already agreed the enforcement procedure. That means that supervision within our territorial waters—that is, up to a 200-mile limit, or the median line—is the responsibility of the British Government. The duty of the Minister responsible for fisheries is to ensure that adequate vessels and aeroplanes are available so that the job is well done.
Mr. Robert Hicks: Will my right hon. Friend confirm that the Community of Ten agreed to conservation and associated measures such as supervision and policing? Irrespective of what transpires between now and January 1983, may we have an assurance that the measures will be introduced on that date and that they will involve the Commission's own input in terms of policing and enforcement?
Mr. Walker: Yes. I am pleased to say that when the British Government put forward a draft regulation, which became a Commission proposal, it was agreed that the date for enforcement should be either the date of a common fishing agreement or 1 January 1983. The measures will come into operation on 1 January 1983, irrespective of agreement being reached.
Mr. Robert Maclennan: I may have misunderstood the Minister's last answer. If national measures have to be implemented, will the restructuring package go through, or is that an integral part which falls if there is lack of agreement among the Ten? If we have to consider national measures, will the Minister reconsider specific licensing proposals for the Shetland box, because there is great anxiety that the exclusion of vessels under 80 ft will render the licensing system meaningless and ineffective?
Mr. Walker: Certainly. The countries that have licences in the north of Scotland box genuinely share our desire that the fishing stock there should increase, not decline. Therefore, in the management of that box we do not have to face a country that wishes to exploit the box or decrease fishing stocks. We shall discuss with licence holders sensible arrangements to ensure that the box continues.
Restructuring aids are part of the total package. I suppose that in the event of a total package not being agreed there could be discussions between member countries about whether individual aspects of the package, such as some of the third country agreements and the restructuring package, could be agreed in isolation. We shall look into that with our colleagues.
Mr. Kevin McNamara: Is the Minister aware that we prefer vessels to be used for fishing rather than protection, so that they can obtain food for people from the deep water? What compensation terms will he fix for the deep water fleet, which has lost heavily from the negotiations and the 200-mile extension, to ensure that ports such as Hull can maintain a viable deep sea fleet?
Mr. Walker: We shall have to examine the restructuring proposals, particularly in terms of the problems encountered by the long distance fleet. As the hon. Gentleman knows, the loss of the Icelandic waters was a considerable blow. Negotiations on the 200-mile limit were conducted in 1976 by a former Secretary of State for Foreign and Commonwealth Affairs.
Mr. Michael Brotherton: Does my right hon. Friend agree that if there is to be no majority voting in the Council, and that, if no agreement is reached with the Danes, there will be no common fisheries policy? In that case, will my right hon. Friend reaffirm the pledge given in the House by the Minister of State on 21 October that fishing up to our shoreline by foreign fishermen to the detriment of our industry would not be allowed?
Mr. Walker: Yes. I repeat that pledge. One of the important features of obtaining an agreement with the eight other countries is that there will be no difficulty in the Commission's approving national measures to ensure that proposals on access which have been successfully negotiated come into force on 1 January.
Mr. John Home Robertson: Unfortunately, but as many of us predicted, it seems likely that it will be necessary to enforce the protection of our fishing grounds. Does the Minister agree that that will cost money? Since a Community package is involved, will the Community foot the bill for that enforcement? Will the Minister say more about the legal position here and in other Community countries?
Mr. Walker: Enforcement is a matter for national States. We are happy to take on our responsibilities to ensure proper enforcement in British territorial waters.
Mr. Barry Henderson: Will my right hon. Friend assure the House that what he said briefly about 2,000 tonnes of Norwegian cod will have no adverse effect on east of Scotland fishermen, who are accustomed to fishing in Norwegian waters? Is my right hon. Friend aware that we warmly welcome his assurance that if the Danes do not agree to the policy tomorrow the Prime Minister will take up the matter at the summit? Does he agree that that must have serious implications for the long-term health of the Community?
Mr. Walker: I shall convey to the Prime Minister my hon. Friend's views about the importance of the summit. My hon. Friend is talking about a quota of cod in a joint stock in the North Sea that belongs to the Norwegians. I understand that yesterday the Norwegians said that for 1982 they would transfer 2,000 tonnes of cod to the Danes if that would help the settlement. If that had been done, it would have made no difference to the quotas of cod agreed in the package that will apply for the next 20 years.
Mr. Gavin Strang: Is the Minister aware that the sell-out of the Shetland interest is unacceptable? Has he read the letter sent to hon. Members by the convenor of the Shetland council, which describes the proposals as disastrous? May we have an assurance that the right hon. Gentleman will not seek to implement the proposals in relation to Shetland and Orkney and that the indigenous fishing industry will be adequately protected, because it is crucial to the Shetland economy and will be necessary long after North Sea oil has run dry?
Mr. Walker: I note the hon. Gentleman's views. I suggest that he also takes the trouble to read the letter sent by my right hon. Friend the Secretary of State for Scotland, commenting in detail on the Shetland position. Before the hon. Gentleman comes to a conclusion he should read that letter carefully. It shows that what we negotiated for the Shetland Isles is probably better than anything negotiated for any other part of Europe. Before the hon. Gentleman leaps to make suggestions on the basis of a letter from the convenor, he should consult some Scottish fishermen about what they think of the suggestions.
Sir Albert Costain: Will my right hon. Friend tell the Danish Government how much their agriculture depends upon housewives liking Danish bacon? Will he make it clear that if they stop the British housewife from obtaining fish she may go sour on the taste of bacon?
Mr. Walker: It is not for me to comment adversely upon our imports of foreign bacon, but I am pleased to say that the new Charter bacon campaign in Britain promoting a much better quality of British bacon already gives the Danes enough problems.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call the four hon. Members who still wish to ask a question.
Mr. Austin Mitchell: Is there any danger that British fishermen will be stopped from fishing in Norwegian waters, either because the Commission cannot now agree to allocate catches there or because the
442
Nowegians will not enforce Commission measures against the Danes? What is the legal position of national conservation measures? I understand that national measures can be taken only if they are non-discriminatory. If a Danish skipper is brought before a British court on an access charge, will he be able to argue that the measures discriminate against the Danes or, as a second defence, that Community law supersedes British law and that the only Community law on access after 1 January is equal access up to the base line of the territorial sea?
Mr. Walker: No. That is not the view of the Commission, the British Government or the Danish Government, who have circulated advice to their parliamentary committee which makes clear their judgment of the legal position. Our view, and I think the Commission's view, is that if a Danish vessel went against a Commission-approved national measure it would be subject in British courts to a £50,000 penalty and the confiscation of fishing gear. That would be a legal right.
Sir Peter Mills: Will my right hon. Friend bear in mind that Conservative Members will fully support him if he has to take national measures? He can do nothing else, even though it may be costly. In considering national measures, will he bear in mind the problem in the South-West of the Spanish boats that are registered in that area? That may be a way for the Spanish Government to get round the common fisheries policy.
Mr. Walker: I am grateful to my hon. Friend for his support. What he said about Spanish vessels obtaining licences as part of the British fishing entitlement is of deep and real concern to me. I am discussing with the Commission and other countries in the Community what action can be taken speedily on this problem.
Sir Walter Clegg: May I take up with my right hon. Friend the question of restructuring, which has already been mentioned? It was an integral part of the package which appealed to the fishermen. If it is not possible to get the money from Europe if we take national measures, will the Government then step in to make sure that the fleet is properly restructured?
Mr. Walker: Obviously, I hope that the restructuring package will be carried out on a European basis. I know that my hon. Friend is aware of the grants that are involved, and 50 per cent. of those grants would then come from Community financing. I hope that, irrespective of what happens in the next few weeks, we can reach agreement in that respect. Clearly it is the duty of the British Government to consider and decide what is necessary on restructuring.
Mr. Albert McQuarrie: I am sure that the House will be grateful to my right hon. Friend and his colleagues for the resolute stance that they have taken in the European Economic Community to ensure that the package goes through. Does my right hon. Friend agree that if the Danes do not accept the package tomorrow they should be advised in no uncertain fashion that we have the necessary protection vessels to secure the waters around our shores and that, if necessary, we will use gunboats, as my right hon. Friend the Secretary of State for Scotland said, to keep them away from our waters?
Mr. Walker: I hope that the Danish Government will agree to this package tomorrow. I have no desire whatever to see gunboats operating against a close friendly country

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such as Denmark. We have a perfectly legal right to ensure proper enforcement and I assure my hon. Friend that that will happen.
Mr. Mark Hughes: Will the right hon. Gentleman assure us that the Community, not the British taxpayer, will pay for the additional Nimrods and gunboats? Secondly, can he assure the House that under the terms of the Treaty of Accession—I am being fairly precise—and the Luxembourg compromise this House can take decisions which will not be referred to the European Court about the validity of any action that he may wish to take or introduce in this House to confirm British fishing rights? Otherwise, the proposals will be empty. We need a clear statement that we are empowered to take the necessary legal measures and that they will not be subject to the authority of an extra-British court. Will he urge on his colleagues the need to have a debate on this matter?
Mr. Walker: I should welcome a debate at any time. Now that the basic negotiations have been completed there is much that I should like to say in a debate in this Chamber about what has taken place throughout the negotiations.
The hon. Gentleman's first question was about enforcement in territorial waters. That is the responsibility of national Governments. This Government is happy to accept that responsibility, and we expect other countries to accept their share of responsibility.
The answer to the hon. Gentleman's comment about the legal position and the European Court is that any person, organisation, Government or group can refer anything to the European Court. That has always been so, and nothing has changed in that respect. I am convinced that the Commission will approve national measures along the lines of the agreement of the Nine. That will make things completely legal.

Britoil
4.35 pm
Mr. Merlyn Rees: On a point of order, Mr. Speaker. My point of order concerns the imminent sale of Britoil shares, the sale of national assets. The Department of Energy originally published an order for the transference of shares in Britoil from BNOC to the Secretary of State. We prayed against the order, and found that the Government could not proceed that way. We therefore tabled a revocation motion—which I confess was new to me—in good faith, and that motion was accepted.
However, the Department decided that no revocation motion is valid. So there is no procedure under the Act by which we can raise the matter—the end of the matter, as it were—arising from the legislation in the House, despite the assurances—general assurances, I accept—that were made about accountability during the passage of the Bill.
As you may recall, Mr. Speaker, I asked for a Standing Order No. 9 debate. I raised the various issues, which I shall not go into now, which should be reported to the House, leading to a discussion before the sale of the shares. In your wisdom, you did not accept that. The following week—on 18 November, I think—the Secretary of State made a statement. He listened to us, but he gave us no information about the issues and the method of sale. The final decision was not delayed. There is a written question today, which to some extent prompts me to raise the matter now, to ask the Secretary of State for Energy whether he is
"now able to make a statement about the method of sale of shares in Britoil and the timing of the sale".
Because of its nature and the manner in which a written answer is reported to the House, we do not regard it as a proper method of parliamentary accountability.
I understand from press circles that tomorrow there is to be a press conference, when all will be revealed. The Minister and the chairman of Britoil will talk to the press. Whether there is a press conference is a matter for the Secretary of State, but information on a matter as important as this, the sale of national resources, should be given to the House. A full statement should be made to the House, giving all the information that will be made available to the City tomorrow morning, or whenever it is. This is a matter of vital concern for the people of this country, and this House should be given the information. We cannot wait for a press conference and read the information in the newspapers. This House should have a full statement about the sale of Britoil. The way in which the Secretary of State is proceeding does not meet the needs of the House. I therefore seek your advice, Mr. Speaker, about how to get the information which at the moment will be given only to the press.
Mr. Speaker: The right hon. Gentleman has outlined the problem.
The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen)rose—
Mr. Speaker: Does the Leader of the House wish to catch my eye?
Mr. Biffen: Within the rather narrow constraints of points of order procedure, it may help if I say that my right hon. Friend told the House in October that the flotation of Britoil would take place this month, if market conditions permitted. I recognise the anxiety that is felt by right hon.

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and hon. Members about being kept informed of developments, as exemplified by the remarks of the right hon. Member for Leeds, South (Mr. Rees), and I can tell the House that my right hon. Friend the Secretary of State for Energy intends to make a further statement tomorrow, and certainly ahead of any press conference.
Mr. Speaker: The right hon. Gentleman will not expect me to say any more.

Statutory Instruments, &c.
Mr. Speaker: By the leave of the House, I shall put together the Questions on the five motions relating to statutory instruments.
Ordered,
That the Notification of Installations Handling Hazardous Substances Regulations 1982 (S.I., 1982, No. 1357) be referred to a Standing Committee on Statutory Instruments, &c.
That the Police Pensions (Amendment) Regulations 1982 (S.I., 1982, No. 1151) be referred to a Standing Committee on Statutory Instruments, &c.
That the Social Security (Claims and Payments) Amendment (No. 2) Regulations 1982 (S.I., 1982, No. 1344) be referred to a Standing Committee on Statutory Instruments, &c.
That the Social Security (Unemployment, Sickness and Invalidity Benefit) Amendment (No. 2) Regulations 1982 (S.I., 1982, No. 1345) be referred to a Standing Committee on Statutory Instruments, &c.
That the Medical, Nursing, Dental and Veterinary Qualifications (EEC Recognition) Order 1982 (S.I., 3982, No. 1076) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Biffen.]

Orders of the Day

  Debate on the Address
  [FIFTH DAY]
  Order read for resuming adjourned debate on Question [3 November],
  That an humble Address be presented to Her Majesty, as follows:
  Most Gracious Sovereign,
  We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which your Majesty has addressed to both Houses of Parliament—[Sir John Eden.].
  Question again proposed.

  Public Enterprise
  Mr. Speaker: For today's debate I have selected the amendment in the name of the Leader of the Opposition.
  4.39 pm
  Mr. Stanley Orme: I beg to move, at the end of the Question, to add:
  But humbly regret the absence from the Gracious Speech of any measures to meet the crisis facing vast sections of British industry, in particular steel; condemn those proposals for British Telecommunications and British Shipbuilders which continue the policy of stripping the taxpayer of public assets by selling them at knockdown prices to private interests and the introduction of private profit replacing public service in the generation and supply of electricity, which will have a disastrous effect on employment in these crucial areas of British industry, and add to the grievous toll of mass unemployment which has been brought about by deliberate Government policies; and reaffirm the next Labour Government's commitment to re-acquire at the earliest opportunity the shares of denationalised concerns by paying exactly what the Government received for them.
  The debate is taking place against a gloomy industrial background. British industry, in particular its manufacturing sector, is in crisis. Since the Government came to power manufacturing output has fallen by one-seventh and employment has been cut by 1½ million—over one-fifth.
  Conservative Members are fond of quoting improvements in productivity as a sign that all is well in the real economy. What nonsense. If BP and ICI were the only firms left, productivity would still be higher. So what? It takes the logic of a Dr. Pangloss to secure a reduction in manufacturing jobs of 2,000 a day as a stunning policy success.
  The trends are continuing. Manufacturing output is below the level of a year ago and the CBI has stated publicly that it sees no sign of recovery. How does the dogmatic sale of national assets contribute to a reversal of the economic disasters of the past three years?
  A buoyant manufacturing sector is vital to the economy, yet all the Government are doing is changing the ownership of assets at prices which, no doubt, will be appealing to their friends in the City. They are not getting to grips with curing the downward spiral of the manufacturing sector, on which many services, such as transport, depend. The manufacturing sector is a multiplier. Its effects are dispersed to the benefit of the whole economy. Until recently it contributed to the balance of payments, enabling us to import food and fuel. It is the engine room of growth.
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  A fast-growing manufacturing sector is associated with a fast-growing economy, and vice versa. It is no surprise that the disastrous performance of the real economy over the past three years has gone hand-in-hand with the massive fall in manufacturing output.
  Let me underline the situation. Next year the engineering industry will be taking on only 7,000 apprentices and technicians. In 1974, it took on 30,000 and in 1978–79 23,000. When an upturn comes—however much the Government have delayed it—where are the skilled workers being trained to produce the goods within the British economy if they are not to be sucked in with imports? Only 7,000 technicians and apprentices are being trained throughout the British engineering industry. That is a disgrace.
  We must judge the Government's industrial measures in the Queen's Speech against that background. The Chancellor's statement yesterday goes no way towards resolving the problem. I have no doubt that the Secretary of State will refer to the further reduction of the national insurance surcharge. He will tell us that he has given industry £700 million. In fact, he has taken back £175 million in national insurance contributions. According to my calculation, the resulting improvement in labour costs will be ½ per cent. compared with a 3 per cent. loss in our competitiveness over the past three years. That is the sum total of the Chancellor's proposals.
  I turn now to the proposals in the Gracious Speech to privatise or denationalise—whichever term one prefers—British Telecom. Incidentally, that measure is not to be found in the Conservative manifesto of 1979. Conservative Members might think that that is interesting. It means that the largest measure of privatisation in Britain has not got a mandate from the country.
  British Telecom, and its predecessors, has been built up over many years by the public for the public. It has net assets of well over £10 billion, and possibly over £15 billion. It is difficult to assess them because they have not been on the market as such. All those assets are publicly owned. British Telecom does not receive any grant or subsidy from the Government. It has been profitable for the past seven years. All its loans from the State are at market rates of interest. In no sense whatever is BT a burden on the taxpayer. On the contrary, all the profits earned by the corporation are ploughed back into the business, except when the Government insist on a special payment to the Treasury. What is wrong with that? How will the Government's proposals improve matters?
  Shareholders of a privatised BT would expect it to invest in only high profit areas of the network in order to obtain the greatest possible return so that high dividends would be available. That must surely result in substantial reductions in the service offered to the low or non-profit sections of the business. Therefore, the services most under threat would be in the rural areas, public call boxes, the extension of the telephone into the homes of those currently without and residential call charges outside peak hours. I hope that the Secretary of State will answer the points that I am making.
  It is unlikely that the benefit of new technology will be extended to those areas of the United Kingdom which are not heavy users of telecommunications services. Therefore, privatisation will prolong the existence of two nations—those with and those without a telephone connection. That is socially divisive in an age of information technology.

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  A large question mark hangs over the future of the 235,000 employees of BT. They are not satisfied that their pension rights are fully and adequately protected, because if BT is privatised it will reflect the values, including pension arrangements, of the private sector. Also, job security is threatened. My right hon. Friend the Member for Chesterfield (Mr. Varley) will deal with that aspect in more detail.
  The future of BT is also linked to cabling, which again could be developed through a publicly owned network. BT's proposal for a switched multi-star configuration with the maximum use of optical fibre from the beginning is the most sensible. The star structure is being developed in Japan and France. I ask the Secretary of State for Employment what is so funny about that.
  The Secretary of State for Employment (Mr. Norman Tebbit): It is clear that the right hon. Gentleman does not have the remotest idea of the meaning of the words that he is reading.
  Mr. Orme: Coming from the Secretary of State for Employment, that is a bit thick.
  Mr. D. N. Campbell-Savours: The right hon. Gentleman is a bit thick.
  Mr. Orme: Some of us have gone into these matters in detail with those in BT. If the right hon. Gentleman does not understand the issues, we do.
  Sweden's public service is a world leader and France is investing enormously in public telecommunications. BT has expanded as a public corporation with stability and assurance. However, the United States has run into a crisis in many areas with its privately owned systems.
  There is mounting criticism against the Government's proposals, not least from the Director General of the NEDC, Mr. Geoffrey Chandler, who has asked the Government to make a clear statement giving priority to public and productive industry. An editorial in the Financial Times claims that the Government have been over-hasty with privatisation. Why, therefore, are the Government going ahead? Who gains from privatisation? The Conservatives say that to denationalise is to put industry in the people's hands. But what are the facts?
  Shares in British Aerospace were sold at 150p, but as soon as they reached the Stock Exchange they were traded at 171p—an immediate speculative gain of 14 per cent. The Government sold 50 per cent. of Cable and Wireless shares at 168p each, and when they reached the Stock Exchange they were traded at 203p—another immediate profit of 21 per cent. There was the scandal of Amersham International, the shares of which were over-subscribed 23 times. There was a loss to the public purse of £23 million. Will the proceeds from the sale of BT shares finance further investment in BT?
  The Secretary of State has received a letter from Mr. Glynn, the general secretary of the Society of Post Office Executives. The letter refers to words of the right hon. Gentleman that were quoted in The Times:
  "It is proposed that BT as an integral organisation should offer shares on the market to the public so that the public can then finance more of the investment in BT, rather than it should fall on the telephone subscribers as it does at the moment."
  Mr. Glynn's question to the Secretary of State, which I underline, is whether that means that the proceeds from the sale of the shares—51 per cent. to the public and 49 per cent. to the Treasury—will finance investment in BT.
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  The Labour Party rejects the Government's privatisation proposals. We shall reverse the policy and return the industry to a democratically controlled publicly owned British Telecommunications. Shareholders will be repaid precisely the amounts that were paid for the assets at the time of sale. We shall ensure that no speculative gains are made at the nation's expense.
  Mr. Michael Morris: Where is the democratic control in British Telecom at present?
  Mr. Orme: The council that represents consumers in the Post Office is effective, but it is to be abolished by the Secretary of State.
  The crisis in the British steel industry continues unabated and there has been no response from the Government so far. I reiterate the Labour Party's firm view that a further decline in British steel manufacture to below 14·4 million tonnes would be unacceptable. The five major units of production must be maintained. We cannot contemplate another Consett or Corby. My Scottish colleagues have produced an analysis of what will happen in the Ravenscraig area if the plant were to close, and the reverberating effects on the whole of Scottish industry. The same consequences would be felt in Scunthorpe, Port Talbot, Llanwern and Teesside.
  What are the causes for the decline? I have a letter from the British Steel Corporation in which it clearly states that it is of the opinion that the lack of demand and the imports coming into the United Kingdom are two of the basic and damaging factors facing the steel industry. The private sector is unable to survive the import penetration, and it is BSC's largest customer. After major closures. a 20 per cent. cut in capacity, tens of thousands of redundancies, a major capital reconstruction and the MacGregor plan, the steel industry is again in desperate straits, thanks to the Government's recession and their failure to act against imports.
  The Government cannot stand by and watch the crisis worsen. They have a responsibility to act. We need reflation in the industrial sector of the economy and we need action on imports now. The high value of the pound is another crucial factor which is having an effect on steel. I have a letter from the corporation, dated 16 September, which states:
  "In the long run, our principal concern continues to be the weakness in the main steel using industries in the UK … In the short term, however, our principal concern is not so much the level of steel consumption but the increasing penetration of imports into this country."
  We make the following demands of the Government. First, there should be a ban on all steel products sold at dumped prices. Secondly, there should be an across-the-board freeze on imports while urgent negotiations are held to arrange new controls. Thirdly, we should place a ceiling on steel imports which in no circumstances can be exceeded. We have seen what our American competitors have done. We have seen how they have shut the door. There is a strong rumour that the United States will extend the new measures on certain steel imports to others that are not part of the newly signed pact. I hope that the Secretary of State will comment on that. There is also the effect that cash limits are having on the British Steel Corporation. It is clear that the limits should be extended.
  In the Scottish context there is the threat hanging over Ravenscraig, to which I have already referred, and the crisis at British Aluminium's Falkirk rolling mill. The

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  disgraceful feature of the crisis is that when BACO closed the Invergordon smelter at the end of 1981 the Government gave it a gift of £21 million, which they justified as being needed to protect jobs elsewhere, especially at Falkirk. However, the money was not tied to the Falkirk operation. We warned the Government that the Falkirk plant would remain in jeopardy. The Government have wasted £21 million of British taxpayers' money. We demand that they make every effort now to remedy this gross error and ensure that the Falkirk rolling mill remains open.
  There is a reference in the Gracious Speech to privatisation of the shipbuilding industry. The shipbuilding and aircraft building industries are crucial to our economy and employment. Those two basic industries were saved by public ownership under the previous Labour Government. Privatisation has not helped the aircraft industry, which is now in crisis. Yet the Government intend to go ahead with selling off the British shipbuilding industry, or part of it, which is fighting to maintain itself.
  Let us examine the facts. British Shipbuilders has been in operation for five years. During that time the industry has been through the most traumatic change. Since 1977, nine yards, 38 building berths, and three engine-building facilities have been closed and 22,000 jobs have been lost. Strikes in the industry are few. Good industrial relations appertain in the shipbuilding industry. We believe that the public ownership of the industry provides the only means of achieving, in the first instance, survival, and eventually recovery. Any break-up would destroy the national agreement and with it the unions' commitment to assist the industry through its crisis.
  Through consultation with British Shipbuilders the unions are aware that the present market in shipbuilding is the worst experienced in living memory. The uncertainty that would result from further legislation would affect the morale of the work force and the confidence of the customer. The unions have also expressed outright opposition to any form of denationalisation which will put at risk an industry which has made great progress in the past few years, and with it the jobs of 65,000 workers in areas where unemployment is already far too high.
  The privately owned ship repairing industry, which was left out of public ownership, has suffered in the recession. The private sector now employs fewer than 2,800 people, compared with 9,000 only three and a half years ago.
  The shipbuilding industry is linked firmly to the defence equipment industry, which involves public money which should continue to be invested in a publicly owned industry.
  Therefore, I should like to put forward to the Secretary of State and to the Government the following proposals. There should be no privatisation or hiving-off of British Shipbuilders or any part of it. There should be increased Government aid in the short term. A scrap and build programme should be introduced. An expansion of industrial democracy within British Shipbuilders should be carried out. British shipowners, Government Departments and nationalised industries must buy British. What a battle we had over the "Atlantic Conveyor." Had we not received that order, many of the yards in the North-East would have been devastated by lack of orders. There should be a national maritime policy. The Opposition propose the maintenance of the real value of the intervention fund at
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  the 1978–79 level and its extension to cover offshore platforms. These issues are relevant to the shipbuilding industry in the United Kingdom. To move towards privatisation and to sell off the profitable parts of the industry at this time is not in the interests of the British economy or of British Shipbuilders.
  Mr. Alan Haselhurst: Will the right hon. Gentleman explain how the ownership of a particular industry affects the demand for the goods that that industry supplies?
  Mr. Orme: The ownership of the industry and the attitude of the Government to their ordering policy have a direct effect. If this industry is broken up, we shall be left without a British shipbuilding industry. A few years ago we were providing 30 per cent. to 40 per cent. of world shipping. That figure is now 1 per cent. or 2 per cent. We brought the industry under public ownership to save the British shipbuilding industry. That is the basis of the Opposition's argument.
  I turn now to British Aerospace which, in a sense, is linked to British Shipbuilders. British Aerospace is in an impossible position. To meet the civil and defence requirements, a great deal of capital is required. Although the industry is part privatised—perhaps the hon. Member for Saffron Walden (Mr. Haselhurst) will take note of this point—money is not forthcoming from the market. The only way that the industry goes forward is by substantial launch aids from the public purse. If we want to have and protect basic industries, we must pay for them. The private sector has not in the past helped those industries to survive.
  Under full public ownership the industry was profitable, owing much of that profit to sales to the Government for military and civil aviation purposes. However, as the Public Accounts Committee pointed out, the sale to speculators meant a loss of £22 million to the taxpayer.
  Will the Government give unqualified support to the production of the A320 airbus? Their support is essential to maintain an airframe industry in Britain. As hon. Members will know, the A320, as proposed, is a 150-seat short-medium haul aircraft of a completely different type which will use half as much fuel per seat as the generation of aircraft currently in service—the DC9, the Super 80 and the Boeing 737. It is estimated that there is a market for more than 3,500 of this type of aircraft. So far, only Air France has placed an order—for 50 A320 aircraft.
  A new, modernised turbo-prop engine will have to be designed for the aircraft. Who will make the engine? Provided that the decisions are taken quickly, the A320 could be off the assembly line by 1987. But at the moment there is nothing on the drawing board, and the next two years are important for the survival of the airframe industry in the United Kingdom. If this is to be a European project, it will not be sufficient for Britain to manufacture only the wings, which would be 20 per cent. of the total aircraft. That would not be sufficient to maintain full employment. Therefore, the Government must clearly state their policy and put their support behind this civil aircraft.
  I turn now to the P110, which has been renamed the agile combat aircraft. Will the Government give the go ahead? I understand that there is great frustration within the industry. When the management of British Aerospace visits the Department of Industry it is asked question after

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  question, but no decisions have been taken. The industry is pressing for some firm answers from the Government. The Opposition wish to know today what action is being taken.
  Mr. Robert Atkins: As the right hon. Gentleman knows, this point affects my constituency and others of many of my hon. Friends. Can he be more explicit about the problems that the industry is apparently having on the agile combat aircraft? This morning I spoke to the project director, who assured me that he is satisfied with the progress being made in his discussions with the Ministry of Defence. From where does the right hon. Gentleman receive his information?
  Mr. Orme: My information comes from the management of British Aerospace, which is dissatisfied with the shilly-shallying of the Departments of Industry and Defence. I wish to place that firmly on record.
  Will the Secretary of State say anything more positive about the future forward ordering of Nimrod aircraft, which affects the constituents of the hon. Member for Preston, North (Mr. Atkins) and my hon. Friend the Member for Preston, South (Mr. Thorne)?
  I have several questions about the motor industry—in particular, British Leyland. I was pleased to see that British Leyland increased its market share, but unfortunately it missed the 18 per cent. for which it had planned. This percentage is a dangerously low share of the market, and in our opinion every effort should be made to increase it. One major factor is imports. When will the Government stop talking about this and take some action?
  The Spanish situation is completely unacceptable. The tariff for Spanish cars coming into the EEC is 7 per cent., but the tariff for cars going into Spain is 30 per cent. If Spain joins the Market next year, it will be allowed 10 years to phase out those tariff arrangements. That is completely unacceptable. That is only one example. I could point to others in Europe, Japan and America.
  The viability of British Leyland is crucial. I notice that Mr. Rhys, the permanent adviser to the Select Committee on Industry, has said:
  "BL is now too small for the economies of scale needed for a company trying to produce a full range of vehicles."
  Any attempt, therefore, by the Government to break up BL and to sell off the so-called profitable parts would mean the end of a British independent motor vehicle producer. The effects of this upon imports, motor vehicle accessory producers and the use of British steel would be catastrophic. We ask the Government to desist from any mad venture in this direction.
  The Gracious Speech is not relevant to our industrial problems. We need investment, we need to be competitive and we need to increase productivity, but these should be developed in the interests of the community as a whole, not of a small section that hopes to gain from the hiving off of any profitable areas.
  The Government are on the rampage with privatisation and denationalisation. They have done nothing to improve the efficiency of industry or the well-being of people who work in it. Their pursuit of income tax cuts to be financed by selling off our industrial base shows just how shabby they are. They simply will not face the real problems in our production industries—declining output and increasing unemployment. Instead, they seek to deflect attention from their disastrous economic policies by cheap gimmicks to line the pockets of their friends in the City.
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  The nation needs to get industry moving again, and we want to see the benefits dispersed in society to those who have earned them and to those who need them.
  5.14 pm
  The Secretary of State for Industry (Mr. Patrick Jenkin): We have listened to the right hon. Member for Salford, West (Mr. Orme) with interest, and I shall endeavour to reply to some of the points that he made.
  I am intrigued that the right hon. Gentleman made so little reference to the amendment. I must draw the attention of the House to one of the most remarkable propositions ever to have found itself in an amendment moved by the official Opposition. The long and wordy amendment, with its criticism of privatisation
  "and the introduction of private profit replacing pubic service"
  says that it
  "will have a disastrous effect on employment in these crucial areas of British industry".
  That is a strange proposition, because it appears that the Opposition are now seeking to support public ownership and nationalisation, which has as its prime purpose the creation or safeguarding of jobs.
  Mr. Orme: Yes.
  Mr. Jenkin: I am glad to have the right lion. Gentleman's endorsement of that. If that is the case, nationalisation has been an even bigger failure than any of us might have guessed. Has the right hon. Gentleman forgotten that under the last two Labour Governments about 200,000 jobs disappeared in the nationalised coal mining industry; that about 40,000 jobs disappeared in British Steel under the Government of which he was a member; that in British Rail three jobs out of five have disappeared in the last 20 years—
  Mr. Dick Douglas: What was the level of unemployment then?
  Mr. Jenkin: —or that by next year two jobs out of every seven in British Airways will have gone; or that of the 87,000 shipbuilding jobs that existed when the industry was nationalised, only 65,000 remain today?
  If one of the purposes of public ownership is to preserve employment, the right hon. Gentleman has kicked a remarkable own goal. If the purpose of nationalisation is to generate employment, the right hon. Gentleman had better explain to private industry how it is expected to meet the higher costs and charges that that implies. If what private industry says to him is anything like what it says to me, he will know that private industry is convinced that it has been in the public services, which do not face the same commercial disciplines as the private sector, that overmanning and inefficiency have been rife.
  If that is what was said, presumably the right hon. Gentleman retorted "Well, what do you expect? Overmanning is what public ownership is meant to be all about." What else does the amendment mean if it does riot mean that? This is one of the most astonishing propositions for any Opposition to commit themselves to, and the right hon. Gentleman talked more rubbish today than usual.
  Mr. Reg Race: Will the right hon. Gentleman give way?
  Mr. Jenkin: I have only just started, and perhaps the hon. Gentleman will allow me to continue.
  Even within the Labour Party, many people now understand that the debate about jobs must be a debate

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  about making British industry efficient and competitive. It should be a debate about the direct link between satisfying customers and safeguarding jobs.
  Crucial to that is the defeat of inflation.
  "Inflation is the mother and father of unemployment".
  Those are the words of the right hon. Member for Cardiff, South-East (Mr. Callaghan) when he was Prime Minister. Does the right hon. Member for Salford, West agree with his right hon. Friend? Why did he not mention the subject and welcome the continuing and substantial fall in inflation as necessary for the safeguarding and creation of jobs? Why did he say nothing about the fall in interest rates?
  We had a catalogue of demands for help for one industry after another. The right hon. Gentleman talked about a maritime policy and massive help to the aircraft and shipbuilding industries. However, there was no sign that he understood that the fall in interest rates of 7 per cent. since last autumn has on the CBI's own estimates reduced company finance charges by between £1½ billion and £2 billion.
  The right hon. Gentleman said that I would mention the national insurance surcharge. Indeed I will. Perhaps the right hon. Gentleman is a little sensitive as the national insurance surcharge was Labour's tax on jobs. It was imposed by Labour and increased by Labour. It is utter humbug for the Opposition to demand that we cut it faster. It was their contribution to increasing the burden on industry and adding to the problem of unemployment. When yesterday's announcement by my right hon. and learned Friend the Chancellor takes effect, the Government will have cut the national insurance surcharge by 2 per cent. which is worth £1 billion to private industry this year, 1982–83, and £1½ billion in 1983–84.
  The right hon. Gentleman mentioned energy costs. He will know that the Chancellor has announced help worth £250 million for industry in the past two Budgets. Energy costs have been reduced by £250 million, national insurance surcharge has been reduced by £1½ billion and interest rates have been reduced, saving nearly £2 billion. That is what British industry has been asking for and it is what the Government are doing. I would listen more sympathetically to the right hon. Gentleman's pleas for help for industry if the Labour Government's record had not been so dismally awful.
  Mr. Peter Shore: Perhaps the right hon. Gentleman will answer what his right hon. and learned Friend the Chancellor found it so difficult to answer yesterday. Taking into account the measures that he has just announced, is British industry more or less internationally competitive? Does he agree that we are 36 per cent. less competitive than we were three and a half years ago? If so, what will he do about it?
  Mr. Jenkin: I shall deal with competitiveness later.
  Mr. Shore: It is an important matter.
  Mr. Jenkin: I agree.
  What of the friends of the right hon. Member for Salford, West in local government? I am surprised that when talking about the costs that fall on industry he did not mention rates, as they are one of the biggest taxes paid by industry. Almost without exception, the highest rates in Britain are imposed by councils in which Labour
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  councillors have a majority. In South Yorkshire, Teesside, the West Midlands and inner London, the burden of rates is destroying jobs. If the right hon. Gentleman doubts that he should ask the unemployed in Sheffield, Middlesbrough or Sandwell.
  Mr. Orme: What about the Government's reduction of rate support grant which has thrown the burden on to local taxpayers?
  Mr. Jenkin: That has been the case only if local authorities do not abide by their spending targets. The great majority of councils do abide by them. It is only a small minority of Labour-dominated councils that are flouting them and destroying jobs through high rates. I hope that we shall hear no more from the right hon. Gentleman about Socialism's contribution to safeguarding or creating jobs.
  It is customers who create jobs in industry, whether public or private. The important point is how British industry can meet the needs of British customers and respond effectively and quickly to changes in the market place. It is against that background that we must ask how the nationalised industries can be organised best to help the country earn its living.
  We should stand back for a moment and examine nationalisation's record in Britain. There may be one or two exceptions but I doubt whether many Opposition Members now believe that the hopes for nationalisation that were held out by the post-war Attlee Government have begun to be fulfilled. The public do not think so. According to a recent national opinion poll, only 16 per cent. believe that nationalisation offers any way out of our difficulties. Even among Labour voters only 38 per cent. support nationalisation. Taxpayers know that nationalisation has been a millstone around their necks.
  The cost of capital write-offs and grants since the Second World War has been a staggering £40,000 million in today's pounds. In the past seven years alone, £8,000 million has been spent on grants and write-offs to the nationalised sector.
  As for the idea of some starry-eyed Socialists who in the dim and distant past used to believe that nationalisation would make people feel that they had a stake in those industries, how many of the right hon. Gentleman's constituents believe that they own the CEGB or have shares in the British Transport Docks Board, the British Airports Authority or the North of Scotland Hydro-Electric Board? Any hope that those industries will become more responsive and accountable to the public than privately owned companies have been shattered by experience.
  Many conscientious and hard-working people are employed by those industries. They strive to do their best—there can be no question about that—but the system is against them. State control and ownership stifles the enterprise of management and imposes a burden on the taxpayer. Moreover, it often alienates customers by its bureaucratic inefficiencies. No one should accept that system uncritically. On the contrary, it must be changed.
  I find it puzzling to listen to lofty pronouncements, whether from the vicar's tower or from the Front Bench below the Gangway, that where the boundary between public and private industry lies today, there it must remain for ever.
  To argue that the problem is only one of management and that ownership is irrelevant ignores three fundamental

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  weaknesses in the public trading sector. The three weaknesses are monopoly, finance and accountability. None of them is primarily a question of management. They are all questions of ownership.
  Anyone who argues in the light of nearly 40 years' experience that there must be a way of managing State monopolies that will increase their efficiency, satisfy their customers and yield a return on the taxpayer's investment instead of being a burden on the taxpayer must believe in fairies. Successive Governments have tried. Some of the ablest business men in the country have been put in charge of nationalised industries and they have tried. There have been any number of White Papers, cash limits, financial targets, required rates of return and cost objectives. Every device has been tried and none has solved the fundamental problem of the State industries. Nor can they, because the fundamental problem remains—State monopoly, financed by the taxpayer and nominally accountable to Parliament through Ministers. The system has failed. Are we to sit back and do nothing about it? That is what the right hon. Member for Salford, West suggests. That is what the Social Democrats suggest.
  Mr. David Penhaligon rose—
  Mr. Jenkin: I shall not give way unless there is a difference of view between the hon. Gentleman and the right hon. Member for Salford, West.
  Mr. Penhaligon: I should like to point out that the Government have enjoyed quite a lot of support from the Liberals for the break-up of monopolies. I do not understand how British Telecom will be any less of a monopoly after the proposed legislation than it was before.
  Mr. Jenkin: I understand the hon. Gentleman's point. I accept that some State industries must remain in the public sector as there is no viable alternative. There are, however, many instances where the best thing for the industry concerned, its customers and its work force is to free it to compete for markets and finance in the private sector. That is not a dogmatic approach. It is a common sense one that the mass of the British people readily understand and want.
  I shall now deal with our proposals for British Telecom. I am happy that the majority of the House will welcome them as the largest ever measure of liberalisation from State control. For a nationalised industry, British Telecom is unique. The right hon. Member for Salford, West gave some figures. I shall give a few more.
  Voice communication over the telephone and data processing by computer are converging to give us what is called information technology, one of the most rapidly growing markets in the world. Since 1972, the number of subscribers to the BT network has almost doubled to nearly 20 million. Growth at this rate requires enormous sums for investment. We also need to replace much exchange equipment that has been outdated by the electronic revolution.
  The Government have begun to deal with this problem by opening up the field to competition—competition in trunk networks for business subscribers through the Mercury consortium, competition in value added networks for all sorts of new applications, competition for equipment and for attachments, competition for radio telephones and so on. Already BT is beginning to respond to the new challenges it faces but so long as its investment
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  needs, which are running at hundreds and hundreds of millions of pounds a year, come either from existing subscribers through charges or from the Treasury through its EFL, BT's hands will be tied.
  The crucial question is how BT's investment programme is going to be financed. At present, 90 per cent. of the investment programme goes straight on to the charges of subscribers. Everyone knows that telephone bills are a source of major consumer dissatisfaction. The logical answer is that BT must be freed so that it can raise capital on the market, so that the investment programme can be speeded up and so that the burden falling on the consumer can be reduced.
  The disciplines of the market will increase efficiency. For instance, BT's installation and maintenance staff average about three visits a day. The staff of the privately owned AT & T in America average seven. There is no reason at all, given the right environment, why BT cannot approach this American figure. Once BT is freed from Government financial control and once those who work in BT acquire a stake in the business, as we want to see, there will be powerful incentives for it to be more efficient and competitive.
  There is no reason why BT, freed from State control, should not develop over the years into a major force in world electronics and information technology ranking with AT & T, IBM and other international companies. It will be, and will remain, a national asset. Is British Aerospace no longer a national asset because the majority of its shares are owned privately? Is British Petroleum no longer a national asset because the majority of its shares are privately owned? This guff about national assets is sheer and absolute rubbish.
  I have given categorical assurances about pensions. They are on the record; I shall stand by them. I have also been asked about rural areas. I have made it clear that no one who is entitled to attachment to the network now will be denied it on privatisation. There will be provisions in the licence to make sure that there is fair pricing between different categories of consumer. I was also asked if the proceeds of sale would be available for BT. That is a matter that will fall to be decided by the Government at the time when the shares are floated on the market.
  Mr. John H. Osborn: Is it not a fact that the main purchasers of these shares when they go on the market will be the institutions and the pension funds of the people of this country? As a result, people will have their pensions without being too dependent on the State.
  Mr. Jenkin: I expect the institutions to be interested on behalf of their policy holders and pension fund members in subscribing for shares. I hope that it will be possible to make arrangements not only for BT's employees but also for telephone subscribers to be able to subscribe for shares in the new company.
  The right hon. Member for Salford, West mentioned cable. If anything, cable strengthens the argument. I wonder if the right hon. Gentleman read the speech of the chairman of BT, Sir George Jefferson, last week, in which he put forward a number of ideas showing how BT might seize the opportunities that are opening up with the cabling of Britain and to do so with what he called
  "adequate longer term commercial and financial viability."
  That Sir George can look forward to doing so with adequate commercial and financial viability stems directly from the proposal in the Gracious Speech. As a

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  nationalised industry dependent on either customers or the Treasury for its money, it could not contemplate seeking a significant stake in cable. Telephone subscribers would not stand for it and the Treasury has its constraints. As a private sector company, BT will be free to raise money on the market, win cable orders and create jobs. That is the real link between ownership and jobs. If the right hon. Gentleman really believes that ownership determines the pattern of employment, he will I hope come into the Lobby with us tonight.
  In America, where AT & T is a private company, jobs in telecommunications have been growing at 6 per cent. a year or more. There is no reason why BT, freed from the constraints of financing, should not be able to do the same. I hope therefore that we shall have the right hon. Gentleman's support.
  I turn now to British Shipbuilders, in relation to which a Bill has already been introduced and will be receiving a Second Reading shortly. The Bill's main purpose is to remove the present statutory obstacles to privatisation. I accept that private enterprise and private sector entrepreneurial skills have a part to play in revitalising the shipbuilding industry. Of course, the industry faces severe difficulties. Even in Japan, we read, shipbuilding orders are down some 60 per cent. What the Government are not prepared to see is viable private sector jobs, for instance, in ship repairing, being undermined by public sector losses. The present statutory arrangements provide too rigid a framework. We have to change the law. These matters will no doubt be debated when the Bill comes before the House.
  Mr. Bill Homewood: I should like the Secretary of State to recap on what he has been saying about the connection between privatisation and an increase in jobs. In the three and a half years of this Government, there has been privatisation measure after privatisation measure. We were told yesterday, however, that unemployment will increase by 200,000—a figure that most of us believe to be an underestimate. Where is the connection between privatisation and an increase in jobs?
  Mr. Jenkin: The hon. Gentleman will forgive me if I do not repeat what I have been saying. Information technology offers the fastest expanding market we can see. At present BT is not able to take advantage of that because it is tied either to the Treasury or to subscribers for its funds. We want to free it. I think that deals with the hon. Gentleman's question.
  Mr. Michael Grylls: On British Shipbuilders, will my right hon. Friend accept that many of his hon. Friends would like to see private capital brought into the warship yards as soon as possible? These yards have been starved of capital by British Shipbuilders. All the money that it has made has gone to support the other side of the corporation. These yards need money for investment.
  Mr. Jenkin: I well understand the point that my hon. Friend makes. The former owners of the warship yards have kept in touch with the Department. They have seen the Bill. No doubt, as the Bill goes through the House, and afterwards, they will be able to make their proposals.
  Mr. Don Dixon rose—
  Mr. Jenkin: I hope that the hon. Gentleman will forgive me. I must proceed with my speech.
  I come now to the passage in the Gracious Speech that deals with private generation of electricity, where we shall be introducing legislation. The Bill will remove existing statutory constraints on generating electricity as a main business and will require the electricity boards to purchase electricity from the private generators at a fair price. It will open up electricity generation and supply to competition, it will encourage industry to use waste heat, as in combined heat and power schemes, and will encourage private investment in renewable energy sources, such as hydro-electric and wind power.
  The House will recall that I made a statement on the steel industry and answered questions on 22 October. Subsequently, there were questions about it at Question Time. I fully understand the anxieties that are felt in all parts of the House about the steel industry. Across the world, markets for steel have been collapsing and there is a world-wide excess of steel-making capacity. This country is not alone in facing a crisis in its steel industry.
  The British Steel Corporation is now considering how to respond to the downturn and is reappraising its medium-term prospects. I have asked Mr. MacGregor, the chairman, to put forward a number of options for the future so that the Government can consider the problem on the widest canvas. In recent weeks, I have made it clear to the House that to the extent that these options concern the future of BSC's five major integrated steelworks, neither the Government nor the corporation has any intention of taking precipitate action based solely on short-term considerations. That would be very short-sighted.
  However, we must take a careful look, as far ahead as possible, at the prospects for the steel industry if we are to reach sensible decisions on the future strategy of such an important basic industry. I do not want to disguise from the House the difficult decisions that may face the Government, and for which the Government will accept responsibility. However, the review of BSC's five main integrated works cannot and will not hold up other measures that BSC needs to take urgently to restore its financial and commercial position.
  Mr. Orme: I have been listening carefully to the Secretary of State and he is on a vital point. We understand that he does not want to be precipitate and that he wants to discuss any decision in depth before coming to the House. However, there is great uncertainty both within and outside the industry. Trade unions and those working within the industry are nervous about the situation. Will there be a statement before Christmas, or after Christmas?
  Mr. Jenkin: I am acutely aware of the anxieties that are felt in many parts of the country. I have said privately, and will say again today, that I hope that we shall be in a position to reach decisions and to make announcements before Christmas. However, the right hon. Gentleman will understand that, given the gravity of the issues to be faced, it would be unwise of me to give a cast-iron guarantee. Nevertheless, I shall do my best.
  Mr. A. E. P. Duffy: It has been suggested that the Government should explore any opportunities that are available to help the industry. The right hon. Gentleman will know that under last year's Iron and Steel Act powers are still available to enable him to help the industry and to write off still further some of its

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  indebtedness, and thus relieve it. However, those powers run out at the end of the year. Does the right hon. Gentleman intend to exercise them?
  Mr. Jenkin: I am sure that the hon. Gentleman would not expect me to prejudge any decisions that the Government might reach in the light of the corporation's advice. Therefore, perhaps I can duck that question. Today, we agreed to increase the amount of money to be made available under the private steel scheme. I hope that we shall be able to respond favourably to most, if not all, of the applications that had to be in, under that scheme, by 25 September.
  Since the subject has been raised, I should remind the House that the Government have provided well over £1 billion to help to rationalise British Leyland. I am sure that the Opposition are as pleased as I am that the board can report that a break-even is now in prospect and that it expects to seek private sector equity over the next two years in its mainstream businesses. I hope that Opposition Members welcome that as unreservedly as we do. British Leyland negotiated a two-year wage settlement with its work force. Such settlements help jobs, because excessive wage claims—often uncritically backed by Opposition Members—destroy jobs if they are met. I see that the right hon. Member for Chesterfield (Mr. Varley) is deep in "The Times Guide to the House of Commons". He has something to answer for and I hope that he will do so when he replies to the debate.
  During Mr. Scargill's barnstorming campaign for a 30 per cent. pay increase in the mining industry, the right hon. Member for Chesterfield appeared on a platform and told his audience something that was quoted on BBC radio. He said:
  "This is the most crucial battle that you are facing and if you don't win this battle then just imagine what Margaret Thatcher will do. She will go out on Downing Street, there will be the assembled television cameras and the hordes of reporters and she will say 'rejoice, rejoice.' That would be a disaster for us."
  There was then applause. The right hon. Gentleman clearly backed the 30 per cent. pay increase for miners every inch of the way, although he prides himself on being a sensible moderate. He has tarnished his reputation—I hope, for his sake, not beyond redemption.
  The terms of the Opposition's amendment and the content of the Gracious Speech have led me to concentrate most of my remarks on the public sector. The world recession has hit private industry hard. Nevertheless, the picture is far from all black. Productivity in manufacturing industry, expressed as output per person hour, was, in the second quarter of this year, almost 9 per cent. above the average for 1979. Having lost—I come to the point raised by the right hon. Member for Stepney and Poplar (Mr. Shore)—about 50 per cent. of our competitiveness between 1975 and 1980, we have won back some 10 per cent. to 15 per cent. However, as the right hon. Gentleman will recognise, those figures show that we still have a long way to go. The Government are ready to do all they can to help. I have already described the help, worth several billions of pounds, given by the Government to industry in the form of reduced interest rates, national insurance cuts and help with energy. My Department has a further contribution to make.
  The House will remember that in 1979 payment of regional development grants was deferred for four months to reduce public spending and the public sector borrowing requirement. Its continuation has involved, and still
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  involves, an extra financing cost for industry which it could well do without. The Government have therefore decided that the four-month deferment should end. The amount involved is about £150 million and I hope to clear this within a month. From today, new grants approved will be paid without deferment. I am today placing in the Library a note giving details of how that will be done. The regional development grant scheme does not extend to Northern Ireland but my right hon. Friend the Secretary of State for Northern Ireland will also act to end deferment as it applies to the standard capital grant scheme in the Province.
  The measure will, I know, be warmly welcomed by industry. It will give a valuable boost to company liquidity in the manufacturing sector in the regions. It is further evidence of the Government's determination to play their part in helping industry to reduce its costs and to become competitive. At the heart of our industrial policy lies the truth that it is customers who create jobs. To win customers, industry must be efficient and competitive. Many British firms are efficient and competitive. They are able not only to safeguard jobs but often to take on new people. However, many firms are not yet competitive, although most are making strenuous efforts to become so.
  The prime responsibility for that lies with industry. The Government can help through lower inflation and lower interest rates and by helping industry to cut costs, to introduce new technology and to invest. The Government can also help by freeing industry from the burdens that nationalisation has, over the years, imposed upon it, and by giving the State industries the freedom to become as efficient as their private sector customers. The Gracious Speech contains important measures to achieve this. The amendment moved by the right hon. Member for Salford, West is deeply and irremediably rooted in the Opposition's past failures. I ask the House to reject it.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. Mr. Speaker has asked me to remind the House that yesterday long speeches prevented a number of right hon. and hon. Members from taking part in the debate. Today, many more hon. Members wish to speak. I ask for brevity.
  5.50 pm
  Mr. William Rodgers: For a large part of this afternoon we have been discussing the privatisation of the public sector. No doubt we shall do so during much of this debate.
  If the autumn statement of the Chancellor of the Exchequer yesterday had been a prospectus with which to launch a company, nobody would conceivably have bought the shares. It was depressing on every possible count. As has been pointed out to the House, it assumes that in 1983 we shall have 3·5 million registered unemployed, with a peak figure certainly larger. My favourite sentence, and one which is very finely honed, Ls the final one in paragraph 1.18:
  "At the end of 1983, the inflation rate may still be around 5 per cent."
  Anybody who has ever had ministerial responsibility, particularly in the Treasury, will know the amount of midnight oil which was burnt to find a phrase as acceptable as that. It hides a great bending of conscience, because we face the prospect that in the coming year unemployment

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  will rise to a still higher level, while the fall in inflation which we have seen will be reversed and we shall be back to double figures again.
  The most depressing paragraph in the depressing statement that the Chancellor published is paragraph 1.12:
  "Over the past five years or so, and partly reflecting the poor level of competitiveness, UK industry has lost share in both overseas and domestic markets. Between 1977 and the first half of 1982, the volume of world trade rose by a total of about 18 per cent, while UK exports of manufactures were unchanged. In the domestic economy over the same period, the demand for manufactures changed very little; but import volumes rose 40 per cent, while output of the UK manufacturing sector fell 14 per cent."
  That single paragraph tells the whole immensely depressing story. Because of the period it covers, it conceals the Government's responsibility for the disaster, and disaster it is. We must judge the relevance of the Government's measures in the Gracious Speech by the extent to which they will lead to a better performance in future and to a further, less depressing autumn statement.
  What is happening to industry today? We should face the character and depth of the crisis. There is, indeed, as the right hon. Member for Salford, West (Mr. Orme) and others have implied, a monstrous crisis in the steel industry.
  I welcomed the remarks of the Secretary of State when I understood him to say that more money was to be made available to the private sector, but he will agree and the House knows that both the private and public sectors have been affected by the collapse. Certainly the disaster in the public sector could soon become a catastrophe. We are all aware of the savage social consequences of any further major closure. I am deeply concerned in my constituency capacity with the future of Redcar, which was once the symbol of Britain's industrial regeneration but is now a menacing shadow of industrial decay. What applies to Redcar applies to the other four major plants throughout the country. The industry has shed half of its labour force in the past four years and there has been a remarkable rise in productivity—at least until this autumn—but, despite those considerations, we all desperately fear the review which is taking place. Difficult decisions have to be taken and there is every prospect that they will be damaging to the future of the British industry. Morale in the industry is low and is getting lower.
  The problems of industry are not only those of the public sector, though the speech of the Secretary of State might have suggested that. Britain's engineering industry is battered as well. It ought to be generating the demand for home-produced steel. Instead, there is short-time working, redundancies and closures. The bad news yesterday from Lucas was only a measure of how some of our most successful firms find themselves in difficulties. The story in the engineering industry and a large part of the private sector is one of falling orders, falling output, falling investment and falling employment. On top of that, there is the danger of a trade war which would be very damaging to the whole of Britain's economy.
  Judged by that sad and tragic story, the Chancellor's measures appear piffling. The least that he should have done was to abolish the national insurance surcharge. That would have been a major step forward, and I greatly regret that he did not have the courage to do it.
  Mr. Patrick Jenkin: Will the the right hon. Gentleman remind the House whether he voted for the introduction of the surcharge and for its increase?
  Mr. Rodgers: There was a very good case for the national insurance surcharge when it was introduced, because there were no problems of unemployment rising on the scale that we have seen in the past three and a half years or of unemployment at the present level. The strongest case against the national insurance surcharge is the present level of unemployment and the prospect that it will rise further. That is the overwhelming reason why the Government should have got rid of it and not prayed in aid the case made for it five years ago.
  Mr. Tebbit: The right hon. Gentleman's memory is at fault. The "good reason" for introducing the national insurance surcharge when he voted for it was that the IMF told the Labour Chancellor of the Exchequer, whom the right hon. Gentleman supported at the time, that he had to do it.
  Mr. Rodgers: It was entirely necessary in the circumstances at the time.
  The Secretary of State for Industry asked why I supported it then and do not support it now. The truth is that the economic circumstances of the country have wholly changed since 1976. That is the truth and there is no getting away from it.
  Dr. Jeremy Bray: The imbecility of the interventions from the Government Front Bench is shown by the IMF's index of relative unit labour costs which was 92, 90 and 96 in 1976, 1977 and 1978, respectively, compared with 133 today. It is today's figure which is totally destroying the competitiveness of British industry, and the Secretary of State for Industry knows that.
  Mr. Rodgers: I am grateful to the hon. Gentleman for that intervention.
  The Government's response to this failure of performance is not to get rid of the national insurance surcharge, which they should have done, but to go for a further programme of privatisation, which is wholly irrelevant to the major economic and industrial needs of the country.
  The official Opposition are more or less committed, depending on whom one may speak to, to nationalising 25 of the top 100 companies. They are further than ever away from having the chance of doing so or of reversing the privatisation measures that the Government intend to introduce. At the same time, whatever the nonsense embodied in the Opposition's proposal, the Government must justify their measures in terms of the state of the country and our principal needs.
  Not only are there the proposals in the Queen's Speech for British Telecom and shipbuilding, but later this week we have the sale of Britoil shares, about which the Secretary of State for Energy intends to make a statement tomorrow, which will no doubt include the terms of the disposal, loyalty bonus and all. I agree with that normally cautious publication, The Sunday Times, that this is a doctrinal sale wholly irrelevant to Britain's needs either in the oil industry or in relation to our industrial performance as a whole.
  The same applies to British Airways. I can claim my part, nearly 15 years ago, in enabling British Caledonian

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  to become another flag carrier. Although that decision was not always popular with the party for which I sat, I defended it because there was a good case for providing British Airways with competition. Subsequent events have justified that decision, although airlines have always had plenty of international competition. But it is a totally different matter to try to sell off British Airways after it has returned to profitability.
  The Secretary of State made a passing and rather snide remark about the recent speech of Mr. Geoffrey Chandler, the director general of NEDO. Like many others, I agree with Mr. Chandler's good sense in presenting a check list for industrial recovery in his remarks made on 20 October. Mr. Chandler referred to the excessive debate about ownership that had gone on for too long. He said that any gain from changes of ownership between the public and private sectors was dwarfed by the absence of continuity. He touched the nub of the matter when he said that what mattered was operational efficiency, not ownership.
  That is the nature of the problem. It is tragic that the Government and the official Opposition are so committed to changes of ownership that they are not lending their weight to meeting the need to change the performance of British industry at every level, whether in the public or private sector.
  Mr. Michael Marshall: A year ago the right hon. Member for Stockton (Mr. Rodgers) spoke positively about the future of the nationalised industries. Will not the Government's privatisation policy help to stabilise ownership and improve industrial performance as a result of employee participation through shareholding, and so on? Is not such depoliticisation of industry worthy of serious study rather than the suggestion that there is a pendulum?
  Mr. Rodgers: There is a pendulum. What is worthy of serious study is private capital in the public sector. There is an important difference between allowing a nationalised industry to go to the market, for which there is a very good case, and deciding to transfer majority shareholding in the way that the Government are doing through legislation. The two policies are poles apart. I am more than prepared to examine ways in which nationalised industries can meet their capital needs. I welcome co-operation between the public and private sectors and I welcome competition, too. In those respects, I have no objection to the Government's decision to license the Mercury network, but the Government's introduction of competition into telecommunications is no reason to seek to transfer the rest of the shareholding and make the industry another political football, as my hon. Friend the Member for Thornaby (Mr. Wrigglesworth) has put it.
  We now have new and rigorous standards in British shipbuilding, with higher productivity and fewer employees. I understand that trading losses in the industry have been substantially reduced, despite competition from heavily subsidised overseas shipbuilding. What is the Government's attitude towards Britain's strategic interest in shipbuilding, the unfair nature of foreign competition and the dependence of the Ministry of Defence upon the warship building yards? The Secretary was unrevealing about the Government's intentions. It would be outrageous and totally unnecessary to sell off the warship building yards when the Ministry of Defence is their largest customer.
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  What is the future of British Leyland? It has been in massive need of improvement, and some progress has been made. I read that one part of British Leyland—Jaguar—has made a remarkable recovery and is now very successful in United States markets. Jaguar is now in public ownership and has absorbed much of the taxpayers' money as well as management time. Will Jaguar soon suffer distraction and disruption through privatisation? There is no case for proceeding in that way when a company in public ownership is producing the goods that people want to buy. It is yet another instance of any gains from privatisation being far outweighed by the sheer upset and diversion of energy that privatisation represents. It is time to call a halt to the switches between the public and private sectors.
  The only argument in favour of privatisation that I have heard relates to the capital requirements of the nationalised industries. The chairmen of the nationalised industries have complained about this often in the past. They feel that they are the victims of the Government's insistence that the capital needs of the nationalised industries should be included in the public sector borrowing requirement. But that is simply a theological matter. It is a Treasury convention. The Secretary of State said that the Treasury had its own constraints, but they are self-imposed constraints that the Chancellor of the day has accepted. It is only the self-imposed constraints and conventions of the Treasury that deny the nationalised industries the more flexible financial structure which would make it unnecessary to justify changes of ownership. as the Chancellor does, on the basis of the capital requirements of the industries.
  I make four brief points about what I think should be the constructive approach to the public sector. First, I believe in a long arms-length relationship between Ministers and the nationalised industries. There is a great deal to be said for that, as it would move the industries further into the commercial sphere and away fom everyday political decisions.
  Secondly, the chairmen of the boards of nationalised industries should be appointed by a wholly independent body drawn from industry which might itself sanction major structural change.
  Thirdly, nationalised industries that are capable of competing should do so within the discipline of market forces.
  Fourthly, there is everything to be said for making monopolies and public utilities subject to an efficiency audit commission. This would strengthen their commercial character and diminish their political role.
  A great deal more hard thinking is needed about the role of the public sector and how it should be managed by Ministers. The House of Commons is falling down on its job because successive Governments have been more concerned with ownership than with trying to raise the morale of nationalised industries, now desperately low at every level, and giving them a settled future in which they can contribute fully to the health of the nation. Alas, however, neither the Gracious Speech nor the Chancellor's autumn statement yesterday holds out any prospect of industrial recovery or of allowing the nationalised industries to contribute to it. In those circumstances, privatisation is doubly irrelevant.
  Although the official Opposition amendment contains a number of very fair points, especially about the depressing state of British industry today, I regret that it

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  contains the wholly irrelevant proposal that in some way renationalisation would remedy the damage done by privatisation. I do not believe that that is so. All our industries, both private and public, need a settled environment for success. By voting for our own amendment tomorrow, my right hon. and hon. Friends and I plan to make that clear.
  6.9 pm
  Mr. Chris Patten: I shall follow the points made by the right hon. Member for Stockton (Mr. Rodgers) in a moment. My first point is about the Gracious Speech. One is often struck in this House by how little resemblance there is between the original script and the developing plot. It is rather as though we were living in one of those modern plays in which people make up the script as they go along. For example, one scours the laminated prose of the Queen's Speech last year in vain for some reference to the events which, more than any others, shaped our destinies in the last Session.
  This time last year, those of us who did not think that there was a great deal of good news for the economy were regarded with about as much enthusiasm as something that the cat brought in. It was believed that the economy was on the brink of recovery, but the Government's political standing in Ladbroke's did not inspire much confidence. Since then, the position has been reversed. The recovery has receded by a millimetre or two, but the Government's standing has made a substantial comeback. That is partly due to my right hon. Friend the Prime Minister's leadership during the Falklands campaign. Those who criticise her now for accepting a degree of credit for what happened would have been the first to put the boot in if things had gone wrong.
  This year's script is fine as far as it goes. I am surprised—no, not surprised but perhaps confirmed in my sad reflections on the current political and intellectual condition of the Labour Party by its choice of this amendment to discuss today. I speak as someone who does not take the fashionable nineteenth century Liberal view that everything that the State does or tries to do should be cut or curbed. Nevertheless, I find it difficult to associate the word "enterprise" with the public sector. There is a disjunction between those words.
  That is not entirely a criticism of the public sector. There are some things that State-run organisations cannot conceivably do in a particularly enterprising way, partly because their chairmen have Members of Parliament breathing down their necks. On the other hand, there are some organisations that could and should be run with more commercial enterprise and flair. Most organisations would benefit from escaping from Treasury control over, for example, their investment programmes. The cliché "dead hand" is wrong; it is the all too live hand of the Treasury that is the problem.
  I can understand how, as a result of one's value judgments, one might think that nationalised industries should be preserved more or less as they are. I can understand how, as a result of one's value judgments, one might think that more industries should be taken into State ownership. I do not share those value judgments, but I can comprehend that point of view. However, I cannot see that there is any argument that nationalisation, or public ownership to use that rather paradoxical jargon, is justified
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  by the increasing efficiency of our use of the nation's economic resources. There is not a jot of evidence to support that proposition, as my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) said.
  The fact that the Labour Party is still committed to this rather Neanderthal way of looking at the economy goes some way to explain the rather limited affection and esteem in which it is held by the British electorate. The right hon. Member for Stockton talked about irrelevance, but what is really irrelevant is the amendment, which is particularly irrelevant to the sorts of economic problems that have been referred to in a number of speeches from both sides of the House since the debate commenced.
  We have heard much about inflation and the success that the Government have had in the past few months in reducing the rate, mostly from the Government Benches. We have heard much about the terrible rise in unemployment, mostly from the Labour Benches. It is a great pity that so much of manufacturing industry, while perhaps leaner and fitter and raring to go, is still flat on its back. The prospects for inflation, output and unemployment read rather as they did last year. We shall see more success with inflation and more difficulties with output and unemployment.
  Unemployment is one reason why I am so keen—keener than I have been—that we should do something to restore, or rather go the whole way to restore, the woeful 5 per cent. cut in unemployment benefit. It is a great pity that the Chancellor of the Exchequer was not able to say something about that yesterday. It seems extraordinary, when he knows that we are spending £120·5 billion in the coming year, that he could not say that he would provide the small amount to restore the cut.
  Mr. Hal Miller: Could it not be equally, and more convincingly, argued that any such additional funds that the Chancellor might have available should go to reducing industrial costs and providing more competition and more hope for employment, rather than to increasing unemployment benefit?
  Mr. Patten: I shall come in a moment to things that the Chancellor might do to increase the competitiveness of British industry. However, as my hon. Friend knows, the cost of restoring the 5 per cent. cut is about £60 million, which is just over one-tenth of what the Inland Revenue is getting from the taxing of short-term benefits. There is no real problem about funding. I hope that the Chancellor, or somebody, will be able to put our minds at rest about the 5 per cent. cut, otherwise the House will have to take the matter into its own hands.
  I hope, too, that my next point about inflation will not be thought unfair by my right hon. Friend the Secretary of State for Employment, or any other Minister. Deep recessions and substantial deflations normally have the result of reducing the rate of inflation. They normally have the result of cutting pay-push inflation. They also, if we are lucky—this has happened in this recession, partly because of some of the things that the Government have done—have the result of cutting out restrictive practices and helping to cut out unproductive plants.
  However, we might remember that recessions also cut investment for the future and the amount of money spent on research and development. Sooner or later one has to try to come out of a recession, not least because long

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  periods of high unemployment and long periods of recession are just as destabilising as periods of high inflation. The trick is to escape from a recession without triggering off the sort of pay-push inflation that has always in the past—and would again—aborted recovery. There is, to borrow a phrase from the pages of history, a middle way between managing a recession and unleashing an inflationary boom. In this country in the past decade or so we have demonstrated our ability both to manage recession and to preside over inflationary booms. So far, unfortunately, nobody has hit the jackpot in between. That is what we should be trying to do now.
  Even if we were to carry on precisely as we are, even if, to quote the history books again, there is "no change of gear" and the Government continue as they are, my strong feeling—I am sorry to make such a vulgar point—is that the Government's political standing will hold up. We are more likely than anyone else to win the next general election. The main reason for that is not General Galtieri—that is a rather idle point. The main reason is that the decisive factor in British politics has changed. The decisive factor in every other election, no matter what the political scientists said, was "throw the rascals out." Now we have a different factor—"do not throw the rascals in." That attitude will be decisive at the next election. At least in private there is probably a consensus on that on both sides of the House.
  But if the Government are better poised than anyone else to win the next election, it does not make much difference to the economic argument. Before or after the election we must try to get out of the recession. Even the Treasury must realise that we have to inch our way forward. I use no more heroic term than that.
  Someone who knows the difference between a boom and a recession and knows the consequences of a recession made this point the other day. The speech was quoted in the Financial Times. He said:
  "Now we are told that if we tighten our belts and keep quiet, the depression will simply go away. Nobody knows how. We are back in the age of witch doctors who tried to make the weather by making the right kind of speeches to their constituents."
  That was said in the Carlton Club—which is still standing—by Mr. Harold Macmillan. It hit several nails, and one or two other things, squarely on the head. Sooner or later we shall have to find a place once again in our political lexicons for the word "demand" and face the decade-old problems of the British pay bargaining machinery that makes it almost impossible for a Chancellor to get out of a recession without provoking another round of inflation.
  Such arguments break against the Treasury walls like waves upon a stern and rockbound coast; but even if it will not countenance our arguments, it is surprising that it will not countenance its own. The central point for Treasury Ministers is the PSBR. It is presumably as bad to undershoot the PSBR as to overshoot it; for the second year running it will be undershot—the White Book that we received yesterday suggests by about £½ billion. To take up the phrase used by my hon. Friend the Member for Croydon, South (Sir W. Clark) yesterday, I do not know many thinking people who reckon that that is anywhere near the figure; it will be far nearer last year's figure of £1¾ billion.
  It is therefore above and beyond argument that the Chancellor's policy is more contractionary than he meant it to be at the time of the Budget, and it affects all
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  industries, whether nationalised, denationalised or whatever. As the Financial Times pointed out this morning, we also get that message when we look at the exchange rate.
  I was pleased that the Chancellor did a bit to take up the slack on the PSBR yesterday through the national insurance windfall for industry this year. It would be wrong to be churlish about the cut; all my speeches since I came into the House have denounced the national insurance surcharge. But even within his self-imposed constraints the Chancellor could have done a great deal more. I should have liked him to do a little more with the windfall on the national insurance surcharge, and he could have done what his predecessor did when he undershot the PSBR and dealt with tax allowances straight away. As we saw in 1977, that can be done in a couple of months. The problem then was that the Chancellor overegged the pudding the following spring.
  Had my right hon. and learned Friend acted on tax allowances now he could have spent all the money, within his own contraints, next spring on abolishing the national insurance surcharge and helping to cut industrial costs. Those factors affecting demand and industry's competitiveness are more relevant to its problems than the Opposition's proposition that a major reason for our economic decline is that we have not nationalised enough or that nationalised industries have not had enough industrial or political clout. Those factors do not come near the top of most lists of what is credible.
  There are limits to what a Chancellor can do in a couple of Budgets or what he can do on his own in the present international economic conditions. That is why, if I had the time, I would press particularly the Prime Minister, who has the authority to do so, to ask for an earlier economic summit and one that came to more sensible conclusions than previous ones.
  When the chairman of Lloyds Bank says that there is a one in 20 chance of the world banking system collapsing—those are pretty good odds from a banker—and when other equally sober citizens tell us that any recovery will be anaemic, fitful and short-lived, we should give a good deal more attention to the changes needed in our international economic arrangements. The problems could be every bit as difficult and damaging as those in the 1920s and 1930s.
  During the Summer Recess there was excitement about a report, apparently from an organisation which, from what it said, appears to show scant regard for the truth in calling itself the Think Tank. It was addressing entirely the wrong question. It is true that if we continue domestically and internationally as we have been we shall have enormous problems funding the Welfare State. That is even more true of funding our defence. Those problems are doubled and redoubled in trumps. In other words, if we continue with the economic policies that the right hon. Member for Down, South (Mr. Powell)—I am sorry that he is not in the Chamber—has been urging with felicity and fortitude for a number of years, we shall fetch up. willy-nilly, only being able to afford the defence policies of which he is in favour.
  The real question for the Think Tank, and for the Government, is how to help to end the recession domestically and internationally without unleashing another decade of inflation. I hope that we shall hear a little more about that. I am sure that we shall hear a lot more that is a lot more convincing from the Minister when

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  he winds up the debate and I hope that we shall hear even more in the weeks and months before the general election campaign.
  6.27 pm
  Mr. Stan Thorne: You drew attention a few moments ago, Mr. Deputy Speaker, to the length of Back Bench speeches yesterday. Already 37 minutes have passed since the Front Bench speeches and we have had only two Back Bench speeches. A number of hon. Members will not be able to take part in the debate before the Front Benches wind up. The only solution is a 10-minute embargo on Back Bench speeches.
  Ministers have made accusations against the Labour Government about the national insurance surcharge. The right hon. Member for Stockton (Mr. Rodgers) also had the temerity to address that subject. Unlike him, I did not vote for the surcharge when the Labour Government introduced it. The measure should never have been brought to the House even in the difficult economic situation.
  The amendment deals with the present economic situation, privatisation and unemployment. In the Preston travel-to-work area the most recent figures are, for male unemployment, 13,011, and for female unemployment, 6,552. There are 20,000 people unemployed, which is a rate of 13·2 per cent. The Government's activities have doubled the figure in the past couple of years.
  The textile industry was in some difficulty before July 1979, but the Government's actions have done little to help. Job losses in the textile industry in the Lancashire area are horrific. The Government's policy on the campaign with the slogan "Make it British" has failed. Foreign manufacturers gain entry to Great Britain far more easily than they do to any other country in Europe, and the effect of the Government's policy has been to worsen that in the textile industry.
  In the Preston area—I am grateful for the comments by my right hon. Friend the Member for Salford, West (Mr. Orme)—aircraft play a major part. British Aerospace was publicly owned until a few years ago. There was a new spirit within British Aerospace because of that public ownership. A considerable improvement in morale in the Preston area was evident following that measure, but the Government take no account of that. It is something that apparently they can sweep on one side in the interests of benefiting the private capitalist entrepreneur or shareholder—call him what one will—in British society.
  My right hon. Friend the Member for Salford, West was right to point out that the workers of the aerospace industry desperately need a decision about the advanced combat aircraft. In Bristol and other parts of the country, there is urgent need for a decision about the A320. The civil aircraft industry desperately needs a Government commitment.
  In the local media one of the Government Front Bench spokesmen, the Minister of State for the Armed Forces, is reported recently as having suggested that 15,000 redundancies in British Aerospace in Warton, Salmesbury and Preston could occur during the next few months. That suggests that the Government will not take a decision about the ACA that would protect the jobs of men in those factories.
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  A more constructive approach and firmer commitment involving £50 million to the demonstrator programme may have been welcome, but it is a drop in the ocean in the forward planning that is essential. The sooner we get a clear statement from the Government, the sooner we can restore the morale that has been lost during the past three or four years in the British Aerospace industry. British Aerospace—as hon. Members know—is a high technology industry. Highly skilled engineers are involved in research and development. We shall see a drift away from the industry by those highly skilled technologists unless the Government take decisions shortly.
  If the Government have alternative work for those skilled engineers—there are several thousands of them—in the near future, the Government should make a clear and comprehensive statement about their proposals. The publicly owned British Aerospace industry had begun to show a stability which is being eroded by uncertainty about the Government's intentions.
  That is one of the problems being experienced in my area by British Telecom. A decision was taken not long ago to separate British Telecom from the Post Office. It was said that one was a loss maker, although today I understand that it is making reasonabe profits. The other was a higly profitable industry. The Government were anxious to sell to their capitalist profiteers an industry that would assist them in the pursuit of private profit. One should not be surprised about that. The protection of private profit is part of the philosophy of the Conservative Party. People should become increasingly aware that when a decision has to be taken between the pursuit of private profit and the provision of a public service the Government are committed clearly to the protection of private profit.
  The privatisation of British Telecom has an important impact on jobs. It seems to me that a private telecommunications industry will seek to run down jobs in unprofitable rural areas. I understand from the Mercury announcement that it will be cheaper to telephone from London, and therefore there will be a tendency to centralise the industry in London.
  In the past British Telecom bought British goods. The hon. Member for Saffron Walden (Mr. Haselhurst) asked my right hon. Friend the Member for Salford, West a question about the effect of ownership on the product market. Privatisation will affect British Telecom because it will go abroad to purchase gimmicky equipment and import it. That will mean a loss of jobs for the British manufacturer of that type of equipment. Nobody has suggested that there will be an embargo against that when it is privatised. It will have a blank cheque to use foreign manufactured goods and that will have a profound effect on jobs.
  Although I sat here for several hours yesterday, I was not fortunate enough to catch Mr Speaker's eye and I could not make the points that I wished. I shall make them as briefly as possible now. Jobs were relevant to yesterday's debate on the Welfare State. Many jobs could be created in the Welfare State. There would need to be inputs in certain areas which I shall outline. Our economy is faced with the cost of six and a half million people who depend on supplementary benefit. The Government have failed to take action about long-term unemployed people. Despite the immorality of the position, long-term unemployed people lose £10·60 per week in supplementary benefit because they must register for work that is not there.

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  Again, the Government are not prepared to take action. The Tory Government have cut £2 billion from social security benefits when there is a great need for them.
  In a recent report that I read at the weekend, the DHSS reveals that in the Preston, Leyland and Chorley districts £1·2 million in benefits is unclaimed. About 7,000 people are said to be involved. In the Blackpool area, £1·8 million is unclaimed and 10,000 people are said to be involved, mainly the elderly and families with children. Staff shortages are said to make it impossible to deal with claims promptly.
  I wonder whether staff shortages also explain an interesting letter from the DHSS at Preston to the director of Preston polytechnic about the abuse of social security benefits. The gentleman from the DHSS asked the director whether he would supply in confidence information about people who let accommodation in their houses to polytechnic students. He was also asked to provide the names and addresses of such landlords and any additional addresses with which they may be associated. Does that mean that staff shortage in the DHSS is so bad that not even the fraud squad can deal with abuses and that instead, we have to call upon the directors of polytechnics to supply information? If the director supplies the information every landlord named is entitled to be informed in advance. Commercial confidentiality is involved.
  My time is running out, although I wanted to say much more. One Government Member spoke for 29 minutes yesterday so I hope that none of his hon. Friends will ridicule long speeches from Opposition Members.
  Home helps are needed in Lancashire. About 250,000 extra hours work costing £500,000 are urgently needed. The meals on wheels service needs to be extended and to be given £1 million per annum for the next five years to meet existing needs. Jobs are involved.
  One can talk about adult training, residential places, sheltered schemes, about the 3 million people over the age of 75 and the inadequate provision that we make for them. I could refer to the Government's failure to implement the recommendations of the Royal Commission on the National Health Service. It is a crime even to consider the closing of the Royal Marsden breast screening programme since the report recommends a major expansion of such proven programmes. About 1,600 doctors are unemployed. The Royal Commission report recommends that doctors retire at 65, especially if they have small practices. One then thinks of the East End of London, Liverpool and many major cities.
  Drugs cost the National Health Service £1 billion a year. A DHSS working group was intended to report on prescribing. What has happened to its report? Perhaps the Secretary of State, who is a master cyclist, can employ his bike to find out the answer to that question. Where is the report?
  Drug companies, through pricing policies, inflate the expenditure that the Government are forced to meet to supply drugs. We spend £12 million a year on tranquillisers such as Valium and Librium. They do not cure patients. They are mere substitutes for care. If we provided the much-needed jobs in the Health Service, we could provide the means to prevent some of the terrible deprivations created by the Government.
  I agree with some of the comments by the hon. Member for Bath (Mr. Patten), but I reject his forecast of the outcome of the next general election. The sooner that we
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  have a general election, get rid of this Government and put the country on the road to sensible Socialist policies, the better it will be for the British people.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The hon. Member for Preston, South (Mr. Thorne) referred to long speeches made yesterday. I remind the House that the shortest speech so far today has lasted 18 minutes and I am told that 24 right hon. and hon. Members wish to speak.
  6.47 pm
  Mrs. Jill Knight: I gladly acknowledge the substantial help given to industry this week. The cut in the national insurance surcharge is of immense importance. I was amazed that the right hon. Member for Stepney and Poplar (Mr. Shore) called it a "cosmetic change". That is part of the trouble with the Labour Party. Its Members have no understanding of spending taxpayers' money. To call a £1 billion benefit package "cosmetic" is absurdly unrealistic.
  I am pleased at the freeze on gas prices, but I wish that industry's power costs could be further cut. Certainly industry believes that it is unfairly discriminated against compared with continental firms, and perhaps more help could be given in that direction.
  As a West Midlands Member, I feel bound to express my grave anxiety about the continuing decline of industy in the area. I see no sign of conditions improving. With exactly the same ungratefulness, arrogance and greed displayed by little Oliver Twist, I must ask for more.
  The seeds of today's problems were sown years ago. They go back to the 1950s and 1960s when it looked as though prosperity was here to stay and industry would prosper for ever. The sun was going down on the empire, but it was thought that it would shine for ever on industry and Britain. Governments felt at that time that industry was a milch cow that could be taxed and taxed and rated and rated. We are still suffering from those actions. When the industrial rating system was abolished in 1960, it perhaps did not seem a bad thing, but the effects of rates on industry today are crippling.
  In the following decade a sort of chessboard policy was adopted, moving industries and parts of industries all around Britain, wherever officialdom deemed that it would be of advantage. It may have helped to provide instant jobs for a time, but if a scheme is to flourish it should be based on viability and not used just for short bursts. A tree without firm and healthy roots does not grow. It may be all right for a while, but the leaves will soon start to turn brown and fall. That is what has happened with the transplant of industry that took place.
  Mr. Quinton Hazell, the chairman of the Supra Group, whose influence is respected and heeded far outside the West Midlands, spoke at Aston university yesterday. He spoke about the motor industry. He said that the hub of that industry was the Midlands, Oxford, Luton and Dagenham. He said that
  "to split this asunder … was disaster number one",
  and he went on to say:
  "It has become more and more obvious, as it has been to us in the Industry ever since and even before it occurred, that you cannot splinter the Motor Industry as political pressures did in England. You cannot have production lines 300 miles long."
  I hope that we have learnt that lesson, because our competitors in Europe and elsewhere do not have production lines 300 miles long. They operate where

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  everything is nearby—whether steel, pressings, components or accessories—and where labour and management are close. It means that they have a tremendous advantage.
  The enterprise zone policy causes great resentment. It may not be expressed, particularly by people who are lucky enough to be in an enterprise zone. Such people will say "Thank you very much, Minister. Do keep on giving." However, it is hard for people just over the line where the enterprise zone stops. They get nothing, while the chap across the road not only gets help from the Government in a dozen different ways, but frequently, because of the special help, gets orders. People placing orders now look to see where the enterprise zones are and put their orders there, because it is likely that the product will be cheaper if it comes from firms receiving Government help. The point has been put to me again and again by industrialists in Birmingham that the Government should understand that the whole system of enterprise zones causes enormous resentment. In my view, that resentment is well based.
  How best could the money now spent on enterprise zones be spent? In my view, help should be given to industry through rates. That would be a far better form of help.
  Mr. Homewood rose—
  Mrs. Knight: I shall not give way, because I am anxious to get on with my speech. Many other hon. Members wish to speak in this debate.
  The money would be more wisely spent on rates help than on enterprise zones. The notion that industry, in its present state, can pay full rates is as out of date as a cloche hat. Industry pays the full rateable value and gets no equivalent service back-up. Rates have gone up by more than one-third in the last two years alone. The tragedy is that as rates went up and up the prosperity of industry went down and down. The position of industry was almost intolerable. More and more businesses have been hit by the recession. Moreover, it is unfair that industry is not allowed a vote. Businesses cannot even say what they think about increased rates, although it is true that many of them vote with their feet and leave areas where rates are high. That is particularly noteworthy in London.
  It is important to realise that businesses often have to reduce manpower to pay the rates bill. As the rates bill increases, more and more people are thrown on the dole, while businesses scratch around to find the money to pay the rates. Moreover, money is lost for research and development, which is crucial to successful business. I know firms which have not introduced new technology because of their heavy rates bills. That, in turn, means higher production costs for businesses in Britain than for businesses abroad, whose Governments look sympathetically at rates as they affect business.
  Today the rates are the two-ton straw that breaks the back of a camel suffering from anorexia nervosa. The Minister should realise that something will have to be done to help industry. At present, when a factory is left vacant because of bankruptcy or contracting business, it is sometimes razed to the ground because what is left of the firm cannot afford to pay the rates. Unless the factory is rendered totally unusable, the rates have to be paid. There
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  have been many instances in the West Midlands where, if the factory has not been totally razed to the ground, its roof has been taken off.
  When the upturn comes, it will be crazy to have to rebuild a factory which was solid and existing. The situation is sheer lunacy. Not only are buildings being destroyed, but there is a knock-on effect on the machinery inside. One cannot store machinery in a building that has no roof. The machinery is sold off, frequently for next to nothing, to overseas firms which then flood the market with cheap imports manufactured on the very machinery which was sold at about 5 per cent. of its real value. Mr. Hazell drew attention to that fact also.
  I should have preferred the outright abolition of the national insurance surcharge, and I hope that it will come. I hope that something more will be done about energy costs, but I do not support those who say that the high pound should be devalued. I recall industrialists who now complain to me about the difficulty of the high pound when they export complaining to me some years ago about the difficulty of the low pound when they had to import. So I view that complaint with scepticism.
  We have good news for industry on the national insurance surcharge. We have good news on inflation and on interest rates. It is very good news that productivity per man over the past six months has increased by 10 per cent. That is the sort of good news that we want to hear. That is what will help industry. However, I beg the Government to heed the dreadful predicament of industry over rates. I plead with my right hon. Friend the Secretary of State for Employment to consider again the policy on enterprise zones. He should ask himself whether it might be better to spend the money in such a way as to help industry more and reduce unemployment more.
  7 pm
  Dr. Jeremy Bray: The hon. Members for Birmingham, Edgbaston (Mrs. Knight) and for Bath (Mr. Patten) who have spoken from the Conservative Back Benches see no signs of recovery and nor do Labour Members. It seems to me that they dare to strike but fear to wound. Lustier action will be needed if we are to edge Britain out of recession. Later in my speech I shall speculate on the part that those hon. Members, and others who think like them, may play in that process.
  I start by discussing the gravest industrial crisis we face—that in steel. In the worst recession since the war, the gross domestic product has fallen by 4 per cent., manufacturing industry output by 15 per cent. and steel production by 50 per cent. since 1979.
  All obsolete steel capacity has already been closed. There has been speculation that the Government will now close one, or even two, of the remaining big five steel works which form the hard core of a modern, efficient and highly productive steel industry.
  The speculation has often mentioned Redcar works and Ravenscraig works in my constituency as being the furthest from the markets and the most likely to suffer. I do not believe that the Government will close Ravenscraig, or indeed any of the big five. If they were to do so, the social devastation would be appalling.
  Unemployment in Lanarkshire is well over 20 per cent. with 10,000 jobs already having been lost in steel. Our unemployment would soar to over 50 per cent. Thirteen thousand jobs would be lost directly and indirectly in the steel industry; its suppliers, and service industries which

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  would go to the wall if the community lost its basic income of £100 million a year. There would be industrial action across many industries and a work-in supported by the whole of Scotland which would make that on the Upper Clyde look like a Sunday school picnic.
  With or without the resignation of the Secretary of State for Scotland, the Government's authority in Scotland would be destroyed. It is not only the Conservative Party which would suffer. There is little of it left in Scotland. The union with Scotland would suffer too. I cannot conceive of any Government being so foolish as to close Ravenscraig.
  But it is not the social or political arguments which will stop the Government doing that, or closing any of the big five. It is the economic need for steel, if Britain is ever to recover. To close one of the major steel works would be to admit the failure of the Government's economic strategy, not just for a year or two but for the next decade. No Government will do that just before an election or, as I shall show, after it.
  If there were one works which fell clearly behind the others, that could suffer, but there is no such works. Ravenscraig never had the large labour forces once employed at Port Talbot and Llanwern. However, when manpower was reduced in South Wales, for a while Ravenscraig's productivity did fall behind that of other works. That has now changed. In the second quarter of this year productivity at Ravenscraig, when it still had a reasonable loading, was 4·54 man hours per tonne. That is the highest in Britain, way above the BSC and international averages.
  Freight and energy, where British Rail and the electricity board have been treating Ravenscraig as a pork barrel, push up costs, but they can be reduced. However, it is not appreciated generally, and in particular by the press, that Ravenscraig produces the highest qualities of strip and plate, which is where the future market lies.
  While the mill at Port Talbot is ageing and Llanwern is without continuous casting, Ravenscraig is the only works with a completely modern plant from the sinter plant through iron and steel making, secondary steel making, continuous casting and hot and cold strip and plate mills. It is able to supply qualities of steel for everything from one piece deep-drawn tin cans to nuclear submarine hulls which cannot be supplied from elsewhere in BSC.
  Even so, it can be argued that the steel market will not rise to the 14·4 million tonnes of manned steel capacity that exists now. The steel industry cannot judge that question because in the deepest depression it cannot tell how far the fall in final demand has been amplified by stock reductions in successive stages of industry. Perhaps the steel content of GDP has fallen, but it has not fallen 50 per cent., which is that shown by the fall in output relative to the fall in GDP since 1979.
  Historically, industries have always been too despairing in a recession and too euphoric in a boom. More importantly, the industry cannot tell what policy this or other Governments will follow, particularly as regards the exchange rate and competitiveness.
  In the short term, the Government will raise BSC's cash limits and do what they can within the framework of the European Community's policies to limit the damage through agreed production levels, prices and the linking of
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  Government aid to the rationalisation which has already occurred in Britain but has yet to be carried out in other European countries.
  In implementing that policy, Governments in the European Community will become responsible in January for the inspection and implementation of the Davignon measures, previously the responsibility of Community officials. Therefore, I hope that we shall see a great tightening up of import controls and prices. The Secretary of State for Industry must make it clear at the Council of Ministers' meeting on 18 November that his action on imports from Europe will be related to theirs on production and prices.
  Within such a policy framework, the Government will still seek to cut back capacity and costs. Therefore, to avoid any possibility of later misunderstanding, let me say that if the Government were to close or mothball the second blast furnace and the hot and cold strip mills at Ravenscraig and Gartcosh, it would be tantamount to closure of the whole works and all the consequences to which I referred would follow. Ravenscraig is not viable merely as a plate producer.
  Once major units are mothballed the likelihood of their ever reopening is slim, except in an old-fashioned war. Start-up costs are huge with the costs of relining furnaces, training workers and recommissioning plant. Operating plants are constantly updated and a mothballed plant would fall quickly behind the state of the art. It would be argued subsequently that it was cheaper to import steel, steel products, products of steel products, and so on. The process of deindustrialisation would be irreversible.
  The main consideration is what is happening to the economy. The Government will say that they are waiting to see what is happening to the market and meanwhile do not wish to take any irreversible decisions. I give the Secretary of State for Industry honour for saying that this afternoon. The cost of perhaps £50 million a year to maintain a steel works in production is tiny compared to the £1 billion or more that it would cost to replace it.
  Underneath, it is not just the steel market, it is the will of the people which will manifest itself, not just in the election—though certainly in that—but in the shape of the economy which they wish to see emerge. There we are bound to see a major change in policy whatever happens in the election.
  Last month the following judgment was made in evidence to us in the Treasury and Civil Service Committee:
  "At its peak in 1981, the 'real' sterling exchange rate was not only about 50 per cent. above its depreciated value of 1976 but about 30 per cent. higher than in 1972. This is by far the most excessive over valuation which any major currency has experienced in recent monetary history … the large real appreciation of sterling from 1979 to 1981 was probably the most important element in that period of British economic policy as concerns its effects both on domestic inflation as well as on British trade, production and employment."
  The judgment that a reduction in inflation has been bought at the cost of trade, production and employment by the most excessive overvaluation in recent monetary history was made not by one of my hon. Friends on the Left, not by some distraught Keynesian economist but by Dr. Otto Emminger, former President of the German Bundesbank.

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  There has been only an 8 per cent. recovery in competitiveness since 1981 and competitiveness has been estimated by Philips and Drew this morning to be 17 per cent. worse than its average for 1973–78.
  This misalignment of the exchange rate cannot be sustained. The artificial reduction in inflation that it has bought at the cost of such painfully increasing idleness can be sustained only so long as British industry continues contracting and the share of imports rises. Once there is no industry left to contract further, the balance of payments will deteriorate and the exchange rate will collapse. Anticipation that the rot cannot continue will bring about the realignment of exchange rates at some earlier but uncertain point of time.
  The Government cannot allow that to be before the general election because realignment will raise prices, and the Government's much prized reduction in inflation will be shown as the chimera that it is. But once the election is over, whoever wins, and whatever the nature of the Government, the constraint will be removed. The realignment cannot be postponed for ever. It will be in the interests of a new Government to bring it about sooner rather than later in the life of a new Parliament. It will transform the prospects for steel and manufacturing generally. It will need to be accompanied by many other fiscal and monetary measures.
  Here is another description of what has happened:
  "The Government's policy was ultimately an act of faith in an incompletely understood adjustment mechanism that was undertaken for largely moral reasons. It carried with it a belief that any overvaluation of sterling that resulted would be removed by reductions in British prices and costs or rises in overseas prices and costs, that the results would be good for trade, if only by inducing stabilisations elsewhere by force of example, which would benefit an internationally oriented economy such as Britain's. Once the decision was made and announced there was no going back on it."
  How often have we heard "There is no alternative"? That is not a description of the Government's medium term financial strategy, though it fits exactly. It is a description of Mr. Churchill's return to the gold standard in 1925 from Moggridge's "British Monetary Policy 1924–1931." However, Mr. Churchill's over-valuation was in the neighbourhood of only 10 per cent. whereas now it is 17 per cent. at least. That is the lowest possible estimate. The result in 1925 was to keep Britain in the doldrums. The result today has been to plunge Britain into depression. To make the gold standard policy work, it was necessary to achieve a reduction in wages such as happened in 1921. Perhaps the Government will try that again. However, the general strike in 1926 put a stop to the possibility of any wage reductions and wage rates remained almost constant from 1922 to 1938.
  The moral commitment of Conservatives in 1925 was to the gold standard and the dollar exchange rate. Even the Labour Government of 1929–1931 clung to it in the crash of 1931. Philip Snowden, the then Chancellor of the Exchequer, bleated pathetically to the Cabinet as recorded in the minutes of 22 August 1931. This was two days before the collapse of the then Labour Government. The minutes read:
  "The Chancellor of the Exchequer informed the Cabinet of the nature of the consequences that would follow a departure from the gold standard. So far as he was concerned, he had no doubt whatever if he was compelled to choose between retaining the
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  Labour movement in its present form and reducing the standard of living of workmen by 50 per cent., which would be the effect of departing from the gold standard, where his duty would lie."
  Yet no sooner had the Conservatives regained control in the National Government than they were off the gold standard in a month. With no coherent international strategy, exchange rates fluctuated, but gradually, with cheap money and expansionary fiscal policies, the slow recovery began in 1932. For those lucky enough to be in work, neither wages nor prices fell or rose by more than the odd per cent. until 1939.
  History never repeats itself exactly. However, even if the Conservatives were to remain in government after the election, which Heaven and the electorate seem likely to conspire to forbid, circumstances would force a change in the exchange rate and a new Conservative Government would be quick to recognise it in 1983 as the National Government were in 1931. As the overvaluation is far greater this time, the concealed inflation will manifest itself whoever is in office and the Government's boast of having reduced inflation will be exposed for the fraud it is.
  If we are to bring the country back to sanity, we must take seriously the moral reasons, however twisted, which have fortified the Prime Minister and her lackey on the disastrous and fraudulent course on which they have led the nation. As The Times puts it today in its leader on inflation,
  "Five per cent. is too high. It is a lesser deceit than 10 per cent. but a deceit for all that."
  That is a quite different conviction from that which drove Sir Montague Norman, Governor of the Bank of England, who led Mr. Churchill on to the gold standard. The foreign exchange rate, which the Prime Minister and the Chancellor of the Exchequer now regard as a wayward and dispensable consideration, was for the Tories of the 1920s the sacred cow. They believed that the pound must exchange for $4·85 yesterday, today and tomorrow. That was their belief. They took the view that a contract is a contract is a contract. "Not so", say the Tories of the 1980s. They say that a pound today must exchange for a pound tomorrow. We cannot have them both. Only in Heaven is that possible, that deadly equilibrium Heaven, in which nothing ever happens.
  The Government are clinging to an arithmetical mistake and not a moral principle. Morals are to do with men, not arithmetic. The only rule in arithmetic is "Thou shalt not make a mistake". Unfortunately, that is what the Government have done.
  In a strange but revealing perversion of the parable of the Good Samaritan, the Prime Minister said that the Samaritan could not have saved the man who fell among thieves if he had had no money. The whole point was that the priest and the Levite who passed by on the other side had plenty of money. It was only the Samaritan who knew when he had to spend it. It was only the Samaritan who had a heart.
  I have spelt out elsewhere in more painful and more technical detail than any other Member what the Government need to do to restore the economy to some semblance of balance and sanity, and to contribute constructively to world recovery. If the details are not for today, the result in terms of the lives and livelihoods of steel workers and their families, and of workers

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  everywhere, is compelling. The Government must stay their hand before it further mutilates their industries and plunges them deeper into unemployment.
  7.18 pm
  Mr. Alan Haselhurst: My text, if I need one, from the Gracious Speech is the statement that the Government
  "will take further steps to encourage initiative and enterprise."
  I welcome most warmly the paragraph on Europe, which is a good indication for me of the Government's earnest in respect of initiative and enterprise. The full and wholehearted terms in which it is expressed will find support on the Government Benches and among those in industry who understand that Britain's membership of the Community is an essential part of hopes for recovery.
  I should like to ask the Government about the relationship between manufacturing and service industry and then to see how, in the light of that relationship, we might best help our industry. I hope that the Government will treat with scepticism the somewhat trendy notion that manufacturing industry is now of such declining importance that it can be relegated to the sidelines and all our eggs placed instead in the basket of the service sector.
  There is no doubt that employment in the manufacturing sector will decline. There is therefore a corresponding importance to be attached to the service sector, but I do not believe that that in itself is an argument for downgrading the importance of manufacturing and I propose to adduce a number of arguments in that direction.
  All things being equal, I would query whether services can be counted on to take up the slack in the British economy left by a decline in manufacturing, whether one assesses that in terms of wealth or employment. Let us consider the export of goods and services for 1980. For manufacturing, the value added was 50 per cent. A further 25 per cent. was attributable to getting the products of manufacturing industry to the market, and only 25 per cent. to services unconnected with manufacture.
  A breakdown in the balance of payments for 1980 of the credits for private services shows that the total of all things that could be classified as services—some of these include industries that are related to manufacturing—was £15,412 million, compared to a total £37,000 million attributed to manufacturing exports. It is asking a great deal of tourism, financial services and overseas students to expect that gap to be made up in the foreseeable future.
  In this connection, some manufacturing sectors obviously have to be seen as strategically important to the British economy. The hon. Member for Motherwell and Wishaw (Dr. Bray) made that point as effectively as anyone. We must also remember that part, at least, of the contribution that the service industry can make to our economy depends upon its relationship to manufacturing. There is a limit to the number of jobs that even services can provide. One has only to examine what is happening in the banking world, the hotel industry and in retailing to realise that we cannot expect to see those as areas in which jobs will mushroom. Some people would look to the potential of tourism, which I accept is important, but there is a limit to which these small islands, even if we exploit our entire geographical area, can provide the number of jobs that would be needed as a substitute for manufacturing industry.
  On the positive side of the argument, we should not ignore the innovative potential of British industry. It is
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  interesting to note that the science and technology agency of Japan's Ministry of International Trade and Industry produced some figures last year about technological innovation leading to significant breakthroughs. The proportions that it assigned were as follows; Japan 8 per cent.; West Germany 13 per cent.; the United States of America 24 per cent.; and the United Kingdom 55 per cent. On the basis of those figures we should not easily he railroaded into writing off British manufacturing industry. Manufacturing industry still remains the greatest potential wealth earner, even if robots do a great part of the producing.
  If, as I would argue, manufacturing is vital to the continuing success of, and hopes for, the British economy, how can we best help manufacturing industry? It will not be helped by anything that the Opposition have suggested so far, whether in this debate or elsewhere. The attack of the right hon. Member for Salford, West (Mr. Orme) was hopelessly ill-founded. He peddled the sterile thesis of yesteryear, which is that if the State were to embrace all manufacturing in Britain this would somehow save us, without beginning to adduce one shred of evidence to explain how that in itself would create more demand or make our industry competitive and efficient compared with that of other countries. He gave the game away when, in answer to my right hon. Friend the Secretary of State, he virtually admitted that the Labour Party's plan would turn our industry into a social service.
  I do not want to be a mouthpiece of the CBI, although I sometimes consider it odd that there are not more mouthpieces of the CBI on the Conservative Benches. It would be odd if the voice of industry were not echoed in speeches from the Conservative Benches. I sympathise with the CBI in its argument about the burden of costs upon industry today. Therefore, I obviously welcomed the tenor of the Chancellor's economic statement yesterday, although I had a tinge of regret on two counts.
  There was nothing in the statement about the burden of rates. I recognise that the problem, whether it be domestic or non-domestic rates, is a knotty one, but some of us feel sad that the Government, who have shown courage in many things, have somehow not been able to find the courage to deal with this particularly difficult problem.
  My other regret concerns the 5 per cent. abatement of unemployment benefit. I do not believe that industry would rout the argument that there has to be balance and that if, unfortunately, a percentage of the population are unemployed of necessity because of a changeover in our economy, those people must be carefully and sensitively looked after. Not many people would disagree with that.
  Yet I am surprised that even the CBI does not make more of the need for demand in the economy. Cost reduction is, of course, important. The fact that the national insurance surcharge is being reduced, the fact that interest rates are falling and the fact that industry has within its own power the ability to control wage increases can all help industry's competitive position. Will those things by themselves cause business men to invest and, as a secondary question, would such investment if it came create a greater number of jobs rather than a smaller number? We are left with the tantalising possibility that the Chancellor in his next Budget may bring about some major reductions in personal taxation.
  There are two perfectly respectably argued points of view about how far the reduction in direct taxation is crucial to the recovery of industry. I am much inclined to

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  the argument that a reduction in taxes helps to stimulate demand and bolsters incentive, and I should like to see those reductions made, but I am bound to admit that in the present state of the British economy a cut in income tax could be a somewhat blunt instrument. If more demand is released in a general sense, the Government have no actual control over what people do with the extra money that they find in their wallets or in their handbags. If a high proportion of that money were to go into the purchase of Japanese video recorders, Italian refrigerators or more cars, whether from Japan or other overseas manufacturers, what would be the benefit to British industry of such a reduction in taxation?
  If £2,000 million is to be released into the economy, I would ponder with my right hon. Friends whether there is a case for saying that the money could do more good for British industry and our people if it took the form of a commitment to capital spending, whether at local or national level. Then at least we could ensure that in the first place orders were placed on basic British industries, which would be likely to create more employment in the short term. If, later, the money earned goes to buy Japanese video recorders, at least it will have done some good to British industry on the way.
  I hope that as we analyse Britain's industrial needs we shall do so correctly, remembering that what suits one sector may not accord the same help to another. We should not lightly dismiss the future role of manufacturing in our economy. In the action that we take we should above all be sure that the initiative and enterprise which in the Gracious Speech we are committed to encourage lie substantially within the British Isles.
  7.30 pm
  Mr. David Penhaligon: Many of the comments made so far have revolved round the proposal in the Gracious Speech to denationalise or privatise British Telecom. I should like to state the Liberal Party's view.
  Over the years, and certainly during this Parliament, we have supported a considerable amount of Government legislation when we believed that that legislation improved competition within various sectors. I think immediately of transport. We take the view that any practical measures that break up monopolies are to be welcomed. It was with that in mind that last Session we supported Government legislation to introduce some competition into the vital British Telecom sector.
  However, no impressive reasons have been advanced in support of the proposals regarding British Telecom. Indeed, the only one advanced was that it would improve its financial pattern and investment ability. The Government argue that if the money is borrowed from the market instead of from the PSBR, that will help the British economy. I do not accept that. It is time that we differentiated between money borrowed for sensible, long-term, credible investment and money borrowed for other purposes. I suspect that over the years the money borrowed for British Telecom has had a better return on capital than the money borrowed for British Rail. There should therefore be a differentiation in the way that we borrow money for various purposes.
  Even if one accepts the Government's argument—which I do not—that it is important to go to the market as opposed to the PSBR, I do not see why the law
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  cannot be changed so that British Telecom can have direct access to the market, given that it is a commercially viable business. Leaving aside that argument, there are few other reasons in support of what the Government are doing.
  Mr. Tebbit: I am following the hon. Gentleman with considerable interest. Who would decide whether the borrowing was for a profitable and useful purpose or whether it would go down the drain, like the other £40,000 million of taxpayers' investment in the nationalised industries?
  Mr. Penhaligon: The Minister poses a fair question, and I admit that at the margin the problem is difficult. I suspect that over the years he and I would not have found great difficulty coming to such a decision. Whether we would always have had the courage to admit it in public as elections drew near is perhaps another point.
  Several hon. Members have also spoken about rural areas, kiosks and pensions in the context of British Telecom. Those aspects will depend on what the clauses in the Bill provide. It could be a disaster for rural areas, such as mine, if there were not some controlling legislation. On the other hand, the legislation could be phrased so as to improve services in the rural areas. Much the same can be said about kiosks and pensions.
  Some of the letters that I have received asking me to vote against the denationalisation of British Telecom—which I shall—have tempted me to transfer my allegiance to the other side, because some of the arguments are false, and I suspect that those who advance them know it. The Government have presented only one competent reason for this denationalisation—that British Telecom should have free access to the market as opposed to the PSBR. I concur with that observation. There is no reason why British Telecom as it exists today cannot be given access to the market, which can lend it money if it chooses.
  I await with interest the share launch of British Shipbuilders. The Labour Party accuses the Government of making profits for their friends in the City. I imagine that the Government will have to pay people to take shares in British Shipbuilders, except perhaps in the warships sector which attracts Government contracts. That is not competition, and nor is it anti-monopoly. The Liberal Party will not support that proposal.
  The third proposal relates to electricity generation. If it proves to be what I believe it is, we shall support and welcome it. It could do much to make practical use of heat generated in industry and could encourage innovation and alternative sources of generating electricity. A proposal that is sensibly drawn could well be advantageous to our economy and in the long term might introduce some exciting innovations in electricity generation.
  That is the Liberal Party's general attitude to the denationalisation proposals in the Gracious Speech.
  I have always regarded the hon. Member for Birmingham, Edgbaston (Mrs. Knight) as a firm Government supporter. When the hon. Lady says that she sees no sign of improvement in that great city, we begin to realise that something fundamental and desperate is happening. Like many hon. Members, I have spent more time in Birmingham in the past few weeks than hitherto I expected, and I met a number of manufacturers. It was quite clear that, if anything, the hon. Lady underestimated the situation.

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  Many companies are now being run more on hope than on faith. As the hon. Member for Motherwell and Wishaw (Dr. Bray) said, the fact that their competitiveness is down is overwhelmingly linked with the exchange rate. It is true that industrial productivity has improved and that there has been some marginal progress on inflation, but even both taken together do not make an impact on the loss of competitiveness that has occurred because the Government have allowed the British exchange rate to reach its present level.
  I agree with every hon. Member who has said that our industrial base, upon which we all depend, has eroded and declined. I go further. I believe that the Government, perhaps not through malice, are pursuing a series of policies that are destroying our industrial base. If hon. Members do not believe that, I do not know what they have been doing during the Summer Recess.
  The Association of Independent Businesses, at the small end of the market, has spoken of
  "a decline in the fortunes of our sector".
  The National Federation of the Self-Employed has concluded that the Government have failed small businesses. The real wealth producers in the manufacturing sector know that the pressures on them are enormous and nearly all of them fear for the medium and long-term future of their businesses.
  The Government believe that they have shown some ingenuity in the small business sector and that they have produced several interesting ideas, but it is like carrying buckets of water into the middle of the desert. There is nothing wrong with that, but they do not help much or for long. Small businesses need a good climate and customers who want to buy their products. All the small measures that one can imagine do not overcome the most basic requirement of anyone who wishes to set up a small business—a good business climate.
  It is fashionable for hon. Members to blame rates. The Government are making a colossal electoral error in not doing something about them. It is an asinine way of collecting revenue. The notion that rates are causing the great decline in the manufacturing sector is preposterous. It is constantly being argued that businesses are moving to low-rated areas. I am the Member of Parliament for the lowest-rated area in England. If that is so, one should not be able to move in Cornwall for the manufacturing sector, but we have about 20 per cent. unemployment. It is patently not true and the Government probably know it. In a few areas, where extremely Left-wing Labour councillors have been elected, money is spent like dishwater, but to cite that as the main reason for industrial decline is preposterous and Conservative Members know it.
  We must regain competitiveness. As the hon. Member for Motherwell and Wishaw (Dr. Bray) said, the Government must face up to exchange rates. I hope that they do so sooner rather than later. If they leave it until much later, there will not be much industry to recover on the new competitive base.
  7.41 pm
  Mr. Michael Marshall: The principal theme of the debate, as suggested by the Front Bench spokesmen, has been the Government's role, their relationship with the nationalised industries and the principles of privatisation. It is worth examining the principles of the Government's privatisation programme. I shall relate that to previous
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  privatisation of British Aerospace and Cable and Wireless—in which my interest is well known—and the management part of the National Freight Corporation. the Phoenix development in the British Steel Corporation and the opportunities before us in the Queen's Speech.
  With regard to privatisation in the British Steel Corporation, I listened carefully to a moving part of the speech of the hon. Member for Motherwell and Wishaw (Dr. Bray). He made several fair points. Privatisation is one way to approach some parts of an industry to identify particular market segments with more precision than has been done in the past. That is true of the recent bringing together of the forging interests of the British Steel Corporation and the private sector in a fifty-fifty public-private enterprise. That is a good move.
  The hon. Member for Motherwell and Wishaw spoke of the problems that might afflict Ravenscraig or another major plant. I urge caution on my right hon. Friend the Secretary of State in the time that he takes to examine that problem, especially if we relate it not only to the market assessment but to the problem that must be cracked in the European Coal and Steel Community—how we reach a fair share of the market. There must be a Community view and a Community solution.
  My right hon. Friend should be encouraged in his deliberations by recalling the time that the Labour Government spent on their closure review. No urging from Opposition Members to hasten that would be appropriate, nor do I believe that it would be accepted.
  I shall now deal with the principles of privatisation that the Government have displayed. A few of the arguments were not addressed to the basic issue. The reason for examining what is now proposed for British Shipbuilders and for the future pattern of British Aerospace is to solve the problems that must be overcome for large parts of our nationalised industries, because they are internationally competitive manufacturing industries. That clear distinction was first drawn when we examined the Government's shopping list.
  The right hon. Member for Salford, West (Mr. Orme) displayed a prehistoric approach. I would be happier if he were bending his mind to the problems of new industries. British Telecom is such a new industry. That is why I shall argue later that it must change and evolve to respond to the opportunities before it.
  In an intervention I tried to urge the right hon. Member for Stockton to consider mixed ownership. It is not the easy cop out, sell-out or profiteering that the Opposition say it is. It raises the important question whether a capital structure in a mixed public-private enterprise is regarded by the public as a reasonable approach to bringing stability to nationalised industries. It is more effective than the childish suggestion that we should stay as we are. The Westminster-Whitehall mixture is singularly ill-geared to provide the necessary freedom of manoeuvre to internationally competitive manufacturing industries. All hon. Members know that from their experience of Select Committees. There are many grave disadvantages for major industries, such as British Aerospace that must compete in the world at large, in the form of nationalised industry that we have evolved. That is why the Government approach deserves close consideration.
  Capital structure is not an academic exercise. It provides an opportunity for employee shareholding. That, and the opportunity for home ownership, offers opportunities for a new climate in which an individual

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  lives and works. It is exciting that many people in BT will look forward to that opportunity. Those who met the lobby in Westminster Hall recently know that behind the rhetoric many people are interested in the proposition. Moreover, I met many ex-employees of BT during the weekend. They are also interested in the opportunity.
  The availability of capital should be examined carefully. It is not simply a matter of Treasury insensitivity or semantic argument. Any hon. Member who has had an opportunity of working in Government will know that there are serious difficulties when discussing risk-taking enterprises. As BT moves into the communications and information technology age with its great commercial opportunities, it must inevitably enter the risk-taking business. I suggest that, as it does, no Government Department will find itself comfortable or qualified to handle such risk-taking decisions. My right hon. Friend the Secretary of State for Employment made that point in an earlier intervention.
  If capital availability for many of those industries is of the greatest importance, we should consider what is happening in reverse. We should remember that capital was being denied to the warship building side of British Shipbuilders because its profits were being channelled to underwrite the losses of the merchant ship building side. That is an example of internal problems in the early years of nationalisation.
  That is why the proposal in the Queen's Speech will allow freedom to privatise warship building. It will not be easy and it will not happen in the short term, but it must be right. That is what shop stewards in Vosper Thornycroft in my constituency will argue. They have clearly lost out in the balance of power in bringing together nationalised industries. The same argument applied to the bringing together of the 13 largest steel companies into the nationalised British Steel Corporation. In that kind of merger, the politics that come into play are damaging to the interests of many long standing successful parts of British industry. We have reached the stage where we should try to step aside from reflex actions in arguing about nationalisation and denationalisation. New structures, new opportunities for shareholding and new access to the capital market should be matters that everyone takes seriously.
  The BT situation is classic. The right hon. Member for Salford, West sought to make some play of this proposal because it did not appear in the Conservative Party's manifesto. Part of the problem of our political system is that if we were to try to predict the course of industry over the next five years we would never get it right. As industries begin to accelerate and respond to change, many new opportunities arise that could not have been foreseen in 1979. Those who were involved in the proceedings on the British Telecommunications Bill will recall that the Government were accused of creaming off. Now, when we seek to give BT the opportunity to act as a private company, to compete—I am among those who believe that it must be on all fours with any other private company—and to use its judgment in moving up or down market or into attachments, the argument about freedom of access to the capital market is reinforced.
  BT's approach to privatisation should encompass its access to the capital market, freedom of movement and the greater flexibility in management that private ownership
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  will allow. These are points that the hon. Member for Truro (Mr. Penhaligon) might wish to reconsider. I was disappointed that he closed his options, having been half persuaded, as I have been more than persuaded, by many of the bogus arguments that are flying about. Hon. Members will look to see that full assurances are given on pensions just as they were for British Aerospace. In considering how shares are to be made available, I hope and believe that the small investor, starting with employees, will be given every opportunity. I sincerely hope that a place will be found for ex-employees in that kind of scheme.
  Job security is far more likely when BT occupies, so far as we can see, 90 per cent. of the market. There will be more opportunities to move widely in the international sphere than now exists. There is a tremendous pool of excellence in this country. The great centre of excellence at Martlesham has not been exploited because of the problem of capital shortage. This could be built upon. I see scope for job growth in BT and the whole of the industry. Employees and customers will gain. The onset of competition has improved beyond recognition BT's service in the provision of lines for offices. Those who were previously told that they would have to wait six months are now offered lines in office buildings before they are even built. The changes are of great importance.
  Hon. Members have described how BT's charges have been used to gather money for investment. This has been happening not only over the last three years, but for a long time. It is not a sensible means of financing a business. The opportunities to bring down charges should be attractive to customers.
  For those within BT the way is open to a great opportunity for a company that in many ways has been outstanding in the technical sense but thwarted in its commercial development and its opportunities to trade with the world at large. The Government are to be commended on their approach. I hope that the legislation will be implemented as soon as possible—indeed, before the election. Whatever happens, I shall be happy to go to the electorate and say that we have either implemented the legislation or intend to do so. I am confident of the reception of the public to that suggestion.
  7.55 pm
  Mrs. Renée Short: I am sorry that the hon. Member for Truro (Mr. Penhaligon), despite making a speech that contained many good reasons for voting with us, will not be doing so. The hon. Gentleman made a lively speech. I hope that his constituents will read it and mark it. It is fascinating that he has been the only hon. Member to refer to small businesses. The Government are not playing that record any more. They are playing the denationalisation record.
  I found the speech of the Secretary of State arrogant and disappointing. The right hon. Gentleman put forward a poor case. It is clear that the Government think that this is an issue that can be presented to the electorate as a cure-all for the evils that they themselves have created since they came to office in 1979. They came to power by bamboozling the electorate—I hope that that is not an unparliamentary word—about tax reductions and ending unemployment, and by appealing to the lowest common denominator to obtain their ends. They had every intention of using unemployment created deliberately by them as a weapon to reduce the economic power and therefore the

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  standard of life of millions of people. That is what they have done. They have forced people into giving up their determination to improve their standard of living. People who are on the dole and receiving supplementary benefit tend to lose their desire to fight or to feel that they have a stake in changing their condition.
  The Government bamboozled people and appealed to their greed. Not unnaturally, they were not able to fulfil any of the promises that they made at the time of the election. The reduction in the rate of inflation, the rise of which to unprecedented heights was entirely due to the Government's policies, was achieved at a cost of nearly 4 million unemployed. That is the situation today. Those policies have effectively destroyed domestic production by one third and created an industrial wasteland in every region, especially the West Midlands.
  How the Prime Minister and the Chancellor of the Exchequer have the nerve to claim that this has been a successful policy is beyond comprehension. They have not merely cheated ordinary working people who fell for their mendacious promises, which they never intended to fulfil, in 1979. They are trying to do the same again on the post-Falklands wave of false patriotism. It was Churchill, was it not, who said of the Tories of his day that patriotism was the last refuge of the scoundrel? That holds good today.
  The Government have not even kept their promises to their own natural supporters, the industrialists and the manufacturers. Even the CBI has been moved to protest at the Prime Minister's policies, which it did at its last conference and the preceding one. It is concerned about the stagnant economy and the unprecedented number of bankruptcies. The Government made record profits for the financiers and the banks with their high interest rates. They did very well. When nationalised industries are thrown on the market at scandalously low prices, the same thing will happen again over Britain's oil.
  In the West Midlands there were no fewer than 170,000 redundancies between 1979 and September 1982. Of those, 12,000 were in Wolverhampton and more than 1,000 redundancies are pending. In the West Midlands as a whole, in addition to that 170,000 there are 10,000 redundancies pending. The construction industry is one of the most seriously hit sectors, although it represents 10 per cent. of our national product. More than one third of its labour force is on the dole. The output of new houses is the lowest, as a proportion of existing stock, in the whole of Europe. That is a nice record for this Tory Government.
  The contraction of the building materials and building components industry has been a striking success for the Prime Minister's policy of destroying British industry and I hope that she is proud of it. In the West Midlands there are 34,000 unemployed building workers, which amounts to 10 per cent. of the total number of unemployed in the region.
  Once we take into account the needs of the building industry as a whole and the need for local authorities in our industrial towns and cities to rejuvenate their housing stock—whether privately or publicly owned—it becomes obvious that one way of getting the economy moving again is to stimulate building. However, the Government steadfastly refuse to do that. The decision of one of our largest industries, Ready Mixed Concrete, to close several of its aerated concrete block factories and to discontinue the manufacture of reinforced aerated concrete roof and wall slabs is the latest example of the decline in the building components industry.
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  Such production is no longer economic in the present, depressed state of the economy, and therefore many more skilled technicians and workers will now join the ranks of the unemployed, but components are still needed because some building is continuing. The Prime Minister should have the following lesson rammed home. We are still using the types of blocks and components that that firm produced, but they are not British produced. They are imported from Holland.
  That is only a small example of what is going on, but it is typical. We run down our industries and are unable to supply what our customers need. As a result, imports from Europe and everywhere else in the world further depress our market. It is the economics of bedlam. Imports are being sucked in as a result of the Prime Minister's policies, because British industry is no longer in a position to fulfil even the present, reduced legitimate demand.
  All we hear from the Prime Minister are complaints that British industry will not produce the goods that are wanted and as a result people are turning to imports. She is blaming her supporters for Britain's ills. Indeed, many of them must be sick of that. In the monetarist economy that she has created it is vain to expect financiers and industrialists to invest huge resources without some assurance of a safe and secure market. As long as the Prime Minister refuses to give a measure of protection to at least part of our beleagured industry, which is under pressure from Japan, Spain, Korea and anywhere one can name—but, above all, from Germany, France and Italy, whose industries are substantially Government subsidised—she will fail to save British industry Is that not a scandal? For as long as that continues, British industry will continue to decline.
  The path that the Prime Minister has set out upon, aided and abetted by her Ministers, is one of continuing and further decline for British industry. The Secretary of State for the Environment makes dramatic gestures, asking local authorities and even nationalised industries to increase their expenditure on capital projects by £1,000 million this year, and that is very nice, but of course he fails to provide the necessary resources to cover the revenue implications and the cost of maintenance, repairs and all the contingency payments that would follow.
  When my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) tackled the Prime Minister, on 3 November, about the revenue implications she refused to answer the question whether local authorities that did as they were told would be immune from penalties for exceeding their expenditure limits. I should be grateful if the Minister would give us that answer tonight. It would be of great interest to local authorities, as I am sure that they are anxious to carry out some capital building work.
  If local authorities are to be penalised for following apparent Government policy, that policy is clearly a sham and the Prime Minister should come clean and admit as much instead of encouraging the Secretary of State to tell local authorities to build more. I do not know what sort of Britain the Conservative Party thinks it has created, or what sort of Britain it thinks it will have created by the next general election, but as a result of its policies Britain is rapidly becoming an industrial wasteland.
  The Labour Party will have the task of recreating Britain's wealth after the general election. The people of Britain are sick and tired of the double talk practised by the Prime Minister and her Ministers, of her disruptive and

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  hostile policies and of her doctrinaire attempt to undo what was done by Labour Governments after the war, simply to justify the misguided policies that she insists on pursuing.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The House will understand that I have no control over the length of speeches. Many hon. Members have been waiting all day to take part in this important debate and the concluding speeches will begin at 9 pm. Therefore, I make a special appeal for short contributions.
  8.8 pm
  Mr. John H. Osborn: I shall heed your remarks, Mr. Deputy Speaker, and try to confine my speech to 10 minutes. The hon. Member for Wolverhampton, North-East (Mrs. Short) spoke about waste. I have had to comment on the fact that, in the Attercliffe and Brightside areas of Sheffield, steel works have been closed and pulled down. However, that has not happened only in the past three years. It has happened steadily over the past decade.
  I want to talk about steel and Sheffield, the snags with nationalisation, the advantages of promoting free enterprise—I do not like the word "privatisation"—some of the aspects of unemployment, and finally the international scene.
  I have no illusion that much of the collapse of the private sector of the steel industry has been due to the nationalisation of steel in Sheffield and elsewhere. It started in 1945. The steel masters in the 1950s and 1960s had the sword of Damocles of renationalisation over their heads and could not raise the funds to modernise their industries because of that threat.
  Nationalisation created two classes of management—those who had the State as their employer and those who had not. It also created two grades of steel worker—those who call on the State to pay their wage bill and those who depend on the sales of what they make for job security, their wage packet and the level of their wage. In Sheffield, particularly in the small businesses, many have accepted a wage reduction to keep their jobs going.
  An example of what I mean is that the EEC has made retraining grants available for those who are declared redundant, but for some unknown reason it takes about six months for the money to come through, while in the BSC. which depends on the public purse and the taxpayer, an advance payment is made for training immediately. Those who have been made redundant in the private sector have to wait a long time for their money and I have had many complaints on this subject. I should be grateful if my right hon. Friend the Secretary of State would bring the House up to date on that position.
  Even more disturbing in a city such as Sheffield, management and shop floor workers who have been declared redundant in the public sector have had much higher disbursements than those who have had to leave the private sector, because when contraction has taken place in the private sector the funds to pay for the redundancies have just not been there. This has created a privileged group in the public sector, compared with those declared redundant in the private sector. After the indecisions of the then Government and my right hon. Friend the Secretary
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  of State for Industry's predecessor in the late 1970s, the steel industry was presented with an immense challenge. I supported the appointment of Ian MacGregor. In my view, he has been a good man for the industry, but the rationalisation of the industry in this country, with the inevitable contraction, has presented problems.
  Today I am not dwelling on the fact that in Britain we have no readily available iron ore. Cheap iron ore is available to our competitors, as is open-cast coal. The sad thing is that with the BSC facing possible further contraction the suppliers to the steel industry—those in the private sector who supply the moulds and refractories—are facing grave difficulties. I hope that the Secretary of State is aware of this.
  The sensible merger of Johnson and Firth Brown was announced in August. The company is perhaps better known as Sheffield Forgemasters Holding PLC. This has brought together a Phoenix III after Phoenix II and Phoenix I. I welcome that, but there has been strain and unrest and even in this area strikes do not create jobs; they let in the competition.
  One of the difficulties that we have to face is that our problems are not our own. The problem in the West is that too many countries have found too much of their gross domestic product taken up by public sector expenditure. Throughout the world this has been a problem as a result of the energy shock and the subsequent wages shock which went with it.
  The Gracious Speech makes it clear that the Government will encourage the development of free enterprise. I welcome that. I have been concerned with DBS and cable television and have met teams from Mercury, Cable and Wireless and British Telecom. In my view, the fact that British Telecom has been released from the Post Office and put in a competitive environment has brought a breath of fresh air into the attitudes of its management. As my hon. Friend the Member for Arundel (Mr. Marshall) said, that is to be welcomed.
  The provisions of the Oil and Gas (Enterprise) Act 1982 were in force when I went on an energy studies visit to BP's Forties field. The British National Oil Corporation had been both poacher and gamekeeper. It produced oil and had a regulatory function that gave it access to privy information about competitors in production and exploration. In meetings and in visits to sites, I found that BNOC's release from its poacher-cum-gamekeeper role was encouraging other operators in the North Sea.
  The Government's attitude is one of encouraging competition and new ideas and fearing State monopoly powers that oppose innovation and competition.
  Mr. Douglas: Will the hon. Gentleman give way?
  Mr. Osborn: No, I shall not give way.
  The Council of Europe had a long debate on unemployment and the economic situation at its last Assembly in October. Dr. van Lennep spoke of moving in "uncharted waters". I said that I felt that we had moved into a post-industrial revolution era, on the assumption that the industrial revolution had lasted 150 years.
  I welcome the assertion of my right hon. Friend the Secretary of State for Trade that the balancing of exports and imports in the steel industry will be examined. However, I hope that my right hon. Friend's statement yesterday will mean that the private sector will have the same agreement as the public sector. Imports of stainless,

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  alloy, tool and high speed steels have reached a penetration of 60 to 70 per cent. of the United Kingdom market. That penetration calls for discussions within the industry and monitoring of imports by the Government; I have raised this on a number of occasions.
  Time prevents me from doing so now, but on another occasion I shall talk about unemployment in Sheffield. The Secretary of State for Employment knows that I welcomed job splitting. He also knows that I consider that the Government should go much further, perhaps in the direction of part-time jobs, reduced overtime and possibly a review of the Employment Protection Act. I was at the CBI meeting last week and I know that there is much more to be done for industry. I therefore ask my right hon. Friend to investigate further what can be done to mitigate the high level of unemployment.
  8.17 pm
  Mr. A. E. P. Duffy: The hon. Member for Sheffield, Hallam (Mr. Osborn) conceded that Attercliffe and Brightside in the east end of Sheffield had been reduced to wasteland, but he was at pains to argue that the destruction had not all happened under the Tory Government. He knows better than that.
  During the last three years 20,000 industrial jobs have been lost in that area. In that time the work force has been decimated at plants such as Hadfield's, Firth Brown, Sanderson Kayser, Edgar Allen Balfour and Aurora, and in both the stainless and special steel areas of BSC. The hon. Gentleman knows that during the past three years firms such as Brown Bayley, an honoured name in industrial circles, have disappeared. The announcement of the next firm to disappear was made only a fortnight ago. It is Bone Craven, a firm that has long decorated the Sheffield industrial scene.
  I could add to that list of job losses by moving just a little further afield into Brightside and mention Arthur Lee. I could move into the centre of the city and other hon. Members' constituencies and double that list. The hon. Member for Hallam knows that. He has no right to try to brush over the devastation of Sheffield and so many other parts of the country. I realise that he is in some difficulty, but he could have spoken with more sensitivity.
  My right hon. Friend the Member for Salford, West (Mr. Orme) brought out the full horror of the present condition of British Steel. If the BSC chairman is again forced to wield the axe, Britain will no longer have a place as one of the world's major steel producers. The hon. Member for Hallam must know that. He has been connected with the steel industry all his life. He should know more about it than we do, but he simply brushed over the matter. That is not good enough. We have heard about the problems facing BSC. There is world steel overcapacity.
  Mr. John H. Osborn: The hon. Gentleman leads me to regret that I did not take 20 minutes for my speech. I should then not have brushed over those points so quickly. That was perhaps unfortunate, but I certainly share the hon. Gentleman's concern about what has happened in Sheffield. It has happened gradually, however, although the impact has been recent.
  Mr. Douglas: Who did it?
  Mr. Osborn: The Labour Government.
  Mr. Duffy: First, there was world steel overcapacity. Then there was the European problem, including imports from third countries. Now the United States market can no longer be relied upon and protectionism is assuming forms that would surprise even hon. Members. Finally, the hoped-for upturn at home has not materialised. Indeed, demand has slackened so alarmingly that the chairman of BSC has told me in correspondence that he has been forced to reappraise the corporation's plant configuration. I take that to mean that even the plan to reduce the work force to 92,400 by March next year—it was more than 200 ,000 in 1976—will be nowhere near enough and the chairman fears that when the upturn comes demand will not recover even to the level of five years ago. As the chairman previously admitted, however, any such reduction in capacity and manpower would mean Britain's abandoning any lingering dream of remaining a world force in steel making.
  The real tragedy is that the latest crisis has come at a time when the gains from past sacrifices were beginning to materialise. Productivity, quality and delivery times have all improved dramatically, as the chairman acknowledged in the corporation's latest annual report when he said that in some works productivity was comparable with "best European levels". The special steels division improved its output by 27 per cent. in the year to last April, and overall productivity for strip products was 8·7 man hours per tonne of liquid steel in March 1982, against 13·2 in September 1979.
  Similar improvements can be seen in BSC's sections and commercial steels. Large steel users such as Ford say that quality and delivery times have improved impressively. I am sorry that the Secretary of State for Employment is not present to hear me make those claims on behalf of a nationalised industry, in view of his earlier sneers at public enterprise.
  BSC's strategy for stainless steel has been equally successful. Exports to France and Germany have increased. If the hon. Member for Hallam knows all this, why did he not make even a brief acknowledgment of the performance of steel, with his background and in his city? Production, quality and delivery times have all improved and the operation of the Sheffield complex has proved successful and efficient. You may protect the hon. Gentleman here, Mr. Speaker, but he will not be forgiven in Sheffield. The speech that he made today will be held against him for many years to come.
  New records have been notched up time and again this year in stainless steels as well as in special steels. BSC stainless now produces a higher percentage of stainless steel through the continuous casting route than any other producer in Europe. It has also made several important market breakthroughs, including the development of stainless steel accommodation modules for offshore oil rigs. Yet in June it put 600 of the Sheffield workers responsible for those achievements out of work.
  Some of those people had given up jobs in other sectors of British Steel to join the stainless sector, and that was their reward. They feel bitter that they have had to bear an unfair share of the consequences of the industrial problems that face the whole of Europe and they greatly resent the fact that British steelmakers, who had accepted the need to reduce capacity and to modernise, are now being penalised.
  Last year BSC's stainless turnover increased by £20 million—scarcely a sign of a flagging business—but the

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  sudden pressure of the new recession at a time when the Government are imposing strict cash limits on BSC as a whole has turned Sheffield's stainless steel dream into a nightmare. Like the special steel sections, Sheffield stainless has long recognised that the only way forward is to take the long hard road to better productivity and to concentrate on making high quality finished steel products that are competitive in world markets.
  That the Minister may be contemplating further job cuts in Sheffield after such a hard slog is viewed as intolerable, as the hon. Member for Hallam must be aware. The men are not in the mood to take much more because, on top of everything, their union is now expected to put up with the sneaky privatisation that we can see in the current Firth Brown-River Don merger, which is a shotgun marriage. One would not have realised that from the reference made to the merger by the hon. Member for Hallam. He tried to put a good complexion on it, but it is a shotgun marriage with no consultation with the work force. Hundreds of jobs are now at stake—700 immediately, and the figure may rise to 1,100. The hon. Gentleman made no reference to that.
  Mr. Martin Flannery: They are on strike at the moment.
  Mr. Duffy: Are they on strike at the moment?
  There is exemplary shopfloor leadership in the persons of the chairman and the convener of shop stewards at Firth Brown, who are left distraught with anxiety and worry. Again, that was not reflected by the speech of the hon. Member for Hallam.
  The men in steel want a Minister in this Government who will stand up for British Steel, not consign it to the knackers' yard. From the public they want the recognition that those who buy Italian washing machines, German cookers, French fridges and cars from anywhere but Britain are putting their steel workers out of jobs. Foreign car imports alone are now costing the Sheffield region the equivalent of more than 100,000 ingot tonnes of steel in orders lost each year.
  The present labour force in Sheffield steel is being maintained by extensive use of the short-time working compensation scheme. Once it is exhausted, inevitably the consequences for jobs will be serious. Will the Minister say what his plans are for the short-time working compensation scheme, because it is of fundamental importance to the east end of Sheffield and to BSC?
  BSC faces huge problems, but to regard it as a public industry that has failed the nation is absurd. I remind the Secretary of State for Employment, in his absence, that its expertise in technology is universally acknowledged. Its highly modern plant includes the £140 million stainless steel development in Sheffield, with continuous casting techniques and the high standard of finishing required for aerospace and high technology, and is probably the best in the world outside Japan.
  British Steel has done a tremendous job since taking over the 14 separate companies at nationalisation in 1967. Management and men have achieved much under the worst possible circumstances, and suffered much. It is hardly an example of an industry dragging its feet or failing to face the challenge of change.
  Comparison is often made with our European competitors, but they, as my hon. Friend the Member for
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  Wolverhampton, North-East (Mrs. Short) said, are, almost without exception, losing money. Most of them are now nationalised or supported by their Governments. Fuel costs are subsidised, interest rates are lower and by and large they do not have to contend with contracting markets at home or strengthening currencies abroad.
  Has the Secretary of State for Industry made it clear in Brussels that there is a limit to the amount of capacity that we can take out of the British steel industry without prejudicing product mix, the needs of manufacturing industry in Britain, or the provision of weapons systems within the Western alliance? The Secretary of State, safe in London with his southern-based constituency, refused in June to contemplate any change in the decision to strip much of South Yorkshire of even its meagre Government assistance. How many jobs must go before the Government realise that South Yorkshire is sliding fast into economic and job chaos and that what is at stake is the economic survival of South Yorkshire?
  It is unthinkable that that portion of the steel industry that is basic to the South Yorkshire economy, and the remainder which produces the basic requirements of so much domestic engineering, should not survive. However, with over half of their combined market now taken by imports, we are moving rapidly to that situation. I wonder how many people realise how desperate is the steel industry's situation.
  The prospect of a Britain with little more than a token bulk and special steels industry is ominously close. I sense that the Secretary of State for Industry is well aware of that and is disposed to take a long-term rather than a short-term view of the industry's future. The Government must decide whether Britain is to have a steel capacity that can always be relied on to meet the nations's basic needs. Alongside that must be a special steels capacity. Both will need money now and for the foreseeable future if they are to survive in even today's skeletal form.
  8.30 pm
  Mr. Jonathan Aitken: To judge by the tone of the speech of the hon. Member for Sheffield, Attercliffe (Mr. Duffy), the election campaign in Sheffield has already started. I do not believe that the cheap debating points made against my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) will convince the constituents he has served so well for over 23 years.
  The right hon. Member for Salford, West (Mr. Orme) said that he opened the debate against a gloomy background. It appears that lugubrious pessimism has permeated both sides of the House, but it is out of tune with the mood in the country, which has been dramatically influenced by the Falklands victory. The Falklands factor, which I take to be a short-term psephological factor, is neither here nor there in our long-term political history, but the Falklands campaign has changed the national mood and public confidence in the process and authority of government.
  In the eight years in which I have been a Member of the House, I have seen locust years of economic disappointment, cutbacks, retrenchments, withdrawals, compromises and national humiliations. It was a tonic after that long history of Government failures suddenly to experience the glorious success of the Falklands campaign. It restored authority and faith in the process of government. If it had stood alone, one might have

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  dismissed it as an aberration, but the Government have followed it by another major long-term success—the victory over inflation. It is no flash in the pan.
  Between 1971 and 1980 under successive Governments our inflation rate averaged 14·2 per cent. The Government have reduced that to a year-on-year figure of 7 per cent. and are confidently forecasting 5 per cent. by the spring.
  Mr. John McWilliam: What is the average?
  Mr. Aitken: To have more than halved what was widely regarded as the most intractable rate of inflation in the industrialised world is a formidable achievement.
  Mr. Flannery: By sacking everybody.
  Mr. Aitken: But just beating inflation is not enough. Unemployment remains the scourge of our country. There are no magic formulas for ending it. Certainly none has been prescribed by the Opposition this afternoon. From where I sit here in the unreal world, listening to gloomy speeches, and in the real world, running a public company that employs people, I believe that there are grounds for cautious optimism that the British disease is being slowly cured and an improvement in the employment figures is slowly working through.
  Mr. Flannery: Come off it!
  Mr. Aitken: The hon. Member for Sheffield, Hillsborough (Mr. Flannery) is another Member from the area where the election campaign has started. Let me give him evidence of what I say.
  Demand is expanding faster now than for over three years. There is something of a consumer-led recovery. High street retail sales in the July-September quarter are 3 per cent. up on the same period last year; new car registrations are up 12 per cent.; net building society receipts have doubled; and labour productivity in manufacturing is improving at nearly 7 per cent. Above all, the commercial activity of ordinary people is getting the economy slowly moving again. They are spending more by saving less. It is a spontaneous recovery that is being made possible by falling interest rates, lower wage costs, reductions in mortgages and, above all, tumbling inflation.
  There is a snag in the good news. It is a consumer recovery—real though it is—that could so easily be frittered away if the extra purchasing power goes on imports. There are some ominous signs that that is happening. The volume of imported manufactured goods was 12—3 per cent. higher during the first nine months of 1982 than in the same period last year. That is why rising demand is not yet resulting in more jobs, and may never do so unless the Government take some bold and decisive action on their trade policies.
  We want to see the rising demand turn into more jobs. The smack of a British Government's firm hand has to be felt on the bottoms of some foreign trading nations and institutions. We should smack first at the bloated bureaucrats of the EEC who are responsible for such outrages as the extraordinary fact that a British car being exported to Spain has to pay a tariff of 37 per cent. while an imported Spanish car pays a tariff of only 4 per cent.
  We should hit out at those nations which cheat in their international trade by unfair import regulations, especially the Japanese, or those which believe that international trade is some sort of one-way street, as do the Koreans and the Taiwanese. Free trade must be fair trade, and our Trade
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  Ministers must not end up like Sir Austen Chamberlain of whom it was said that he always played the game and always lost it. We have to see a more robust, nationalistic fighting spirit in our trade policies. I hope that we shall not shrink from suggesting those measures in our discussions on GATT and elsewhere.
  I shall pick only one further item in the Queen's Speech to which I wish to draw attention and which I support strongly—information technology. I welcome the Government's commitment to what are called the "sunrise" industries, such as cable systems, microelectronics, fibre optics and information technology generally. They are new industries that are growing at an annual rate in excess of 14 per cent. They offer by far the greatest hope for new jobs, commercial opportunities and potential for British research and inventiveness.
  We have already had our share of success stories. My hon. Friend the Member for St. Marylebone (Mr. Baker) is more like a Messiah than a Minister when it comes to spreading the gospel of what he rightly calls the new industrial revolution. It is essential that we do not lose Great Britain's momentum and lead in that revolution. By all means let us have debates on the Hunt report on cable television, but let us not get too bogged down and distracted by academic arguments about regulatory bodies. There must be some ground rules for cable television, but let us not lose sight of the fact that cable television is one small part of the huge information technology potential of cable systems. The Cabinet's information technology advisory panel, in its excellent report, said:
  "We have to accept that cable systems will go through an initial phase when their attraction will be based on entertainment considerations."
  Let us not get so excited about the small problems of regulating the initial entertainment considerations that we lose sight of the glittering prizes that a national cable network can bring in renewed economic vigour, new jobs and industries. I support the Gracious Speech.
  8.40 pm
  Mr. John McWilliam: I welcome the criticism by the hon. Member for Thanet, East (Mr. Aitken) of the Government's attitude to cable television. The Hunt committee was not allowed to examine technology and the development of a national cable network. Its prime function was to examine information infrastructure. I wish that the hon. Gentleman had made that citicism when the statement on the report was made.
  It is time that hon. Members realised the full implications of what we are doing. The argument revolves around whether the new service should be all sport and porn instead of reaching its potential for a truly national information network. If "off the shelf' technology—a Government euphemism for obsolescent or 40-year-old technology—is involved, the vision will never come to fruition.
  I took no pleasure from the Secretary of State's speech today. There was nothing in his speech to give real hope to the 200 people who have just been declared redundant at TI Churchills at Blaydon. That firm makes computer numerically controlled lathes. If that seed-corn of industrial development is destroyed, what hope is there for industry? At the same time as the 200 people lose their jobs, shares in the company increase in value because it

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  is going into consumer durables. Where is British manufacturing going? How will the Secretary of State deal with the problem?
  I hope that we can hear more about the denationalisation of British Telecom. I am sponsored by the Post Office Engineering Union. I have 22 years' experience as a telephone engineer and I find some statements from hon. Members on both sides of the House worrying. I realised that I had cause to worry when I received a letter from the Secretary of State for Industry on 19 October. It used the words "Ringing the changes". I was worried in particular about the left-hand side of the top of the letter which carries the good old-fashioned quad cable, circa 1910, and the right-hand side, which looks a little like a 1940 coaxial cable. There is not much hope for the future since the Department cannot even use the latest technology to circulate its propaganda—and it is pure propaganda.
  The letter states:
  "We are determined to protect rural services. Everyone who has access to telephone services at present will continue to have access to telephone services in the future."
  That is marvellous, but what about people who do not have access to telephone services? When will the expansion take place? There will not be any such expansion. The Secretary of State never promised that.
  In his speech today the Secretary of State tried to dodge the issue. Mr. A. Scott, in a paper published on 24 August, outlined the assumptions to be used in BT's 1983 medium-term plan. The paper
  "identifies Government intentions with regard to the privatisation of BT."
  The paper was leaked extensively in The Guardian and other newspapers. Of pensions the paper says:
  "The POSSF deficiency liability will not pass to BT plc".
  The only reason why the Post Office staff superannuation fund has a deficiency is that when it became a funded scheme the Government insisted that, instead of having a block of stock with its various bits and pieces, the entire liability should be met by consols. That is why there is a liability. I agree that that liability will diminish, but the responsibility for existing pensioners still exists. Nowhere in these documents have I seen an acceptance of that responsibility by the Government. Indeed, they have sought to evade it.
  Today the Secretary of State tried to dodge the issue when he spoke about the sale of shares. He asked where the proceeds of the sale would go. He tried to suggest that no decisions had been made. This document says that the Secretary of State
  "offers 1·275 billion shares for sale on 1 April 1984 and a further 1·275 billion shares for sale on 1 April 1985 and retains the proceeds of both sales".
  There is no messing; it is quite clear. That is what the Department of Industry is saying to BT. So I do not know why the Secretary of State tried to confuse the House today. It is clear that his Department has already told BT what is happening.
  There are other problems, too. The Secretary of State suggested that staff will be as well off as they ever were, and that there will be no problems. He suggests that the fact that BT will offer shares will not mean that dividends have to be paid to anyone. At least, his letter suggests that. All of us, as reasonable men and women, know that that does not seem likely. Let us look at the document again. It says:
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  "BT plc will pay a gross dividend in 1984–85 and subsequent years of whichever is the less of current cost profits and 50 per cent. of historic cost profits (before charging supplementary depreciation)".
  It means that a dividend of about £350 million is to be distributed. That does not seem to be hayseed. To me, that seems a most desirable share. Moreover, it is £350 million which otherwise would have been reinvested in services of which the hon. Member for Arundel (Mr. Marshall) spoke, whereby BT would develop in the ways that people wanted it to develop.
  Incidentally, I agree with the hon. Member. I do not see BT being the same body as it was in the past—inward-looking and obstructive to developments. British Telecom is quite capable of development—indeed, so capable that some friends of Conservative Members have screamed rape and blue murder, because BT has started to compete with them. So let us have no illusions. Any future BT organisation will have to be flexible and it will have to keep its eye on the technological developments which Britain needs.
  That brings me to another criticism of Government policy. I challenge the Government to tell me where, with the exception of Amersham International, the risk technology capital is. In fact, there is none. Whenever firms go into the high reaches of technology, they expect the Government to bail them out. We are no different from the Americans or anyone else. High technology in America has developed almost entirely on the basis of federal research programme grants. Anyone who has visited the National Technical Information Centre in Springfield, Virginia, knows what I am talking about. However, they are more crafty about it than we are.
  When someone has a patent with the NTIC, funded by federal money, it is closed to all but American industry for the first 18 months, and is opened up only after that. We do not do that. We either snare the patent up with the British technology group, when it does not get out at all, or we offer it to the lowest tender and probably flog it to the Japanese who undercut us fifteen ways from Sunday. We are not clever about that either.
  We have other problems too. It is argued that one of the reasons for privatising British Telecom is its inefficiency. I challenge the Secretary of State now to name five private companies the productivity of which, over the past 10 years, is as good on any objective analysis as British Telecom, or the Post Office as it was before. He will not be able to. They do not exist. This debate has befuddled hon. Members with assertion and political dogma. We should talk about the reality—that which is best for the people of Britain. What is best for the British people is a flexible telecommunications system which will meet future needs and the needs of those in rural communities, the sick, the old, the disabled and those people in cities who are otherwise isolated, but which will also meet the needs of business.
  The privatisation of British Telecom will mean an excellent service between London and Birmingham, London and Manchester, London and Glasgow, and London and Edinburgh, but God help those who have a small company in Hexham, in Consett or, for that matter, in Arundel or anywhere else that is off the main lines. They will get clobbered in the quality of their service and the tax that they pay.
  Another fundamental objection is also contained in the letter to which I referred. At the Conservative Party

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  conference the Secretary of State for Industry said that the Government wanted the 200,000 or so people in British Telecom to be shareholders. It happens that at the moment there are 245,882 people working in British Telecom, so his figure is a wee bit of a shortfall. Perhaps it was a slip and he did not count the employees correctly. However, we return to the leaked British Telecom policy document. It says:
  "The Department of Industry have mentioned maxima of 230k men"—
  for the uninitiated that is 230,000 men—
  "for 1984–85 and 200k men for 1986–87."
  There are an awful lot of people missing there, are there not? There are 50,000 people missing—a drop from 245,882 to 200,000. That worries me.
  When I was a telephone planning engineer in the dear old days three and a half years ago when there was difficulty in maintaining the grade of service at an exchange, my job was to work out what was wrong, write up a work guide, order the stores, design the job—and nothing happened. Nothing happened because there was no investment or no staff, usually both.
  When I was a union branch secretary 10 years before that, I was conscious that routine maintenance in telephone exchanges was being written off as a matter of course by management. It was not being done. I do not know where the figure which the Secretary of State gave today of three visits per clay per faultsman came from. When I was a maintenance control officer nobody made fewer than eight visits a day. If they did, they were on the carpet. The average was between eight and 12 visits a day. The right hon. Gentleman must have been looking at the rural service, because his figures are not accurate.
  No one is idle in BT, but much of the work that needs to be done is not being done. If 50,000 are to lose their jobs over the next few years, there will be a worse service for some than the current one. There are not so many new electronic exchanges which will reduce manpower to be introduced. These exchanges will only reduce manpower from four to two or from four to one, and there are not so many employed in telephone exchanges in any event. If 50,000 lose their jobs, there will not be the bodies available to provide even the present service.
  The Secretary of State has a duty to tell us where the cuts in the standard of service will be made. Will they take place in the rural areas or the urban areas, or will services be cut between the main centres? Will Mercury take the demand? Mercury is another laugh. It will be all right for those in London or Birmingham but it will not be any good, for example, for those in Newcastle. That is because it is not going there. Are we to see increases in domestic tariffs? Are business tariffs to be further reduced?
  If Conservative Members want a better telephone service, there is one easy way to get it. First, they should forget the daft ideas that amount only to providing shares for their friends. Secondly, they should cut the manpower productivity targets for BT so that it can afford to employ the staff that will give a better service. If there is a fault in someone's telephone, a machine will not be able to put it right. Someone will have to visit the premises in which the telephone is situated and fix it. That is the only way to do it.
  I take the greatest exception to the proposed share issue. The two tranches of billions of pounds are, in effect, to be flogged off and the Government will take the money. It is not taxpayers' money. It is money that has been
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  contributed by those who have subscribed to the telephone service over the years. The Government will take away their part of the investment into the capital structure of BT. They will then flog it off and the proceeds will he used to give nice tax handouts in an election year or the year immediately following the election. Those who contributed to the development of the capital structure—the telephone exchanges and the individual telephones—will not get a bent farthing.
  This will be the biggest rip—off in history and it should be seen as such. When the Secretary of State replies to the debate, I hope that he will be duly contrite. He will be saying to his constituents, my constituents and everyone else's constituents who happen to have a telephone, "I am sorry, mates, but it is far more important to me to let my friends in the City get their noses in the trough than to provide you with a decent service and to recognise the contribution that you have made to the development of our telephone service." I hope he will say that and say it clearly. That will be the result of flogging off shares.
  It appears that 50,000 jobs are at risk. I invite the Secretary of State to deny that that is the effect of the Department of Industry's directive. We are talking about employees who are already overworked. They are already not able to do that which Conservative Members are now asking of them. When the 50,000 are made redundant there will be nowhere for them to go. Currently, there are 4 million unemployed. This is a terrible indictment of any Government and it is the clear implication of this Government's policy. I am willing to put the letter to which I have referred on the Table of the House if anyone wishes to see it.
  8.59 pm
  Mr. Hal Miller: I hope that the hon. Member for Blaydon (Mr. McWilliam) will forgive me if I do not reply in detail to his remarks. However, it must be a triumph for this Administration if they have imbued some spirit of competition in British Telecom. The hon. Gentleman's speech was tarred with the same brush as the other speeches from the Opposition Benches in that it had very little to do with the debate and offered no constructive solution to Britain's problems.
  One of the most interesting facts is that, with the exception of the hon. Member for Motherwell and Wishaw (Dr. Bray), the genuine debate in terms of exchange rate and demand has come from the Government Benches. It is significant that the Opposition have failed in their duty to provide any credible alternative policies, as was evinced in the by-election result in Birmingham, Northfield. There is no credibility in the policies offered by the Opposition. Therefore, we have to look to the Conservative Government for the policies that must be pursued.
  I welcome the opportunity to take part in the debate, because I wish to enter on the side of competition and of industrial costs. The demand-ciders have lost their case. My hon. Friend the Member for Thanet, East (Mr. Aitken) pointed out that there had been an increase in demand, but that it was being taken largely by imports. Perhaps the exchange rate has an element to play in that, and I shall deal with it later in remarks.
  We need to respond to the pressure from our competitors abroad to provide the standard of living that we need. For our industry to become more competitive we must recognise that a great deal of the competitive environment in which it operates is established by the

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  Government. I wish, therefore, to put forward what I call a competition policy. The Government are already doing many of the things that I wish to see, but I want to propose a package that they could present more easily and credibly and which would help resolve some of the discussions with the CBI.
  First, I call for free competition inside Britain. My right hon. Friend the Secretary of State has already taken some steps to reduce the uneven distribution of the regional development grant by reducing the number of assisted areas, but there is still a great deal to be done before the discrimination against the West Midlands is ended. Could not a cash limit be put on regional development grants? Much more is spent in that way than is spent on the central policy of higher technology, which I favour. When firms succumb to the pressure of competition—perhaps in Scotland—they are rescued by the Scottish Development Agency and spared the results of the Government's competition policy. Examples are to be found in the carpet industry and in foundries.
  Secondly, I should like to deal with competition with our trading partners. My hon. Friend the Member for Thanet, East referred to the Spanish tariff discrepancies which my right hon. Friend the Secretary of State described as grotesque. When will we see some action? Is it enough that, because the Spanish agreement was with the EEC, we should not be able to act to protect British interests? It is not certain that our EEC partners will help us in this matter, because many of their factories and companies have been set up on the basis of collaborating with and importing from Spain.
  There are also other trading barriers and unfair practices, such as political prices from Comecon countries, quotas and other non-tariff barriers in Japan. We must see a robust defence of British interests by our Administration, which should take into account the competitive devaluations in which some of our EEC partners are now indulging, bolstered by price controls, that are affecting our opportunities.
  Thirdly, there is a need for research and development. Profits have been so tight that companies have been forced to give up research and development. Much more is done by the Governments of our trading partners to finance their research and development. For example, in the motor industry we need only think of Volkswagen, Porsche and Renault. We must also ensure that skilled technological manpower is available so that we are able to take advantage of the Government's programme by moving into the new technologies. Many companies in the West Midlands are locked into an outdated structure.
  In such a policy I would also include investment in infrastructure, such as roads, rail and sewerage, which do not involve additional manpower. I welcome the call to local authorities to spend their capital allocations. A great deal is now being done on the cost structure of our energy prices, rates, national insurance surcharge and the national insurance contribution. In short, I wish to see a competition policy spelt out, presented and enacted. I urge that on my right hon. Friends.
  Mr. Douglas: On a point of order, Mr. Speaker. I do not want unnecessarily to take up the time of the House, but many hon. Members have sat throughout the debate without being called. I do not know what great mysterious
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  events take place behind the Speaker's Chair, but there should be some procedure for looking at the length of speeches, particularly at the end of a debate, which have excluded other hon. Members from participating.
  Mr. Dixon: Further to that point of order, Mr. Speaker. I have been in the Chamber since the beginning of the debate, and I wrote to you last week asking for an opportunity to take part because of the serious conseqences for the shipbuilding industry on the north-east coast. The Secretary of State for Industry did not even have the courtesy to give way when I tried to intervene to make a point about the shipbuilding industry. I doubt whether he has read the Patton report, the Geddes report, or the Booz-Allen report on private investment in the British shipbuilding industry. It is a damned disgrace, having listened to some of the waffle—
  Mr. Speaker: Order. I am sorry for those hon. Members who have sat throughout the day and not been called. I noticed that three hon. Members took an hour between them. Therefore, some hon. Members have not been called because of the time taken by their colleagues.
  Mr. Dixon: Further to that point of order, Mr. Speaker.
  Mr. Speaker: Order. We should now get on with the debate.
  Mr. Dixon rose—
  Mr. Speaker: I shall listen to the hon. Gentleman, because I know that he feels strongly about this matter, but he must realise that the House wants to get on with the debate.
  Mr. Dixon: Will you explain, Mr. Speaker, how a Back Bencher can make points that are important to his constituency and his area? As I said, I wrote to you last week, but I have not—
  Mr. Speaker: Order. I know that the hon. Gentleman wrote to me last week, but he was not alone in doing so. Some hon. Members have been extremely selfish in the amount of time they have taken, and that is unfair to their colleagues.
  9.9 pm
  Mr. Eric G. Varley: Every Opposition Member who has had a chance to speak—I strongly regret the fact that my hon. Friends who have raised points of order have not had that chance—has expressed the great anxiety that exists not only in his constituency but throughout the country about the state of unemployment and industrial decline.
  I have never before heard my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) make such a penetrating analysis of the mismanagement of the economy and the disaster that confronts our steel industry. My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) echoed his sentiments.
  We are often told that Britain must maintain its position as a manufacturing and trading nation. I agree. A further rundown in the steel industry ought to be unthinkable. The country should be grateful for the intervention of the Secretary of State for Scotland in the debate when he threatened to resign with the whole of the Scottish Office to prevent the closure of Ravenscraig and other steel plants.

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  My hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) mentioned the West Midlands. I hope to take up the points that she raised.
  My hon. Friend the Member for Blaydon (Mr. McWilliam) knows a great deal about telecommunications, and he made his case well.
  Criticism of the Government has not been confined to this side of the House. One of the most critical speeches came from the hon. Member for Bath (Mr. Patten), whose speech compared well with that made yesterday by the right hon. Member for Chesham and Amersham (Sir I. Gilmour). Those speeches reflected the genuine anxiety that exists in some quarters of the Conservative Party, but I am afraid that they will not get very far, because the Prime Minister is impervious to their pleas.
  I have been reading an article in tonight's edition of The Standard by Mr. Anthony Shrimsley. He says that
  "the political landscape is littered with the unmarked graves of those who were pushed, stumbled or retired more or less gracefully from high office … Gone are the apparently untouchable Lord Carrington, the last representative of the Magic Circle, Lord Soames, the languid Sir Ian Gilmour and the wet and witty Norman St. John-Stevas. Departed also are Mr. Mark Carlisle and those worthy Thatcher warhorses Lord Thorneycroft and Angus Maude."
  The Prime Minister is in complete control. Even the Secretary of State for Northern Ireland and the Minister of Agriculture, Fisheries and Food are prevented from speaking at the Tory Party conference and must address fringe meetings. If a Conservative Member has not at some stage embraced the mad incantations of Professor Milton Friedman he is not eligible to be a member of the present Administration.
  Over the debate, the House and the country looms the bleak shadow of mass unemployment. The Government have the unenviable distinction of presiding over the highest number of registered unemployed in the history of the United Kingdom. That is a stain on the Government's record and on the Prime Minister's personal reputation that nothing ever can or will remove.
  Our debates since last Wednesday have dealt with the contents of the fourth Queen's Speech in this Administration. It is instructive to look back at the three preceding Queen's Speeches to see how their promises have been fulfilled. The first was delivered on 15 May 1979, 12 days after the general election that brought the Government into power. It said that the Government would
  "create a climate in which commerce and industry can flourish. In this way they will lay a secure basis for investment, productivity and increased employment in all parts of the United Kingdom."
  At that time there were 1,299,300 registered unemployed in the United Kingdom. It was a long Session.
  The second Queen's Speech was delivered 18 months later, on 20 November 1980. What had become of the Government's promise to create a climate in which commerce and industry could flourish and employment increase in all parts of the country? Unemployment had increased to 2,162,900. That was an increase of 771,000, or 66·5 per cent., but the Prime Minister was not daunted. The Queen's Speech of 20 November 1980 spoke about
  "recognising the hardships and worries of those suffering unemployment."
  It promised to recognise
  "the need to bring down the rate of inflation and create conditions for sustainable growth of output and employment."
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  Another year went by. A new Session of Parliament opened wih another Queen's Speech on 4 November 1981 stating:
  "My Government share the nation's concern at the growth in unemployment."
  What happened in that year as a result of the Government's promise to bring about growth in employment? The answer is that unemployment went up once again. It rose from 2,162,000 to 2,988,600, an increase of 826,000, or 38·2 per cent.
  The Prime Minister was impervious to her record of failure. The Gracious Speech in 1981 expressed concern over the growth of unemployment, although the needle was getting a bit stuck in the groove. Once again there was the same old promise to improve prospects. How has that promise, made a year ago, been fulfilled? Since the 1981 Queen's Speech, which expressed concern about the growth of unemployment, unemployment has gone up from 2,988,600 to 3,295,000, an increase of 307,000, or 10·3 per cent.
  At this stage hon. Members should note an important statistical fact which the Prime Minister has misused to misrepresent and distort the record about what she claims to be a fall in unemployment. As the base figure of unemployment gets bigger, the percentage increase gets smaller, even though the absolute figure in human terms can be counted every time in hundreds of thousands.
  These year-by-year figures of the mounting toll of unemployment nationwide conceal a catalogue of tragedies. Three and a half years ago the Tories stated in their manifesto that they wanted to
  "reunite a divided and disillusioned people."
  They have certainly united the country. Every part of the United Kingdom shudders under the pall of mass unemployment. Areas of Britain that have always been prosperous now suffer unemployment percentages which, under a Labour Government, would have been unthinkable in areas that have, sadly, long suffered chronic unemployment.
  When the Labour Government left office, unemployment in Wales and Scotland was 7·7 per cent. and in the Northern region 8·2 per cent. Unemployment now in the South-East, an area represented by, among others, the Secretary of State for Industry, the Secretary of State for Employment and the Minister for Industry and Information Technology, is up to 10·4 per cent. In Northern Ireland, for every 100 workers out of a job when Labour left office there are now 204. In Scotland the figure is 213, in the Northern region 214, in the South-West 221, in Wales 223, in the North-West 244 and in East Anglia 254.
  In Yorkshire and Humberside, for every 100 out of work when the Tories came in there are now 268, in the East Midlands 274 and in the South-East 291. The West Midlands holds the record. For every 100 out of a job when the Prime Minister walked into Downing Street, there are now 323. It is a devastating fact that today there is a higher percentage of unemployment in the West Midlands than in Scotland.
  The Prime Minister has truly united the country. For the first time young people are experiencing the trauma of mass unemployment. The number of teenagers out of a job is horrendous. Our young people are suffering from unprecedented levels of unemployment, and their prospects of worthwhile employment are shrivelling every day.

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  My right hon. Friend the Member for Salford, West (Mr. Orme) spoke of the highest intake of apprentices ever known in the engineering industry under a Labour Government. It was in excess of 25,000. Last year that figure fell to 15,000—the worst figure since records began. This autumn, engineering companies have taken on 9,200 apprentices. Since that record Labour year, the intake of engineering apprentices has fallen by a devastating 63 per cent. Even worse, despite the pathetic increase in new apprentices, existing apprentices are being made redundant. Last month alone more than 200 were made redundant.
  Now we have the new scourge of long-term unemployment. For the first time the number of workers who have been on the dole for more than a year has passed the 1 million mark. Today, the number of workers jobless for more than a year is almost as great as the total number of unemployed when the Prime Minister took office. A year ago, 22 per cent. of those on the dole had been out of work for more than a year. Today that proportion has risen to 32 per cent. Wherever one looks in industry, one sees that the Government's policies have cast a blight. [Interruption.] If the hon. Member for Hayes and Harlington (Mr. Sandelson) wants to intervene, why does he not do so instead of muttering? He has defected from the Labour Party and does not have the courage to force a by-election in his constituency. All that he does is lecture the Labour Party. If he has something to say, why does he not get on his feet and say it?
  Mr. Neville Sandelson: I am on my feet and have listened with great tolerance and patience to the right hon. Gentleman's endless repetition of familiar facts. However, I and the whole country want to know what the right hon. Gentleman and his party will do. He should tell the country, because it has no faith in them.
  Mr. Varley: The hon. Gentleman has not been in the Chamber all day. At this time of night he has come to disrupt the debate. He should return to where he has been all day. He sounds as if he is ill.
  Mr. Sandelson rose—
  Mr. Varley: I shall not give way.—[Interruption.]
  Mr. Speaker: Order. The right hon. Gentleman must be allowed to continue his speech.
  Mr. Michael Morris rose—
  Mr. Varley: I shall not give way.
  Last week, in that hectoring speech of hers, the Prime Minister went on about small businesses and boasted about them in the following words:
  "We introduced the best range of measures in the Western world."
  The Under-Secretary of State for Industry who is responsible for small businesses is in the Chamber. When hon. Members questioned that assertion, the Prime Minister said that
  "the Opposition are not interested in good news."—[Official Report, 3 November 1982; Vol. 31, c. 20.]
  I shall tell the Prime Minister the news about small businesses, not as she represents it, but in the words of the Association of Independent Businesses. It has just sent me a letter, and has no doubt sent letters to the Secretaries of
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  State for Industry and for Employment. It sums up the position of small businesses in its "Emergency Trade Survey", in which it says that
  "we conclude that the business optimism apparent at the beginning of 1982 has gone. More worringly, it appears firms that have rationalised and shed labour in large numbers in 1980–81 are still in trading difficulties. As slow payments. bad debts and bankruptcies mount, for many business men their faith in the trading system is going into decline."
  That is what the Prime Minister regards as good news.
  The right hon. Lady has more good news. She said in the debate on the Loyal Address last year:
  "Today, we see British industry slowly but inexorably improving."
  When my hon. Friends asked about that improvement and where it was taking place the Prime Minister again said:
  "Opposition Members do not like that. They love bad news and hate to hear good news."—[Official Report, 4 November 1981; Vol. 12, c. 22.]
  The Prime Minister may not score many marks for originality, but when she thinks that she has found an original phrase she is prepared to stick to it.
  What are the signs of this inexorable improvement? What about company liquidations? They have not been "inexorably improving"; they have been inexorably increasing. In the first three quarters of 1980 there were 4,666 liquidations, and in the first three quarters of this year there were 8,662. The number of companies going bust has nearly doubled. Over the past year alone, the number is up by 39 per cent.
  What about the inexorable improvement in production? In August last year the index of manufacturing production stood at 89·6. In August this year it was down to 88·6. What about the inexorable improvement in investment? The latest available figures show capital investment in manufacturing industry at £660 million for the second quarter of this year. A year ago it was £756 million. The inexorable improvement is a reduction of £96 million. Wherever we look in industry, the scene is bleak.
  The inexorable improvement is described in Barclay's International survey, published 12 days ago. On engineering, it said that
  "the industry remains fully entrenched in the recession with sales and output running for some time at levels between 15 to 20 per cent. below the average for 1979."
  Elsewhere,
  "UK output of paper, printing and publishing materials continues to decline … The level of output of paper and board is now below that achieved in 1957."
  The survey reveals the same picture in textiles, chemicals and other industries.
  The Prime Minister was wrong to choose the word "improvement" but I cannot fault her choice of "inexorable". The disasters befalling all our industries are a direct result of the Government's pitiless policies and the Prime Minister's stubbornness and arrogance.
  The Gracious Speech in 1980 promised a sustainable growth in employment. When Labour left office in 1979, there were five unemployed for every declared vacancy. Today, there are 27 people fighting for every vacancy. Under this Government the number of workers in employment has fallen by 2·4 million. In manufacturing industry the Government's record is catastrophic. The number of workers in manufacturing industry between June 1979 and June 1982 fell from 7·2 million to 5·7 million. Of the jobs in manufacturing industry when Labour left office, more than 20 per cent. have been wiped out as a direct result of Government policies.

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  What is there in the fourth and possibly final Queen's Speech of this Parliament to fight unemployment, apart from the usual collection of sanctimonious and insincere phrases? I have to admit that the Government are taking vigorous action to reduce not the number out of work, but the number listed as out of work. This month the new method of collecting figures will cut the numbers, while doing nothing about the problem. The Secretary of State for Employment is a quack doctor who applies plastic surgery to the problem while making no effort to cure the disease.
  What has become of the Prime Minister's words from this Dispatch Box about the need for real jobs? When the Conservative Party was in opposition she would get up every other week and talk about real jobs. The Labour Party has given support to the youth opportunities programme and similar schemes, but according to the Prime Minister such schemes do not create real jobs, although there are now more young people in YOP jobs than ever before.
  Not one paragraph, sentence or word of the Queen's Speech is aimed at fighting the horror of unemployment. Instead, we have the obscene irrelevance of selling public assets. Those assets were created by the taxpayer, but the taxpayer is now being deprived of the benefits. The revenues from the God-given windfall of North Sea oil should be used to create new industry and employment, not merely to finance unemployment.
  The argument that apparently took place this weekend between the Prime Minister and the Secretary of State for Energy was not about how best to use Britoil for the benefit of the people. Instead, there was an unseemly squabble about what kind of rip-off would least damage the Government's image. The Secretary of State for Employment has a lot of experience of looting public assets. He lost £25 million for the taxpayer on the sale of Amersham International. If he were a local authority councillor, he would have been surcharged and disqualified from public office.
  The Secretary of State for Industry, too, is getting ready for his turn, stoutly assisted by his Minister of State, provided that he can get a pair.
  Mr. Michael Morris rose—
  Mr. Varley: The Government are getting ready to sell off British Shipbuilders. If the Secretary of State for Employment had his way there would be no British Shipbuilders to sell off, because without nationalisation the British shipbuilding industry would have sunk without trace long ago.
  If Conservative Members are not prepared to accept my word, let them listen to the chairman of British Shipbuilders—a man appointed by the Conservative Party. When he was questioned by the Select Committee on Industry and Trade about the Polish deal, he said:
  "I think the consequences to British shipbuilding would have been drastic if not final. I think that at the time the prospect of getting orders was so poor that our shipbuilding capability in significant parts might have had to be dispersed."
  What has been saved by nationalisation and the sacrifice of the industry's workers is to be put on the auction block for the highest bidder when, six years ago, no bidder would have looked at it.
  The Secretary of State for Industry today talked continually about the "failure of public ownership." Occasionally the Prime Minister speaks in that vein, too,
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  but it is not the failure of public ownership that makes these great industries appetising for the City sharks. It is the success of such industries in public ownership that makes them attractive to potential purchasers.
  The financiers who turned their backs on Ferranti when it was in trouble could not wait to get their greedy hands on it when public ownership and public money had made a success of it. Public ownership made British Aerospace an attractive property, and public ownership saved Fairey Holdings so that it could be sold off. The Government are creating diversions instead of concentrating on the task of creating employment. Unable or unwilling to deal with the problems, the Prime Minister fiddles the figures.
  Everything is now blamed on the world recession, as the right hon. Member for Chesham and Amersham said yesterday. Last week, the Prime Minister blamed it all on the world recession when she said:
  "In the last 12 months for which figures are available, unemployment rose by 51 per cent. in Canada, 45 per cent. in Germany, 40 per cent. in the Netherlands, 17 per cent. in Italy, 15 per cent. in Belgium, and 10 per cent. in the United Kingdom."—[Official Report; 3 November 1982; Vol. 31, c. 19.]
  To choose a date just one year ago was a very strange thing to do, as the Prime Minister took office not one year but three and a half years ago. The figures for that period, standardised and adjusted on the same basis, are as follows. Unemployment rose by 20 per cent. in Italy, 35 per cent. in Canada, 51 per cent. in Belgium, 91 per cent. in Germany and 123 per cent. in the United Kingdom. The Prime Minister should not use phoney figures. That is the true international comparison.
  Everything is now blamed on the world recession, but when the Hendon Young Conservatives formed that famous queue for the Conservative poster the caption did not read "Don't blame the Government—there's a world recession". It said "Labour Isn't Working". If Saatchi and Saatchi said that the Labour Government were 100 per cent. wrong, by their own standards the Conservative Government are 223 per cent. wrong.
  Certainly that is how a woman in my constituency who came to see me a few days ago saw the situation. She said that she had voted for the Conservatives. Her son had undertaken an apprenticeship with a local firm four and a half years ago. In his final year, he had received the apprentice of the year award. He has now been made redundant because his employers calculated that after such a short period in full-time employment it would be cheap to get rid of him. That apprentice of the year, the son of a Thatcher supporter, is now on the scrap heap at 21 years of age.
  The hon. Member for Thanet, East (Mr. Aitken), who is not in the Chamber, raised the subject of the Falklands. In the past few months the Prime Minister has been too ready to drape herself in the Union Jack. It is certainly true that brave young men there tried to show that they were ready to die for Britain. What young men and women in this country now want is the right to work for Britain. I shall not forgive the Prime Minister, and the country will not forgive her either.
  9.38 pm
  The Secretary of State for Employment (Mr. Norman Tebbit): The right hon. Member for Chesterfield (Mr. Varley) began by reading an extract from The Standard newspaper. I admit that he read it quite well, but from then on his speech went downhill. As a one-time

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  Minister now in opposition, it was certainly cheeky of him to go on about the delicate subject of redundancies in high places—a fate that he seems to have suffered. I, too, have read the papers recently. Only yesterday the Labour Party's house magazine, the Morning Star, declared—[Interruption.] The Leader of the Opposition may wish to shout me down when his right hon. Friend has already taken up too much of my time, but he will not succeed.
  The Morning Star said:
  "Certainly Mr. Varley is no man to lead a crusade or even to present the policy. Get a friend to read you pages from the local telephone directory out loud and there you have Mr. Varley's style."
  With support like that from his friends and his own newspaper, I shall not add to the right hon. Gentleman's woes by dwelling further on his speech. At best, the right hon. Gentleman was dealing in half truths, and the rest of the time he sank well below that.
  This has been an interesting debate, particularly in the nature of some of the Back Bench speeches. My hon. Friend the Member for Arundel (Mr. Marshall) made an interesting speech, full of knowledge about the steel industry. My hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) spoke, as always, briefly, concisely and for Sheffield. I assure him that we are pursuing the European Community vigorously to try to get those redundancy payments paid by the Community. My right hon. Friend the Secretary of State for Industry will take up this matter, and so shall I.
  I assure my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) that we have not abandoned manufacturing industry, but it has to compete.
  My hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) was well advised to make her point about the burden of rates on industry. Firm after firm has been moving out of London, driven out, or driven into bankruptcy, by the level of rates, and the same is true for the rest of the country.
  My hon. Friends the Members for Bromsgrove and Redditch (Mr. Miller) and Thanet, East (Mr. Aitken) referred to the need for fair competition. My hon. Friend the Member for Bromsgrove and Redditch made an effective speech about the competition policy that he would like to see.
  I assure the hon. Member for Motherwell and Wishaw (Dr. Bray) that we are as concerned about the future of Ravenscraig as he is, and my right hon. Friend the Secretary of State for Industry has already made that plain.
  In the speech of the hon. Member for Preston, South (Mr. Thorne) I was glad to hear his warm support for the production of more fighter and bomber aircraft, particularly as I know that he is not too keen on the Royal Air Force having them. I look forward to his warm support for exporting such war planes to many countries all over the world.
  The right hon. Member for Stockton (Mr. Rodgers) made a characteristically smug speech, posing as a sort of middle-aged boy scout. He deployed theological disputes about ownership and managed to keep a straight face as he did so. Who would have thought that he and his colleagues stood for election in 1979 on their proud record of nationalisation, promising more of the same? They supported the same programme as the right hon. Members for Bristol, South-East (Mr. Benn) and Chesterfield. If the
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  Labour Party had won the last general election, the right hon. Member for Stockton would have been pleased to take office again. He would have been only too pleased to have stood on the party platform, holding hands with his chums and singing the Red Flag together as usual.
  In many ways, this has been a curious debate in which the Labour Party expressed its firm attachment to the half-baked nineteenth century Marxism of clause four. It made it plain that it is still committed to the eternal extension of nationalisation. The amendment in the name of the official Opposition refers to what seems to be one of the three policies on renationalisation compensation held by the Labour Party.
  There is the Labour Party policy reached at the Labour Party conference in 1982, that compensation should be given only on the basis of proven need. Then there is the policy enunciated in the amendment—[AN HON. MEMBER: "Not true ."] Does the hon. Member say "Not true"? I assure him that I have here my 6 October 1982 copy of Tribune. It even gives the figures for the vote. I do not suppose that we should believe the figures for the vote at the Labour Party conference, but they carried the day.
  Then there is the policy on the Order Paper, which makes a commitment
  "to re-acquire at the earliest opportunity the shares of denationalised concerns by paying exactly what the Government received for them."
  That is the official Opposition policy. It is not the party policy. The party policy is the conference party decision.
  Then there is what might be called the alternative Opposition policy described by the right hon. Member for Bristol, South-East. He stated:
  "Both at the TUC congress and the Labour Party conference … we called for the reacquisition of public assets without compensation."—[Official Report, 10 November 1981, Vol. 12, c. 499.]
  Mr. Campbell-Savours rose—
  Mr. Tebbit: I suppose that that is the policy of the provisional as opposed to the official wing of the Opposition.
  Mr. Campbell-Savours rose—
  Mr. Tebbit: As we know all too well, the more often the officials on the Front Bench witch hunt the provos on the Back Benches the more vigorously they take on the policies of those whom they witch hunt out of the party. We are still puzzled to know what policies they do support.
  Mr. David Ennals: Deal with the subject!
  Mr. Tebbit: Just for a laugh, let us look at the policy on which the Opposition are committing themselves tonight. They are committing themselves to a policy to reacquire shares at the price paid. Do they really mean that if the shares have fallen in value in the meantime they would pay more than the current market price? Do they really mean that where pension funds, including those of the nationalised industries or even trade unions, have bought above the issue price they would take them back?
  Mr. Clinton Davis: Deal with the amendment.
  Mr. Tebbit: I am dealing with the amendment.
  I do not know whether any trade unions have bought such shares, but trade union investment portfolios make interesting reading. For example, until recently the NUM

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  was a substantial shareholder in Turner and Newall at the time when many people were saying that the company was dealing in dangerous materials without taking adequate safety precautions.
  We should also interest ourselves in the Opposition's policy on the National Freight Corporation, which was bought out by its employees. Would those employees have their business taken away from them without compensation, with half compensation, if the right hon. Member for Salford, West (Mr. Orme)) had his way?
  The Opposition want to talk about nationalised industries. They suggest that we have treated them badly. Far from starving them of resources, capital investment in the current year will be 26 per cent. higher than last year and 40 per cent. higher than in 1980–81. If that is bad treatment, they could do with more of it. I wonder for whom the Opposition thought they were speaking—the workers, who have lost so many jobs in nationalized industries under Labour Governments, the taxpayers, who have lost £40 billion in nationalised industries, or the consumers, who have lost faith in nationalised industries?
  The right hon. Member for Salford, West waxed lyrical about the service offered by British Telecom. He should talk to the people who have been kept waiting month after month for telephones. Not long ago, under the protection of the British Telecom monopoly, it cost twice as much a year to hire a telephone answering machine as it now costs to buy one. Because of such monopoly protection, we did not develop answering machines, which are now almost all imported.
  Mr. McWilliam rose—
  Mr. Tebbit: The right hon. Gentleman should go out into the world and find out what people think about the nationalised monopolies and about the private sector.
  Do the Opposition believe that we should have put more money into British Leyland? Do they believe that we were wrong to back the Metro, the Jaguar XJ40 and the LM10? Do they approve the demanning and the increase in productivity? Do they believe that
  "British Leyland can only succeed on the basis of producing vehicles competitively"?
  Do they believe that
  "There's no way you can force people to buy Leyland cars. They will only do so if the products are equal to, or better than, the competition"?
  Are they still amazed that
  "the Labour and trade union movement has not understood this"?.
  That is what the right hon. Member for Chesterfield wrote in The Sunday Times business section on 22 January 1978. He wants to forget what he wrote.
  The right hon. Member for Salford, West talked about British Shipbuilders. When British Shipbuilders was being nationalised, we were assured by the then Minister of State, Department of Industry that it would never be allowed to go into loss. On 17 February 1976 the right hon. Member for Manchester, Ardwick (Mr. Kaufman) said:
  "The words 'adequate return on capital employed'… require a return before charging interest which is positive and also adequate…An objective…could not envisage a loss-making situation".…[Official Report, Standing Committee D, 17 February 1976; c. 949.]
  That was what they said when they nationalised it.
  Mr. Barry Sheerman: Even ICI makes a loss under this Government.
  Mr. Tebbit: British Shipbuilders made a loss under the previous Government as well. Nationalisation has not been a success. It does not save jobs, except at the expense of customers. It has not held down prices, except at the expense of taxpayers, and never for long. It has led to a worse use of capital resources.
  The official Opposition and some other groups have difficulty in understanding the Government's interest in dealing with inflation. That is not because we do not care about industry's problems or employment, but because we care about it. In 1978 the right hon. Member for Chesterfield said:
  "Financial stability and low inflation are the first two necessary conditions"
  for industrial regeneration. In my view, he was right. The fact is that for industry, as for everyone else, the overriding need is to reduce inflation. Only by slowing down the inexorable rise in prices in line with other countries and our international competitors can industry be made competitive.
  To regain our international competitiveness we need also to improve our productivity. Does the right hon. Member for Chesterfield believe that competitiveness is any less important because unemployment is higher? I was as surprised as my right hon. Friend the Secretary of State for Industry to hear the right hon. Member for Chesterfield speaking in support of the miners' strike. He has said that people want the right to work. He did not say that when he was speaking in support of the miners' strike. He was running round the country like a puppy at the heels of Mr. Scargill. He was supporting the 31 per cent. pay claim. The Labour Party treasurer was reported as wanting a zero increase and redundancies for his party's employees.
  Mrs. Renée Short: On a point of order, Mr. Speaker. That really is a load of rubbish.
  Mr. Speaker: Order. The hon. Lady knows that is not a point of order for me to rule upon.
  Mr. Tebbit: However, it is a revealing remark.
  Mrs. Short rose—
  Mr. Speaker: Order. Has the hon. Lady a real point of order upon which I can rule?
  Mrs. Short: Would you be good enough to ask the right hon. Gentleman to answer the debate, Mr. Speaker?
  Mr. Speaker: Order. Mr. Tebbit.
  Mr. Tebbit: I am in a better position than the hon. Member for Wolverhampton, North-East (Mrs. Short), because I heard more of it than she did. I am answering the amendment moved by the Opposition.
  The right hon. Member for Chesterfield told the miners that they were facing a crucial battle. He said:
  "If you do not win that battle, that would be a disaster for us."
  For which "us" would the miners voting be a disaster? Was it a disaster for the miners that there was no strike? Was it a disaster for British industry that there was no strike? Was it a disaster for the thousands of workers whose jobs would have been at risk if there had been a strike? Or was it just another disaster in a long line of disasters for the right hon. Member for Chesterfield? If there is one ability that the right hon. Member for Chesterfield has above everything else, it is to be on the losing side of every argument.
  Mr. Varley: Is the right hon. Gentleman aware that he is a disgrace to the position of Secretary of State? When, in the time that remains, will the right hon. Gentleman tell the House what he intends to do about unemployment?
  Mr. Tebbit: If the right hon. Gentleman had not wasted an extra 10 minutes I should have had 10 minutes longer to reply.
  The tone of Opposition speeches today suggests that Opposition Members have forgotten anything that they learnt in office. The facts of life have not changed. Output per man in Britain's manufacturing industry had over many years fallen steadily in relation to that of our rivals overseas. We were substantially overmanned. That had nothing to do with the level of sterling, but it had everything to do with the efficiency of British industries. In many sectors we have been uncompetitive. It is relevant to the Opposition's amendment to compare the performance of the public and private sectors in that respect.
  I have little time left, so I must be brief. Between 1971 and 1981 nationalised industry prices rose by 330 per cent. That decade covers both Labour and Conservative Governments. In that time the retail price index increased by 260 per cent. The nationalised industries were by far the worst performers in the country. The only reaction by the right hon. Member for Chesterfield and his friends is to demand the nationalisation of more industries and to prevent the liberation of nationalised industries into the private sector. That does not say much for clause four and its devotees.
  Hon. Members: What about unemployment?
  Mr. Speaker: Order. Constant shouting from a sedentary position is unparliamentary. We must watch our standards, at least to ensure that everyone has a hearing.
  Mr. Tebbit: There is no need for me to apologise for speaking to the Opposition amendment.
  Mr. Varley: But the right hon. Gentleman is not speaking to the amendment.
  Mr. Tebbit: The right hon. Gentleman cannot have read the amendment. It reaffirms
  "the next Labour Government's commitment to re-acquire at the earliest opportunity the shares of denationalised concerns by paying exactly what the Government received for them."
  The Opposition thought that important enough to put it on the Order Paper. I pay them the compliment of believing it important enough for me to deal with it.
  In the spring of this year there were various calls for reflation by increasing Government expenditure—that is, reflation to add to inflation. The calls varied from a mere £1 billion or £2 billion by some of my hon. Friends to £4 billion or £5 billion from members of the SDP and to £8 billion, £9 billion or £10 billion by the official Opposition. There were calls to bring down inflation and interest rates. There were calls to increase demand, cut the national insurance surcharge and end the delay in the payment of regional development grants.
  Demand, as measured by final retail sales, is firmly up. Interest rates are well down. They are far lower than they have been for many years. The national insurance surcharge—the Labour Government's tax on jobs—has been cut. The delay in the payment of regional development grant is ended. Inflation has come crashing down, to the bitter disappointment of the Opposition Front
  516
  Bench. Industry's costs have been cut by Government measures by about £2 billion a year since the Budget. In addition, the CBI estimates that each 1 per cent. fall in interest rates means another £300 million cut in costs.
  The Government have met almost every reasonable demand made at the time of the last Budget. They have done more than many of our critics asked of them. They have done it without piling inflation upon inflation, which would have been the consequence of following the demands of Opposition parties. Nationalisation and Government spending have been tried and they do not work. The problem was not the market economy not working, but that it was crippled by Government spending, taxing, borrowing and inflation—dirigiste policies for Ministers who had lost their way.
  The foundations for a return to full employment have been laid. The amendment deserves to be thoroughly well rejected.
  Question put, That the amendment be made:—
  The House divided: Ayes 218, Noes 337.

  Division No. 1]

  [10 pm

  AYES

  Abse, Leo

  Dormand, Jack

  Adams, Allen

  Douglas, Dick

  Allaun, Frank

  Dubs, Alfred

  Anderson, Donald

  Duffy, A. E. P.

  Archer, Rt Hon Peter

  Dunnett, Jack

  Ashley, Rt Hon Jack

  Dunwoody, Hon Mrs G.

  Ashton, Joe

  Eadie, Alex

  Atkinson, N. (H'gey,)

  Eastham, Ken

  Bagier, Gordon A.T.

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

  Barnett, Guy (Greenwich)

  English, Michael

  Barnett, Rt Hon Joel (H'wd)

  Ennals, Rt Hon David

  Benn, Rt Hon Tony

  Evans, Ioan (Aberdare)

  Bennett, Andrew (St'kp't N)

  Evans, John (Newton)

  Bidwell, Sydney

  Faulds, Andrew

  Booth, Rt Hon Albert

  Field, Frank

  Boothroyd, Miss Betty

  Fitch, Alan

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

  Flannery, Martin

  Bray, Dr Jeremy

  Foot, Rt Hon Michael

  Brown, Hugh D. (Provan)

  Ford, Ben

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

  Forrester, John

  Brown, Ron (E'burgh, Leith)

  Foulkes, George

  Buchan, Norman

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

  Callaghan, Rt Hon J.

  Freeson, Rt Hon Reginald

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

  Garrett, John (Norwich S)

  Campbell, Ian

  Garrett, W. E. (Wallsend)

  Campbell-Savours, Dale

  George, Bruce

  Cant, R. B.

  Gilbert, Rt Hon Dr John

  Carmichael, Neil

  Golding, John

  Carter-Jones, Lewis

  Graham, Ted

  Clark, Dr David (S Shields)

  Hamilton, James (Bothwell)

  Clarke, Thomas (C'b'dge, A'rie)

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

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

  Harman, Harriet (Peckham)

  Cohen, Stanley

  Harrison, Rt Hon Walter

  Coleman, Donald

  Hart, Rt Hon Dame Judith

  Concannon, Rt Hon J. D.

  Hattersley, Rt Hon Roy

  Conlan, Bernard

  Healey, Rt Hon Denis

  Cook, Robin F.

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

  Cowans, Harry

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

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

  Home Robertson, John

  Crowther, Stan

  Homewood, William

  Cryer, Bob

  Hooley, Frank

  Cunliffe, Lawrence

  Howell, Rt Hon D.

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

  Hoyle, Douglas

  Dalyell, Tam

  Huckfield, Les

  Davidson, Arthur

  Hughes, Mark (Durham)

  Davies, Rt Hon Denzil (L'lli)

  Hughes, Robert (Aberdeen N)

  Davis, Clinton (Hackney C)

  Janner, Hon Greville

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

  Jay, Rt Hon Douglas

  Deakins, Eric

  John, Brynmor

  Dean, Joseph (Leeds West)

  Johnson, James (Hull West)

  Dewar, Donald

  Johnson, Walter (Derby S)

  Dixon, Donald

  Jones, Rt Hon Alec (Rh'dda)

  Dobson, Frank

  Jones, Barry (East Flint)

  517

  Jones, Dan (Burnley)

  Robertson, George

  Kaufman, Rt Hon Gerald

  Robinson, G. (Coventry NW)

  Kerr, Russell

  Rooker, J. W.

  Kilroy-Silk, Robert

  Ross, Ernest (Dundee West)

  Kinnock, Neil

  Rowlands, Ted

  Lambie, David

  Ryman, John

  Lamond, James

  Sever, John

  Leighton, Ronald

  Sheerman, Barry

  Lewis, Arthur (N'ham NW)

  Sheldon, Rt Hon R.

  Lewis, Ron (Carlisle)

  Shore, Rt Hon Peter

  Litherland, Robert

  Short, Mrs Renée

  Lofthouse, Geoffrey

  Silkin, Rt Hon J. (Deptford)

  Lyon, Alexander (York)

  Silkin, Rt Hon S. C. (Dulwich)

  McCartney, Hugh

  Silverman, Julius

  McDonald, Dr Oonagh

  Skinner, Dennis

  McKay, Allen (Penistone)

  Smith, Rt Hon J. (N Lanark)

  McKelvey, William

  Snape, Peter

  MacKenzie, Rt Hon Gregor

  Soley, Clive

  McMahon, Andrew

  Spearing, Nigel

  McNamara, Kevin

  Spellar, John Francis (B'ham)

  McTaggart, Robert

  Spriggs, Leslie

  McWilliam, John

  Stallard, A. W.

  Marks, Kenneth

  Stoddart, David

  Marshall, D (G'gow S'ton)

  Stott, Roger

  Marshall, Dr Edmund (Goole)

  Strang, Gavin

  Marshall, Jim (Leicester S)

  Summerskill, Hon Dr Shirley

  Martin, M (G'gow S'burn)

  Taylor, Mrs Ann (Bolton W)

  Mason, Rt Hon Roy

  Thomas, Dafydd (Merioneth)

  Maxton, John

  Thomas, Dr R. (Carmarthen)

  Maynard, Miss Joan

  Thorne, Stan (Preston South)

  Meacher, Michael

  Tilley, John

  Mikardo, Ian

  Tinn, James

  Milian, Rt Hon Bruce

  Torney, Tom

  Mitchell, Austin (Grimsby)

  Varley, Rt Hon Eric G.

  Morris, Rt Hon A. (W'shawe)

  Wainwright, E. (Dearne V)

  Morris, Rt Hon C. (O'shaw)

  Walker, Rt Hon H. (D'caster)

  Moyle, Rt Hon Roland

  Wardell, Gareth

  Mulley, Rt Hon Frederick

  Watkins, David

  Newens, Stanley

  Weetch, Ken

  Oakes, Rt Hon Gordon

  Welsh, Michael

  O'Neill, Martin

  White, Frank R.

  Orme, Rt Hon Stanley

  White, J. (G'gow Pollok)

  Palmer, Arthur

  Whitehead, Phillip

  Park, George

  Whitlock, William

  Parker, John

  Willey, Rt Hon Frederick

  Parry, Robert

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

  Pendry, Tom

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

  Powell, Raymond (Ogmore)

  Wilson, William (C'try SE)

  Prescott, John

  Winnick, David

  Price, C. (Lewisham W)

  Woodall, Alec

  Race, Reg

  Woolmer, Kenneth

  Radice, Giles

  Wright, Sheila

  Rees, Rt Hon M (Leeds S)

  Young, David (Bolton E)

  Richardson, Jo

  Roberts, Albert (Normanton)

  Tellers for the Ayes:

  Roberts, Allan (Bootle)

  Mr. Derek Foster and

  Roberts, Ernest (Hackney N)

  Mr. Frank Haynes.

  Roberts, Gwilym (Cannock)

  NOES

  Adley, Robert

  Biggs-Davison, Sir John

  Aitken, Jonathan

  Blackburn, John

  Alexander, Richard

  Blaker, Peter

  Alison, Rt Hon Michael

  Body, Richard

  Alton, David

  Bonsor, Sir Nicholas

  Amery, Rt Hon Julian

  Boscawen, Hon Robert

  Ancram, Michael

  Bottomley, Peter (W'wich W)

  Aspinwall, Jack

  Bowden, Andrew

  Atkins, Rt Hon H. (S'thorne)

  Boyson, Dr Rhodes

  Atkins, Robert (Preston N)

  Bradley Tom

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

  Braine, Sir Bernard

  Baker, Kenneth (St.M'bone)

  Bright, Graham

  Baker, Nicholas (N Dorset)

  Brinton, Tim

  Banks, Robert

  Brittan, Rt. Hon. Leon

  Beaumont-Dark, Anthony

  Brooke, Hon Peter

  Bendall, Vivian

  Brotherton, Michael

  Benyon, W. (Buckingham)

  Brown, Michael (Brigg & Sc'n)

  Best, Keith

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

  Bevan, David Gilroy

  Browne, John (Winchester)

  Biffen, Rt Hon John

  Bruce-Gardyne, John

  518

  Bryan, Sir Paul

  Gummer, John Selwyn

  Buchanan-Smith, Rt. Hon. A.

  Hamilton, Hon A.

  Buck, Antony

  Hamilton, Michael (Salisbury)

  Budgen, Nick

  Hampson, Dr Keith

  Bulmer, Esmond

  Hannam, John

  Burden, Sir Frederick

  Haselhurst, Alan

  Butcher, John

  Hastings, Stephen

  Butler, Hon Adam

  Havers, Rt Hon Sir Michael

  Carlisle, John (Luton West)

  Hawkins, Sir Paul

  Carlisle, Kenneth (Lincoln)

  Hawksley, Warren

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

  Hayhoe, Barney

  Cartwright, John

  Heath, Rt Hon Edward

  Chalker, Mrs. Lynda

  Heddle, John

  Channon, Rt. Hon. Paul

  Henderson, Barry

  Chapman, Sydney

  Heseltine, Rt Hon Michael

  Churchill, W. S.

  Hicks, Robert

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

  Higgins, Rt Hon Terence L.

  Clark, Sir W. (Croydon S)

  Hogg, Hon Douglas (Gr'th'm)

  Clarke, Kenneth (Rushcliffe)

  Holland, Philip (Carlton)

  Clegg, Sir Walter

  Hooson, Tom

  Cockeram, Eric

  Hordern, Peter

  Colvin, Michael

  Howe, Rt Hon Sir Geoffrey

  Cope, John

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

  Cormack, Patrick

  Howell, Ralph (N Norfolk)

  Corrie, John

  Howells, Geraint

  Costain, Sir Albert

  Hudson Davies, Gwilym E.

  Cranborne, Viscount

  Hunt, David (Wirral)

  Crawshaw, Richard

  Hunt, John (Ravensbourne)

  Critchley, Julian

  Irvine, Rt Hon Bryant Godman

  Cunningham, G. (Islington S)

  Irving, Charles (Cheltenham)

  Dickens, Geoffrey

  Jenkin, Rt Hon patrick

  Dorrell, Stephen

  Jenkins, Rt Hon Roy (Hillh'd)

  Douglas-Hamilton, Lord J.

  Johnson Smith, Sir Geoffrey

  Dover, Denshore

  Jopling, Rt Hon Michael

  du Cann, Rt Hon Edward

  Joseph, Rt Hon Sir Keith

  Dunn, Robert (Dartford)

  Kaberry, Sir Donald

  Durant, Tony

  Kellett-Bowman, Mrs Elaine

  Dykes, Hugh

  Kimball, Sir Marcus

  Eden, Rt Hon Sir John

  King, Rt Hon Tom

  Edwards, Rt Hon N. (P'broke)

  Kitson, Sir Timothy

  Eggar, Tim

  Knight, Mrs Jill

  Elliott, Sir William

  Knox, David

  Emery, Sir Peter

  Lamont, Norman

  Eyre, Reginald

  Lang, Ian

  Fairbairn, Nicholas

  Latham, Michael

  Fairgrieve, Sir Russell

  Lawrence, Ivan

  Faith, Mrs Sheila

  Lawson, Rt Hon Nigel

  Farr, John

  Lee, John

  Fell, Sir Anthony

  Le Marchant, Spencer

  Fenner, Mrs Peggy

  Lennox-Boyd, Hon Mark

  Finsberg, Geoffrey

  Lester, Jim (Beeston)

  Fisher, Sir Nigel

  Lewis, Kenneth (Rutland)

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

  Lloyd, Ian (Havant & W'loo)

  Fletcher-Cooke, Sir Charles

  Loveridge, John

  Fookes, Miss Janet

  Luce, Richard

  Forman, Nigel

  Lyell, Nicholas

  Fowler, Rt Hon Norman

  Lyons, Edward (Bradf'd W)

  Fox, Marcus

  Mabon, Rt Hon Dr J. Dickson

  Fraser, Rt Hon Sir Hugh

  McCrindle, Robert

  Fraser, Peter (South Angus)

  Macfarlane, Neil

  Fry, Peter

  MacGregor, John

  Gardiner, George (Reigate)

  MacKay, John (Argyll)

  Gardner, Edward (S Fylde)

  Maclennan, Robert

  Garel-Jones, Tristan

  Macmillan, Rt Hon M.

  Gilmour, Rt Hon Sir Ian

  McNair-Wilson, M. (N'bury)

  Ginsburg, David

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

  Glyn, Dr Alan

  McNally, Thomas

  Goodhart, Sir Philip

  McQuarrie, Albert

  Goodhew, Sir Victor

  Madel, David

  Goodlad, Alastair

  Magee, Bryan

  Gorst, John

  Major, John

  Gow, Ian

  Marland, Paul

  Gower, Sir Raymond

  Marlow, Antony

  Gray, Hamish

  Marshall, Michael (Arundel)

  Greenway, Harry

  Marten, Rt Hon Neil

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

  Mates, Michael

  Griffiths, Peter Portsm'th N)

  Maude, Rt Hon Sir Angus

  Grimond, Rt Hon J.

  Mawby, Ray

  Grist, Ian

  Mawhinney, Dr Brian

  Grylls, Michael

  Maxwell-Hyslop, Robin

  519

  Mayhew, Patrick

  Rathbone, Tim

  Mellor, David

  Rees, Peter (Dover and Deal)

  Meyer, Sir Anthony

  Rees-Davies, W. R.

  Miller, Hal (B'grove)

  Renton, Tim

  Mills, Iain (Meriden)

  Rhodes James, Robert

  Mills, Sir Peter (West Devon)

  Rhys Williams, Sir Brandon

  Miscampbell, Norman

  Ridley, Hon Nicholas

  Mitchell, R. C. (Soton Itchen)

  Ridsdale, Sir Julian

  Moate, Roger

  Rifkind, Malcolm

  Monro, Sir Hector

  Rippon, Rt Hon Geoffrey

  Montgomery, Fergus

  Roberts, M. (Cardiff NW)

  Morgan, Geraint

  Roberts, Wyn (Conway)

  Morris, M. (N'hampton S)

  Rodgers, Rt Hon William

  Morrison, Hon C. (Devizes)

  Roper, John

  Morrison, Hon P. (Chester)

  Ross, Stephen (Isle of Wight)

  Mudd, David

  Rossi, Hugh

  Murphy, Christopher

  Rost, Peter

  Myles, David

  Rumbold, Mrs A. C. R.

  Neale, Gerrard

  Sainsbury, Hon Timothy

  Needham, Richard

  St. John-Stevas, Rt Hon N.

  Nelson, Anthony

  Sandelson, Neville

  Neubert, Michael

  Scott, Nicholas

  Newton, Tony

  Shaw, Sir Michael (Scarb')

  Normanton, Tom

  Shelton, William (Streatham)

  Nott, Rt Hon John

  Shepherd, Colin (Hereford)

  Ogden, Eric

  Shepherd, Richard

  O'Halloran, Michael

  Shersby, Michael

  Oppenheim, Rt Hon Mrs S.

  Silvester, Fred

  Osborn, John

  Sims, Roger

  Owen, Rt Hon Dr David

  Skeet, T. H. H.

  Page, John (Harrow, West)

  Smith, Cyril (Rochdale)

  Page, Richard (SW Herts)

  Smith, Tim (Beaconsfield)

  Parkinson, Rt Hon Cecil

  Speed, Keith

  Parris, Matthew

  Speller, Tony

  Patten, Christopher (Bath)

  Spence, John

  Patten, John (Oxford)

  Spicer, Jim (West Dorset)

  Pattie, Geoffrey

  Spicer, Michael (S Worcs)

  Pawsey, James

  Sproat, Iain

  Penhaligon, David

  Squire, Robin

  Percival, Sir Ian

  Stainton, Keith

  Peyton, Rt Hon John

  Stanbrook, Ivor

  Pink, R. Bonner

  Stanley, John

  Prentice, Rt Hon Reg

  Steel, Rt Hon David

  Price, Sir David (Eastleigh)

  Steen, Anthony

  Prior, Rt Hon James

  Stevens, Martin

  Proctor, K. Harvey

  Stewart, A. (E Renfrewshire)

  Raison, Rt Hon Timothy

  Stewart, Ian (Hitchin)

  520

  Stokes, John

  Wall, Sir Patrick

  Stradling Thomas, J.

  Waller, Gary

  Tapsell, Peter

  Walters, Dennis

  Taylor, Teddy (S'end E)

  Ward, John

  Tebbit, Rt Hon Norman

  Warren, Kenneth

  Temple-Morris, Peter

  Watson, John

  Thatcher, Rt Hon Mrs M.

  Wellbeloved, James

  Thomas, Jeffrey (Abertillery)

  Wells, Bowen

  Thomas, Mike (Newcastle E)

  Wells, John (Maidstone)

  Thomas, Rt Hon Peter

  Wheeler, John

  Thompson, Donald

  Whitelaw, Rt Hon William

  Thornton, Malcolm

  Whitney, Raymond

  Townend, John (Bridlington)

  Wiggin, Jerry

  Townsend, Cyril D, (B'heath)

  Williams, Rt Hon Mrs (Crosby)

  Trippier, David

  Winterton, Nicholas

  Trotter, Neville

  Wolfson, Mark

  van Straubenzee, Sir W.

  Wrigglesworth, Ian

  Viggers, Peter

  Young, Sir George (Acton)

  Waddington, David

  Younger, Rt Hon George

  Wainwright, R. (Colne V)

  Wakeham, John

  Tellers for the Noes:

  Waldegrave, Hon William

  Mr. Anthony Berry and

  Walker, B. (Perth)

  Mr. Carol Mather

  Walker-Smith, Rt Hon Sir D.

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

  Public Enterprise

    DIVORCE JURISDICTION, COURT FEES AND LEGAL AID (SCOTLAND) BILL
    Order for Second Reading read.
    Ordered,
    That the Bill be referred to the Scottish Grand Committee.—
    [Mr. Garel-Jones.]

    SCOTTISH GRAND COMMITTEE
    Ordered,
    That, in the course of their consideration of the Divorce Jurisdiction, Court Fees and Legal Aid (Scotland) Bill, the Scottish Grand Committee may meet in Edinburgh on Monday 22nd November at half-past Ten o'clock.—[Mr. Garel-Jones.]

  Gatwick Airport
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]
  10.14 pm
  Mr. Tim Renton: The Government's decision, announced ten hours ago, to go ahead with outline planning permission for the second terminal at Gatwick airport has made my request to you, Mr. Speaker, for an Adjournment debate in a sense both superfluous and timely. I should like first to thank my right hon. Friends, and my hon. Friend the Under-Secretary of State for the Environment who is to reply, for not delaying the decision until tomorrow morning. It could have been announced tomorrow morning after my Adjournnent debate but that would have been rather a sneaky thing to do. I am glad that the Government took the plunge and made the decision, which they announced this morning.
  Having said that, I must say to my hon. Friend the Under-Secretary of State that this is a classically bad decision that will come to be greatly regretted by Governments in years to come, because it does not begin to deal with the long-term problem of where we should site national airport development in Britain. It is a short-term piecemeal decision which, like most such decisions, will turn out to be bad.
  I should like to draw an analogy with a decision made by Harold Macmillan's Government in the early 1960s concerning the siting of a major new steel plant. The Government of the day were unable to decide where the major new steel development should take place, so, unlike Solomon, they split the baby. They built a small steel plant at Ravenscraig in Scotland and another at Llanwern in South Wales. In consequence, instead of one new large viable steel plant we have had two small steel mills, both of which were uncompetitive.
  In saying how much I regret this decision—I know that I am supported in this by hon. Friends whose constituencies surround mine, one of whom, my hon. Friend the Member for Horsham and Crawley (Mr. Hordern), is hoping to catch your eye, Mr. Speaker, during the debate—I am not trying to make a political point against my hon. Friend on the Front Bench. The question whether there should be a second terminal at Gatwick started to develop in the late 1970s. The matter has bumbled on for about five years. It is nearly two and a half years since the inquiry ended, and it happens to be my hon. Friends on the Front Bench who have taken the final decision rather than honourable opponents, but that does not make the decision any better.
  Why am I so opposed to the decision? A second terminal at Gatwick without a second runway—and, according to the Minister's decision announced today, without additional maintenance or cargo handling facilities—will be only a short-term, piecemeal solution to a temporary problem. What was the problem? An excess of passengers was expected in the late 1980s before either Stansted was developed as a full-blown airport or the fifth terminal at Heathrow was developed. That was the main reason for suggesting a second terminal at Gatwick. I would suggest to my hon. Friends that that temporary problem has now disappeared because of the much slower growth in traffic now than was forecast at the end of the 1970s and during the inquiry.
  522
  Gatwick growth has sharply slowed down from more than 17 per cent. a year a few years ago to around 10 per cent. a year. That has meant that in the past 12 months there have been 11 million passengers through Gatwick rather than the 12·7 million forecast by the British Airports Authority during the inquiry. That, in turn, means that the present existing capacity at Gatwick would certainly last until the late 1980s.
  The position of the South-East airports as a whole is even more startling. Last year the growth in traffic was only 2·2 per cent. Taken over two years, the increase has been only 1·1 per cent. annually.
  On that basis, once the fourth terminal at Heathrow is built, there will be sufficient spare capacity in the South-East to last for 60 years. It is therefore hard to see why the Government have persisted in this short-term solution. I can only imagine that with the continuance of the Stansted inquiry it is because this matter has hung around far so long and they felt it necessary to to something. That is not the best way to reach planning decisions.
  So much of the argument was about forecasts in traffic growth. That was a key issue at the inquiry. It was debated for six months. As I have just said, the present figures show that growth has slowed down dramatically. In those circumstances, it is extraordinary that when the traffic forecasts were changed, the interested parties had no opportunity to discuss them in front of the inspector. Why was the inquiry not reopened for the new forecasts to be discussed? I suspect that local authorities may decide to challenge that decision in the courts, but it is for them to make that move if they wish to do so.
  This is not just a constituency point, because this decision goes no way towards dealing with the national problem of where future airports should be sited. It does not touch the question of regional airports. It simply gives us a second terminal, which I believe will not be fully used unless there is a second runway in due course. That is at the heart of much of my worry.
  I find it impossible to believe that in the early 1990s, when this development is completed and there is a capacity for 25 million or 26 million passengers a year at Gatwick, the traffic will be handled on one runway, unless the British Airports Authority and the charter companies can persuade many people to take 2 am charter flights in January out of Gatwick. If they persuade them to do so, that will be no comfort at all to my constituents who live in the flight path and who from Copthorne to Crawley Down already complain about the amount of noise from night flights.
  If the second terminal is not fully used in the early 1990s, and if the argument is developed—as I fear it will be—for full capacity to be made of the new terminal, there will be pressure for a second runway. Despite the legally binding agreements that have been entered into between the BAA and the local authorities, I fear that this matter will be raised again in the early 1990s to make full use of the new construction and capital investment that is taking place.
  That would be a deplorable solution. It would end up with Sussex being covered in concrete from Crawley to Brighton. That is not something that my constituents wish to see.
  I have one specific question for the Minister which I hope he will answer either tonight or in due course. What help will the Secretary of State give to the local authority most involved—the West Sussex county council—so that

  523
  it can cope with the infrastructure demands that will certainly be made on it and on the relevant county services by this growth at Gatwick?
  I say that in the knowledge that this county council is a low-spending authority. We heard that on Friday when my hon. Friends and I met the county council at Chichester. It constantly made the point about the low target figure for its rate support grant that it received from the Department of the Environment.
  It is No. 38 out of 39 in the league table simply because it has been good. Because it is a low-spending authority, it has been clobbered. It has not been recognised that there is a growing population in West Sussex. That, with perhaps an additional 11,000 jobs flowing from the Gatwick development, means that the pressure on the council must increase. West Sussex's need for help with infrastructure must be recognised by central Government.
  On this matter as on many others, Sussex Members of Parliament have a good habit of standing together. I know that my hon. Friend the Member for Horsham and Crawley wishes to catch your eye, Mr. Deputy Speaker. This is not simply a constituency issue or a piper's lament for the wealds and downs of sunny Sussex that are likely to disappear in the next generation. It is a genuine regret about the piecemeal nature of the decision that does not in any sense deal with national airports policy requirements. That decision will be greatly regretted in the years ahead.
  10.25 pm
  Mr. Peter Hordern: I congratulate my hon. Friend the Member for Mid-Sussex (Mr. Renton) on his good fortune in securing the debate following the Government's decision about the second terminal at Gatwick. I hope he will forgive me for saying that this must not be taken as the only debate on an issue that is so important to our constituents.
  Neither I nor my hon. Friend are against a substantial increase in passenger traffic at Gatwick airport. We have always believed that passenger traffic should increase by some 50 per cent. to about 16 million passengers a year. As he knows, about 11 million passengers are handled each year. That is far below the British Airport Authority's forecast for last year. It said that 12·7 million passengers would be handled.
  I understand that the Government propose a phased increase in the second terminal. They expect some 25 million passengers a year by the mid-1990s. West Sussex county council has a good record in forecasting such matters and estimates that with the workers and dependants who are expected at the airport there will be another 22,000 people by 1991, requiring 7,400 extra dwellings.
  During the inquiry, the inspector recognised the strain that would be put on existing employment and infrastructure in the county. He said that existing firms that wish to expand may choose to go elsewhere. He also observed that people coming into the county would swamp the land allocation and that if more land were made available it would probably lead to the over-enlargement of existing towns and building on countryside that is best left open. He therefore suggested that manufacturing and warehousing be reduced and that all future development of that type should be refused.
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  My right hon. Friend the Secretary of State has gone further, as he does not recognise the need for any action and maintains that existing employment must face the competition without any assistance.
  Our area has the good fortune to have the widest choice of employment in science-based industries and in export-led firms anywhere in the country. If the proposed expansion takes place, those opportunities will not be available to our young people. That represents a major loss of job opportunities.
  Furthermore, as my hon. Friend the Member for Mid-Sussex said, who will pay for the infrastructure? May we have a firm assurance from the Minister that the county council will not be expected to pay for such infrastructure by borrowing money—by the Government increasing the council's allocation—but that it will receive cash grants for capital expenditure for the building of schools and houses? I cannot help feeling that the growth will not be so large and so rapid as the Government think and that the second terminal will turn out to be, if not a white elephant, at least a whited sepulchre and that, in the end, it will come to be called Heseltine's personal Taj Mahal.
  10.30 pm
  The Under-Secretary of State for the Environment (Sir George Young): My hon. Friend the Member for Pudsey (Mr. Shaw) would normally have responded to this debate, as he concerns himself with this aspect of my Department, but my hon. Friend is on Government business overseas. When he asked if I would stand in for him, I had no idea that today we would be announcing the go-ahead of the outline planning permission for a second passenger terminal at Gatwick together with road access from the A23.
  As a London Member with a constituency near an airport and as one who has taken part in debates on airports policy in the past, I am aware of the broad strategic issues that my hon. Friends have raised. I understand the concern that they have expressed in a positive and constructive manner. As my hon. Friend the Member for Mid-Sussex (Mr. Renton) says, my right hon. Friends the Secretaries of State for the Environment and for Trade have today granted the British Airports Authority outline planning permission for a second passenger terminal at Gatwick together with road access from the A23. They have, however, refused planning permission for roads, services, taxiways and aircraft stands for an additional maintenance and cargo area because they have concluded that the need for these facilities has not been proved.
  I am deeply conscious of the fact that this information has come as a disappointment to my hon. Friends the Members for Mid-Sussex and for Horsham and Crawley (Mr. Hordern) and, I suspect, other hon. Members who have expressed doubts about the second terminal. I would like to assure them that my right hon. Friends came to their decision after very careful consideration of all the evidence, not only that put forward before and at the public local inquiry which was held from January to July 1980, but also the written representations from the interested parties which were invited as a result of new air traffic forecasts being made available after the inspector's report on the public inquiry had been received.
  It has been suggested that the inquiry should have been reopened to hear evidence in relation to the forecasts. My right hon. Friends concluded, however, that there was no reason why the implications of the new air traffic forecasts

  525
  could not be properly and fully investigated and assessed without reopening the inquiry. They were satisfied that the parties were not unfairly hampered or prejudiced in any way by putting their case by way of written representations.
  My right hon. Friends have accepted most of the inspector's recommendations for minimising the environmental consequences of the decision and have placed a number of conditions on the planning permission to reduce the effects of noise and other nuisance. These conditions include a requirement to provide barriers or earth mounds to the north and east of the terminal to protect the residents of Povey Cross Road and the Horley Gardens Estate from the effects of noise from aircraft on the ground. In addition to the inspector's recommendation, my right hon. Friends have also imposed conditions banning, except in emergency, the night use, from 11 pm to 7 am of auxiliary power units and stop-and-start engine testing on the aircraft stands and taxiways of the second terminal.
  The effect which this decision will have on the mid-Sussex area, to which my hon. Friends have drawn attention, has been taken fully into consideration by my right hon. Friends, and although they agree with the inspector's conclusions that the main impact of the additional employment, which might eventually be 11,000, will fall on central Sussex, and, to a lesser extent the Reigate and Banstead, Mole Valley and Tandridge districts of Surrey, they do not accept his recommendation that local authorities should try to ensure that the additional population arising from the second terminal should be part of the population growth planned in the structure plans and that this should be achieved by, among other provisions, requiring future reduction in allocation of land for firms unconnected with the airport and the locality.
  My right hon. Friends fully recognise that the additional employment arising from the second terminal will have substantial consequences in the central Sussex area, as my hon. Friend the Member for Horsham and Crawley said, in relation to the labour supply for employers in the area. But they are not convinced that the inspector's recommendation would help to solve these difficulties. Indeed, they consider that it might unduly inhibit the growth of industry, including that of small firms in the area.
  My hon. Friend the Member for Mid-Sussex has expressed doubts about whether it will be possible to accommodate a through-put of up to 25 million passengers a year using two terminals but with only one runway. There is, however, no suggestion that 25 million passengers a year could be handled off the single Gatwick runway at present, but as the number of passengers per aircraft movement continue to increase with the introduction of modern wide-bodied aircraft, there is no reason to believe that such numbers cannot be reached at Gatwick by the early to mid-1990s.
  A number of those who have opposed the provision of the second terminal at Gatwick take the view that the slower growth in air traffic indicated by the new forecasts means that a new terminal at Stansted could be available by the time additional terminal capacity in the London area is needed and that the demand should therefore be met at Stansted. Indeed, that case has been put forward tonight. As the House knows, however, the British Airports Authority's proposals for the development of Stansted to meet the expected longer-term demand in the London area
  526
  airports system, brought forward by invitation of the Government, are at present the subject of a public inquiry. This inquiry is also examining proposals for alternative solutions and the proceedings of that inquiry are not expected to be concluded before the summer of 1983; my right hon. Friends cannot, of course, pre-judge the conclusions of the inspector who is conducting the Stansted inquiry or the decision they will take in the light of his report.
  The British Airports Authority has said, in its written representations on the new air traffic forecasts, that it now considers 1990 to be the first full year by which the first phase of a new Stansted terminal could be available, on the assumption of a favourable decision by mid-1984, and that 1988 is the first full year for which additional capacity could now be provided at Gatwick. On those assumptions, my right hon. Friends are satisfied that there is still likely to be a gap of at least two years when demand will exceed the existing capacity, unless the second terminal at Gatwick is provided as soon as possible.
  Also, evidence was submitted by the BAA, both at the inquiry and in written evidence on the new forecasts, to show that Gatwick has experienced exceptional growth in recent years and that growth can be expected to continue at a greater rate than at other airports in the South-East, despite the demise of Laker and Braniff. My right hon. Friends have accepted that evidence and take the view that on present trends the capacity of the existing terminal. at Gatwick, as against the rest of the London area airports system, is likely to be exhausted by the mid-1980s.
  My hon. Friends have rightly drawn attention to the problems they see arising in the neighbouring areas of Gatwick as a result of the provision of the second terminal. I think it right, however, to mention the considerable benefits, both direct and indirect, that will arise. First, it will be a major help to the tourist industry, by greatly increasing the capacity of airlines to provide improved service and greater comfort for travellers both to and from the London and South-East areas. Secondly, the building of the new terminal and the associated facilities will provide a considerable opportunity for the construction industry. It will also create employment, perhaps of the order of 11,000 jobs eventually, and be a general boost to the economy of the area—despite the fears my hon. Friend the Member for Mid-Sussex has expressed about "overheating". Lastly—I am sure this should not be forgotten—it will provide a substantial rate income for the local authorities.
  Both my hon. Friends pressed me to answer the question about what assistance would be made available to the local authorities that have to provide the infrastructure. This will be a matter for discussion between my Department and the local authorities concerned. taking into account not just the costs of the infrastructure, but the benefits—by way of extra rateable income—that the development will bring about. I am sure that the Department will enter into those discussions with good will and a keenness to resolve the situation satisfactorily in the interests of all concerned.
  In his report, the inspector mentioned the advantages to the nation of providing capacity to meet the demands of air travel. A number of the parties who support the second terminal pointed out that refusal of planning permission for the proposed terminal would have a serious adverse commercial effect on the Gatwick-based airlines

  527
  and would undermine the Government's policies which are designed to limit air traffic at Heathrow and relieve the greater noise burden around that airport.
  As my right hon. Friends have made clear, they believe that it is in the national interest to provide adequate facilities for future demand for air transport to London and the South-East, that that will bring consequential benefits for important growth sectors of the economy and that to refuse to provide such additional capacity would constitute an unjustifiable obstacle in the way of an important aspect of the regeneration of the economy. I am pleased to see at my side my hon. Friend the Under-Secretary of State for Trade, who has a particular interest in, and responsibility for, that aspect.
  528
  My right hon. Friends are satisfied that there is a need for a second terminal at Gatwick, both to meet the expected demand within the London area airports system and to provide for the continued growth of air traffic at Gatwick. They are satisfied that these considerations outweigh the environmental and planning objections to the proposed development.
  I am sure that this is not the last that we shall hear of this matter and that my hon. Friends will have other opportunities to raise the legitimate interests of their constituents which, rightly, they have the reputation of taking to heart.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes to Eleven 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 Bath and Wells.

Taxation on Family Income
Lord Hatch of Lusby: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what percentage changes have been made in taxation payments by a married couple with two children on national average wages and by such a family on five times the average wage, between 1978–79 and this year.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): The percentage of income, including child benefits, taken in income tax is estimated at 19.9 per cent. this year for the couple on average earnings, compared with 19.1 per cent. in 1978–79. For the couple on five times average earnings, the figures are 42.1 per cent. and 48.1 per cent. respectively.
Lord Hatch of Lusby: My Lords, is the noble Lord the Minister aware that according to a Written Answer given in another place the total tax burden on the average family living on an average wage is now 14.7 per cent. higher than it was in 1979, whereas the tax burden on those who are earning five times the average is 6.5 per cent. less than it was in 1979?
Lord Trefgarne: Yes, my Lords, I agree with the figures which the noble Lord has advanced. The top rate of tax when we came into office was something like 98 per cent. on unearned income and about 83 per cent. on earned income. These rates were widely believed, certainly so far as the Government were concerned—and, I believe, so far as many Members of the Opposition were concerned—to be insupportable.
Lord Hatch of Lusby: My Lords, is the Minister saying that the Government have fulfilled the pledge which was given in the Conservative Party's manifesto to cut income tax at all levels?
Lord Trefgarne: My Lords, if the manifesto of the party opposite had been put into effect as a result of the general election at that time, the level of tax now would be vastly greater than it is.
Lord Hatch of Lusby: My Lords, would the Minister answer my question?
Lord Trefgarne: My Lords, I do not deny that we should have preferred to move faster in reducing the general level of taxation than has in the event proved possible. The main thrust of our economic policy was
96
first to get down the rate of inflation so that the money left in people's hands was worth more. The fact is that the real income of people now is greater than it was when we came into office.
Lord Morris: My Lords, would my noble friend agree that the contribution of this Government in increasing the net disposable income of the people of this country by virtue of the almost dramatic reduction in inflation has made a great contribution effectively to the state of this country?
Lord Trefgarne: Yes, my Lords, that was the point I was trying to make: that the money available to the average income earner is significantly greater now, in real terms, despite the fact that we have been unable to reduce taxation as fast as we would wish. And that is as a result of the main thrust of our policy, which is to get inflation under control.
Lord Molloy: My Lords, naturally everybody will rejoice that the rate of inflation has been brought down, but would not the noble Lord acknowledge that, although this Government have brought down inflation, they sent it rapidly rising within six months of taking office and that the corollary of their policy is that we have had a massive increase in unemployment?
Lord Trefgarne: My Lords, it has certainly been necessary during the course of our period in office to ensure that inflation is brought under control and, as part and parcel of that policy, that public expenditure is kept under control also. As I have already said, we should have wished to move faster in reducing the level of taxation. That has not proved possible, but we hope that it will prove possible in due course.
Lord Blyton: My Lords, is the Minister aware that the ordinary working-class woman cannot understand how inflation is going down when every week prices are rising so far as her purse is concerned?
Lord Trefgarne: My Lords, the containment of the rate of inflation which we have achieved to a very remarkable extent, I believe, during the time we have had responsibility for these matters started in the face of the real difficulties which are now widely accepted and public knowledge. We are not suggesting that prices are being reduced. It is the rate of increase initially which we have sought to contain, and we have been very successful in doing that.
Baroness Sharpies: My Lords, is my noble friend aware that the price of many foods, especially fresh fruit and vegetables, is much cheaper than a year ago?
Lord Trefgarne: My Lords, I am certainly aware of that, and it contributes to the figures to which I have referred.
Lord Glenamara: My Lords, considering the burden of taxation, does not the noble Lord agree that direct taxation is only half the story? There is also indirect taxation. If such increases as the increase in the price of gas, which is simply another form of taxation, are taken into account, the burden of taxation on the

97
people of this country is enormously higher than it was when the Conservative Government came into office?
Lord Trefgarne: My Lords, I would not for a moment agree that the price of gas being set at a proper market level is some element of taxation. Of course it would be possible to give away gas. Of course it would be possible to give away electricity generated or created at the public expense. But that would be a most unwise policy and would not in any way represent Government thinking.
Lord Jacques: My Lords, would the Minister explain to the House how he arrives at the market level when there is only one seller of a commodity like gas?
Lord Trefgarne: My Lords, gas is a form of energy. There is a very clear market level for the right price for a particular source of energy when compared with other sources.
Lord Kaldor: My Lords, is it not true that, at the beginning of their term, the Government announced it as their policy to increase gas prices by 10 per cent. more each year than the prevailing rate of inflation and that this was done in the face of the strongest opposition by the board of the British Gas Corporation?
Lord Trefgarne: My Lords, it is certainly the case that we have sought and have achieved increases in the price of gas faster than the increase in inflation, but that, as I have explained, was to bring the price of gas up to a clear comparison with other forms of energy. Prior to that gas, which is a very attractive form of fuel for many purposes, was being sold well below the proper market price. Quite apart from the economic considerations, this was not a proper husbanding of scarce resources.
Lord Harmar-Nicholls: My Lords, does my noble friend not think that if we are going to discuss the effect which gas has on the general economy we ought to remember history; that when the cost of gas was going up it was a Minister of the previous Government who put all the extra cost on to industry, which may well have helped to bring up the figures of unemployment? Ought we not to make up our minds as to where our priorities lie—to help bring down unemployment by helping industry or merely to make propaganda points for the sake of getting them on the record?
Lord Trefgarne: My Lords, if I was to list the unwise policies of the previous Administration, I should be here all day.
Lord Elwyn-Jones: My Lords, is not general electioneering beginning a little early?
Lord Trefgarne: That may well be, my Lords, but it was the noble Lord, Lord Hatch of Lusby, who tabled this Question.

Common Fisheries Policy
Lord Campbell of Croy Lord Campbell of Croy had given notice of his intention to ask the following Question:
To ask Her Majesty's Government what stage has been reached in negotiating agreement upon a common fisheries policy within European Economic Community.
The noble Lord said: My Lords, as I understand that there is to be a Statement later this afternoon on this subject, which seems appropriate after yesterday's meeting of Community Ministers, I beg leave not to put the Question standing in my name on the Order Paper.
Question, by leave, withdrawn.

USA Rapid Deployment Force: Ras Banas
2.44 p.m.
Lord Kennet: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what proposals have been made in NATO or to NATO Governments by the United States Government about direct or indirect offset funding for their Rapid Deployment Force facilities at Ras Banas in Egypt, and whether Ras Banas is within the NATO area.
The Minister of State for Defence and Procurement (Viscount Trenchard): My Lords, no such proposals have been made by the United States Government to NATO or to Her Majesty's Government, and I am not aware of any having been made to other NATO Governments. Ras Banas is not within the NATO area.
Lord Kennet: My Lords, given that the proposed American quick reaction force looks like being able to call upon something like a quarter of a million men, can the Government say whether any NATO involvement in the operation of the logistics of this force will be preceded by a full debate in Parliament and in public in this country?
Viscount Trenchard: My Lords, so far as Her Majesty's Government are concerned, they have made statements at various times, of which I know the noble Lord is aware, on the support which we give to the Rapid Deployment Force and the fact that support in permanent and assigned kind can be only very small indeed. I have nothing new to say on that subject. This afternoon I shall in the debate before us be talking a little about out of area questions.

Gatwick Airport: Second Terminal
2.46 p.m.
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have reached a decision concerning the construction of a second terminal at Gatwick airport and, if not, when they expect to do so.
The Earl of Avon: Yes, my Lords, my right honourable friends the Secretaries of State for the Environment and for Trade have issued their decision today and have granted the British Airports Authority outline planning permission for a second passenger terminal at Gatwick Airport.
Baroness Burton of Conventry: My Lords, is the noble Earl aware that I am very glad to receive an affirmative reply and that I would like to thank him for the papers I have received? Is he further aware that I did not know whether or not the Government were trying to buy me off or had reached a decision; that as I have not yet had time to read all the papers I am glad that he has answered the question for me; and that I assume that planning permission has now been granted?
The Earl of Avon: Yes indeed, my Lords, the noble Baroness is totally correct; the fact that it happened today and not tomorrow is entirely fortuitous.
Lord Boyd-Carpenter: My Lords, can my noble friend tell us what has been the total cost of the prolonged public inquiries before this decision was made?
The Earl of Avon: My Lords, in this happy atmosphere I am afraid to have to tell my noble friend that I do not have those figures at my fingertips.
Lord Leatherland: My Lords, purely to seek information, may I ask the noble Earl what will be the effect of this move on Stansted Airport in Essex?
The Earl of Avon: My Lords, this inquiry is an entirely separate matter.
Lord Leatherland; No, my Lords, because, if this particular airport is going to do more, will Stansted be asked to do less?
The Earl of Avon: My Lords, these factors have been taken into account, and no doubt in the other planning inquiry they will be taken into account again.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. this afternoon, my noble friend Lord Trefgarne will, with the leave of the House, repeat a Statement that is to be made in another place on the National Health Service pay dispute. This will be followed by my noble friend Lord Mansfield, who will repeat a Statement on the Fisheries Council Meeting on 8th November.

Committee of Selection
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, that in accordance with Standing Order 60 a Committee of Selection be appointed to select and propose to the House the names of the Lords to form each Select Committee of the House (except the Committee of Selection itself and any Committee otherwise provided for by statute or by order of the House) and the panel of Deputy Chairmen of Committees and that the Lords following together with the Chairman of Committees be named of the Committee:—

Boyd-Carpenter, L.

Byers, L.

Cledwyn of Penrhos, L.

Denham, L.

Hylton-Foster, B.

Ilchester, E.

Kennet, L.

Listowel, E.

Ponsonby of Shulbrede, L.

Wigoder, L.

Young, B. (Lord Privy Seal)

That the Committee have leave to report from time to time.—(Lord Aberdare.)
On Question, Motion agreed to.

Health and Social Services and Social Security Adjudications Bill [H.L.]
Lord Trefgarne: My Lords, I beg to introduce a Bill to amend the law relating to the financing of certain social services in England and Wales and Scotland and to children and young persons; to make fresh provision for the Central Council for Education and Training in Social Work and further provision for the remuneration and conditions of service of medical practitioners in the National Health Service and health service officers; to amend the law relating to homes regulated by the Nursing Homes Act 1975, the Child Care Act 1980, the Residential Homes Act 1980 and the Children's Homes Act 1982; to change the status of Family Practitioner Committees in the National Health Service; to repeal enactments about the designation of health authorities as teaching authorities and membership of authorities so designated; to make further provision for social security adjudication; to abolish certain advisory bodies; to make minor alterations in certain enactments relating to health; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Trefgarne.)
On Question, Bill read a first time, and to be printed.

National Heritage Bill [H.L.]
The Earl of Avon: My Lords, I beg to introduce a Bill to establish Boards of Trustees of the Victoria and Albert Museum, the Science Museum, the Armouries and the Royal Botanic Gardens; to transfer property to

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them and confer functions on them; to make provision in relation to Government grants to, and employment by, armed forces museums; to establish a Commission for Ancient Monuments and Historic Buildings for England; to confer functions on the commission; to dissolve the Historic Buildings Council for England and the Ancient Monuments Board for England; to amend Sections 3 and 4 of the National Gallery and Tate Gallery Act 1954; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Earl of Avon.)
On Question, Bill read a first time, and to be printed.

Abortion (Amendment) Bill [H.L.]
Lord Robertson of Oakridge: My Lords, I beg to introduce a Bill to amend Section 1 of the Abortion Act 1967. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Robertson of Oakridge.)
On Question, Bill read a first time, and to be printed.

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

Foreign Nuclear, Chemical and Biological Bases (Prohibition) Bill [H.L.]
Lord Jenkins of Putney: My Lords, I beg to introduce a Bill to prohibit by law the siting of nuclear, chemical and biological weapons under the ownership or control or joint control of foreign countries within the United Kingdom, the British Isles or British territorial waters or British airspace or bases; and for purposes connected therewith. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Jenkins of Putney.)
On Question, Bill read a first time, and to be printed.

The Queen's Speech

  ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
  Debate resumed on the Motion moved on Wednesday last by the Lord Lucas of Chilworth—namely, That a humble Address be presented to Her Majesty as follows:
  "Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament".
  2.54 p.m.
  Viscount Trenchard: My Lords, it is an honour, but a frightening one, to find myself opening in support of the foreign affairs and defence section of the humble Address, and, for your Lordships, I fear a poor substitute for similar Motions which have been initiated by my noble friend Lord Carrington in the past.
  Inevitably I shall leave to my noble friend Lord Belstead the near impossible task of answering over 30 contributions from many distinguished Members of this House. We both undertake to draw the attention of our right honourable friends to these contributions, which I look forward to hearing. Perhaps my introduction will be slightly defence-orientated, for which no doubt my noble friend will later compensate, but the main issues of foreign affairs and defence are so inextricably bound up that I hope to cover at least some of the main points. That is all I can do in the customary time. If my choice, in the view of some Members of this House, excludes subjects which they know to be of utmost importance, I hope they will accept that one can only cover a few points in the time available.
  I plan to concentrate on four main areas, each of which could occupy the House for a day or more. They are, first, the EEC; secondly, NATO and the preservation of peace in Europe; thirdly, defence and security further afield, with a small reference to the Falklands; and, finally, disarmament. For a wider discourse the House has only to refer to the speech of my right honourable friend the Foreign Secretary last Thursday in the other place.
  I turn first among my chosen subjects to the EEC. This is one of many subjects where the Government are bombarded with contradictory advice. "Leave it", now says the party opposite. "Stop upsetting our European partners by taking a parochial view on budgets and refunds", say others. Perhaps my right honourable friends have it right in being determined to stay in the EEC and to help make it work in the interests of all European countries, while at the same time continuing to make considerable progress to ensure that its policies and its practices do not harm major British interests, and, indeed, are developed in a way which will help them.
  Nobody who has lived in, or read the history of, the first half of this century can doubt the overall political importance of maintaining and developing the European Community. The voice of commerce and industry has been, and still is, virtually unanimous in favour of Britain continuing to play its full part within the EEC. They cannot all be wrong. The agricultural and food price problems are complicated, but they are far from one-sided matters. Those who point to the possible extra costs of food within the CAP system must remember the bill to the taxpayer of the deficiency payments schemes with which this country found it necessary to support its agriculture before joining the EEC. The EEC Select Committees of this House know, and have shown in their valuable

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  reports, that this is a complicated subject, and that, however slow, progress is being made in relation to the more difficult areas, including the CAP and even in relation to fisheries policies, notwithstanding the disappointing news this morning. I believe that my right honourable friend the Prime Minister and her colleagues, in negotiating over recent years refunds totalling over £2,000 million from our budget contributions, have achieved real progress. Before this Government took office, no refunds were paid.
  My Lords, let me return to industry, which is my own background subject. How can anyone seriously contemplate leaving the EEC, which last year took over 41 per cent. of our visible exports? Our visible exports to the EEC in 1981 were worth over £21 billion—three times as much as our exports to the USA and Canada together. Our exports of manufactured goods to the European Community grew by 470 per cent. between 1972 and 1980. Of course, there is the growth of imports into this country, but this problem, based on the uncompetitiveness of much of our industry in the late 'sixties and early 'seventies, is not directly an EEC problem, as the spread of those imports clearly reveals.
  As we make progress in restoring our competitiveness and move from stopping to reversing the loss of share of our own market and world markets, so the EEC market will prove of greater and greater value. In any event, our overall problems do not alter the facts of the degree of dependence that we now have on this market, as my figures have made clear. There is no possible practical basis, in the real international world in which Britain must live today, for a change in the policy held by all parties in this country until recently—namely, to stay in and help develop the EEC. The campaign to leave it is, I have to say, based on a facile campaign to gain public support by suggesting that all those in favour of cheaper food should support it. My Lords, where should we have been two weeks ago without the power of the EEC to reach a settlement on steel with the United States?
  Let me move on to my second subject: peace and security through NATO. Like the popular appeal of cheap food, some criticise our policy based on NATO and deterrence by suggesting that they favour peace while the Government's policy is based on planning for a war. It is based on no such thing. Deterrence based on a variety of abilities to respond effectively to aggression has in the Government's view kept the peace in Europe for nearly 40 years and can continue to do so. The policy of flexible response, while it can always be re-examined in relation to each option for response contained within it, remains our soundest defence and our best basis for practical disarmament talks, to which I shall return later. The unreal phrases are those of "intention to fight a nuclear war", or "to start a nuclear war", or the phrase "nuclear exchange", and there is the illusion that the strengthening of conventional defence, important as that is, makes either this country's or NATO's nuclear weapons unnecessary. The reasoning that these phrases and that illusion are unreal and that deterrence and flexible response are real is based upon the fact that, until perhaps a new generation arises, Russia and the Warsaw Pact countries are the potential aggressors who continue to prove their aggressive policies in
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  Afghanistan, Poland and, with their allies, in other parts of the world.
  History since the Second World War is regrettably strewn with evidence of Russian aggressive expansion. NATO is the alliance of the free democracies who have no territorial ambitions. This country in the past—and recently in the Falklands—and the United States have been prepared selflessly and at great sacrifice to come to the help of peoples and countries faced with aggression. At times this has involved a judgment on the substance and standing of a particular Government and critics are free to criticise this country or the United States, in my opinion usually wrongly, for making a false judgment, but this is so totally different to Soviet intervention demonstrably against the will of the people of a particular country. There are now 3 million refugees from Afghanistan. So I believe, with regret, that it is still quite unarguable that the world is still split today between the dictatorships who are potential aggressors and free democratic defenders.
  In the Government's opinion aggressors attack when they think they can get away with aggression at an acceptable cost, and it has been said in this House that the Russian pain threshold has been proved to be high. In those circumstances an adequate ability to respond in the conventional and nucleur fields is vital. If we have it and if the potential aggressor is not encouraged to believe that we would never use any particular part of it, then, contradictory though it may sound to some, we shall in fact never have to use any part of it. It is in this respect that the democracies are vulnerable. Our freedom encourages many views to be given great prominence. Dictatorships do not understand our ways. Hitler did not believe we would defend our freedom. The pursuit of moral arguments and, I have to say, the views of a very small minority of retired senior officers, and others, must not be allowed to cause an aggressor to miscalculate.
  My noble friend Lord Thorneycroft has in this House on a previous occasion declined to follow the endless speculation as to exactly in what circumstances, if an aggressor were to doubt our will, we would be prepared to use a particular part of our deterrent armoury. He has pointed to the fact that the whole basis of deterrence must be based on maintaining uncertainty on what particularly we would do, but upon the certainty that we would make sure that aggression was frustrated. Critics who use phrases such as "start a nuclear war", base their criticism of our policy on the premise that the Russians have the means to retaliate and have said they will. I can only deal with the naivety of the second of these two points by saying, "They would, wouldn't they"! That they have the means, indeed that they have greater means than the defensive armaments of NATO is, of course, fact. Why, incidentally, do they have over 200 SS-20s targeted on Europe?
  If we do not have the ability to respond at every level we are very vulnerable to nuclear blackmail, and thus an aggressor might believe he could gain his ends at no cost. A number of critics have, however, argued that NATO's nuclear weapons are useless as a deterrent, claiming that the Russians would never believe that NATO would ever dare use them because the danger of retaliation would be too great. But let us consider a hypothetical case. Let us assume that the aggressor,

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  God forbid, does miscalculate and commit an act of aggression, believing that we would not be prepared to use nuclear weapons if our conventional defences were overwhelmed; and let us assume that NATO did launch a nuclear weapon in a defined area and accompanied by clear warnings to cease aggression. Would the aggressor retaliate? Would he escalate? He could not possibly gain his prize that way, and he is the one that wants it, and certainly not at a cost acceptable to him.
  Some of those who analyse these matters do, I believe, start their analysis from the background of blow and counter-blow between two armies at war locked, for instance, in an old-fashioned tank battle. Enoch Powell, in his Brunei discourse, says that Russia does not want to occupy Western Europe—an opinion he is more than entitled to express—and that this is partly because to do so would almost certainly involve Russia in a long and exacting war. I have to say that Brigadier Powell is out of date. In today's world a major conflict, even in conventional terms, in central Europe could not be of long duration. Critics will not start their analysis from the realistic position of today where the awesome power of modern weapons, which cannot be disinvented, makes the objectives of the aggressor impossible to attain at a cost acceptable to him. In this respect these awesome weapons are a plus. He cannot possibly achieve his aim at a cost acceptable to him, provided, and essentially provided, that he never doubts our will. For then we will never have to use any weapon. As President Reagan has said, NATO will not use a single weapon except in the event of armed aggression. In regard to the aggressor's perception of our will to defend ourselves, the alliance of free nations, with all the changes of emphasis and leadership that occur in democracies, and which we see every week of the year—with all those changes our will to defend ourselves is likely to be far more credible if the abilities to respond at any level are not all held by one nation or based in one country. That is why Trident and the provision of bases for cruise and Pershing missiles is supported by the alliance as a whole.
  Some of your Lordships may have seen Mr. Richard Perle, the American Assistant Secretary of Defense for International Security Policy, on a "Panorama" programme recently. He made it quite clear that the United States of America and the alliance was not only solidly behind our independent deterrent but would be very disturbed if we gave it up.
  Those who say there are enough nuclear weapons to destroy the world many times over cannot at the same time logically claim that the British independent deterrent is not of significance on its own. For it is of major significance, due to the power of these awesome weapons, in reality and psychologically in the perception of the Russian mind. Those who claim that we should not spend an average of 3 per cent. of the defence budget and a peak of 6 per cent. on Trident because of its effect on conventional weapons, should not also pass resolutions which, if implemented, would reduce defence spending by 30 per cent.
  And so to my third area, the Falklands and other parts of the world. My right honourable friend will be producing a White Paper before the end of the year, and I cannot anticipate its contents. The Government
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  have been increasingly worried about possible threats from the Soviet Union and her allies in many other parts of the world, and that is why we have welcomed the United States' idea of the Rapid Deployment Force. All that I must say yet again at this stage is that the dangers that exist in other parts of the world are not growing as a consequence of a lesser threat in Central Europe. Indeed, the balance of arms in Central Europe, nuclear and conventional, continues to swing against the free democracies of NATO.
  Whatever the analysis of the Falklands may show, as my right honourable friend has already said on many occasions, we must keep our eye on the main threat, albeit with increased confidence that the men and equipment which we have in our forces are able to respond to the most difficult situation in very far flung fields. We can also be more confident that the sacrifices which they have made in the Falklands have made a real contribution to the deterrence of smaller would-be aggressors in other parts of the world. In passing, I must ask the House to take particular note of the personal contribution of the noble Lord, Lord Shackleton, before, during and after the Falklands conflict.
  On a slightly more lighthearted note, I cannot resist saying in passing that reading and listening to the media since the end of the Falklands campaign, and while the Government are still largely in baulk until their White Paper is published, I cannot help feeling that so deeply is it engrained in the civilised British character to criticise ourselves, and so often has it been the case in the past that we lose the initial stages of conflicts forced upon us, that we still have not really absorbed the fact that on this occasion we defeated aggression quickly. Perhaps we have not absorbed that this is the first peace-time occasion in which our defence budget had been maintained at a very sizeable level and that this ensured that we had at the outset of hostilities superb quality armed forces well equipped even for the unexpected.
  My right honourable friend the Foreign Secretary dealt last week with the events in the United Nations General Assembly in relation to the Falklands and my right honourable friend the Prime Minister has spoken publicly on this subject. I personally was rendered nearly speechless—not quite. It is hard to understand how so many countries could have so little understanding of the feelings of the victims of aggression or such scant regard to the principle of self-determination as to support the Argentine/UN resolution. I think this can only mean, as many of us became so aware during the Falklands conflict, that in many countries, including the United States of America, people have still not understood who lives in the Falkland Islands or their history. We can only hope that we can gradually get into their heads that there are not, and virtually have never been, any Argentinians in the Falklands. A necessary pre-requisite to progress in this area is a proper and final renunciation of the use of force by the Argentine—a subject not mentioned in the resolution.
  I pass to my fourth subject, that of disarmament, which I think is an appropriate one on which to conclude my contribution to this debate. I believe it is becoming more and more accepted in the country that unilateral disarmament is not likely to affect the Warsaw Pact one iota (except to make aggression more

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  likely). Their response to the years of declining NATO defence expenditure in the early and mid-70s has been to build up their forces and their superiority. The balance is still at present swinging that way.
  Indeed, the fact that serious negotiations have started on the START talks and on the intermediate range nuclear weapons, and that progress in other fields at Madrid and Geneva is perhaps becoming more possible, has only become more likely because the potential aggressor, already spending some 14 per cent. of his GDP on defence, has realised that he is not going to get away with tipping the balance further against us. He has not given up what the noble Lord, Lord Chalfont, referred to as the psychological war. While his SS-20 missiles pass well over the 300 mark, he will try to achieve his aim from a position of great strength by encouraging the peace-loving citizens of this country to throw away their arms.
  I am sure that the Russian people are peace-loving too. I am sure that Dr. Oleg Popov wants peace and I commend to your Lordships his letter in The Times of yesterday on the experience of his Russian peace group and his comments on E. P. Thompson's letter of 28th October. His conclusion is worth quoting. He wrote:
  "Until such time as the Soviet system is reformed to allow independent groups to function freely and to build up trust between the peoples of both east and west, nuclear disarmament by only one side would, in our view, be a recipe for disaster. It has always been the position of the Moscow Group"—
  that is, the Moscow peace group—
  "that both sides must take simultaneous steps to halt and then reverse the arms race: this clearly points to multilateral disarmament—not destabilising unilateral disarmament—as the only hope for the future."
  My right honourable friend the Foreign Secretary on Thursday last used a telling phrase in this respect when he said at col. 120:
  "We cannot base our policy on comfortable guesses about Soviet intentions".
  Indeed their actions have belied their cosy words, but they are now negotiating in these important areas.
  I referred earlier to the naivety of believing some of their propaganda and I want here to include in that the notion that we should get alarmed because they threaten to cease talking. They are talking. They may even walk out, but they will come back provided that we are negotiating from a position not of parity but of adequate responsive strength. We will support, as we have supported, all realistic initiatives towards peace, and there have been many proposed by the West since the end of World War II. This of course includes the Baruch plan which offered to renounce all nuclear weapons. And today let me make it plain that this country supports the United States and is more than satisfied that the United States is determined to make a success of the START and the INF negotiations.
  Many voices, and some in this House in previous debates, have pressed that Britain should become involved directly in the START and intermediate range talks. They say that if the negotiations between the USA and the USSR are successful, our weapons will become a significant percentage of NATO's total. As a percentage of the strategic weaponry of either of the great powers at present we have about 3 per cent. The right honourable Member for Leeds, East, Mr. Denis Healey, stated in the other place that our
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  Trident missiles would have the same destructive power as the whole of the Soviet SS-20 force. This is simply not true, even if it were relevant to compare a relatively small strategic force with an intermediate range system. The Russian SS-20 force which exists today has much greater destructive power than our Trident force will have available in the mid-1990s. Both sides in the main negotiation to reduce the huge stocks of strategic weapons are well aware of the British and the French position. The negotiations are, and should be, directly between the USSR and the USA at this time. We are entirely satisfied with consultation and believe that progress will be made in the self interest of all parties, both because of security and because of economics. The inspection and verification problems are in some weapon areas becoming less burdensome although they are still freshening in others.
  We also support to the full the mutual and balanced force reduction talks. The terribly powerful conventional armaments of today are every bit as important in disarmament terms if we are to reduce tension. My Lords, the threat of aggression still lies upon the free peoples of the world. Disarmament can therefore proceed only in a balanced and verifiable way. In the world as it is, with calm nerves, patience and determination, progress will, albeit slowly, be made without risk to the freedom which we are practising today and which we cherish.
  3.20 p.m.
  Lord Cledwyn of Penrhos: My Lords, the noble Baroness the Leader of the House was kind enough to make a generous reference to me when she opened the debate on Thursday. I am very grateful to her and, like her, hope that we can co-operate to secure the best interests of the House—without of course prejudicing our duties as an Opposition. I should also like to follow the noble Baroness in paying a tribute to my noble friend Lord Peart for his long and loyal service here and in another place, and for being such a kindly and friendly colleague.
  We are all grateful to the noble Viscount, Lord Trenchard, for his wide-ranging opening speech both on foreign affairs and on defence. I hope to refer to some of the things he said in the course of my remarks, but what we are awaiting is the White Paper to which he referred, and hope that it will be a clear statement of the way in which the Falklands experience, in all its facets, has affected our defence policy. I assume that that will be the content of the White Paper?
  It is not enough to say that we are not sending "Endurance" to the breakers' yard; nor is it enough to say that the Falklands war, for all its heroism and epic quality, was not by its very nature central to our defence problem and that the crucial theatre is nearer home. The value of conventional forces was dramatically illustrated and the quality of our armament was severely tested. What we appreciate beyond doubt is the quality and courage of the men who sailed and flew to the Falklands. What happened there must affect our future policy.
  The noble Viscount has just referred to Trident. We on this side of the House have considerable doubts about this weapon, with its enormous cost and its enormous destructive capacity. I am not expert enough to judge the precise differences as between the

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  SS-20 and Trident. These are matters which we shall have to debate in detail again.
  In recent days we have read three important leaders on defence in The Times newspaper, and these have made interesting suggestions. If I may, I should like to quote one from the last leader which said:
  "The nuclear threshold would not be seriously lowered if Britain gave all her forces—sea, land and air—capabilities more suited to operations outside the NATO area. They have a reasonable general purpose capability at present, as evidenced at the Falklands, but it will not last much longer unless this current review heeds the lessons of that campaign".
  It is the lessons of that campaign that the House and the country want to know about.
  Yesterday the Chancellor of the Exchequer announced that £622 million would be added to the defence bill as a result of the Falklands action. When he replies I would be grateful if the Minister would tell us how this large sum has been calculated and, broadly, how it will be allocated. The Chancellor referred to the "future security of the Falklands". How much extra money per annum do the Government propose to allocate for the purpose of the security of the Falklands? These are matters which must be taken into account in any long-term consideration of our defence strategy.
  As is customary, the gracious Speech begins by referring to the major problems facing the world at this time. They are, of course, numerous and complex, and it is impossible to deal with them all adequately in one debate. When defence is added, the debate inevitably becomes even more cumbersome. We can all agree that "the security of the nation and the preservation of peace" are matters of the highest priority. How to achieve these in an uncertain world is the problem facing this and other Governments.
  Security implies adequate defence in partnership with our allies. It also implies determined and concerted efforts to bring armaments under control, and the fourth paragraph of the gracious Speech refers to this. Indeed, it points to two of the greatest needs; namely, the organisation of effective aid to the poorest countries, and disarmament. But I must say to the Government that general expressions of goodwill and pious hopes, however well meant, are not good enough. Our response to the Brandt Report and the Government's tepid reaction to the Cancun Conference—although I exempt the noble Lord, Lord Carrington, from this criticism—do not match up to the assertions of sympathy in the gracious Speech.
  We note, for example, that the IMF is to give a loan of £600 million to South Africa because their gold is not selling so well. It is difficult to reconcile that with the refusal of the United States to give aid through the United Nations to underdeveloped countries to process their raw materials. It is as well to point out at this stage that our aid programme has been cut by 11 per cent. in real terms this year, and our contribution to the International Development Association has also been cut. The IDA, as everyone in this House should realise, is very important indeed to the poorer countries of the world. Perhaps the noble Lord the Minister will comment in his reply on the Government's attitude. Did Her Majesty's Government support the IMF loan to South Africa and, if so, what were the reasons for doing so?
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  The noble Viscount referred at some length to disarmament. There is an increasing desire to know what progress, if any, is being made in the various conferences to which he referred, and we are grateful to him for the information he gave us. Again, I must say that the United Nations conference was not a great success, and I certainly did not think that the Government themselves used the occasion to the best effect. We do not have to agree with all that goes on in the United Nations, but for all its weaknesses, it still remains the best hope of mankind for a permanent peace. Let us not forget that we were very glad to have the substantial diplomatic help given to us by Resolution 502 of the United Nations during the Falklands crisis. It marshalled world opinion, and rightly so, in the United Kingdom's favour for both military action and the imposition of sanctions. That more than anything else undermined the power of the Argentinian junta. We must, therefore, sustain and strengthen the United Nations and its agencies at all times.
  Perhaps when he replies the noble Lord, Lord Belstead, will tell us what is happening in the various talks that are going on. The START talks at Geneva, which we strongly support, are crucial because they are a real test as to whether the great powers genuinely want a reversal of the nuclear arms race. There has been some limited success. SALT 1 was important, and although SALT 2 was not ratified by the United States Senate, the limits and sub-limits it set on strategic missiles systems appear to have been observed by the United States and the USSR. Perhaps the Minister will also say a word about the Vienna talks on MBFR. These have been going on for a very long time; I think that they started in 1973. I understand that verification is the stumbling block in these talks, but I believe that they should go on. They provide a bridge—albeit a slender one—between East and West and it is absolutely vital to keep it open. I hope that the Minister will agree on this.
  Lord George-Brown: My Lords, has my noble friend—
  Lord Cledwyn of Penrhos: My Lords, today the Madrid Conference on Security and Co-operation in Europe opens.
  Lord George-Brown: My Lords, has my noble friend the time to let me ask him a question? It seemed to me that he threw away the reference to verification. He said that he understood that verification was a stumbling block. Will he tell the House whether or not he accepts that the ability to verify that the Russians are doing what they say they are doing is not a stumbling block, but an absolute essential?
  Lord Cledwyn of Penrhos: My Lords, what I made clear was that it is a stumbling block in the way of the success of the talks. I certainly agree that verification, in this as in other disarmament discussions, is essential.
  I should like to put a final question to the noble Lord under the heading of disarmament. Do the Government not believe that British and French forces must be included in the negotiations with the USSR if the negotiations are ultimately to be successful? It seems

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  difficult to find a good reason for their exclusion from the agenda.
  This leads me to our friends and allies, and especially to the United States. It is regrettable and sad that our relationship with the United States should be at such a low ebb at the present time. Obviously there are times when we must disagree with our friends and allies, and there is nothing wrong in that, but it is essential that there should be mutual trust and understanding between us.
  In recent months that relationship has been under strain for reasons which are well known to everyone in the House. The disagreement on steel has thankfully been resolved, at least until 1985, but the Siberian pipeline argument continues. It seems that there is more emotion than logic in this debate about the pipeline, and perhaps the Minister will clarify the latest position for us. President Spadolini of Italy said in Washington a few days ago that a solution was imminent, but this has been denied in Washington. We and our partners in the Community have taken the view that trade with the East is beneficial on balance, while the United States believe that technology and hard currency—but not grain, be it noted—are strategically sensitive. Perhaps the Minister will comment on this as well.
  Another recent point of disagreement with the United States is over the resolution on the Falklands, to which the noble Viscount referred. It is a pity that the United States did not at least abstain, as France did. Britain valued the support of the United Nations, our partners in Europe, and the United States, who gave crucial assistance when we needed it. The United Nations' resolution asks us to resume negotiations with the Argentine Government a few short months after the Argentine invasion. That is difficult to accept. If the nature and attitude of the Argentine Government had changed, if it was now a liberal, democratic and trustworthy Government, then our reactions might be modified. But it remains, unhappily, a military dictatorship seemingly quite unrepentant about the tragedy, the suffering and the grief which its predecessor caused, and we are now asked to talk to it. It is too soon, as yet. Sunday's Observer newspaper referred to that régime as being, "steeped in corruption, mismanagement, and death". One hopes that they will very shortly move to better things and hold free elections in the Argentine.
  The time will come to talk of solutions to the problem, but we, and the Government, certainly must think of possible solutions to the problem now, and must use the good offices of the United Nations in due course. We must work for the gradual resumption of normal relations with the Argentine. That will be a sensible path to follow, especially, as I say, if they move towards more democratic procedures. Meaningful talks will only be possible if mutual confidence is restored. We must never overlook the rights of the Falklanders themselves and the traumatic experience that they have been through. I am grateful, as are my noble friends, to the noble Viscount for the kind references he made to our noble friend Lord Shackleton and to his work in producing at short notice a most important report. Can we be told which of my noble friend's recommendations are being carried out? There appeared to be some disparity between the views expressed by Ministers in the
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  Foreign Office and what their colleague Mr. Cranley Onslow said when he visited the Falklands recently.
  If we are therefore disappointed by the United States' action in the United Nations, we also understand their anxiety to re-establish good relations with South American countries. Our aim should be to have good relations with those countries ourselves. We also understand the deep concern which exists in the United States about the highly unstable condition of a number of central American countries. Of course we have an interest in the possible Venezuelan threat to Guyana and a similar threat by Guatemala—suffering under another hideous tyranny—to Belize. I assume that we shall continue to maintain forces there.
  The gracious Speech also refers to the Middle East and to Namibia. A great deal has happened since, on 21st June, we last debated in this House the tragic developments in the Lebanon. No faction emerges with credit from that appalling catastrophe: the suffering and devastation shocked the world, and the need, after seven years of near anarchy, is for peaceful reconstruction. Can the Minister tell us what practical help we are giving them?
  We wish the new Government of President Gemayel well and hope that they will be even-handed in their treatment of Christians and Moslems. Their future depends on even-handedness and fair treatment of all religious groups. I think we all support the presence of the International Corps in the Lebanon, and also the need for it to stay until stability has returned. The Foreign Secretary has now reported that the United Kingdom has been requested to supply troops, as I understand it, to reinforce the forces already there. The House will wish to know what is going to be our response to that request.
  Again, the exodus of the PLO from Lebanon, deeply but not mortally wounded, is not the end of the story. Peace will not come to the Middle East until the Palestinian problem is resolved. Israel must move to help them find a home, and they must recognise Israel. There have been some constructive moves. The United States' initiative of 2nd September deserves our support, and the communiqué following the conference had some encouraging aspects.
  The process of reconciliation is not easy, and we welcome the Foreign Secretary's visits to the Middle East. I noted with interest what Mr. Pym said in Cairo—namely, that the PLO should join in the peace negotiations. Perhaps the Minister will elaborate on this, because it seems to go further than the Venice declaration. The urgent need is to bring all the parties to the negotiating table as soon as possible. In this, President Mubarak, who is, I believe, a wise leader, can play a greater part than he has done so far. This week, the Foreign Secretary goes to Jordan. This visit coincides with a report that the United States Government is now proposing that the PLO should accept King Hussein as their spokesman in a future conference. Perhaps the Minister can tell us what is the reaction of Her Majesty's Government to that possibility. King Hussein is placed in a crucial position geographically and historically, and is a most courageous man.
  As to Namibia, I recall the noble Lord, Lord Carrington, saying in this debate two years ago, when he was Foreign Secretary, that negotiations appeared to be approaching their culmination. He was to be

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  disappointed, as we all were. During the last 12 months we have been led to believe several times that a breakthrough was imminent. Negotiations have been going on for five years, and I think the Western Contact Group has worked hard and deserves our thanks. Just as a settlement appears to be materialising, the South Africans either raise some objection at the last moment, or they cross over into Angola with their forces.
  Let me give some examples to prove that. In September 1978, the then Prime Minister, John Vorster, announced his rejection of the United Nations' election plan. In February 1979, ceasefire letters were ready to be signed by South Africa and SWAPO, but South Africa failed to respond. In January 1981 the South African delegation at the Geneva conference on Namibia said that it would be "premature" to sign a ceasefire. These are some examples of intransigence, and, of course, since the change of administration, the United States have, unfortunately, taken a rather less positive stance.
  The presence of the Cubans in Angola is, and has been, a primary obstacle, and the South Africans have made the most of it. The French Government have now made a most helpful and constructive suggestion—namely, that French troops would move into Angola as a replacement for the Cubans if the latter were asked by Luanda to withdraw. France is one of the five Contact States, and others might be prepared to follow. I doubt that the South Africans or Unita would want to attack such interposed forces. This would certainly help to clarify South Africa's position on this matter once and for all. I should once again be very grateful to the Minister if he would comment on the latest position and the Government's attitude to the French proposal.
  The gracious Speech mentions other problems but time does not allow me to deal with them. They are the problems of Poland, Afghanistan and Cambodia, where people are suffering untold misery and where freedom and independence are mercilessly ground under foot. We must not forget them. We and our allies have our problems, but they are as nothing compared with those which oppress those and similar countries.
  For over 30 years the Western Alliance has been the basis of our foreign policy. It has been the guarantee of our freedom and the foundation of our international activities. I mentioned our disagreements with America; we also have disagreements with our partners in the EEC. I will not take further time now to deal with them, but they are the budget problem, the common fisheries policy, the problem of recurring surpluses and other matters which must all cause concern. But with patience and time they can be resolved. Like all human relationships, the Western Alliance must be nourished if it is not to wither. That is the task of Prime Ministers and Foreign Secretaries. The time is due for our Government and other European Governments to end sterile bickering and to think seriously about the nature of their relationship with each other and with the United States. That should be the Government's objective in the months that lie ahead.

The NHS Pay Dispute
3.41 p.m.
Lord Trefgarne: My Lords, with the permission of the House, I will now repeat a Statement being made by my right honourable friend the Secretary of State for Health in the other place. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement about the pay dispute in the National Health Service.
"As I have reported to the House, revised proposals on health service pay were put to all the staff organisations on September 16th as a basis for discussion. They envisaged discussions about improved pay determination arrangements for all non-medical National Health Service staff groups, together with a two-year pay agreement to cover the period until 31st March 1984. I proposed that the financial basis of the two-year agreement should be the offer for this year of 7½ per cent. to nurses and midwives and professions allied to medicine, and 6 or 6½ per cent. for other groups, together with an additional 4 per cent. for next year. The proposals made it clear that there could be no more money for this year.
"As a result of this initiative, there have been lengthy exploratory discussions with the professional organisations representing nurses, midwives and health visitors. There have also been discussions with representatives of the professions allied to medicine. I am glad to say that in the last few days talks have been taking place with the health service unions affiliated to the TUC.
"Following the Government's consideration of the outcome of the discussions with the professional nursing bodies and the TUC Health Services Committee, I have authorised the management sides of the Whitley Councils which negotiate the pay of nurses and midwives, and of the professions allied to medicine, to make revised pay offers covering the period until 31st March 1984. The financial resources which I have made available to them are on the basis envisaged in the proposals put forward on 16th September, but the Government have agreed that, in formulating pay offers, these management sides may proceed on the basis that the money available for 1983–84 will be increased to allow average pay increases for that year of 4½ per cent. The distribution of the pay offers within the cash limits set by Government is for negotiation within the Whitley Councils.
"If this revised pay offer is accepted, then the Government believe that better permanent pay arrangements should be established for nurses and the other professions. As the House is aware, the Government are firmly committed to seeking improvements in the arrangements for determining nurses pay. We put proposals forward as a basis of discussion as long ago as August 1980. Talks began in March this year, but these discussions have not shown the progress we would want.
"Mr. Speaker, we should remember that we are dealing here with a group of dedicated and skilled staff who do not take strike action because of the consequences of such action on patients. The Government believe that it is time that we settled

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upon more satisfactory arrangements. We have therefore decided to propose the establishment of a review body, which will have the task of making recommendations to Government about the pay of nurses, midwives and health visitors. We propose that it should have the further remit of making recommendations about the pay of the professions allied to medicine, such as physiotherapists and radiographers.
"I shall shortly be launching consultations relating to the composition, terms of reference, coverage and method of work of the new review-body. Like other review bodies, it would, in looking at levels of pay, need to take account of all relevant factors, including, for example, economic and financial considerations and service needs. It is intended that its first report should relate to the period beginning 1st April 1984, at the end of the two-year pay agreement now proposed.
"I believe that this decision will give the professions concerned a much better basis for determining their pay and that it will be warmly welcomed by them. The Government regard their position as wholly exceptional. There can be no general extension of the review body principle to other staff groups.
"This is an important step forward for the nurses and the other professional groups and, therefore, for the health service. The proposals we have made offer a fair settlement for pay over two years followed by the establishment of a review body. They provide an opportunity for stability in the National Health Service to make the service improvements we all want and to recover from the damaging effect of the industrial action which has taken place this year.
"On the pay of other health service staff, discussions with the Health Services Committee are continuing. The aim must be to secure a resumption of negotiations in the relevant Whitley Councils. That is the way forward and the proposals I have announced today are a significant step in that direction."
My Lords, that is the Statement.
Lord Wallace of Coslany: My Lords, I wish, on behalf of the House, to thank the noble Lord, Lord Trefgarne, for repeating that Statement, a lengthy one. May I first ask him to confirm—my attention was diverted momentarily—that he used the sentence:
"There can be no general extension of the review body principle to other staff groups".
Lord Trefgarne: I did.
Lord Wallace of Coslany: My Lords, the timing of this Statement is significant, in fact suspiciously so; I understand that the Royal College of Nursing is meeting today to decide on Government offers, and at the same time, as we know, delicate negotiations are going on in another direction. Of course, this is an offer only to nurses, midwives and health visitors and not to ancillary staff. Indeed, no mention is made of other groups of workers—namely, ancillary workers—and I should like to know why not. As for the offer, one assumes that negotiations will continue for both sections, and it is obvious that they will continue on
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the points mentioned in the Statement. The Statement underlines the fact that ACAS should have been brought in much earlier. Frankly, it seems obvious that ACAS has been largely responsible for this move in getting the Government to change their attitude.
I welcome the establishment of a review body, but why not a similar set-up for other staff? Why say:
"There can be no general extension of the review body principle to other staff"?
And may I ask the Government why they have not made such an extension? After all, we must face the fact—mention has been made, most appropriately, of the dedicated attitude of nurses and other medical staff in the health service—and the Government must remember that the success of hospital work is decided by teamwork at all levels. Even the most first-class consultant is dependent on the teamwork of nurses and supporting staff; the ancillary staff who assist in feeding patients and helping to look after them play their part, too.
May we be given some information—I appreciate that we are at a delicate stage—about the position of the present talks with the health service unions affiliated to the TUC? I ask that because speeches by Ministers in recent days have not been helpful in what has been a delicate negotiating stage. Indeed, it is regrettable that the dispute has gone on for so long. Arbitration would have been sensible and fair to all sides and would have ended the dispute many weeks or months ago. I should like to conclude by saying to the Minister and to the Government in general that Government Ministers involved in the dispute should be sent by the Prime Minister for a crash course on industrial relations. So far they have acted like a bull in a china shop and have not helped the situation.
3.50 p.m.
Lord Winstanley: My Lords, on behalf of my noble friends on these Benches and, in addition—I hope here that I establish a welcome precedent—on behalf of, and at the request of, my noble friends in your Lordships' House in the Social Democratic Party, I should like to join the noble Lord, Lord Wallace of Coslany, in thanking the noble Lord, Lord Trefgarne, for repeating this important Statement. In so far as the Statement suggests that there is a glimmer of light at the end of a long, dark and, frankly, unnecessary tunnel, we welcome it. We would ask the noble Lord to bear in mind that noble Lords on these Benches, while fully understanding the reasons for the health workers' industrial action, have never supported that action, though we have supported, and still support, their claim that many, if not all, health workers are in fact seriously underpaid, as evidenced by the large number of full-time workers who are at present in receipt of family income supplement.
We welcome the hesitant steps which the Government appear to be taking towards the evolution of a new system of pay determination for workers in this vital, essential, public service—a course of action which has been urged from these Benches and indeed from the Social Democratic Party for a very long time—but we regret the apparent intention of the Government to try to drive a wedge between groups of workers who ought, ideally, to be working harmoniously together in partnership. We believe that some essential workers in this vital public service are

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indeed more essential than others, but we nevertheless believe that all those workers are essential if the health service is to function satisfactorily. I ask the noble Lord whether the Government will keep an open mind on the wisdom of the course of action of trying to divide groups of workers in a vital, essential service, who ought to be working very closely in partnership.
Lord Trefgarne: My Lords, I am grateful to both noble Lords for the welcome that they have given to the Statement. I should first like to deal with the points made by the noble Lord, Lord Wallace of Coslany. The noble Lord asked, why was it just now that we were making an offer in respect of the nurses and midwives and related professions, and not to the other members represented by the TUC Health Services Committee? The fact is that we made a revised offer on 16th September, and have had discussions with the nurses' representatives more or less continuously since that time. It was only last Friday, I think, that the representatives of the TUC Health Services Committee actually came to have a discussion at all. Previously they had rejected out of hand the proposals which my right honourable friend had put forward.
As for the question of a review body for other grades of workers within the health service, the Government feel very strongly indeed that over the last few months, during a period of great difficulty in the health service, those who have kept the service going have been the nurses and the midwives and the professions related to them. It is they who have spurned industrial action and, as I say, it is they who have kept the treatment services available within the health service. We think it right to take recognition of that fact in formulating our new proposals.
The noble Lord referred to a team effort in the health service. It has not been much of a team just lately. A number of the players have been remaining on the sidelines or in the pavilion.
As for the TUC talks, I hope that your Lordships will forgive me if I do not expand on what is happening in the talks. They have only just begun. They are at a critical stage. The Government—and I trust the others taking part—are not without hope that some way forward will emerge from the talks. But I hope that your Lordships will forgive me if I do not expand in detail on what is happening. Certainly no conclusion had been reached when I left my department a few moments ago.
The noble Lord, Lord Wallace, said the Government had acted like a bull in a china shop during the progress of the dispute. During the progress of the dispute the Government have moved their position three times. They have twice made additional resources available for pay purposes within the health service. During the same time we have been confronted by a total refusal of the unions to negotiate within the Whitley Councils. There has been industrial action on a wide scale, which has caused very serious difficulty—that I do not for a moment deny—and they have not budged one centimetre from the original claim of 12 per cent. which they lodged some months ago. Twelve per cent. was what they said it was, but if one took into account the extra holidays and reduced working hours that they wanted at the same time, it was something nearer 20 per cent., which clearly could
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not have been countenanced in present circumstances. As I say, during the same time the Government have made a number of moves to meet the aspirations of the workers. That is why we have made the new proposals that we have made, which I hope will commend themselves to your Lordships.
The noble Lord, Lord Winstanley—if I may pick up a point that he made—said that he thought that many, if not all, the health service workers were underpaid. I do not deny that in the health service there are some workers who are comparatively lowly paid, but, as I have previously said to your Lordships, they are not, I believe, more lowly paid than others outside the health service doing similar work. I should like to solve right across the board the problem of low pay in our economy, but I fear that I could not start by solving it in the health service, except at unacceptable cost to the public purse.
The Earl of Halsbury: My Lords, before I come to my question I should like to assure the noble Lord that my speech last Thursday was not based on any leak from his department. I am delighted that, after a lapse of eight years, it is taking the advice that I gave it that number of years ago. However, the fact that it is taking only half the advice that I gave it indicates to me that it still does not understand why I gave the advice.
That brings me to my question. Does the noble Lord really think that he can adhere to his intention to confine the review body practice to the nurses and midwives without extending it to the radiographers, the physiotherapists, and the other trained grades? Outside the trained grades there is a market rate for unskilled labour, and assistants, floor cleaners, and so on, have a basis for saying whether they are overpaid or underpaid by comparison with unskilled labour outside. But where the Government control recruitment to training for a skilled profession, and then to all intents and purposes act as the monopoly employer of that profession, there can be no independent standard of what people ought to be paid except the judgment of independents who must not be parties or self-interested in the sense that the Government are. That is the basis of the advice that I gave, and if the noble Lord is going to accept only half of it, it means that he has not understood the reason for the advice.
Lord Trefgarne: My Lords, I am not sure that I made myself clear in either the Statement or the subsequent response to noble Lords opposite. I emphasise that we intend to consult on the proposals, and therefore maybe to change them in the light of the consultation. We have certainly not reached a final view as to which of the professions on the margins of the ones that the noble Lords are describing ought, or ought not, to be included within the ambit of the new review board. But at present we have in mind that it should include nurses, midwives, health visitors, physiotherapists, radiographers, remedial gymnasts, occupational therapists, orthoptists, chiropodists, dieticians, and speech therapists, which I believe cover most of the professions that the noble Earl had in mind.
The Earl of Halsbury: I am delighted to hear it, my Lords.
Baroness Jeger: My Lords, I fear that some of the noble Lord's rather intemperate words this afternoon will have further entrenched the apparently invidious divisions that are being made within the National Health Service. I should like to ask the noble Lord: on which side of the line are the very skilled, essential, and highly trained theatre and laboratory technicians to fall? Surely it is quite wrong for the Government to propose a divide-and-rule basis for settling claims in the National Health Service, in which everyone must work together. In view of the length of training of the laboratory and theatre technicians, I should like in particular to ask the noble Lord where he puts them.
Lord Trefgarne: My Lords, we do not at present have in mind to include within the ambit of the review body the grades to which the noble Baroness refers, but I make it clear that we have no closed view on the question. We intend to consult on the proposals that we have made, and maybe to adjust them in the light of the consultation. It was not we who divided, as the noble Baroness suggests, the various groups of workers within the health service. Even after September 16th (if you leave aside what happened before that time) it was the nurses who came in response to the proposal that we had made for discussions with us, and not the other groups, who spurned the offer of discussions that we made at that time.
Lord Molloy: My Lords, is the noble Lord aware that what he has just said is not entirely correct? He has just said that they "spurned" the offer; that is, turned it down absolutely and said they would have no discussion, no negotiations. When the noble Lord looks at the record I think he will find that that is not wholly true. May I also put this to him: Will the review body cover the ancillary staffs and the ambulance crews? Will those very important people be included? Also, will the noble Lord not reconsider the offensive statement he made when he suggested to any neutral person listening to this discussion this afternoon that Great Britain's nurses had been on total strike for the past seven months? What happened is that because of the obdurate behaviour of this Government they were driven to hold some small token strike. That is the reality; and this Government then dived in, with all the venom they possess, to attack Britain's nurses.
My final question is this. It may well be, as has been the case in the past with the results of other review bodies, that when they are examined both by the employers (in this instance the Government) and by the staff involved, neither side can agree. If that is so, will the Government then be prepared to do what is done throughout British industry but what has been spurned by this Government; that is, indulge in the sensible tradition of British negotiation and then see that a totally independent arbitrator is assigned to attempt to resolve the situation?
Lord Trefgarne: My Lords, I have on a number of occasions explained to your Lordships why the Government cannot proceed along the line that the noble Lord suggests; namely, to appoint an arbitrator to determine these matters. As I have said many times, it is for the Government to decide what is the total sum of money available for this purpose, and then to allow the Whitley Councils to formulate and make the
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necessary offers having regard to the sum of money that we can make available.
The noble Lord earlier said that I had suggested that the nurses had been on total strike for seven months. I said quite the reverse. The position is, of course, that by and large the nurses have not been on strike over recent months. It is the other grades of workers who have been on strike—the ancillary workers, for example, to whom the noble Lord refers. If the noble Lord thinks that that is not true, he should have been with me on some of the visits that I have made to hospitals around the country in recent months, as indeed have my honourable and right honourable friends in the department. There has been widespread industrial action in the health service in recent months. I exclude the nurses from that because, of course, the nurses, with a few exceptions, do not take industrial action. That is why we think it right to move forward with the creation of the review body to which the Statement refers.
The Earl of Halsbury: My Lords, I think I owe the noble Lord an apology, if I may, with the indulgence of the House, deliver one. I heard the beginning of his remarks from the other end of the Chamber, hurried back here to take part in the questioning and missed the critical portion, to which I referred.
Lord Nugent of Guildford: My Lords, while my noble friend is being accused of obdurate behaviour in the Government's unwillingness to concede the very large increase sought by the unions on the other side, is he aware that the Government have been seen as representing the general interest of the nation as a whole, and especially of the taxpayer, and indeed the whole of industry, in settling a level for the increase which had some relationship to the general level of increase which could be paid in industry, which has to earn the living of the community and provide for these funds in the first place? The representation that the Government have been obdurate and unreasonable does not fit the picture at all.
Lord Trefgarne: My Lords, I am obliged to my noble friend for that information. Not for the first time he puts his finger on the nub of the matter.
Lord Wallace of Coslany: My Lords, there is one point on which I should like to correct the noble Lord the Minister, if I may. He referred to the fact that the only people who had gone on strike were the ancillary workers, and he categorised the whole situation as involving ancillary workers only. He has visited hospitals, and so have I. It is a fact that, in the case of the great majority of ancillary workers, what they have done has been done with extreme reluctance, and in many cases on only a token basis. There are a few places where there has been industrial action and the media have emphasised those, but not those cases where the staff have done their best to keep going.
Lord Trefgarne: My Lords, if the noble Lord thinks that the effects of the industrial action have been anything other than serious, he is, I assure him, deluding himself. It is of course true that not all the ancillary workers have been on strike. Indeed, in some areas very small numbers indeed have been on strike. But they have been carefully selected so that they have

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in some cases managed to bring their hospials to a halt, or nearly so.
Lord Molloy: My Lords, does the noble Lord not agree—
Several noble Lords: Order, order!
Lord Molloy: But, my Lords, this is terribly important. I think the noble Lord might have acknowledged the TUC's code and the call of the Confederation of Health Service Employees to their members to see that there was adequate cover particularly for emergencies. I confess that in some instances that call was disregarded, but that was the plea of the trade unions. The noble Lord knows it and that the TUC backed it, and he might have had a word to say in acknowledgement of that fact.
Lord Denham: My Lords, I hope that the noble Lord, when he intervenes, will ask a question eliciting information, because that is the purpose of questions after Statements.
Lord Trefgarne: My Lords, it is true that the TUC and the main unions involved in the dispute issued some guidelines with regard to the maintenance of emergency services, but I have to tell your Lordships that those guidelines were not adhered to and there were cases where emergency services were not maintained.

EC: Fisheries Council Meeting
4.7 p.m.
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, with the leave of the House, I should like to repeat a Statement being made by my right honourable friend the Minister of Agriculture and Fisheries in another place. The Statement is as follows:
"With permission, Mr. Speaker, I would like to make a Statement on the meeting of the Council of Fisheries Ministers held in Brussels on 8th November. I represented the United Kingdom, accompanied by my right honourable friends the Secretary of State for Scotland and the Minister of State.
"The Danish Minister told the Council that his Government were unable to accept the package of measures which had been proposed by the Commission and agreed by nine member states at the Council on 25th/26th October, and specifically informed the Council that they required licences in the North of Scotland box, quotas of west coast mackerel and improvements in their quotas of cod, haddock and saithe in the North Sea. The United Kingdom and eight other member states informed the Danish Minister that there would be no way in which they would agree to change the agreement of 25th/26th October. The Commission suggested talks with the Danish Minister on any matters outside the agreement that could enable the Danish Minister to approve the package. At the conclusion
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of many hours of talks the Danish Minister informed the Council that no suggestions had been made that would enable the Danish Government to give their agreement. The Commission and all the nine other member states expressed their strong disappointment and disapproval at the Danish Government's attitude. Following these expressions of disapproval, the Danish Deputy Prime Minister, who presided at the Council, proposed a suspension to enable the Danish Government to consider their position further. The Danish Minister then informed the Council that his Government would consider approval of the package at a meeting tomorrow, 10th November, and would then tell the Commission whether or not they could approve the package agreed by the other nine member states.
"I hope that the Danish Government will approve the package. But, if they do not, the Council agreed to resume discussions before the end of the month in order to consider what national measures would be necessary to implement so far as possible the package agreed by nine member states to conserve Community fishing stocks and to allocate them fairly between member states."
My Lords, that concludes the Statement.
4.9 p.m.
Lord Bishopston: My Lords, I thank the Minister for repeating the Statement made in the other place. Will the Minister bear in mind, and make clear to our EEC partners at all times, one vital fact which cannot be repeated too often, and that is that over 60 per cent. of the fish in the so-called EEC waters are within the United Kingdom 200-mile limits? On that basis, would he accept that, when he refers in the last few words of the Statement to the allocation of the fishing stocks "fairly" between member states, this must mean an agreed preference in zones, in quotas and in other ways for United Kingdom fishermen, in view of our major United Kindom interest?
The Statement, among other things, says:
"The United Kingdom and eight other member states informed the Danish Minister that there would be no way that they would agree to change the agreement of the 25th/26th October".
I am sure that your Lordships will welcome those words and that assurance, which fits in with what I have said earlier. The Statement goes on:
"The Commission suggested talks with the Danish Minister on any matters outside the agreement that could enable the Danish Minister to approve the package".
Can the noble Earl the Minister say what he has in mind in relation to aspects outside the agreement; and, failing an early agreement, will he make clear our determination to ensure enforcement of the proposal through national measures, if need be? I note that he referred in the final part of the Statement to the consideration of national measures being necessary to implement the agreement as far as possible. Finally, what regulations does the noble Earl anticipate will be necessary to bring into effect these proposals before 1st January?
4.11 p.m.
Lord Mackie of Benshie: My Lords, I welcome the Statement. From this morning's Press, it appeared that some further concessions might be made to the Danes.

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While, when the original Statement was made, I welcomed it strongly, I was perfectly aware that large concessions had already been made, particularly in the "Shetland box", in order to try to get agreement from the Danes. I would seek an assurance from the Minister that Her Majesty's Government will stand firm on this. There is no shadow of doubt that the Danes and their industrial fishing have ruined the herring in the North Sea, and that must be brought under control. I think that the whole principle is absolutely right that, if the other nine nations are in agreement, then something must be done to force common sense and a sense of community and communautaire feeling on Denmark. The device of national legislation and national action by the other nine nations working together is one which can do a great deal to make the Community work. Without any doubt, if one extends the Luxembourg compromise to every single matter concerning Europe, then the Community will never work.
I should like an assurance from the Minister that the necessary legislation will go ahead with all speed in order that this resource in the North Sea and elsewhere around Britain is preserved not only for us but for the whole of Europe. I regard it as a matter of vital importance. I cannot go along entirely with the noble Lord on the Labour Front Bench that all the fish within the 200-mile limit belong to Britain. The fact is that, without the Community backing us, I do not think that we could ever have enforced our 200-mile limit round our shores. But I should like an assurance that the Government are going to stand by their Statement.
Lord Bishopston: My Lords, I did not say that all the fish within our 200-mile limit belonged to Britain. I said that it does justify a preference for British fishermen—including Scots.
The Earl of Mansfield: My Lords, I thank both noble Lords for their welcome to this Statement. Dealing first with the noble Lord, Lord Bishopston, the package which was agreed by the nine member states in October reflected, insofar as access and quotas are concerned, the preponderance of stocks in the North Sea and elsewhere which could be said to be in British waters. That package, I may say, was agreed by all the fishermen's organisations in Great Britain before my right honourable friend gave his agreement so far as Britain was concerned. It does represent a fair allocation to United Kingdom fishermen. Then the noble Lord asked, in effect, what was offered to the Danes outside the agreement which might make them change their attitude. The position is that various matters were put to the Danes by the Commission to see whether they would agree to the package of 26th October. These were of a strictly temporary nature. An example is one which has appeared in the Press and which consisted of 7,000 tonnes of western mackerel which were a once-and-for-all quota which would have had to have been taken by 31st March 1983. That is an example of what the Commission had in mind.
As far as the noble Lord, Lord Mackie, is concerned—and I also take Lord Bishopston's question as to the regulations that might be necessary if there is no agreement—the position is that, if the
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Danes do not agree or do not reconsider the question, then arrangements will be made to have a further meeting with fishery Ministers of the Nine (as opposed to the Ten) either on November 22nd or on November 29th to consider further national control measures. Thereafter, we will, as it were, implement the measures agreed in October; but doing so with the concurrence of the European Commission so that the matter will be strictly legal.
I fully agree with the noble Lord, Lord Mackie, that we must do everything in our power, properly, of course, to make the Danes realise that the package of measures which was agreed in October is in everybody's interest—not least that of the Danes. I can assure the House that very heavy pressure, if that is the right phrase, is being brought to bear on the Danish Government to make them come to the view which has been agreed now for some weeks by the whole of the rest of the European Community.
Lord Kennet: My Lords, obviously the whole House would hope that the Danish Government is at this very moment deciding to come in off its limb to agree to fish in a civilised manner like the rest of us. If it does not, can the Government say whether the national measures which will then be taken would require legislation or whether they can be done solely by regulation; and, if so, whether the regulations would have to come before Parliament? Can the Government please undertake that, whatever happens, there shall be discussion before the national system goes into operation, because what we see now is a prime example of the results of sweeping things under the carpet without discussion 12 years ago?
The Earl of Mansfield: My Lords, whatever happened 12 years ago, there has been a plethora of discussion ad nauseam, certainly since we have been in the Community. As I tried to explain to the House, whatever measures are taken—assuming that there is no agreement on the part of the Danish Government—must be taken in the European context and with the agreement and concurrence of the European Commission. At this moment, I am not able to say whether it could be done by some sort of directive on the part of the Commission followed by implementation by this country. I should have thought not, because such a directive would have to have the blessing of the Council of Ministers. But I am not going to speculate. What I can say is that we shall consider national control measures so far as Scotland is concerned—for that is my particular ministerial responsibility—and such measures would be backed up by our Scottish fishery protection fleet.
Lord Campbell of Croy: My Lords, I thank my noble friend for repeating the Statement for which I withdrew the Question in my name earlier this afternoon. Will the Government use all possible persuasion to try to bring Denmark into line and, in particular, will the Government point out that, while Denmark claims that fishing is a vital industry for her, it is also a vital industry for the United Kingdom and for the very areas in Scotland where Denmark is at present making these further claims for quotas? As regards the agreement reached by the nine members, are the Government completely satisfied that the

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allowable catches are within the scientific advice which they have received on the conservation of fish stocks, because there is grave doubt among some of the fishermen's organisations on that point?
The Earl of Mansfield: My Lords, I am grateful to my noble friend for withdrawing his earlier Question this afternoon. As to his first point, I leave him in no doubt, I hope, that Her Majesty's Government have lost no opportunity to impress upon the Danish Government the very grave consequences of the continued refusal on their part to implement this generally agreed package of measures. We shall continue to urge them to make a rather more detached and certainly more statesmanlike view than they have at present felt able to take.
On conservation measures, the Government attach the greatest importance to basing fishing conservation measures on scientific advice. The Community have taken a number of steps in this direction. The Community policy has made some important advances towards a better appreciation of scientific advice. Having said that, I know that the International Commission for the Exploration of the Sea has made recommendations about the level of TACs, and in some cases the discussions have stretched—if that is the right word—a number of quotas above the recommended TAC. Having said that, I emphasise the very great importance that we attach to the scientific advice which we receive.
The Earl of Selkirk: My Lords, can the noble Earl say that one result of this will be that non-members of the European Community will be excluded entirely from European waters for fishing?
The Earl of Mansfield: My Lords, I am not quite sure what my noble friend means by "non-members of the European Community". If he means the Danes, they will have to abide by the package which was agreed to in October and which will be implemented if they do not, as it were, come to terms with the measure. Countries not in the European Community—and I include countries such as Norway—depend on bilateral agreements between their countries and the Community as a whole. One of the reasons why we are so anxious to conclude a common fisheries policy is so that we can, as it were, conclude further on-going fishery arrangements with the Norwegians and, for instance, the Faroese which fall to be discussed very soon.
The Lord Bishop of Norwich: My Lords, is the noble Earl aware that the members of this Bench, the Bishops and the Prelates who have dioceses on the east coast of England, are very gravely concerned about the impact that this will have upon the employment in the fishing industry—I think particularly of Lowestoft in my own area—and will he do all he can to remind the Danes that when East Anglia is roused there is a lot of trouble, because we still remember the Danish invasions of a mere 900 years ago? If this goes on, there will be further trouble in East Anglia. Will the noble Earl make a note of that, please?
The Earl of Mansfield: My Lords, I am not sure whether they light fiery crosses in East Anglia, but I
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shall certainly lose no opportunity of reminding the Danish Government that some equally unpleasant form of action will be undertaken if the Danes do not have regard to their interests.

The Queen's Speech
4.24 p.m.
Debate resumed.
Lord Gladwyn: My Lords, this debate which has now resumed is, as usual, concerned with two vast, even if inter-related, subjects, and, in the quarter of an hour which is all I am going to devote to them, it is possible to make only some very general and indeed unqualified remarks on some aspects of them. These will be on East-West relations, the European Community, the Middle East and the aftermath of the Falklands operations.
East-West relations are largely dominated by defence considerations, and my noble friend Lord Mayhew will be dealing with those later. All I will say is that, if we believe certain apparently well-authenticated reports, the present efforts of the Americans to construct at vast expense some kind of nuclear "superiority" and even, it would seem if these reports are justified, to contemplate the possibility of some "protracted" nuclear war, are both useless and dangerous, whether politically or economically. Politically, because, when you already possess the ability to obliterate the Soviet Union even on a second strike, "superiority" is nonsense and insistence on it will result only in the collpase of the existing negotiations for the limitation of nuclear weapons. Economically, because, if persisted in, it will continue to unbalance the United States budget and thus delay, if not prevent, any real emergence from the present fearful slump.
Much the same applies to the original American efforts to organise "sanctions"—as they are called—against the Soviet Union and even against Poland; to American opposition to European participation in the Siberian gas line project; and indeed—with the important exception of grain—to what amounted to a virtual declaration of economic war against the entire communist bloc. Happily, there is reason to suppose that these policies have now—thanks partly, I am sure, to the efforts of our Foreign Secretary—been substantially modified if not in some respects abandoned. I hope that the Minister who is going to wind up will confirm that that, broadly speaking, is true.
On the European Community, it is clear that all members are suffering acutely from the world depression and its accompanying—and mounting—unemployment, with consequent loud demands for protection, which, if heeded to any great extent, will inevitably lead to the collapse of the Community. That that would be a disaster is apparently now contested only by the Labour Party and certain extreme nationalists, such as Mr. Enoch Powell. We must all therefore, if we can, work together to encourage inter-Community trade and, if possible, common financial and monetary policies so as to tide over what is going to be a very difficult period. Indeed, if we had any sense we should now be contemplating a considerable increase in what are called the Community's "own resources", some of which could

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then be devoted to common measures designed to mitigate unemployment, particularly among the young. In any case, we must surely all be fully conscious of our neighbours' difficulties, whether economic or political.
Here I should like to repeat, substantially, a point that I made the other day when congratulating the Foreign Secretary on the (as it then seemed) successful conclusion to the latest talks in the Conference of Foreign Ministers: namely, that it would be folly for us to be too insistent on our getting what we might consider to be full satisfaction as regards our own contribution to the European Community budget.
Nobody—least of all our partners—contests the fact that, if nothing is done about the long-term contribution to the budget, we shall be meeting a disproportionately high percentage of that budget. However, scarcely anybody—at any rate on the other side of the Channel—thinks that it would be right that a country which, after all, entered the Community knowing that this would be on the basis of an original deal between France and Germany whereby France opened her market on condition that her agriculturalists were effectively protected; a country whose balance of payments, thanks largely of course to oil, it is true, is now more or less, I believe, in balance; and a country which continues to import large quantities of food from outside the Market should, in spite of its alleged poverty because, owing to its own fault, its GDP is considerably less than those of its neighbours, quarrel over an odd £50 million or £100 million at a time when, unlike herself, all her partners are undergoing or expecting severe balance of payments difficulties. It would be quite wrong, therefore, for the Prime Minister, in a mood of righteous, patriotic—and no doubt electorally valuable—indignation to bang the table and demand, as it were, anything like her full pound of flesh. Far better to leave all this to the skill in negotiation of her subordinates in the Foreign and Commonwealth Office or, if she does not trust them, to the skill in negotiation of somebody in whom she does have confidence but who is nevertheless sufficiently brave and competent to tell her bluntly when enough is enough.
While I am on the subject of the European Economic Community, perhaps I may add—a point which was made just now by the noble Lord, Lord Mackie of Benshie—that our present excellent attitude towards the attempted veto by the Danes on a common fisheries policy obviously demonstrates that the Community can function properly only if it accepts in practice the principle of majority voting.
I turn to the Middle East. Here, as it seems to me, out of the recent appalling happenings in the Lebanon one good thing has emerged, for the Americans have at last got a definite policy which, in the eyes of most anxious observers at any rate, is both sensible and just. At the moment it seems to be totally rejected by Mr Begin's Government, and President Reagan is clearly reluctant to apply direct pressure in order to oblige the Israelis to accept, although he could do so if he wanted to. Still, Mr Begin will not be Prime Minister for ever, or even, perhaps, for very long and we must all hope that before long there will be a Government in Tel Aviv which will, so to speak, at least begin to talk the
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same language as the Americans and indeed the Europeans.
Some mystery surrounds the attitude of the Soviet Government in all these goings on. Is there any truth in reports that they have not been very eager to assist their Syrian ally in its clash with the Israeli forces and that in any case the modern weapons with which they have supplied the Syrians, notably aircraft, are no match for the American weapons made use of by the Israelis? The Russians in any case seem to have been strangely silent lately. Can it be that they are no longer pressing to be present at any future negotiations? Perhaps the Government will be able to throw some light on this. In any case, would not the Government agree in principle that, if there is ever to be any general agreement on Middle Eastern affairs as a whole, Soviet interests must at least be taken into some account?
In the meantime, the great thing is to get both the Israelis and the Syrians out of the Lebanon, and this will be difficult enough. In principle, what ought to happen, surely, is that the international force now in existence should be strengthened so as to enable it, together with what is called UNIFIL in the south, to put the Lebanese army in a position where it can, more or less—and I repeat '"more or less"—ensure internal security in that troubled land. To help in such an effort, it is clear—as now seems to be recognised by the Foreign Secretary himself—that some British presence would be highly desirable. This may be a heretical suggestion, but could we not even transfer a few men from the Falklands? After all, the Argentines are not likely to resume the war unless they have reason to believe that they have command of the air. And if they ever got that, it would not matter very much whether our land forces in the Falklands were 3,000 or 2,750 men.
This brings me to the last matter to which I shall devote just a few minutes of your Lordships' time and as regards which, I repeat, I am expressing my own personal opinion. As the inquest on the Falklands operation proceeds, it becomes, as everybody knows, more and more clear that it was a very close run thing. Happily, our luck held and we were able, thanks entirely to the extraordinary skill and bravery of all those concerned, to avert what would have been a disaster of the first magnitude. And thank God for that. But the question remains—and this is something which I believe does not come within the competence of the Franks Committee, which has to decide simply who, if anybody, was to blame for not appreciating the imminence of the Argentine attack and for not taking steps in time which might have been likely to avert it—why did the conflict break out at all?
It broke out immediately, of course, because the Argentine Government decided on an unpardonable act of aggression which was rightly condemned by the United Nations and which has now been splendidly repulsed—something for which, after all, the United Nations should, as such, be grateful, one would have thought, if it has any regard for the maintenance of the principles which are embodied in the Charter. But that war also broke out, surely, as the result of a very longstanding dispute in which, however mistakenly, practically all Argentines, including those who detest the present murderous Government and dictatorship, believed that they were in the right. For many years Her Majesty's Government tried to solve this dispute

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peacefully by negotiation, and some two years ago it looked as if this effort might well succeed, the issue of sovereignty being in some way blurred and the long-term interests of the islanders suitably safeguarded.
It must also be obvious that unless we are to maintain a considerable land, sea and air force 8,000 miles away in the South Atlantic indefinitely without any base or staging point nearer than Ascension Island at huge cost and to the detriment of our ability to resist any conventional Soviet assault in Europe, this must still be our objective. After all, it was our objective right up to the moment when, owing to Argentine stupidity in rejecting, for instance, the compromise which Mr. Pym agreed to on behalf of the Government in New York, there was no alternative but to reoccupy the islands by force of arms. It existed right up to that moment.
Certainly, we cannot negotiate until such time as the Argentine declares that the war is over. Certainly we cannot do so on the sole basis of a non-mandatory United Nations resolution which, I believe, speaks—absurdly enough—of the continuance in existence of a "colonial" régime. But, as Mr. Pym himself has said, negotiate eventually we must, preferably, of course, with a new Argentine Government emerging from elections—as, I think, the noble Lord, Lord Cledwyn, said—and the sooner this is possible the better for everybody. Though, with one exception, they very properly abstained on the United Nations resolution, such is clearly the earnest desire of all our allies and friends in the European Community, to say nothing of the major Commonwealth nations, and I do not think that we ought to be too indignant if the United States, whose very difficult position with regard to the South American States must be recognised, also made this clear by her vote.
But, when we do agree to negotiate, there will be no question, even if some poor-spirited people may so assert, that our recent great national effort has been useless and that, as the poet says,
"The struggle naught availeth, The labour and the wounds are vain".
Oh, no. The labour and the wounds have not been in vain—very much in the reverse. I am sure that that will always be recognised. That is all I shall say on the question of the Falklands, which I am sure will be debated later in this Session.
4.39 p.m.
Lord Maclehose of Beoch: My Lords, I ask for the normal indulgence of the House to somebody addressing it for the first time and who is all too conscious of the fact that a number of his former masters are sitting to pass judgment on him. I wish to speak about Hong Kong because the fact that discussions about its future have started is a matter of very great importance. It is a development which has been expected for some time; but it is one thing to expect something and quite another to be faced by its reality. The fact is that the announcement of the discussions and the accompanying flurry of official, semi-official and unofficial statements and press commentary worried and confused the people of Hong Kong.
Indeed, knowledge that its future was under discussion would worry any community. Moreover, this came at a time when Hong Kong's economy had
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been hit by world recession and when its stock and property markets were teetering on the edge of a slide—and duly slid. This conjuncture was bad enough because the period of discussion was bound to be a nervous one, and it would have been much easier to ride it out on a fairly buoyant economy. Meanwhile, I suggest that very great sympathy is due to the people of Hong Kong suffering under this double impact.
In Hong Kong the Prime Minister, and more recently other Ministers, could not have been more reassuring in what they said, but I suggest that it would be timely for the Government to consider whether there are some practical things they could do at this stage to demonstrate their concern for the people of Hong Kong. For instance, could not something be done now about university fees for first-degree students from dependent territories? The Hong Kong Government have for long offered to make a contribution; alternatively, the admirable report of the Overseas Students Trust recommended home student status for students from dependent territories. I ask whether something could not now be done.
Secondly, when the Prime Minister was in Hong Kong she referred to the problem under the new nationality Act of people holding Hong Kong passports, and undertook to look into it on her return. These people wish their national status to be described as "British". This would have no bearing on right of entry or abode in the United Kingdom, which has not existed for them since 1962. But it would be of practical value to them as great travellers in third countries and it would be welcomed. Here, too, I wonder whether something could be done.
Thirdly, and most important, Hong Kong people fear protectionism. In the negotiations with the EEC for a new textiles agreement under the multi-fibre arrangement, a cutback in sensitive items has been called for. That would be serious in itself and all the more serious because of its knock-on effect on the arrangements which Hong Kong has with other countries. In gunning for Hong Kong, the EEC is missing its target. These so-called sensitive textile items from Hong Kong have long been controlled and have actually declined in volume under the current textiles agreement. The rise in imports of these items has come not from Hong Kong but from uncontrolled sources such as the USA and Europe. I realise the pressures on the Government and their frustration at massive imports from countries which, by one means or another, frustrate our exports. But could not a simple rule be applied; namely, that further restriction should not be considered against exports from markets such as Hong Kong which are totally free?
The 5 million people of Hong Kong imported a greater value of United Kingdom goods last year than the 115 million people of Japan or of all ASEAN put together. This shows the importance to our exporters of a market which is totally free and in which United Kingdom goods are welcome. Having regard to the present situation, and on its merits, nothing would be more timely than for the United Kingdom's voice to be raised decisively to protect Hong Kong's legitimate interests.
In conclusion, I would like to return to the discussions now initiated in Peking. There has been controversy and criticism about some aspects. I fear that this is obscuring what has been achieved. The

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mounting concern in Hong Kong made it urgent to start discussions. They have been started and they have been started with a good objective—the stability and prosperity of Hong Kong—agreed at the highest level, and this has been published in a joint communiqué. I am sure that this was the right way to start. There is a Chinese proverb that a journey of 1,000 miles starts with but one step. While I do not believe that these discussions will be a 1,000-mile journey, I am relieved that this first step has been taken.
Obviously the people of Hong Kong are anxious for the talks to be concluded as soon as possible so that they can know where they stand. But the issues are complex and there must be time to explore them thoroughly and to find correct solutions. This is bound to take time. They will be conducted in confidence but from time to time the people of Hong Kong will need to know what is happening, and I hope that this will be possible. They will wish to express their views, and I am sure they will do so—and I hope they will be listened to.
Meanwhile, they must try to do a very difficult thing, but one at which they are very good; keep their nerve and try not to be distracted by rumour, of which I am sure there will be all too much. They can take heart from the fact, which I am sure the noble Lord the Minister of State for the Foreign and Commonwealth Office will confirm, that there is no suggestion of early change. The Chinese Government have never made any bones about the value of Hong Kong and they have constantly endeavoured to reassure the business community. So the assumption is that a solution will be found with which the people of Hong Kong can live. Indeed, it would be an appalling failure of commonsense and common interest were it not.
Moreover, Sino-British relations have never been better and, locally, co-operation between Hong Kong and other parts of China has developed at a steadily-increasing rate in recent years with two-way trade and two-way investment. It may surprise noble Lords to know that Chinese investment in Hong Kong has been as massive as it has been welcome. This has been backed with easier relations with Chinese officials in Hong Kong and elsewhere. This is a good working background for the discussions now being held.
Hong Kong's future value to its residents and to China, to the United Kingdom and to anyone else, depends on its ability to continue developing as an international centre of industry, commerce, finance, communications and tourism, and as a free port. It is my belief that this development in any case could not be sustained without the steady expansion and evolution of the growing relationship with China that is already taking place. This should be cultivated, as it might ease other problems.
This initiative of discussions is concerned not with the past but with the future and to my mind it offers an opportunity to start off on a new footing which could be good for Hong Kong, good for China, and good for the United Kingdom—ending the uncertainties and resentments of the past and looking forward to friendship, economic co-operation, and a stable and prosperous future for Hong Kong. I suggest that it is very much in the interests of all concerned to grasp this opportunity.
4.49 p.m.
The Lord Bishop of London: My Lords, it is a privilege and a pleasure to follow the noble Lord, Lord Maclehose of Beoch, and to be the first to congratulate him on his maiden speech. His reputation in the Diplomatic Service, and especially as Governor and Commander-in-Chief of Hong Kong, where he exercised his responsibilities in such a distinguished way, has been further enhanced by the quality of the speech to which we have just listened. I know that your Lordships' House will look forward with anticipation to his contributions to future debates and to benefiting from the wisdom and lucidity which has been so evident today.
I wish to speak about two specific matters; namely, the reopening of the Review Conference of the Helsinki Accord in Madrid today, and, briefly, about Cyprus. However, I hope that your Lordships will bear with me if I first say something about an issue which underlies many of our problems, not least in the fields of foreign affairs and defence. I hope that I shall not appear to be moralising, though it is about a moral issue that I wish to speak. I do that without apology for, as the right reverend Prelate the Bishop of Rochester said last week, it is a particular responsibility of those who occupy these Benches to draw attention to the principles which should underlie our debates.
It is about conflict and its resolution to which I would draw your Lordships' attention. When I speak of conflict I do not refer primarily to military conflict, which is but one expression of it. I mean the conflict of ideas and interests which is an integral part of the human situation, however much we may regret that such is the case; conflict which in fact is very often the result of the exercise of our freedom. How we seek to resolve conflict is of fundamental importance both for our international relations and our national life.
Conflict arises from a variety of reasons. It can arise from ideological standpoints strongly held. If you believe that what a man is and the way he behaves is determined rather than just affected by his environment, his upbringing, his genetic make-up, you will believe that it is right to use all the resources in your power to modify his environment, determine his upbringing, use genetic engineering if you can to bring about changes, and to seek to extend, whether at home or abroad, the areas in which these things can be done. And you will be in conflict with those who believe that freedom is one of the greatest characteristics of the human person and that improvements in environment or upbringing must be such as to encourage and enable people to exercise that freedom.
Conflict also arises out of a concern for a moral value, such as justice, between those who are passionately concerned for the removal of injustices and those whom they regard as being content with the status quo. It can also arise out of the undesirable aspects of human nature, such as envy, and natural causes such as fear, as well as from that inbuilt propensity on the part of man to corrupt what he touches, which Christian theologians call original sin, but which I suspect many of your Lordships might describe in more earthy terms. It is this which causes compassion to become condemnation, a concern for the truth to become dogmatism, and a desire for recreation to become idleness, and so on.

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We live at a time when widely differing views are held on a number of issues of the greatest importance to mankind, such as that of nuclear deterrence, or the distribution of the world's wealth. The urgency of the issues, and the increasing extent to which we are dependent one on another, both internationally and nationally, mean that these views are held with increasing passion and conviction. As a result, some feel justified in resorting to what is called direct action as the only way in which policies can be changed or evils remedied. When I speak of direct action I mean action which is based on the plain use of power to compel one side to do what the other wants rather than the controlled use of power through negotiations, or action within the law, such as the right to withdraw one's labour or defence against an aggressor. It is the kind of use of power which seeks to use conflict rather than to resolve it.
The resolution of conflict arising from such causes as I have mentioned must be based on an acceptance of law, of order, of human rights, which themselves must be based on a concern for justice, and I would maintain that any attempt to secure justice by direct action of the kind I have described, though it may produce a short-term gain, is in the last resort, ultimately, self-defeating, for it is contrary to the basis of that which it seeks to achieve. That, I believe, is one of the reasons why coups so seldom achieve their aim.
It is for this reason that I believe it is essential that we should make it as clear as possible that if action has to be taken—whether defence against an aggressor, or the enforcement of law and order, in order to secure the rights of which I have been speaking—it is taken for these reasons and not simply for any other, lesser reasons of self-interest or enconomic gain. I was encouraged by the fact that in the action which was taken to liberate the Falkland Islands it was made very clear that it was action taken against an aggressor, to maintain law and order, without which we would degenerate into anarchy. It is, I believe, also, whatever one's views about the matter of deterrence, much to be welcomed that the Government make it clear that their policy of nuclear deterrence is intended to preserve those freedoms which we enjoy here in the West, and which I believe are absolutely essential if man is to be enabled to act in accordance with his moral nature.
I have not mentioned ideological conflicts, differences due to ideological views. I just want to make one point. We have to be quite realistic about these differences. We must not delude ourselves and suppose, for example, that the leaders of the USSR do not mean what they say and do not intend to act upon their own professed ideology. It so happens that in the post this morning I was sent some photographs of posters which one can find up in Moscow—posters which are called Posters of Peace. They are certainly not representing what we would understand to be meant by peace, and I would say were calculated to encourage conflict What matters, I believe, is that we make our own beliefs clear, and that when we have to act in the defence of what we so often simply call the values of our Western cilvilisation, we make it clear why we are doing so. It can be as destructive of peace to allow others to misinterpret and misunderstand us and our motives as it is to misinterpret and
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misunderstand them. This applies not only in international affairs but in all spheres of life.
If our policy is determined—at least that is our intention—by a concern for justice and for human rights rather than simply by an acquiescence to market forces and nothing else, then we must be at pains to make that evident. It is for this reason that we must continually demonstrate in our national policies our concern for human rights and the basis on which we affirm them. I quote briefly from Doctor Alan Falconer, who says in his book, The Church and Human Rights:
"Human rights emerge as attempts to regulate the conflicts between human beings, in such a way as to protect the individual or group, and also in such a way as to enable human beings and groups to grow to maturity—that is they seek to regulate conflict, not to eliminate it."
It is for these reasons that I want to refer to the reopening today of the Madrid Review Conference of the Helsinki Accord. It is, I believe, most desirable that the Government gives the maximum backing to this conference, which reaffirms the necessity for law and order as a basis for international relations. The Madrid conference was adjourned in March largely due to the situation in Poland. While prospects may be gloomy—certainly they do not seem very bright—the follow-up of the Helsinki Final Act does not provide merely a possible way forward to improved relations between East and West. What it does and, in my judgment, what is much more important, is to provide an affirmation that a concern for human rights which is supported by law and order is of pre-eminent importance in international relations.
Fearful of the negative prospects for the resumption of negotiations in Madrid today, the Churches' Human Rights Programme organised a colloquium in October as a result of which the Churches decided to address their own Governments. They were particularly aware that the Madrid conference is the only formal multilateral instrument for political détente and can, therefore, be a contribution to progress in arms control and disarmament negotiations. The Churches therefore urged their Governments who signed the Helsinki Final Act once more to consider what specific contributions they can make to give new life and vigour to a process of détente. They believe that any programme should have two elements: first, agreement on a mandate for a conference on confidence building measures and disarmament in Europe and secondly, substantial progress in the field of human rights.
I see from The Times recently that diplomatic sources in London are reported as saying that the Government would like to see more confidence building measures which carry some conviction, such as an end to the jamming of Western radio broadcasts, and better information and freedom of action for businessmen working in the Soviet Union. I hope that when the Minister replies he can give encouraging answers to my question: what response have this Government given to that approach by the Churches' colloquium?
In August the Foreign Ministers of the neutral and non-aligned states met and expressed, among other things, their conviction that there is no lasting alternative to intensified negotiation and dialogue for overcoming the present difficulties in international

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relations. In particular, they affirm their support for the mandate to which I have referred.
With reference to what I said about human rights—I have not warned the Minister about this and I shall not expect an answer in his reply, but perhaps he could let me have it later—I take the opportunity of mentioning the increasing concern about the state of health of Anatoly Shcharansky, who worked in the monitoring group of the Helsinki Accord. That group, after further persecution, was disbanded. We know that he has been returned from the labour camp to prison in extremely severe conditions. I should like to know whether any action is possible to bring pressure to bear for him to receive more humane treatment.
I also refer briefly to the situation in Cyprus. That, too, was the subject of a consultation in June of the Churches' Human Rights Programme. It is for that reason I mention it today. The situation there remains very unsatisfactory, with the presence of some 16,000 Turkish troops since 1974. This is in contravention of principles III and IV of the Helsinki Accord. It is, I believe, essential to avoid any action which might provoke further confrontation on that island. I should be grateful if the Minister could indicate what steps are being taken, first, to encourage United Nations' initiative and, secondly, to encourage unofficial inter-communal contacts in the island, which have already proved of some benefit.
I said earlier that we must be realistic about the reasons for conflict, but I do not believe that that means we should be deterred from making clear the moral basis for our actions, even though our basis of necessity will often be mixed and we shall have unworthy as well as worthy motives for what we do. On the contrary, I believe that the greatest hope for the preservation of peace and the remedying of injustice lies in our doing just that, even perhaps sometimes at the risk of appearing slightly self-righteous. We must not be afraid to say why we are doing things which we believe to be right, good and true, so that the basis of our Western civilisation is made clear and, as it becomes more and more evident that we are acting for those reasons, the resolution of conflict by negotiation becomes more and more likely.
5.9 p.m.
Lord Home of the Hirsel: My Lords, I should like to echo the congratulations which have been given by the right reverend Prelate to the noble Lord, Lord Maclehose of Beoch. It is a particular pleasure for me to follow that because for many years I had the privilege of seeing him operating in his professional field. He has been one of the great administrators, as everyone in Hong Kong, of all races, will testify. All through his career his judgments have been acute and his counsels wise. We are very lucky in this House that in future we shall be able to draw upon his wisdom.
Towards the end of what I have to say this evening I hope to follow the right reverend Prelate in some of the things he said about restraint in the use of power, and about the moral questions as they affect such issues as the possession of nuclear weapons and disarmament. One thing which the right reverend Prelate said that I can endorse immediately is that in my experience of negotiations with the Russians it is essential that one should explain the action one proposes to take. Nothing is more dangerous than to
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allow the Russians to misunderstand one's intentions.
However, I should like to begin by saying something on the strategy of foreign policy, my thesis being that only when the strategy of foreign policy is clearly defined can the military forces be deployed to the best advantage. Foreign policy is not, of course, an academic exercise; it is conditioned by geography, by the posture of potential enemies and by the potential of friends. It is a complicated business. Nevertheless, our history has a great deal to say on the strategy of foreign policy, and with the benefit of hindsight it is highly informative.
For a good many centuries we were just another country of Europe. The Channel gave us individuality, but none of the kings, queens or Governments who had to design our foreign policy calculated that the Channel gave us sufficient security. Therefore, the continuing design of British foreign policy for more than 200 years was to collect enough friends and allies with the strength necessary to deter any single power who might seek to dominate the centre of the Continent of Europe, and to defeat that power should it make the attempt. The reason was, of course, that if the British base was invaded and defeated, then everything was lost.
The period of empire was no less instructive. The empire was global and foreign policy was recast to fit global responsibilities—both economic and political. For the defence forces the pattern of deployment was changed: the Navy being given priority and a y worldwide role, and the Army fulfilling broadly garrison roles and being the Cinderella of the services. That was the period of the Pax Britannica when, in contradistinction to the earlier period of which I have spoken, which could be described as the politics and diplomacy of influence, this was the politics of power.
That happy state for a good long time seemed to be permanent. However, understandably, there was a flaw in the calculation of the strategists. Two of my father's friends before the First World War were Sir Douglas Haig, who later commanded the allied armies, and Sir Edward Grey, who was at that time the Foreign Secretary. The first used to lament that the strategy of foreign policy was geared to empire and that the defence requirements of empire left no forces at home and exposed the British base in Europe. The Foreign Secretary was concerned that the Kaiser failed to understand the circumstances in which Britain might fight. The Kaiser calculated in terms of battalions, divisions and armies which could be deployed on the Continent of Europe. But, in fact, there were, when the challenge came, no forces of significance to deploy. The challenge from Germany did come in Europe and it did come twice and the outcome of those two wars, as your Lordships well know hung in the balance.
I shall not rehearse the history of those years because your Lordships are all too familiar with them. But even after what I have called the period of the politics of power associated with empire was gone, we in Britain were very slow to recognise that, unless Britain's European and Atlantic bases were secured, everything else would go with them, and to conclude that the deterrence of a potentially dangerous, dominating power, by an alliance kept in good repair, was infinitely preferable to improvisation at the last moment and the consequent ruinous years of extended wars.

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Perhaps I may interrupt the sequence of history for one moment. My interpretation of the Soviet Union's cynical treaty with Hitler before the last war was that, after negotiations with us, the Russians made the cold-blooded calculation that Britain had little or nothing to contribute to the balance of power in Europe. However, that may be, we have now reverted to our more traditional role of the politics of diplomacy supported by a contribution of power appropriate to a European country. The directions in which such influence should be deployed I think are clear: to collect, as we used to do, as many friends as we can find in Europe, and to keep in the closest touch with the United States of America.
We have the instruments to hand. The European partnership of democracies—and this was said in other words by my noble friend when he opened this debate—is literally vital, because, if the ideology of international communism is to be reversed, it will be because the democracies of Europe sustain ideas, ideals and values of life, more compelling in their moral strength than anything the communists can parade. The alliance of Nato is essential because it is the United States which commands the power to deter aggression. So I believe that the strategic foreign policy of Britain is now clear and it is likely to remain in the form that we have it and in the instruments that we have in the European Community and the Atlantic Alliance.
The Falkland Islands campaign was spectacular and magnificent as a display of courage and military skill. But I do not by any means exclude the formation of a task force by the United States, by Britain and possibly by France. There is a lot of merit in such a force. But not even that would induce us to take our eyes off the European and Atlantic bases because, I repeat, if they were to crumble, the whole structure of the free democratic world would go with them.
The power which today has the resources to try and dominate the centre of the Continent of Europe is the Soviet Union. For 30 years it has taken the combined strength of Western Europe and the United States to deflect her from that goal. I will leave it to others to develop the defence requirements of NATO. But for a moment I should like, in the final context of what I have to say about the strategy of foreign policy, to include as one of our strategic purposes reconciliation between East and West, between the Soviet system and the European and Atlantic system. Were we to neglect that, we should be untrue to the instincts and obligations of a Christian democracy of which the right reverend Prelate has just spoken. It will not be easy. In 30 years I have seen only two political agreements with the Soviet Union. The first was the Austrian Treaty, and the second was the ban on tests in the atmosphere of nuclear weapons. It is still less easy when Russia is in ostentatious occupation of Afghanistan, and when, against all her signed pledges in the United Nations and Helsinki, clearly she is intervening in the internal affairs of Poland.
However, it is proper to make one exception to the general diplomatic freeze. That exception is to continue the disarmament conferences. In that context, perhaps your Lordships will allow me to offer some of my conclusions from a long experience of face-to-face negotiations with Soviet leaders over a good many years. First, may I suggest how we should
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not proceed? Over 10 years I never found one shred of evidence to suggest that Russia could be disarmed by unilateral disarmament—not one shred of evidence. On the contrary, I found plenty of evidence that, given a concession without a quid pro quo, Russian would pocket it gratefully and proceed exactly as before. Nor did I ever detect in their calculations any moral element at all.
I hope that those who are genuinely worried about the possession of nuclear power will seriously look for the answer to two questions. The first is, why should Russia negotiate seriously when she has only to wait for Western disarmament to fall into her lap? There is no reason why she should make any move so long as she can expect the West unilaterally to disarm. Then there is the second question—and it is even more basic and pertinent: what is wrong with mutual balanced and verified disarmament? It is fair; it is equitable; it is moral. If that is so, why abandon it, when the arguments in favour are so clearly valid? I suggest that we would make a great mistake if we were to abandon the formula of mutual balanced and verified disarmament, and I suggest that we should persevere until the Russians come to recognise that it is the fair way in which to proceed.
I shall conclude with two reflections on disarmament. In an intervention earlier on, the noble Lord, Lord George-Brown, said that verification must be an absolute condition of disarmament. I agree. Might it not, therefore, pay to start with the possibilities of verification on the existing deployment of forces?—the purpose being at regular intervals to give East and West the assurance that no major changes are designed for aggression. We each photograph ourselves almost every week in every detail of deployment. I wonder whether joint verification of those photographs might not conceivably be arranged at regular intervals. It would give considerable confidence if it was known and proved that no major deployments were being made which could be interpreted as aggressive.
Secondly, officials can very seldom clinch an agreement. I am not competent to judge the timing, but there will come a time—and it may not be very far ahead—when ministerial involvement will be needed in negotiations. I believe that now, therefore, the strategy of British foreign policy is plain: that the NATO alliance—and I think that it should review its strategy to some extent in the near future—can be relied on to keep deterrent forces which shall make the Soviet Union think, and think again, before it risks aggression. So I am not a pessimist at the present time. On the contrary, I find these developments convincing and hopeful.
5.24 p.m.
Lord Kennet: My Lords, the simplicity, the directness and the historical sweep with which the noble Lord addresses the House I, for one, find as riveting now as I did when I first heard him from the Galleries of another place all those years ago. I am happy to join with others in praising the maiden speech of the noble Lord, Lord Maclehose. He spoke to us about Hong Kong with the same optimistic lucidity as he governed it for all those years. Lastly, may I be among the first to welcome the first major intervention of the noble Lord, Lord Cledwyn, as Leader of the Labour

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Opposition, and to say how glad we all are that he is continuing the tradition set by his predecessor in proclaiming in matters of disarmament the policy of common sense and wisdom, and not that of his party?
I turn now to the problem of what we ought to do with the Falklands in the future and how we ought to conduct ourselves in the United Nations and towards Argentina. First, let me echo what has been said in the House of Commons by spokesmen of both the centre alliance parties. We supported the Government through thick and thin when they sent the task force and when they used it. There was no alternative to those two actions and they were, therefore, right. But this does not mean either that we supported the Government or that we shall now refrain from attacking them over their record in the months that led up to the Argentinian invasion. Nor does it mean that we shall necessarily support them in their plans for the future of the islands and in their policy in the United Nations. We have issued no blank cheque and we wait to see how those policies develop.
Let us just look at the story of the United Nations resolution last week, the one where we got only 12 countries—11 of them Commonwealth countries and five of them Commonwealth micro-states—to go through the "No" lobby with us. while 50 abstained and 90 voted the other way; the resolution that Mr. Pym said was:
"hypocritical and a charade and totally unacceptable to Britain";
the one which the Prime Minister, speaking in Paris, so strongly blamed the Americans for supporting; the one which the Government throughout have treated as some sort of affront, or affirmation of Argentine rights over the islands.
If this interpretation was correct, then the diplomatic outlook for our country would be grave indeed. We should have been isolated, and isolated by some of our closest friends and allies. If, on the other hand, there has been some mistake in the interpretation of the resolution—if it has been taken by our Government to mean something which other Governments do not think it meant and which, had they been reading it through different spectacles, our Government might not have thought it meant—then things are not so bad.
The resolution is introduced—and I intend to look at it in some detail—as these Falkland resolutions always are, by reference to the very famous General Assembly resolution of 1960 called 1514; this is the resolution which enshrines the right to self-determination of dependent peoples. This fine text lays it down that:
"All peoples have an inalienable right to complete freedom, the exercise of their sovereignty and the integrity of their national territory",
and that:
"All peoples have the right to self-determination; by virtue of that right they freely determine their political status",
and that:
"All armed action or repressive measures of all kinds directed against dependent peoples shall cease".
If the Government think that it was our actions in the Falklands which went against those splendid words and not the actions of Argentina, then, of course, the Government were right to vote against the resolution.
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But do they think so? The present resolution—the one that I am examining—goes on to take into account the resolution of 3rd April this year which, before the fighting began, asked for both sides to go home and, in particular, asked the Argentines to withdraw their invading army. Remember, last week's resolution was presented to the United Nations by Argentina. The first thing it does is to take account of another resolution which said that they should never have invaded at all. But, of course, if the Government think that this wording, presented by Argentina, hurts us more than them, then they could have been right to oppose the resolution. But do the Government think that?
Last week's resolution also takes account of the:
"expressed intention of the parties".
to the war not to renew hostilities. Once again, this is Argentina speaking. In full international formality they have given what appears to me to be a pledge not to renew hostilities. But, of course, if the Government are unwilling to give a counter-pledge, which is unthinkable, then they would have been right to oppose the resolution.
The resolution then proceeds to reaffirm the need for the parties—that is us and them, Britain and Argentina—to take account of the interests of the population of the Falkland Islands. The American Government put an interpretation on this bit saying they held "interests" to include "wishes, rights, and views". Of course if the Government wish to override the "interests, rights and views" of the Falklanders they were right to oppose the resolution, but did they wish to?
The resolution next reaffirms what the Charter says about the use of force or the threat of force in international relations. This is Argentina saying in yet other language that they were wrong to have invaded, and it seems to me that they undertake not to do it again. But the Government opposed the resolution. Why did they do so? Lastly, the resolution requests Argentina and Britain to:
"find as soon as possible a peaceful solution to the sovereignty dispute relating to the Falkland Islands".
and requests the Secretary-General to lend his good offices.
Of course, if the Government deny that there is a dispute, or admit that there is one and wish to continue it and do not want the help of the Secretary-General, then it was right to oppose the resolution. But all these suppositions are most unlikely, and one must ask oneself the question, what if the Government were wrong in all of this? What if the Prime Minister and the Foreign Secretary are simply prisoners of their own secluded and fantastic interpretation? Why then, they should get rid of it as soon as they can, emerge into the light of day and begin rebuilding a policy which will not only bring a peaceful and democratic solution to the Falklands problem itself, but will also secure us the help of more than Fiji and Vanuatu, valuable though that is, in achieving it.
Let them sit down as soon as may be in the decolonisation committee of the United Nations and say to that committee, and to Argentina in its midst; "An end to all hypocrisy. This is a 'colonial situation', as your successful resolution pointed out. It was you who unsuccessfully attempted to impose an unwelcome colonial régime on a people of alien

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language and tradition, which had freely enjoyed its present political status since 1833, and which is in continuous and undoubted exercise of its right to self-determination. Moreover, your own country, Argentina, is a colonial country, in that the invading Spanish people evicted and subjected the native people, who were Amerindians of immemorial stock. There were no Amerindians on the Falklands. Moreover, it is impossible in decolonisation terms for one settler state to make claims against another. Moreover, the average antiquity of white Argentinian families is about the same as the average antiquity of Falkland Island families. Moreover, the doctrine of Spanish and Portuguese superiority over other races, which lies behind the Bull Inter Caetera issued by the Spanish Borgia Pope Alexander VI in 1493, which purported to divide the New World between the Kings of Spain and Portugal, and lies behind the Treaty of Tordesillas of the next year, and behind the Conference of Angostura of 1819, which purported to say that successor states of the Spanish and Portuguese Empires are legitimate and successor states of the British, French and Dutch Empires are not, is, and always was, unjust, unrecognised, unenforceable and racist. The slogan 'South America for the Latins' is no more and no less respectable than 'South Africa for the Boers', and, if you think otherwise, return Patagonia to the Amerindians".
The Government should then continue, "Your best plan would therefore be to give up your claim to sovereignty, which is against the usual UN practice of leaving post-colonial frontiers where they are, except in rare cases like Cameroun where the peoples concerned agree to change them. However, if you still want to have sovereignty over the Falklands, convince the people who live there that you should have it. You could not do that in the 17 years before your invasion, and the chances of your doing any better after it are slim indeed. As for ourselves, we shall not be waiting until you can persuade free men and women to give themselves over to a foreign military dictatorship which 'disappears' tens of thousands of people. On the other hand, if you were to have another shot at democracy in your own country—who knows?—perhaps the islanders might learn to love you."
In the meantime, though, the Government should be saying, "We must press on. We shall in due course be proposing in the United Nations and to South Atlantic countries, including yourselves, a new and in some ways unprecedented régime for the Falklands. It might include all or some of these elements. Sovereignty could be transferred to the United Nations. The islands could be demilitarised under the same sort of provisions as the Antarctic Treaty, or the Svalbard Treaty; it might even be possible simply to bend the frontier of the Antarctic Treaty north to include them, or at least to include South Georgia and the South Sandwich Islands. There would be a symbolic UN garrison to act as a tripwire against attack from any quarter whatever, which would, at least at first, include a British element, and perhaps elements from those Latin American countries which openly stated that in their view the United Nations Charter takes precedence over the Angostura doctrine. The islanders would be completely self-governing, and there would be a UN administrator or governor, or
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ring-holder, whose function would be mainly symbolic."
The Government should go on to say, "The wealth, whatever it may turn out to be, of the seas and the seabed around will be handled according to international law; that is, the proceeds of the usual 200 nautical mile exclusive economic zone will go to the islanders themselves, and the rest of the seabed will be under the régime set up by the UN Convention on the Law of the Sea. All this we aspire to achieve in about three or four years. We shall, Argentina, welcome your co-operation in the programme. But we do not depend upon it."
That is how the Government should speak. Can they bring themselves to talk like that? Can they bring themselve to feel like this?—because it is clear from the Prime Minister's rather clumsy and self-righteous visit to Hong Kong, and from her, if report be true, one-woman applause act when the Argentines walked out of the General Assembly this summer, to say nothing of the parades and dinner parties, that she feels more personally about the Falklands war than is altogether wise.
There is no parallel with Hong Kong. There is no democracy there to protect. The "unequal treaties" which the British Empire forced upon China really were unequal, and there is no harm in admitting it. Nor has China attacked. Nor, I suspect, will China attack. It is time our Government got their feet back on the ground. The Falklands war was well fought and well won. But it is now time to remember that the way we got into that war was, in the words of a respected and honourable Member of this House who has drawn the consequences for his own part in it, "a national humiliation", and it is time to sound a note of alarm about the self-congratulatory tunnel vision which seems to limit our present policy. I sincerely hope that the Government can broaden that vision and take a more optimistic and positive approach to the whole matter in the United Nations before they get finally battened down into the anti-UN postures which have afflicted Conservative Governments not recently but sometimes in the past.
5.39 p.m.
Lord Rhodes: My Lords, I had the honour in the summer to introduce to this House, or help to introduce, my noble friend Lord Maclehose. He came hard on the heels of one of the most distinguished governorships that this country has ever known. He has a big contribution to make to it now. But I should also like to break with tradition and mention his wife, because during those years that he was the Governor of Hong Kong she backed him up. The number of people who arrived in Hong Kong suffering from jet lag and were helped by his wife are too numerous to mention, and I hope he will convey to her the approval and approbation of at any rate one Member of the House of Lords.
I do not suppose I would have intervened in this debate but for the fact that I am very unhappy about how the negotiations on Hong Kong have started off, and I will tell your Lordships why as I go along. At the moment there is a general lack of confidence in Hong Kong for a variety of reasons: world depression, slump in property values, banks over-lending, speculators over-borrowing and unable to meet their commit-

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ments and of course, not least, Mrs. Thatcher's conversations in Peking.
A shake-out in Hong Kong was inevitable, anyway; you cannot have the highest priced land in the world (even including Manhattan), as it was last year, and continue to have low-priced manufactures to sell. All this has caused a mild panic, particularly among the expatriate Chinese from Shanghai and other cities who have made Hong Kong their home and have prospered there. So the result is a flight of capital.
The Prime Minister told the people of Hong Kong that treaties must be kept but, on the other hand, they could be "varied", she said. She also said that Britain had a moral responsibility for the people of Hong Kong, but that was quickly repudiated by the Chinese when they said that if anybody had a moral responsibility for Hong Kong it was China herself. It was hardly surprising that those exchanges failed to win any confidence in Hong Kong after the visit.
The treaties are those of 1842 and 1860 which ceded Hong Kong Island and Kowloon to Britain in perpetuity. In 1898 there was a scramble by all the powerful Western countries and the "New Territories" were leased to us for 99 years, and it is the timing of the lease which has caused the present unease, as a minimum of 15 years is needed to make leases viable. It was agreed that talks should begin in Peking on the future of Hong Kong, but Mrs. Thatcher's visit revealed fundamental disagreements on the basis for negotiation.
In many ways, her visit to the Far East was dogged with misfortune. There was her mission to Japan to persuade Nissan to come to this country and manufacture motor-cars and the coincidence of the executive of Nissan Cars going to America on the very day she arrived in Tokyo has not gone unnoticed. She arrived in Peking at the same time as the leader of North Korea, and the ex-President of the United States, Mr. Nixon, was there at the same time, not to mention a prominent Russian diplomat.
We knew China claimed sovereignty over all the region, but we hoped Peking would not say so in so many words and that a bargain could be made on ceding sovereignty to China in return for the status quo. But Peking made it clear that sovereignty was not on the agenda. These are matters which should be understood by your Lordships because sooner rather than later this and the other House will have to make a decision on the question of sovereignty.
As I say, they said sovereignty was not on the agenda, but they said they would discuss what administrative changes should take place when sovereignty was ceded to them. It has also become clear that they will probably expect to take over before 1997 and that they intend to adopt a more positive role in future administration, anyway. That was made clear four months ago when China said that they,
"intended to regain sovereignty while preserving Hong Kong's prosperity".
We should have begun putting out studying caps on that four months ago, when that statement was made, but unfortunately we were embroiled in the Falklands on another matter of sovereignty, with the Argentines. So that is how China started to pre-empt the Prime Minister's case in the Peking negotiations.
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Opinion polls have taken place in Hong Kong purporting to show that the Chinese in Hong Kong hope for a continuance of the status quo. Of course they do. But the electorate for the urban council is comparatively very small, and I believe there is a large body of Hong Kong Chinese citizens who feel they have no dialogue either with the Chinese Government or the British Government, and under those circumstances they question Sir Edward Youde's statement when he said, attempting to instil confidence:
"An agreement will be reached which will be welcomed by the people of Hong Kong".
Reverting to the Chinese terms, a fair amount of local autonomy has been suggested by the Chinese, but they also believe—and this needs to be remembered—they can run Hong Kong, and I have no doubt that it would not take them long to acquire the know-how. We have often underestimated what so-called under-developed countries can do. I remember going through the Suez Canal in 1962 when, thinking we could bring Nasser to his knees, the pilots for the ships were withdrawn. All that happened was that our pilots were out of work and the Egyptians took over just as smoothly as could be.
Uncertainty undermines confidence and I am afraid there is more uncertainty now than before the Prime Minister's visit. We are now seeking a way forward, but what shall we do next? First of all, we should repair one on the broken fences. The Foreign Office, or whoever was responsible for the mechanics of the delegation, made a real blunder when they went without the Foreign Secretary. I warned them about it in a speech I made in this House on 19th May, when I implored them to take the Foreign Secretary with them. Why did I make that appeal? I made it because I knew the circumstances under which Mr. Hung Hua, the Chinese Foreign Secretary, came to this country in November 1978 to accompany Chairman Hua; he was bound to remember the cool reception he got when he accompanied Chairman Hua.
My next suggestion may not be as palatable but it is one we shall all have to face up to. It is obvious that sovereignty is not a counter in any negotiation any more. We could protract the negotiations by pretending it was, but there is no point in that now. Why not, then, seize the initiative by accepting gracefully that sovereignty does indeed belong to China, and get going on our negotiations for a smooth transfer of authority under British management, having in mind the wellbeing of Hong Kong and its people? This is an urgent matter. If hardline stances are taken up now on the basis of sovereignty, we shall never get anywhere with it and it will be bogged down as a result, to the detriment of Hong Kong and ourselves.
It must be remembered too—and when I have said this I shall have done—that there is a great deal more at stake than just our relations with Hong Kong and China. What happens in the next few months will decide our credibility in Asia as a whole. Economic power is increasing fast in Asia. Japan is now the third economic power in the world. Some people say that by the end of the century it will exceed even America. It is the only growth area in the world. Japan has galvanised activity throughout that part of the globe—Taiwan, South Korea, the Philippines, South Asia, Singapore, all with high growth rates. New

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Zealand and Australia are increasing their trade with Japan every year.
I say that it is absolutely necessary that what we are doing in Hong Kong, and with China, should be done with a vital perception of our role in the coming years in the Far East. We have nothing to be ashamed of in our day and generation over the question of Hong Kong and its relationship with China. But we must think about the future. We must think about the future of trade with that part of the world, and I only hope that as time goes on we do not have just secret negotiations which will land us into a situation where something is done without our knowledge. I am sure that if we can treat the matter with urgency and imagination, we can come to a settlement which will be honourable to everybody.
5.52 p.m.
Lord Colyton: My Lords, I should like to add my tribute to other tributes that have been paid to the noble Lord, Lord Maclehose of Beoch, on his maiden speech. As a former Colonial Minister, I had the pleasure of knowing several of his very distinguished predecessors in the office of Governor. Now the noble Lord has terminated his great career out in Hong Kong and has come to join us and give us the advantage of his ability and his experience at what is bound to be a critical time so far as that colony is concerned. We welcome him here very warmly.
I am unfortunately so rarely able nowadays to address your Lordships that I have to apologise all the more for having to leave before the termination of the debate. That is on doctor's orders; I have a broken collarbone. This is a debate on defence, as well as on foreign affairs, and I should like to put before your Lordships some aspects of the Falkland Islands question which I do not think—I might be wrong, because I have not been here—have been fully-covered, and they are in the field of global strategy. The United Nations has just laid down the proposition that we should enter into fresh negotiations on the issue of sovereignty. In the situation in which we have been placed by a treacherous act of aggression, surely any solution involving concessions on our part at this stage must be out of the question.
It seems to me that four factors are involved. There is the legal issue of sovereignty, and on that we have no doubts whatever. The facts are incontrovertible. I can remember the matter being discussed in my earliest days in the embassy in Washington, in the early 'twenties. We have again and again, going back even as long ago as that, offered to take the case to the World Court, and the Argentinians have always refused. What better proof could they give of the doubts as to the soundness of their claim? Secondly, there are of course the interests of the inhabitants, some 1,800 people of mainly British stock, and our Government have said, rightly, that their interests must be predominant. I am not clear whether that was intended to give them a veto, but obviously after all that has happened, they are not going to be anxious to place themselves under Argentine rule in a hurry. Their wish will no doubt be to become self-governing. Thirdly, as I say, there are our own strategic interests to be considered; and, finally, I would say that the last thing that we would want is a long-standing, or permanent, breach with the Latin American countries, including the Argentine.
I should like to put forward a few ideas as to how the
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four factors could be brought together. As I have said, we must, naturally, ensure that the interests and wishes of the inhabitants are preserved. But I would submit that that must run concurrently with the strategic interests of Britain and what we call "the West" as a whole. By that I do not mean only NATO, but all the other countries, which one way or another lie under the threat of Soviet world domination—our friends in Australia, New Zealand, Japan, and the countries of South-East Asia. Indeed, the fact is that the neutrals, or third world, also face the very same threat. The Caribbean area, Latin America, the Middle East, with its oil, southern Africa, with its precious raw materials, all lie among the targets of Soviet imperialism. Make no mistake, we are faced with a global challenge, and if our free societies are to survive, there must be a global response.
The Soviet is essentially nationalist and imperialist. It is continually expanding its military potential in every sphere at a cost which involves poverty for its inhabitants and a dictatorial system. I fear that the fact must be faced that in many fields—I speak subject to the views of the noble Lord on my right—the Soviet military capability is ahead of that of the United States. It is also continually expanding its bases throughout the world. All of Indo-China, Cuba, Nicaragua, Libya, and, of course, Afghanistan, lie under its direct influence or control. Aden almost immediately became a Soviet base when we, in my opinion foolishly, pulled out. In Angola and Ethiopia proxies such as the Cubans and the East Germans exercise control.
In terms of sheer military power the Soviet is methodically building up its strength at vital points. In Europe the conventional forces of NATO are greatly outnumbered. In Norway, in the far north, for example, 400 Norwegians face 50,000 Russians. Surely any hope of successful defence must lie in speedy and numerous reinforcements by air and by sea. A Soviet battle fleet is stationed in the Kola Peninsula. It includes the latest cruisers and now, since a couple of weeks ago, a 30,000-ton submarine, the "Typhoon"—a submarine as big as a pre-war battleship, with 16 multihead nuclear missiles. There is under construction a 75,000-ton carrier that will be added to that same fleet. The same thing is going on in the Far East. There is what I believe is known as an anti-submarine warfare carrier, the "Minsk", now facing Japan, and we are told that there is another 75,000-ton aircraft carrier planned for use in Far Eastern waters.
Previous wars have shown how vital it is to our island's very existence to control the sea lanes. Like many other noble Lords, I have lived through two wars in which we were within three weeks of starvation, due to enemy submarines. Now, apart from Arab oil, Europe is dependent on imports for 80 per cent. of its mineral requirements, mostly from South Africa. It was nearly some 50 years ago that Mikoyan, the then Soviet Foreign Minister, said:
"Europe without Africa is like a chicken plucked and ready for the pot".
That was 50 years ago. Other countries are even worse off. Japan imports 95 per cent. of her needs. All this depends on transport and the security of the sea lanes, and we are assuredly confronted by deadly perils in the face of the vastly expanding Soviet Navy—and I have

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not attempted to go into the question of their nuclear submarines—and our own unfortunately diminishing Western merchant fleets, so essential for transport, as the recent operations in the Falkland Islands have shown.
Let us make no mistake, my Lords: the Soviet are just as well aware of this as we are. Indeed, there are some minerals from Africa and elsewhere on which they, too, are completely dependent. They have succeeded in establishing themselves in areas which lie across the world's most vital sea lanes. I have referred to Murmansk, which, with the Baltic already a Soviet lake, threatens a quick sweep across Scandinavia to outflank our defences and threaten the North Sea oil. In the Sea of Japan, the South China Sea, they threaten communications both with Japan and, further on, with Australia and New Zealand.
Then, in Southern Africa they have bases which I know well, wonderful harbours in Mozambique and in Angola, which stretch out to threaten the vital Cape route. Then, when we come to the Atlantic itself, the South Atlantic, what have we got there to contain them? They are well entrenched in Angola and in Guinea. There is NATO in the North Atlantic; there is ANZUS to protect Australia and New Zealand; there is ASEAN to safeguard in some measure the Malacca Straits; and then, of course, there are the American bases here and there in the Pacific, and some British bases as well.
But what about the South Atlantic? It seems to me that the Falklands campaign has revealed in the most dramatic terms the existence of a vacuum in that area. It was only the valour of our forces—our soldiers, sailors and airmen—Providence, superb planning and skill and, we must admit, American co-operation on Ascension Island that made the operation of the task force feasible at all. With the signature of the Panamanian Treaty of 1977 under President Carter, the value of the Panama Canal was at least partly compromised. Apart from that, of course, in wartime it is highly vulnerable to bombing or even to sabotage. Were the Panama Canal knocked out, the only means of communication, both for naval forces and for merchant forces, from the Pacific ports of the United States to the Atlantic ports will be through the Straits of Magellan, the Beagle Channel or even round Cape Horn itself.
It seems to me that in this situation the strategic importance of the Falklands becomes obvious. The omens are bad. The Soviet already have their eyes on South America. Two days before the Argentine invasion, the Soviet Union launched two satellites directly over the Falkland Islands. Then, during the fighting they launched a third, which could see through cloud cover. It is also worth remembering that the Soviet Deputy Minister of Foreign Trade was visiting Argentina at the exact moment of the outbreak of the invasion. It must be remembered, too, that the Soviet Union is Argentina's biggest customer. I do not think that anyone can gainsay the mercurial character of politics in South America. One does not want to be pessimistic, but it is not possible to exclude the possibility, one day, of a Government in the Argentine which would not only co-operate with the Soviet but, perhaps, on request, even grant them a base. Where? In the Falkland Islands.
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In all these circumstances, what should we be doing? In the first place, I think it is essential to maintain a British armed presence in the Falkland Islands for the foreseeable future. I was glad to hear recently that the first supersonic Phantom fighters had arrived at Port Stanley. But, in addition, I suggest that thought should be given to the formation of a wholly new organisation—call it SATO, the South Atlantic Treaty Organisation—to take up where NATO's area of responsibility ends. It is not impossible, and it ought to be thought about. It should include the United States, Britain and France, and, of course, Brazil, the Argentine, Chile and Venezuela. Indeed, there would perhaps be smaller countries—Colombia, Uruguay and so on—who would wish to join in, just as they have done in the NATO Treaty between the United States and Europe.
Of course, ideally, perhaps, the Falklands should become a SATO base, a SATO-owned territory. That is a new idea, but it is perhaps something which is not altogether impossible. In any case, I think it must remain, or should remain, an Anglo-American base, or even, ultimately, an Anglo-American-Argentine base. Such triple sovereignty might perhaps satisfy Argentine pride, and some of her claims. I noticed, for example, that Lord Shackleton, speaking in this House, did not rule out this possibility of some triple sovereignty.
Of course, ideally, too, the Simonstown naval base in South Africa, from which we so unwisely withdrew, should be reactivated for SATO use. It may be said that our dependence on so many independent African States for vital mineral supplies might rule this out as impossible. I do not know; but, of course, in wartime strange things happen, and we might find ourselves being invited back.
I have tried to cover a very large field, and I hope I have not detained your Lordships too long in doing so. The Falkland Islands are only a part of the question, but they are a vital part. The essential need, I would repeat, is that we should adopt a global policy to meet a global threat. In conclusion, I should like to emphasise that in trying to analyse these threats to world security I have not been aiming to propagate hopeless pessimism or a panic-stricken picture of doom. On the contrary, I submit to your Lordships that facing these unpleasant facts is a prerequisite for any strategy to avert such a situation.
6.10 p.m.
Lord Chalfont: My Lords, may I first endorse wholeheartedly the sentiments of the noble Lord, Lord Colyton, regarding the need for a global strategy to meet a global threat. I think that it is something that cannot be said too often. May I also echo the sentiments of other noble Lords in offering a very warm welcome to the noble Lord, Lord Maclehose of Beoch. I have known him over the years, first, when I was a transient Minister in the Foreign Office and he was one of its most permanent and distinguished officials and, subsequently, in my many visits to Hong Kong, where he has been I think one of the most outstanding governors that that island has had the fortune to entertain.
I want to spend a few brief moments this evening addressing myself to a single question regarding the defence and foreign affairs aspect of our concern; that

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is to say, the parlous state (as I believe it to be) of the Western Alliance at the moment with special reference to our relations with the United States of America and in the context of a subtle but significant change which I believe to be taking place at this moment in the balance of the world's structure of power. Recent years have been a catalogue of confusion and misunderstandings with our principal ally, the United States of America. The atmosphere between Western Europe and the United States of America is about as grim as it has been at any time since the Second World War.
If one looks back over recent months and years, it is almost impossible to remember a time when there was not some misunderstanding between us. There was, first of all, the uproar about the proposed deployment of the advanced radiation warhead, or the neutron bomb. We then had a series of misunderstandings and slanging matches over theatre force modernisation, the deployment of cruise missiles and Pershings to meet the threat of the Soviet SS20. There was a great, and, I think, largely artificial, uproar about President Reagan's innocent if somewhat misguided remark about the possibility of nuclear war in Europe—a statement which, after all, was only articulating (although it was perhaps unwise to do so) the whole basis upon which the strategy of NATO is founded.
More recently, we have had arguments about steel exports, about the wisdom of the European attitude to the gas pipeline from the Soviet Union; we have had the beginnings of a great row about intelligence leaks from one of our major intelligence centres; and then, more recently, the beginnings of a row about arms for the Irish Republican Army and the part alleged to have been played in all this by the Central Intelligence Agency. Then, most recently of all, the circumstances surrounding the United States vote in the General Assembly on the resolution about the Falkland Islands—and a reaction by Her Majesty's Government which, if I may say so without being abrasive, I consider to be somewhat excessive.
If one adds to all this catalogue of misunderstandings an underlying structural weakness—which, I think, is based on doubts on both sides of the Atlantic about the validity of our present deterrent and defensive strategy in Europe—we have the beginnings of a very gloomy picture indeed. What I think has happened as a result of this is that we are seeing the burgeoning in Western Europe of, at best, an unhappy degree of neutralism, a kind of tendency to make even-handed judgments as between the United States and the Soviet Union as though these were two similar super-powers and not one super-power enjoying the full panoply of political freedoms and another in which the people live in the oppressive twilight which is inseparable from any attempt to erect the moral squalor of Marxism into a political system. How it is possible to be neutral as between those two escapes me but, apparently, not a number of other people in this country.
At worst, we are seeing also the growth of something which I think is even more dangerous; and that is a poisonous atmosphere of anti-Americanism. This has been reflected recently in public opinion polls, but it really did not need to be reflected in those polls because it can be seen almost everywhere around us. There is scarcely a protest or peace movement which
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takes to the streets of this capital which does not have among its banners and its slogans a high content of virulent and overt anti-Amercanism. This is a feeling which has been made no less virulent by the attentions of some of the media, the Press, television and broadcasting; and I think that it could all be summed up by a series of programmes, a travesty of television, on the subject of the cold war which was screened recently and which when it was completed led one profound television critic to state in a national newspaper that this series of programmes had definitively proved that it was not the men in the Kremlin but the man in the cowboy suit who was the real threat to world peace.
As I have already mentioned, I believe this dangerous tendency in our political perceptions in this country to be taking place against a subtle but extremely important change in the structure of the world's power. In the first place, the United States is now beginning for the first time to question the central proposition that the European Atlantic area is at the heart of its security policy. There was a time when, to the American political establishment, the River Elbe was one of the frontiers of the United States of America. More recently, with the global nature of the Soviet threat emerging (as the noble Lord, Lord Colyton, has just pointed out) and with the arrival in Central and Southern America of the first, familiar, characteristic signs of penetration by international Communism, many percipient Americans are now beginning to believe that there is too much emphasis in their defence and security policies on the European Atlantic area and that they themselves should become more global in their attitude.
The phrase that encompasses this in the current jargon of the State Department and the Pentagon is "global unilateralism". Of course, this is nothing to do with unilaterism in the sense that is most familiar in this country. What it means is that there are many people in the American Government and among those who advise it who now believe that the United States should divest itself of institutionalised and entangling alliances, and should seek its friends throughout the world where they are most needed. This would mean far less concentration on the European Atlantic area than was previously the case and possibly even the removal of American ground forces in Western Europe.
At the same time as this shift in American perceptions is taking place, I think we should not ignore the first signs of what seems to be a rapprochement between the People's Republic of China and the Soviet Union. I think that we should not take as entirely insignificant the fact that at the recent, extremely impressive military parade in the Red Square in Moscow, while the Western ambassadors were absent, as a mark of our disapproval of the Soviet presence in Afghanistan, the Ambassador of the People's Republic of China was present for the first time in 17 years. This is a straw in the wind that we ignore at our peril.
I do not intend to pursue this theory any further at this stage in a debate which is going to go on very late. What I suggest is that it is time for us now to restate our commitment—and the commitment I hope of the rest of Western Europe—to the aims of the Atlantic Alliance not to be become so myopic that we concen-

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trate entirely on the methods and on the petty differences which might at times bedevil our relationships. One of the basic aims of the foreign policy of every Western European country should be to secure the permanent commitment of the United States of America to the security of the European Atlantic area. It seems to me that the attitudes towards the Americans, which are growing in this country and being sedulously fostered by those who have political reasons for doing so, is one of the most dangerous developments in our political life for many years.
If the United States retreats into its global unilateralism—which is only a modern word for a form of isolationism—one of the main aims of Soviet foreign policy over the past three decades will have been achieved: the beginning of the disintegration of the North Atlantic Treaty Organisation and the separation of Western Europe from the United States of America. As the noble Lord, Lord Home of the Hirsel, said—with his immense experience of these matters—if the integrity of the European Atlantic area begins to disintegrate, that will indeed be a sinister development for the free world.
I should like to conclude with a very simple proposition which I hope will lie at the heart of the foreign policy of this Government and of the Governments of Western Europe for the future. It is this: the United States can possibly survive without Western Europe; Europe cannot conceivably survive without the United States of America.
6.22 p.m.
Lord Brockway: My Lords, may I first apologise to the noble Lord, Lord Belstead, because I do not feel able to stay until the end of this debate. Like many others, I have lost a friend in this House. May I also express my appreciation of the maiden speech made by the noble Lord who was the governor of Hong Kong. In this House I have criticised the administration of Hong Kong and that only makes more sincere my appreciation of the speech which he delivered.
I had intended to discuss many of the issues in foreign affairs and defence which were dealt with with refreshing directness by the Leader of the Opposition. It may be to the relief of the House that I shall not be making that longer speech. However, I have decided that these issues—urgent as they are—are incidental to the major issue in the world today: the confrontation between the West and the East, and particulary between the United States of America and the Soviet Union. There are two developments in the world—counter developments—with which I wish to deal in detail. On the one side there is evidence that the super-powers are moving towards a nuclear war. It is no longer merely a distant and uncertain threat to mankind. It is becoming closer and more probable.
For many years both the United States of America and the Soviet Union have been deterred from using nuclear weapons because of their mutual realisation of how it would destroy many millions of their population. But now there is an American view of a limited nuclear war, and there is even talk of a prolonged nuclear war. If a nuclear war begins, it cannot be limited. Even if in the first stage nuclear weapons were directed to military objects and political
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objects, many millions of people would die. But in a war situation, with each nation overwhelmed by the danger to its own security, a limited war could never take place. Our own experience in the Second World War indicates that. We began and Germany began by attacking only military objectives. The war ended with Germany dropping its bombs on the civilian populations of London, Plymouth, Coventry and other places, and with Britain dropping its bombs to destroy civil populations in Hamburg, Dresden and the Ruhr. If you begin in war by directing your weapons on military objects, inevitably—with the security of nations threatened—it becomes an all-out attack.
In the past 10 days this situation has become much more serious following the reaction of President Brezhnev in the Soviet Union to American's attitude and decisions. For many years now President Brezhnev has been devoting his speeches to détente. More recently, he has even taken unilateral action to withdraw missiles in central Europe and declared that the Soviet Union would no longer be the first to use nuclear weapons. But his speeches during the past 10 days indicate a change of attitude because of the policies which President Reagan is carrying out in the United States of America. President Brezhnev is now concentrating on the strength of Soviet military arms and making it clear that they will be used in the event of any early war. I regard the extension of the American policy and the reaction of the Russian policy as indicating a great danger that the nuclear war which we fear may occur.
May I, just for a moment, become philosophic? From the point of view of the universe it would be no great disaster if a nuclear war occurred and destroyed all the inhabitants and life on earth. There are so many planets in the universe. It is inconceivable that there is not life on many of them—with, perhaps, supermen and super-women developed. But, while that might be philosophically a universal view, lessening the effect of a nuclear war on earth, when we think of our children, of future generations, of the achievements of man in art, music, literature and architecture which would be destroyed for all time in a nuclear war, when we think of the ending of all the beauties of nature that are in the world, surely we must dedicate ourselves to preventing nuclear war.
We now have to ask ourselves this question: whether our moral sense can master the destructive techniques which mankind has developed. I want to urge tonight that if we are to avoid this danger there must be a revolutionary transformation of the attitude of governments and peoples in the world.
That brings me to the second development in the world about which I wish to speak. The results of the United Nations Second Session on Disarmament are sometimes regarded as destroying the hope of disarmament. The results were disappointing, but I do not think that they were disastrous. Opinion at the United Nations—and I was there—had to be reached by consensus. In that assembly, fewer than 12 nations opposed the comprehensive programme for disarmament which was proposed. The assembly was begun by a marvellous speech in which the Secretary-General indicated seven progressive changes that might be made. It ended with none of them being accepted. I have got to say that that was largely due to

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the attitude of the representatives of the United States and the United Kingdom. At the end of that session the Secretary-General, in a mood almost of despair, said that we could no longer rely on the great governments; it must now be for the peoples of the world to bring such pressure for disarmament that it will be realised.
I am not quite sure that members of the Government—indeed, Members of the House—understand the strength of the movement in the world now to end nuclear weapons, weapons of mass destruction, and bring disarmament. I have been active in politics for 75 years. I have never known a movement like it, not only in this country but all over Western Europe. How surprised we were when we went to America to find the strength of the movement there, demanding a nuclear weapons freeze. The Democratic Party in America has now adopted it as its official policy. The election results in November showed how the Democratic Party is becoming the majority party in America. Throughout the West—not only in Europe and in America but also in Japan—the movement for peace is more powerful than any movement has ever been before.
More than that, we arc now making contact with the peace movement in the Communist countries. We have adopted a common programme with them. We are planning great joint demonstrations at border towns: West and East co-operating for peace and disarmament. And not only West and East but North and South. One of the splendid features of the session in New York was the leadership which Sweden, India and other unaligned countries gave for disarmament. We are now bringing the unaligned nations into association. Indira Gandhi, the Prime Minister of India, has agreed to appoint a special representative in India to urge the cause of disarmament not only in India but in association with us, in association with the East and the West.
Lord George-Brown: My Lords, out of obvious respect for my noble friend I am reluctant to intervene, but just in case anybody outside should misunderstand, may I ask him this straight question: where in Moscow or in any significant city in the Soviet Union is he organising his anti-nuclear demonstration?
Lord Brockway: My Lords, I have dealt with that subject before in this House. Probably the noble Lord was not present when I did so. We have reached a common programme—
Lord George-Brown: My Lords, I beg my noble friend's pardon but he must answer the question. Mr. Sakharov, who is at least as distinguished as my noble friend, is being harassed beyond endurance for trying to say this. Every other dissident, as they call them in the Soviet Union, is being harassed for saying this. Will my noble friend please tell me where he, Mr. Sakharov and his friends are going to be allowed to have their demonstration inside the Soviet Union?
Lord Brockway: My Lords, I do not propose to be diverted from my argument. I will merely be content to say that, while we have come to an agreement with
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the Soviet Peace Committee on a common peace programme which I believe would be endorsed by most Members of this House, we have not been silent on the Soviet Union's treatment of dissidents and have actually written to President Brezhnev criticising his treatment of the peace activists who are there. What I was saying was that there is now this worldwide peace movement, so strong throughout the West, making co-operation with the East and bringing in the non-aligned nations of the South. This is a worldwide movement.
Lord George-Brown: Except for the Soviet Union, my Lords.
Lord Brockway: President Eisenhower once said that the time would come when the peoples of the world would so demand disarmament that governments would be compelled to accept their demand. That movement is now becoming powerful all over the world.
Lord George-Brown: Except in the Soviet Union, my Lords.
Lord Brockway: I believe that we can exert such pressure as to prevent an early nuclear war and that within 10 years we can not only end nuclear weapons in the world—
Lord George-Brown: Except in the Soviet Union.
Lord Brockway: But can begin to take steps towards full disarmament.
6.42 p.m.
Lord Beloff: My Lords, I do not propose to follow at length the speech of the noble Lord, Lord Brockway, who has preceded me because I have in the past made speeches to counter the plausible and utterly misleading point of view with which on these occasions he regales us. I do not do so because I am beginning to think that the noble Lord, Lord Brockway, is a figment of someone's imagination—I believe it to be the imagination of my friend the noble Lord, Lord Chalfont. When Lord Chalfont explains to us the degree to which the policies of our ally the United States of America are being vilified and misrepresented to this House and, what is much more important, to the British people at large, the noble Lord, Lord Brockway, gets up and gives a speech which bears out what the noble Lord, Lord Chalfont, has been saying.
It is just impossible for anyone who has given serious study to the political or military literature and history of the Soviet Union to find anything novel, or any new turn or any new threat in the recent speech of President Brezhnev. He was restating in slightly different words (he cannot always repeat himself because he is not a noble Lord) what has been a standard Soviet view; that the world is divided, that the Soviet Union is protected by Russia's military might, and that if necessary that might would be used to protect it once more—no more, no less. To try to read in this some extraordinary provocation on the part of the United States of America is really past enduring.

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I have one or two other things to say, and since one or two of them may not be wholly palatable to my noble friend the Minister, I will begin by doing him a favour, if I may, by removing any necessity for him to reply to the speech by the noble Lord, Lord Kennet. After he had made his speech about United Nations and the Falklands resolution, I was so moved and so disturbed at the idea that Her Majesty's Government might have made some fundamental error that I did something which I suppose would only occur to a pedant in your Lordships' midst; I went and read the resolution. It bears no resemblance to the account of it which was given by the noble Lord, Lord Kennet. Although he appeared to be brandishing a paper, perhaps the noble Lord was speaking from memory.
I will make only four points, which seem to me to explain not only the impossibility of the United Kingdom accepting the resolution but also why the Government felt unhappy that some closely allied countries, such as the United States of America, found it possible to do so. First of all, the resolution refers to the maintenance of colonial situations as being incompatible with the United Nation's mission to bring peace to the world, or words to that effect. The word is "maintenance" and that seems to me to imply that the British position in the Falklands, which its people wish to retain, is a colonial situation inimical to peace—and, if that is so, retrospectively it would perhaps justify Argentinian military action. The noble Lord, Lord Kennet, suggested that we should accept that this was a colonial situation but by doing so we would be accepting that our position there was indefensible.
Lord Kennet: My Lords, I wonder whether the noble Lord, Lord Beloff, will permit me to intervene. I was trying to point out that the maintenance of a colonial situation down there would equal the maintenance of the Argentinian claim to sovereignty over land to which they had no title—it is a colonialist's claim, and that is what I was trying to say in my confused way. I am sorry that it did not come across.
Lord Beloff: My Lords, I am delighted if that is the view of the noble Lord, Lord Kennet, but clearly it is not the view of Argentina and of other countries which supported that resolution. No reading of it can make one feel otherwise.
Lord Kennet: My Lords, why on earth should the noble Lord, Lord Beloff, think that my view is the same as the Argentinian view? I was seeking to contradict the point of view of the Argentinian Government.
Lord Beloff: The noble Lord, Lord Kennet, will excuse me, but I believe the impression he gave to the House was that he was trying to contradict or criticise the reactions of the Foreign Secretary and of the Prime Minister to that resolution. If that was not his intention then he fell short of his usual clarity of exposition.
The second reason why I think the Prime Minister, the Foreign Secretary and others found the resolution unacceptable was that it refers to a sovereignty dispute. A sovereignty dispute is something that exists in international affairs and has always existed. It is a set
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of rival claims to the same piece of territory or stretch of water. If it is decided peacefully, it is usually decided by judicial means. If there is a sovereignty dispute, why then did the resolution not suggest that the appropriate recourse was to an international tribunal? I venture to suggest that it did not do so because Argentina has always been opposed to the judicial settlement of sovereignty disputes.
Thirdly, the resolution does say—as the noble Lord, Lord Kennet, reminded us—that is a settlement due account should be taken of the interests of the population of the Falklands. But, contrary to what I understood the noble Lord, Lord Kennet, to claim, the resolution did not say that a settlement should take any account of the views of the inhabitants of the Falkland Islands, of their current allegiance or future wishes. Surely it would not be possible, at a time when we are trying in various ways—material and other—to enable the islanders to rebuild their confidence, for Her Majesty's Government to accept a resolution about the Falkland Islands which gives no place whatsoever to the wishes of the islanders themselves.
Lord Kennet: My Lords, if the noble Lord, Lord Beloff. reads Hansard tomorrow, he will see that I quoted the resolution correctly.
Lord Beloff: My Lords, I assume then that the noble Lord, Lord Kennet. gave a quotation which was the same as mine; that it refers to the wishes but not to the views of the Falkland Islanders.
Lord Kennet: It refers to the interests but not the views and the wishes. I introduced the words "views or wishes" because they were used by the American Government in a statement on its vote on the resolution, and I said so.
Lord Beloff: That takes us a long way from the resolution. The most important fact, however, which it seems to me one has to recognise—because this does I think explain our deep distress about the fact that many of our friends did not support us—is that although the noble Lord, Lord Kennet, said that the resolution refers to the expressed intention of both parties not to resume hostilities, that intention has never been formally expressed in clear terms by the Government of Argentina. Why otherwise would this country, which is. as we all know, stretched militarily, financially, be spending, proposing to spend, vast sums of money on defending the Falkland Islands if no military threat existed, if we do not feel it necessary to do so for other parts of the world? There is a military threat; it has once been actual. The authors of that actuality have not repudiated it. And to say that the resolution recognises the intention of neither party to resume hostilities, which incidentally puts the parties to those hostilities on an equal footing as though the aggression had been, as it were, shared between them, again makes that resolution unacceptable.
Far more important is the fact, to which the noble Lord, Lord Chalfont, drew our attention, and rightly, that we are running through a bad patch in our relations with the United States of America, not only because of their regrettable unwillingness to support us in the matter we have just been discussing, but also because of a considerable degree of revulsion against

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the lighthearted way in which American justice appears to treat what to us is a matter of great importance, the export of arms to enable British servicemen and civilians to be killed in Northern Ireland. It is not a friendly action on the part of American justice, however much one may say, and rightly say, that of course American justice is independent of American Government. My suggestion, however, is not that. I do not wish to join in the criticism of the American Government. I only wish to say that these events and others reinforce the view which I have expressed before, that we are not particularly good at making our case known to the populations of countries friendly to us, and most notably in the case of the United States.
I have said before in this House that I think that the rundown of our information services, and particularly in the United States, has been a regrettable economy and one for which we are paying dearly. I understand from the press that the Secretary of State for Northern Ireland is to go on a speaking tour in the United States in the New Year. But to send a senior Minister who can be spared for only a few days to make a series of set speeches, while no doubt valuable in itself, is no substitute for a continuing effort to see that our case is presented in the American press, through the American radio and television, and in every way we can find to influence opinion and to make clear our position on the Falklands, on Northern Ireland and on other matters.
The rundown of information services and those things connected with the projection of Britain has been discussed by noble Lords, not with particular reference to the United States, on frequent occasions in relation to the BBC. I want, if I may, briefly to refer to one other feature of our information effort which has been given publicity in recent weeks; that is to say, to the decision by the Foreign and Commonwealth Office to curtail the activities of the Wilton Park discussion centre. I know that the Minister will say, if he finds time to reply to this part of my speech, that it is not their intention to diminish activities of which they approve and which they feel are valuable; that it is merely a question of applying proper economies.
But it is the fact that the Council of Wilton Park, the academic advisory council, of which I am, I think, by now the longest serving member, has come to the conclusion that what is proposed will in fact damage the potential of Wilton Park, which has been widely recognised as one of the ways in which opinion leaders in large numbers from friendly countries, mainly but not exclusively the OECD countries, have come to better understand our ways of looking at things. It seems to me that if this is the view taken by those who have been closely associated with an institution over a number of years, and who are, I am afraid, likely now to offer their resignations in the light of this decision, it is at least proper that the Foreign and Commonwealth Office should look again at this matter.
It is not a question, I repeat, of denying the duty, let alone the right, of Government to make due economies—and if there are to be economies in the machinery of Government, then no doubt the Foreign and Commonwealth Office must do their best to fall in—but it is a question of priorities. It is a question, do you attribute more or less importance to diplomatic activity in this or that country or part of the world, or
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do you, at a time when it is so important to maintain and rebuild friendly association with our allied countries, say that this area is one which so far from needing retraction at the moment actually requires expansion, and that there will have to be some transfer of resources to make that expansion possible? I believe this to be, if you like, marginal to the great issues of life and death with which a debate of this kind confronts us, but it is a matter about which many people feel strongly, and one which links with what I believe to have been the most important speech we have heard so far this evening, the speech of the noble Lord, Lord Chalfont, that relations between the United States and Europe and the United States and ourselves are the key to world peace.
6.59 p.m.
Lord Wells-Pestell: My Lords, there was reference in the gracious Speech to the Middle East, and I want to confine myself tonight to dealing with the situation of the Palestine Liberation Organisation and Israel. I want to begin by asking the noble Lord the Minister of State at the Foreign and Commonwealth Office whether he can explain what the Foreign Secretary-meant, when he was asked a few days ago about the Palestine State, by saying that we would want any state that existed to be demilitarised, and that we want the whole area and Israel, for that matter, to be demilitarised. That seems to me to be an extraordinary statement to be made by a Foreign Secretary when one considers that the State of Israel has been there since 1948. If it had not been for it ability to defend itself it would not be in existence now. I cannot believe that the Foreign Secretary is so naive as he sounds. Perhaps there was a slip of the tongue. I should like the Minister to put that right.
I do not know how the government, or any Government for that matter, would accomplish the demilitarisation of Israel. What is much more important from my point of view is this: do the Government visualise a Palestinian State alongside Israel? The Government need to take a fresh look at the situation. Israel has existed since 1948. It has built up a tremendous democratic society. To put another country, or group of people such as the PLO, in a state alongside Israel, can only mean trouble. It would be possible for all the Arab countries around to arm that state in a comparatively short space of time.
Are the Government still committed to the view that the PLO must recognise the existence of Israel and its right to freedom and peace, and for the PLO to renounce its intention to destroy Israel, which is in the PLO charter? Do the Government still support the statement in which Dr. Kissinger promised Israel that the PLO would not be allowed to take part in negotiations unless it officially recognised Israel and renounced the use of force? That promise was made by Kissinger in 1975.I also ask the Government to make it clear that it is not possible to leap a yawning chasm in stages, as the PLO want to do. The chasm between non-recognition and complete recognition has to be made in one jump. It cannot be made in stages.
As I said a moment ago, we need to take a fresh look at the situation and decide that our action in future is shaped and guided by what is just and what is right, and not by any economic considerations. I am appalled, as a good many of your Lordships must be,

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at the behaviour of the United States at the United Nations only a few days ago, when it voted in support of a Motion put by the Latin American countries. It has been explained that America has to mend her fences with those countries. It has been explained that America is to some extent, from a trade point of view, dependent on those countries. Is loyalty going to depend on whether a country can get a certain return from one group of people in preference to another? I believe that we are in danger of making the same mistake ourselves when we have an eye on the Middle East and on all that the Middle East has to offer in the way of trade and oil. I ask the Government not to allow such considerations to affect a just settlement in that part of the world.
No nations, no people in history, have had to fight so long and so desperately for survival than the Jews. Fortunately for the whole world, they have survived and still remain. I say "fortunately" because Lord Balfour, of the Balfour Mandate fame, said in 1917 that the Jews were the most gifted race that mankind has seen since the Greeks of the 5th century. It is perfectly true today. There has been no race more gifted than the Jews in the last 1,500 years.
We need to take a fresh look at the cause of the difficulty. The 1945 Labour Government cannot disclaim their responsibility for a good deal of what is happening today. They treated—at least, the Foreign Secretary did—the Jewish nation in a deplorable way and set the scene for some of the difficulties that we, and the Jews, are now experiencing. Israel has been involved in four wars in the last 34 years. They were wars not of conquest but of survival. The Jews were attacked in 1948, a few days after independence. They were with us and France in the Suez expedition of 1956. In June 1967 Israel pre-empted a strike by striking against Egypt, although not against Jordan and Syria. They were attacked, as we know, in October 1973. The losses that they have sustained in terms of life have been enormous. The losses they have sustained from an economic point of view have resulted in them having probably the highest cost of living in the world.
I can understand why the Israelis are embittered by the failure of nations to recognise their struggle for existence and, if I may say without giving too much offence, by the double standards on which they are being judged and treated by some of us here and elsewhere. It is regrettable, but I believe true, that to some people Israel can never be, or do, right. The Israelis resent the selective morality demonstrated by the West. I do not want to play down or minimise what happened in Beirut. It was appalling, but we have yet to hear the whole of the facts, and presumably they will emerge in due course. Here again, are we really being honest? Many will recall the slaughter of nearly 100,000 Christians and Moslems in the Lebanese civil war a few years ago which was triggered off by the incursion of the PLO. Were we bothered about it? Did we raise a finger or a cry? Of course we did not. There was the massacre of Syrians in Hama by their own Government. Those were dreadful happenings, but they produced very little reaction or condemnation from the rest of the world.
It perhaps would not be popular for me to remind your Lordships of our own reaction at the time the
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atomic bombs were dropped on Hiroshima and Nagasaki, or of the saturation bombing of Germany during the war and the total destruction of German cities, which appeared at the time to be applauded rather than condemned. We must see these events against the things that have happened in recent years, when we ourselves did not lift a finger or raise a cry. We need to ask ourselves why the Israelis went into Lebanon. We need to ask ourselves what happened to make it necessary.
I have been to Israel a number of times. I can remember being in Israel two years before the 1967 war, when the Syrians launched a surprise attack on Israel and where they had on the Golan Heights—a plateau 40 miles long and 15 miles deep—2,000 tanks, 300 aeroplanes, 300,000 soldiers and where they had been shelling for a long, long time the villages and the kibbutz in the area. Is it surprising that Israel will not return to the original state lines? How can we expect them to return to the original state lines? How can we expect them to agree to have on their left side, on the West Bank, a force which is totally opposed to them and which has been opposed to them for some considerable time?
There has been some discussion this week in one of the quality national newspapers about the rights of the Israelis, of the Jews, to be in Israel. The Old Testament of the Bible shows that the descendants of Jacob, son of Isaac, and grandson of Abraham settled in the area of Israel some 2,000 years BC, which means over 4,000 years ago. I am not a biblical scholar and I recognise that there are biblical scholars who reject this, but I understand that there is no doubt that by 1,000 BC—3,000 years ago—Israel was a kingdom and David was the king, and ever since then they have fought and died for survival. I shall not burden your Lordships with the saga of how 1,000 men, women and children, when they were encircled at Masada, committed suicide rather than give in. But for 1,000 years they were dominated by the Romans and the Egyptians.
If we are to play our part, as I hope we shall play our part, let us be realistic. Let us try to understand not only the PLO—because they have a voice and they have certain rights—but also why Israel has found it necesary (and I repeat, "found it necessary") to behave in the way in which she has done. On the tapes in the corridor this afternoon it was reported that the PLO guerrillas expelled from Beirut are to resume training to build up their military strength. Training will be in the camps where they are now. The PLO say that the 10 Arab countries where they are now living will provide them with arms. That was reported less than four hours ago. That is the situation. Therefore, I ask the Government to take a new look at what has happened and to recognise that there can be no question of having a PLO state on one side and Israel on the other. There must be some other solution.
I should like to put a final question to the noble Lord the Minister. It has been said in a number of papers in the last few days that a well known diplomat, Sir Anthony Parsons, is to become special adviser to the Prime Minister. I think that I shall probably be told, "You must not believe all you read. Wait and see". But I believe that the Foreign Office has already got an Arab legion there. Why do they need another? It would be much more to the Prime Minister's

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credit—and I do not say this sarcastically—if she had an expert in Israeli and Jewish affairs to try and balance the situation.
7.15 p.m.
The Earl of Perth: My Lords, we are not even halfway through the speakers and it is already getting late. Therefore, I shall confine myself to one subject only, which is the Falkland Islands. Let us see what the gracious Speech says about them. It says that the Government: will encourage the economic development of the Falkland Islands, maintain an appropriate defence force and at a later stage, in consultation with the islanders, consider their future political development and security.
Since the gracious Speech we have had the United Nations' resolution passed, which was supported by the United States. The Government and many others including the noble Lord, Lord Beloff, today, have strongly reacted against the American action and against the resolution, feeling that it was in some way unfriendly and wrong. I do not agree and I shall try later, without getting into too much controversy, to give your Lordships reasons why I think that that is the wrong judgment to have made on the resolution.
Let me first go back to the gracious Speech and to the question of the welfare of the islanders. The noble Lord, Lord Shackleton, and his committee were charged to outline ways in which to develop the islands' economy. I am sure that all of your Lordships who are interested in the question, will read the valuable report. Its recommendations included better roads, better sea and air communications, improved harbours and an enlarged airport. The economy might be improved by better farming, especially of sheep and salmon, and by greater sea fishing. But I am sorry to say that in my view the report did not really offer us very great hope for long-term growth and prosperity for the islands.
As the report pointed out, much will depend on outside communications and close links with South America—ideally with the Argentine, their nearest neighbour. That may or may not be achieved, but without it the outlook is very difficult. All of this was to cost some tens of millions of pounds. Added to that—again following the gracious Speech—we are to have a garrison of some 4,000 forces, which, by its very presence, would cause great problems for the islanders who number less than. 2,000. Certainly the forces will be constantly changing and there will be a shortage of womenfolk. I know that every care will be taken and that every goodwill will be shown to try to make the overwhelming force fit in with the islanders. But I am fearful that it will be a very difficult task. Somewhere I have seen a figure for the cost of all this over the next five years of over £1·5 billion—something near to £1 million a head for each islander. Are we really wise to contemplate all by ourselves an expenditure which gives no guarantee of long-term prosperity and growth for the islands? The noble Lord, Lord Chalfont. mentioned the possibility of perhaps a triple alliance being centred there. It certainly seems to me that the more we can get others to share such a burden, the better.
I should now like to return to the United Nations resolution. Of course, in a sense, it was too soon. The memories of the tragedy and of the fighting, even
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though it was a glorious victory, are still very much in our minds. Again, to put it mildly, it was a pity that it was the Argentine which took the initiative. But let us also recall that many of our friends sponsored the resolution, such as Brazil or Chile, not forgetting the United States of America. Do not let us forget that the United States helped to get the wording of the resolution changed in our favour. She, interpreting the word "interests", said that it meant the wishes, the rights and the views of the islanders. It is my hope that before too long the service which she may have done us will be recognised. Anyhow, her role in future negotiations will be of the very greatest importance. The very fact that she was one of the sponsors of the resolution may help her to guide matters in the way we want.
I do not want to get into an argument over the exact meaning of the resolution. I have it here; others have looked at it. It reaffirms the non-use of force; it recognises the interests of the islanders—I know that some people are unhappy about the word "interests"—and it asks for we and the Argentine to resume negotiations on the sovereignty dispute. The sovereignty dispute has been going on for 20 years, 30 years or much longer. The resolution calls on the Secretary-General to help and ultimately it calls for a report to be made back to the United Nations. One distinguished diplomat said that these are "weasel words". Time will show. But I very much hope, and I am sure that all your Lordships hope, that it will not prove true.
I make one suggestion for trying to test the sincerity of the Argentine. It is simply that we should ask the Secretary-General to clear up one question; that is, whether the Argentine agree that they have renounced hostilities both for the past and for the future. They do so in the resolution, but many people here—and I can understand this—have expressed grave doubts. Would not the simple course be to ask the Secretary-General to clear up this matter? If he is successful in this to our satisfaction, then is the time for us to go forward with our negotiations.
I shall not at this moment outline what may be a long-term solution. We have been promised a White Paper and I hope that we shall have a debate when it is published. The noble Lord, Lord Kennet, has given us one or two ideas. I would only now ask the Government to look most carefully again at the Antarctica Treaty, and to study whether in some way the Falkland Islands might be linked with Antarctica. For example, it might have some role to play as a headquarters of the signatories to the original treaty. Perhaps the committee of the noble Lord, Lord Shackleton, might be asked to help here and to further its studies to produce yet a third report.
Both the Argentine and ourselves are signatories to the Antarctica Treaty. I believe that sooner or later they must have an interest—dare I say a presence?—on the islands. If that is the case, what is important is that we should bring in others of South America and, indeed, of North America—the triple base mentioned by the noble Lord, Lord Colyton. We have no quarrel with the Argentine people as such. Indeed, we have a long tradition of friendship. If we can work things out together, helped by the United Nations, that must be a right course to follow, especially—and I stress this—for the islanders. To those who say that to think in those terms is a betrayal of what we have fought for

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and of those who sacrificed their lives, I would say that we fought to uphold a principle vital to world peace: that is, that the use of force for territorial gain and disregarding the wishes of the inhabitants must not be allowed, must not triumph. We won; a dictator fell; and the world is a safer place. Therefore, I do not think that that particular worry should occupy our thoughts.
I understand the instinctive reaction of many that somehow or another this resolution is a trick, that it came too quickly, and so forth. But we have always prided ourselves on being realists. I feel that we should seize this chance to see whether there is an opportunity to do what we all want, and in the doing I think that we should call on our friends in the Community and the United States, who helped us so greatly in the recent conflict, to help us again and to try to establish a lasting peace in which the wellbeing of the islanders will be an integral part.
7.27 p.m.
Lord Orr-Ewing: My Lords, I am delighted to follow the noble Earl, Lord Perth, in his very thoughtful speech because I agree with almost every single word he said. I want to concentrate on the diplomacy, not in the run-up to the Falklands incident because on that we await the Franks Report, but during the crisis itself and what I believe we ought to be doing now in that field. I also want to draw attention to the muddle we got into in the manner in which we organised the information coming back from the battle zone and the difficulties which the media encountered.
As I have said, we must await the Franks Report, and I am sorry that it is taking so long. Six months have already elapsed and, as I understand it, some more months will elapse. Whether the Franks Committee will be able to come up with any clear responsibility or faults within the Foreign and Commonwealth Office, I do not know. I feel very much that a dictatorship controlling its media is in a position to change its tactics in a matter of an hour, whereas a democracy, like ours, cannot do that. When a dictatorship is 400 miles away from the zone, as is the Argentine, and we are 8,000 miles away, this adds further to the discrepancy and the differential in reaction time.
I think that we in this House in particular would like to see this committee get on with its work because we all miss the wisdom and the service which my noble friend Lord Carrington gave to public life and to Parliament for very many years. For the moment he stays away and awaits judgment. I think that we lose that service very sadly and we miss his presence. Meanwhile, we ought to acknowledge the fantastic achievement of our diplomatic staff in the USA during the early stages of the Falklands crisis. I am sure that Sir Nicholas Henderson and Sir Anthony Parsons, as the two leaders there, must bear a great deal of this credit together with the staffs that they have with them.
We believed implicitly that right was on our side, but it is no mean achievement despite this to have the following support: first, we achieved the support of the Security Council in backing Britain; secondly, we achieved the support of the EEC in backing Britain; thirdly, of NATO in backing Britain; fourthly, of the Commonwealth in backing Britain; and lastly, and not least important, all four political parties in Parliament
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were backing the action of the Government of the day. In the face of that unity world wide and at home, I could not help feeling that it was surprising that the BBC found so much critical and dissident material, and I shall return to that aspect of the affair later.
Having done so well diplomatically I cannot help feeling that Her Majesty's Government are in danger of sitting back and imposing too long a period of cooling off. I am not asking, and nor did the previous speaker, that we should immediately open negotiations with this undesirable, tough, military dictatorship, but I am asking that perhaps we could use the cooling-off time to better advantage. We cannot afford to do nothing, and just relax. The Argentine is active in creating, or re-creating, friendships and support for its own viewpoint, for its own claims on sovereignty. Neighbouring South American states are bending to their desires, and neighbourliness. Even the USA, as we have heard from so many speeches today, seems to have divided loyalties, and we read and watch the action of the General Assembly of the United Nations.
We believe that we have a cast-iron case on sovereignty. If that is so, may I endorse what was said by many earlier speakers: ought we not to submit our case to some international judicial body? It seems to me that either the United Nations or, perhaps better still, the International Court of Justice are the best available. If it is not the right one, perhaps the Government could consider other ad hoc international judicial groups, or setting up some body, or asking our friends to create one.
The lessons of Chile are interesting in this respect. They have had a quarrel with the Argentine about the Beagle Channel and the islands therein, which has been grumbling on for decades. The International Court of Justice was asked to take up the matter. They deliberated first for some years as to whether it was in their remit and terms of reference, and later about the dispute itself. Eventually they found in Chile's favour. In the meantime the Argentine forbore to start any military action, and in fact the Argentine subsequently rejected the findings of the International Court of Justice and put themselves in the wrong by so doing.
Chile then asked the Pope, as they were two Catholic nations alongside each other, to adjudicate on this matter. Again long periods of years of delay and deliberation. I think that the Pope found again in favour of Chile and against the Argentine's claim. Again the Argentines rejected it. However, in the meantime again peace was bought and time went on. During all these negotiations the Argentine never embarked on any military action against Chile. No doubt the Chilean Ambassador in the United Kingdom, who was for some time the Foreign Secretary in Chile, could give our Government much helpful advice as to how these negotiations were started and how they worked out. I would ask Her Majesty's Government to take the initiative while time is passing and wounds are healing to get a judgment on the single point of sovereignty.
I want now to turn to the second part of my speech, and I want to ask the Government also to look at the manner in which they handled the media, and particularly TV, during this dispute. The TV media is a new dimension in war, and it deserves greater planning, greater thought, and greater attention. It is no good

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Her Majesty's Government having good military plans, perfectly trained and equipped men, if they cannot report the events back to the public, on whose continued support any and every Government ultimately depends. Of course, there are those old characters who would like no publicity, no radio, and no TV, but we cannot disinvent these forms of media. Looking back, perhaps General Templer won Malaya so successfully because there was no TV there, and because we were not able to see just what was going on. Perhaps the USA lost the Vietnam war, because TV was reporting back some of the more horrific scenes, and of course reporting back from one side of the frontier only.
We assembled a force of over 26,000 men, military men and merchant seamen included, with speed and thoroughness, but we do not seem to have given the same attention to the news media. I have been rereading the evidence given to the House of Commons Defence Select Committee at the end of July. Apparently the Ministry of Defence originally planned for six correspondents to go with this huge task force, and that was to cover the newspapers, the radio and television. Quite rightly, of course, pressures built up and No. 10 intervened to make that a larger force. Finally there were 29 travelling with the task force. They covered correspondents, cameramen, still photographers and engineers.
The BBC had one correspondent, Brian Hanrahan, and very well he did, one cameraman and one sound engineer. I think that the ITN ultimately had five, and the Independent Radio News one. I wonder whether the ultimate numbers were right. Of course, there is always the argument whether you sacrifice a bayonet and replace it with a pen, but I urge the Government to remember that in this day and age what the public see at home, and what other nations see because they all take the output from our media, is of supreme importance to the success of the plan and the success of the project.
It is no good getting good film pictures, good video tape pictures, good reporting, if you do not attend to the manner in which this can get back to the public. Of couse, it was much easier to get messages and pictures back from the Argentine because there were established communication links there. But surely, in these days of satellites and transportable equipment, it would have been possible to use the satellites to get our pictures back. I remember much of the time there was delay, and three weeks after the whole thing was over, we were then looking at events which happened at San Carlos and other landing places. This seems an intolerable time in this day and age with satellite communications. We ought to have made better arrangements.
Now one word about the BBC. They seemed to feel obliged to adopt what they call "even-handedness", which gave the same credence to Argentine claims as it did to British reports. So one heard the practice grow up of commentators referring to "The Argentine version of this event is so and so …", and then go on to say, "The British version of this is so and so …". But this is comparing a military junta dictatorship's views, twisted (as all their views have been, and all views can be in a dictatorship) to suit the home media, with the considered views of a democratic nation; it is
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not comparing like with like. That, of course, led to that unfortunate remark by a rather senior BBC person at a conference in Spain where he said, "An Argentine widow is to us the same as a British widow".
They are the British Broadcasting Corporation. Of course, they must get the truth and as much of the truth as they conceivably can, but we did not in wartime take pains to broadcast every claim that Goebbels made, and I cannot see why they took pains to show pictures and make claims—and make disturbing claims to those who had relatives serving on these ships—which came from the military junta.
The BBC had problems because, as I said, it was easier to get pictures and news from the Argentine than from our own task force. Further, the task force communication links were clogged up with vital operational messages, and there was the need not to give away the ships' position by acting as a radio beacon whilst transmitting. Certainly Colonel "H" Jones, before he died, felt the BBC had, possibly inadvertently, helped the enemy, and had he survived he intended to take action. It was a sad reflection. I am . sure it was not done purposely, but both the Government and the communication media have to reexamine what we should do on future occasions.
I would summarise these views in a short speech by saying let us not open negotiations—I do not think that is possible or even desirable at this stage—but take some diplomatic action to resolve the sharply different views as between ourselves and the Argentine on the question of sovereignty, and let us use some international forum to undertake that. Secondly, I urge the Government to see whether we are planning the best possible information service for future conflicts. Whether they are small or large, the country and the world now depend on pictures coming back, punctually and effectively.
7.42 p.m.
Lord Jenkins of Putney: My Lords, I will not seek immediately to follow the noble Lord, Lord Orr-Ewing, though I shall have some comments to make about the Falklands later. I find myself on this occasion much less in disagreement with him than I have on some previous occasions.
In the gracious Speech the Government say they plan to meet NATO expenditure targets and to seek the more efficient use of the resources of the alliance. However, they show no consciousness in the gracious Speech of the fact that the NATO doctrine of reliance on nuclear weapons has come under increasing criticism in recent years. The criticism is not always that of unilateral nuclear disarmers; we are increasingly being joined by more and more people who believe that the 50,000 or so nuclear weapons now in the world must be reduced and that if they are not reduced mankind will stagger into a disaster from which civilisation would be unlikely to recover. Many reflective military men in NATO have revealed their concern. The noble and gallant Field Marshal, Lord Carver, has described the NATO doctrine of "flexible response", as it is called, as incomprehensible and illogical. I am sorry he is not here to speak for himself tonight—I am sure he has good cause to be elsewhere—and in his absence I will, if I may, quote him. He says:

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"To pose an unacceptable risk to the enemy automatically poses the same risk, or perhaps an even greater one, to yourself. But to attempt to reduce the risk in order to make the threat of use more credible by some form of limited nuclear war—territorially or by types of targets or means of delivery—begins to make the risk more acceptable and therefore less of a deterrent. The more acceptable war may appear to be to governments and military men of the nuclear powers, the more likely it is that it will actually come about. And even if it is limited in some way, the effects on those who live in the countries in or over which the nuclear weapons of both sides are exploded will be catastrophic. To call the result defence or security makes a mockery of the term."
I agree with that absolutely. Lord Carver is not alone. A leading West German military strategist goes further; General Krause claims that NATO figures showing vast Warsaw Pact conventional superiority are inaccurate. In a study published by the Frederich Ebert Stiftung in Bonn, General Krause shows that,
"there is no need to counter Warsaw Pact conventional forces with nuclear weapons, nor to increase drastically the conventional strength of NATO."
Why has that study never been translated into English and published here or, so far as I know, in America?
Professor Robert Neild, in his balanced book How To Make Up Your Mind About The Bomb, reaches a similar conclusion, taking the view that the Soviet forces would be strong in conventional defence but weak in conventional attack. Admiral Rickover, who has been called the father of the American nuclear navy, has changed his mind, too; he has called for an international conference to outlaw nuclear weapons. So the anti-nuclear forces in the world, not least in America, are growing stronger all the time as the consciousness of the grave risk in which we exist itself grows stronger. Our own expensive nuclear weapons have not been of any use to us. The notion that they have played a part in keeping the peace hardly bears serious examination. We must convert both NATO and the Warsaw Pact to non-nuclear defence and we must repudiate first use.
In the gracious Speech the Government go on to talk about the economic development of the Falklands and about keeping a defence force there. Some noble Lords have cast some doubt on the long-term future of this policy. A year or so ago the Government were talking to Argentina about the sovereignty of the islands. The reasons that brought the Government to the conference table then have not changed in the meantime. They are geographical, economic and strategic. Those are the reasons, and they add up to a gradual British retirement from sovereignty. That is why the Americas, both north and south, want us out of their continent, just as an increasing number of Europeans want not Americans but American nuclear weapons out of our continent.
The Prime Minister finds the American support of the recent United Nations resolution to be incomprehensible. That tells us more about the Prime Minister than about anything else. The Falklands war has done nothing but create an emotional climate in which reality is having a hard time, and it is only gradually beginning to reassert itself. As some of us—notably Lord Noel-Baker, who is sadly missed—tried to say at the time, the Argentine aggression was not best dealt with by counter-aggression. As it is, we have lost lives, men have been maimed and gallant deeds have been done, but some grave errors have been made, not least by the Government, and, if I may say so, something
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like lies have been told—or something perhaps approaching lies—as will increasingly emerge.
I wish to ask a few questions. Is it the case that some of our warships carry nuclear weapons all the time and that they did in fact take them into the South Atlantic? Did the "Sheffield" go down with nuclear weapons on board? It now seems that the honest answer to both those questions is, yes. As early as 27th April I asked the Government to undertake that the task force would not use, deploy or carry nuclear weapons. I did not receive a straight answer. The noble Viscount, Lord Trenchard, said that there was no question of nuclear weapons being used. He said nothing about carrying them, nor about deploying them —
Viscount Trenchard: My Lords, I wonder whether the noble Lord will allow me to interrupt? He has had explanations from myself and I think other spokesmen from this Bench, on more than one occasion, and in writing, that for very obvious reasons it has been the policy of every Government neither to confirm nor deny on any single occasion the location, presence, or absence of a nuclear weapon, or where it goes. The noble Lord continues to ask these questions with, in my mind, one view only—in order to use the obvious difficulty of the Government in replying to carry with his question a suggestion which is quite unfounded.
Lord Jenkins of Putney: My Lords, if the noble Viscount says that, I would say that of course the suggestion carried in my question is that the Government were in breach of their obligations under the Treaty of Tlatelolco, which makes the South Atlantic and Latin American waters nuclear-free zones. If the Government say that we are not in breach of that undertaking, we shall know that the whole thing is wrong; but if the Government refuse to say that, can they wonder that they are losing out in world opinion? Is not world opinion entitled to say, "Here is a state in breach of its obligations bringing the nuclear weapon into our waters"? If the Government fail to deny that that is the case, and take refuge in generalities, can they be surprised that they are beginning to lose credibility—
Viscount Trenchard: My Lords—
Lord Jenkins of Putney: I shall give way to the noble Viscount in a moment, and I shall be happy to do so. But before I give way to him, I should like to say that it seems that we took nuclear weapons into the South Atlantic on this absurd venture and, in the absence of any denial, it is not surprising that other countries take the view that that is what in fact happened. Now if the noble Viscount wishes, I shall give way.
Viscount Trenchard: My Lords, I should like to suggest to the noble Lord, who has been a prominent member of a certain unilateral disarmament movement, that next time he visits Moscow he should ask loud and clear which Soviet submarine is carrying nuclear weapons when it goes near any Baltic nation, or any other nation. He will not receive a clear answer, and for the same reasons I shall not give him one. I do not think that the House will welcome the kind of propaganda that his questions serve—to try to discredit this country in areas where national security cannot allow a definite answer.
Several noble Lords: Hear, hear!
Lord Jenkins of Putney: My Lords, I do not expect to receive a straight answer from the Soviet Government, but I expect to receive one from the noble Viscount. This is an issue which is of very great importance, because if it is the case that there is no effective political control over the movement of nuclear weapons in the world, then the peril of the world is indeed great.
Viscount Trenchard: My Lords, the noble Lord is simply making up his ninepins in order to knock them down as he goes along. I said no such thing; and the political control that we have and the allies have over all of our defences and security is in my view 100 per cent. sound and permanent. The noble Lord is really inventing these assertions and questions for a purpose of propaganda which is not in the interests of this country.
Several noble Lords: Hear, hear!
Lord Jenkins of Putney: Well, my Lords, I think that we had better allow the world in general and the people in general to make up their minds about that issue. Personally I take the view that it is in fact in the interests of our people to know to what degree their security and safety is being prejudiced by the Government.
Lord Mayhew: My Lords, I wonder whether the noble Lord will allow me to intervene in order to say, as a former Navy Minister in a Labour Government, that of course the attitude that the Government are now taking is identically the same as that taken by the Labour Government when I was a Navy Minister.
Lord Jenkins of Putney: My Lords, the noble Lord will be the first to agree that that constitutes no excuse. Perhaps we may turn to another question, though I am perfectly willing to pursue this one myself. In the interests of the Government, who are clearly embarrassed by it, I shall move elśewhere. But I do not think that we have seen the end of this question. I think that the world is turning against the Government, and I believe that that is a factor in the change of attitude towards the actions of this country in relation to the Falklands. It is, I think, only a matter of time before our own people begin to discover the truth, and I believe that they will soon seek to dissociate our country from the self-righteous and repulsive jingoism which has characterised the British press during the period of the Falklands. The popular press did this country no good service during this period.
I am rather pessimistic about the future of the human race. When I spoke in these terms on 27th July in this Chamber the noble Lord who followed me, the noble Lord, Lord Murton of Lindisfarne, said that he did not think that I could believe what I said. I do not object to people quarrelling with what I say—it sometimes takes a little time—but I wish it were true that I do not myself believe it. I fear that I do. I think that we must get rid of the bomb, or the bomb will get rid of us, and more and more people all over the world are coming to this conclusion. It seems that the nuclear freeze now has majority support in the United States,
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which in terms of this country would mean no cruise and no Trident. In the United States the nuclear disarmament must, and will be, multilateral, or at least bilateral with the USSR. Disarmament must be preceded by reduction, which in turn can only follow a freeze. You have to stop escalating before you can reduce. The order is freeze, reduce, disarm.
Here at home the Church is moving in the direction of nuclear disarmament, with the possible exception of the right reverend Prelate the Bishop of London. The time will come when only the eccentric will still believe in nuclear weapons. We can be sure that when that time comes the present occupant of No. 10 will be numbered among the eccentrics, and I am sure that their voices will still be heard in this Chamber.
The Falklands conflict has shown that something that some of us have been arguing for some time is correct. It is that the invention of the PGM (the precision guided missile) has altered the nature of conventional war. It has turned warships, tanks, and even aircraft, into mobile crematoria in which the unfortunate crewmen are very likely to be burned to death. The PGM—the Exocet missile is an example—has altered the balance fundamentally in favour of defence, with the exception of the nuclear weapon and perhaps of chemical and biological warfare. It means that if these weapons could be outlawed, if we could get rid of nuclear warfare, biological and chemical warfare, we no longer need fear a conventional attack with ships, tanks and aircraft, for in the age of the PGM it would be madness to launch such an attack, which would be certain to fail.
It is a curious fact that the Government grossly overestimate the conventional threat of the Soviet Union in Europe and equally grossly underestimate Russian nuclear capacity to extinguish this country and its people. Why is this? I suggest that it is part of the nuclear dilemma pointed to by the noble and gallant Lord, Lord Carver. On the one hand, reliance on a nuclear response in Europe means that the nuclear weapon has become essential to our defence strategy. But this very reliance on nuclear weapons based in this country has attracted Soviet targeting on Britain on a massive scale. Therefore the Government must try to reassure the British people that Soviet aircraft and missile strength will not be used to anything like its full possibilities.
So the Government have got into the mess of insisting on the need for massive nuclear response to a weapon they minimise when talking in terms of civil defence. But the Government's civil defence asumptions are that the Soviet Union will not use the weapons it has targeted upon us in this country to anything like their full potentiality, whereas in Europe they posit a massive conventional attack which has never been likely and is now virtually impossible.
This really is absurd, and terribly dangerous; for nuclear weapons show every sign of getting out of hand, and once that happens, once this weapon gets into non-governmental hands—and this is becoming an increasing possibility—we are finished. Time is short, and the signs are not very hopeful. The number of Soviet delivery vehicles targeted on the United Kingdom, aircraft and missiles, is between 200 and 250. Most are missiles of various SS types, and many have multiple warheads. An attack of 222 megatons is

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well within the capacity of such a force. It constitutes less than a quarter of the Soviet's Western European deployment.
Such a figure has been used by the Government themselves. Yet Lord Elton, in a Written Answer to my Question on 28th October, said that a survival rate of 1 per cent. in London did not derive from any realistic attack assumptions. But that is not so. The attack assumptions of Scientists Against Nuclear Arms are strikingly similar to those of the Government themselves. Where the difference arises is in the estimate of the consequences of an attack on such a scale. The scientists believe that 72 per cent. of our population would be dead two months after an attack of a strength that the Government themselves believe to be perfectly feasible. It would result in the death of our nation, for, as the American doctors have said, the condition of the suvivors would be such that they would envy the dead. And nothing that the Government could do in the way of civil defence would have any considerable effect.
The Home Office has recently revised downwards its own estimates, but the scientists have used the United States estimates, produced by the United States Defense Department, and they have recently been revised upwards. Even on the smaller scale used in the Government's previous operation Square Leg, the difference between the two estimates means that the Government's figure of 1 million is increased to 5 million dead in London alone. The scientists believe that their estimates are on the low side, but in any event it is clear that the Government's pretence that some form of civilised society could emerge from a major nuclear attack is mere wishful thinking.
The Soviet Union realise this, too. They know they are in peril; they are fully aware of it; and they are anxious to reduce and eventually to eliminate nuclear weapons. We can negotiate with nothing but advantage to ourselves, for the precision guided missile provides protection without the awful moral dilemma af the nuclear weapon. Yet in these circumstances the noble Lord, Lord Skelmersdale, refused to print in the Official Report a statement which sets out what the Soviet Peace Committee are ready to accept. Of course, it is not an inter-governmental document, but one would have hardly thought that it was not worth exploring, containing as it does formulations proposed by the noble Lord, Lord Brockway, and accepted by the Soviet signatories.
My Lords, I conclude by saying this. There are already signs, as the noble Lord, Lord Brockway, has said, that the Soviet position is hardening, and if the present opportunity is lost all may be lost. I urge the Government to throw themselves on the side of peace before it is too late. Let them start by printing in the Official Report the 14 points my noble friend has drawn up. From that basis, let us examine the matter with care, and let us put it to the test. If the Government are prepared to do that, then I believe that they will be doing us more service that they are at the present time.
8.5 p.m.
Lord McNair: My Lords, perhaps I should make it clear that I am not speaking on behalf of my party. Whereas I found myself in agreement with my noble friend Lord Gladwyn and expect to agree with
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everything that my noble friend Lord Mayhew will say later, if he is in good form, that does not mean that either of them necessarily agrees with me. I want to speak about just one subject, one very small segment of the diplomatic horizon; namely, the Lebanon. In a minute or two I shall propose something that I believe we could actually do to improve the situation in that tormented country, but first I have to make one or two background remarks, in the course of which I shall distance myself somewhat from the polite conspiracy of silence in which so much of our press seems to be involved when it writes about the Lebanon.
That grossly fallacious cliché about the Lebanon having been the Switzerland of the Middle East has a lot to answer for. It is the sort of nonsense one would expect to find in a travel agent's brochure. In fact, now I come to think of it, that is probably where it originated. Just about the only thing which the inhabitants of Beirut have in common with the solid burghers of Berne is a very enviable ability to make money out of almost anything. But there the resemblance stops. It is difficult to think of any two countries which are politically more dissimilar.
The proposal which I shall shortly make concerns the Palestinians who are still in the Lebanon, and it is therefore necessary to etch in the relationship which has developed over these last 10 years between the Lebanese and the Palestinians. I referred earlier to a polite conspiracy of silence. It might perhaps better be described as an epidemic of tunnel-vision which I claim to have diagnosed on both sides, in the pro-PLO press, which has been making most of the running, and in the pro-Israeli press, which has been somewhat subdued.
For example, in the post mortem (and I use those words in full knowledge of what they mean) retrospective comment on the horrors of Sabra and Shatila, which must have shocked every single Member of this House, it has been fashionable to assume that those butchers, as they went about their work, were motivated by a desire to avenge the assassination of Bashir Gemayel. I do not believe it. That may have been, as it were, the trigger, but the deep underlying motive is far more likely to have been the memory of kinsmen of their own murdered in an even bloodier massacre at Damour in 1976, when the roles were reversed. And that massacre, that Palestinian outrage, was probably in revenge for some earlier massacre the other way round.
In other words, what we face is nothing less ugly, nothing less frightening, than an ethnic blood-feud which is raging in a country in which the tradition of the blood-feud is still, to this day, more honoured in the observance than in the breach. Who started the vendetta is a sterile question. Its distant origins, of course, go back at least to Black September, a month which turned out to be just as black for the Lebanese as it was for the Palestinians, and which was hardly the fault of either of them. So do not let us waste time on arguing about who started this. Let us face the more fruitful question of how we can stop it.
I have visited the Lebanon only twice, but my second visit was as recent as July of this year. Conversations with as many Lebanese as I was able to buttonhole have convinced me that the Palestinians will never be either safe or welcome in the Lebanon. I am also convinced that the Lebanon will never be

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what we all want it to be—a peaceful, unified and preferably democratic country—as long as it has this Palestinian problem superimposed upon all its homegrown problems, which, God knows, are formidable enough.
I therefore suggest that, in order to protect the Palestinians against further massacres, and in order to relieve the Lebanon of a burden it cannot support, in principle the Palestinians should be enabled to leave the Lebanon en masse. Put like that, I realise that this suggestion probably sounds drastic and impractical. But closer, more detailed examination I think makes one ask, although it is drastic, do not the events of September 16th to 18th require some drastic remedy? It may be drastic but I do not think it would prove to be altogether impractical.
First, however, in order to make it precisely clear what I am and what I am not proposing, may I put my suggestion into formal "resolutionese" language. I ask that the Secretary-General of the United Nations should be asked, first, urgently to study the feasibility of removing from the Lebanon all Palestinians who are willing to leave there and of transporting them, without prejudice to their eventual destination, to any country willing to receive them; and, secondly, to implement such a project if found to be feasible. I must emphasise the two important qualifications contained in those words. First, it can only apply to those Palestinians who are willing to leave; there is no question of a Stalinian mass deportation; and, secondly, it is without prejudice to their eventual destination. In other words, in the great homeland dispute this proposal is neutral.
I believe that everybody ought to have somewhere that he can call home. I want to see a Palestinian homeland but it can only come to pass, and will only come to pass, in such a way and at such a place that it does not threaten the existence of Israel. I simply seek to ensure that, when that intractable problem has been solved, and when that great day dawns, as many Palestinians as possible will still be alive to greet it. May I now examine this proposal in greater detail? What about numbers and destinations?
Nobody knows how many Palestinians there are in the Lebanon. The Government do not know, UNRWA does not know, and the Palestinians themselves do not know. The most authoritative guess I have been able to get is that there may be 400,000-plus. From this formidable figure, we can at once subtract a biggish number who will not wish to leave. There are many, many Palestinians who are so well integrated into the economy and society of the Lebanon that they would certainly choose to stay. And these, of course, being well established and being dotted about inconspicuously here and there are not in the same danger as the refugees. Next, a smaller number, I believe, would be admitted into Israel proper, or the West Bank or Gaza, on compassionate grounds—next of kin, elderly dependent relatives and so on. I have solid reasons for believing that this would be possible, although the number would not be very great.
Next, a larger number surely could be offered at least a temporary asylum for purposes of family reunification in those Arab countries to which their menfolk, their breadwinners, were evacuated under the Habib arrangements. Here, perhaps, one should
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add that there are still armed Palestinian units in the North and in the Beka'a who will have to leave, along with the Israelis and the Syrians, if the Lebanese Government is ever to have a chance of reasserting its authority over its territory. So there will have to be a "Habib Mark II" plan which will increase the number of dependants who would come into this category.
Last, the residue, who do not come into any of these former categories, would mostly have to go, I imagine, to Syria and to Jordan. And I recognise that our greatest difficulty may well be in overcoming the reluctance of those countries to accept any more Palestinians. They would certainly need to be assured that UNRWA would be on hand to arrange for their reception—as it certainly would be if the world would give it the necessary funds. Before leaving the question of destinations, I should add perhaps, although not with any very great hope, that if Western countries, especially the USA, could bring themselves generously to offer residence permits to Palestinians, there would be no lack of takers.
And now to logistics. Let us suppose that we were left with as many as 150,000 men, women and children wanting to be transported a few hundred miles. Is that such a daunting prospect for the United Nations? It is the sort of problem which even a non-super-power like ourselves would tackle unhesitatingly if it felt it to be in its national interests. Surely, the resources of the world are equal to that. Break it down how you like—a fleet of 100 50-seater buses would need to make 30 trips with lorries in support for the transport of household goods; or a fleet of 25 300-seater aircraft would need to make 20 flights. Of course, there is no shortage of shipping in the world. And, last, there would be a substantial number of Palestinians who, given safe conduct and a residence permit, would make the trip in their own transport.
To sum up, I am only suggesting that the Secretary-General should be asked to study the feasibility of this idea. But, of course, somebody has to ask him to do so. Could it be possibly Her Majesty's Government? Of course, I am not expecting the noble Lord, Lord Belstead, to say, Yes, tonight, but I am hoping he will not say, No. Could he, I wonder, have it considered by some of his officials? If some drastic scheme such as I have put forward is not put into effect, we shall see what we shall see, and I fear very much that we shall not like it. But if we could do this, if we could put it forward and press it, and if it proves to be possible, we would win the gratitude of not just the Palestinians, of not just the Lebanese, but of everybody, everywhere, who values human life above everything else.
8.18 p.m.
Baroness Elliot of Harwood: My Lords, I have listened with great interest to the speeches in this debate and I think that many of them have been very remarkable. I think that the speech that we had from the noble Lord, Lord Home of the Hirsel—one of the wisest people we have in the country today—was of enormous interest and great importance. I should also like to say, as I had intended to talk a little about it. how much I agreed with everything that was said by the noble Lord, Lord Wells-Pestell, on the subject of the State of Israel. I endorse everything he said. I will not repeat any of it, but I should like to say here and now that what he said and the way he expressed it was

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entirely in accord the views that I myself hold—and I have had quite a long experience of following the interests of the State of Israel.
In my very short speech this evening, what I really want to talk about is the great importance of our membership of the EEC which, so far, has not been spoken of very much. I believe that one of the disadvantages which we suffer from at the present time is that the media, whether the newspapers, television or radio, so often criticise everything that happens in the European Community. They fail to tell the public of the great advantages which the Common Market brings to us all.
First, I can never forget the fact that the Community brings together European nations which in our own lifetime have twice had great and terrible wars. This will never happen as long as the European countries remain together and work together in the policies which we can all help to create. Of course, it is not easy and there will be disagreements. There are disagreements at the moment on the subject of fishing. However, with perseverance and patience we can achieve, and have achieved, much in the years since we have been members of the Community.
I should like to suggest that we may press one or two subjects particularly in the Community. I should like to see more development go to the regional policies of the Community which improve conditions of housing, transport, employment, training and various developments along those lines. The industrial recession affects all the countries of the EEC as well as ourselves. I should like to see the training of young people for the new techniques of industry and commerce developed still further. The twin evils of inflation and unemployment can only be met if the nations bring down inflation at the start—and we in this country have done that more successfully than any other country—and also concentrate on new developments, consulting the consumer in the sense of trying to develop new industries which the consumer wants and where there are new markets to be explored.
We have done a lot in this country to bring down inflation—more than any other member of the Community. All we all want is new industry, new techniques, based on the demand from Europe and other parts of the world. It is along these lines that the regional and social policy could be developed and the European Commission can draw together experience and knowledge on these problems. The European Centre for the Development of Vocational Training, backed by member states, should be able to help to find out developments in the Community market as a whole and to further these plans and possibilities for the benefit of the whole Community, but more particularly young people. Training these young people for future developments is one of the things we should press for very strongly.
Here in this country in the Queen's Speech we are told that we are going to have a large training programme for young people. I hope that it will be very strongly supported and will lead to the training of people for the next decade (which I hope will be more prosperous than the present one). One of the advantages of being members of the Community is that we help to bring about the growth of industries, and one initiative which I know has been criticised by
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some people is the help which the Community has given to the agricultural industry. It may be that more money than we ought to spend is being spent in that way, but there is no doubt that it has brought about a revolution in agriculture in many countries—not least our own.
Although we are suffering at the moment from overproduction, it is better to have a surplus of food in the world than a shortage. We in our agricultural industry have had enormous help from the EEC. The grants that we received in these past years improved our land, whether by drainage, fertilizers, lime and slag, machinery, new methods of cultivation, or advice through the Farm and Horticultural Development Scheme and our own department of agriculture. That is something which nobody stresses sufficiently. You always hear of too much money being spent on agriculture but nobody tells you of the extraordinary improvement and development that has taken place as a result of these grants.
I speak as one who has been farming for nearly 50 years. I can testify to the revolution which is taking place and which has led to us having the most efficient agriculture in Europe. All this has been enormously helped by grants from the EEC and the Common Agricultural Policy. It has led, as I have said, to problems of over-production; but I believe that we can improve our selling policy and get a better distribution of food not only in Europe but in other countries by a closer study of marketing and studying consumer demand.
I was impressed a few weeks ago when four of your Lordships (of whom I was one) made a one-week tour of some of the areas of Europe which had been helped by the EEC. We went to the South of Italy, which was a less favoured area. We visited Bavaria; Southern France, Provence. We saw there that, by the co-operation between the farmers, and the development of marketing in the subjects which are common there—namely, the production of wine, and milk and the growing of fruit—they have managed to do much to improve their distribution and, in consequence, the consumption of their production. We can learn from Europe, just as they can learn from us where our production of cattle, sheep and cereals is probably better than theirs. Without our membership of the Community, without our close association with the CAP, we should lose out on so much. I am convinced that, from all the points of view that I have mentioned—and there are many others—the Government are absolutely right to remain a leading member of the European Community. I hope that at no moment in our policy shall we fail to support and to lead in the Community, because I am quite certain that it is one of the really big developments that has happened in the past 10 years.
8.27 p.m.
Lady Kinloss: My Lords, I do not wish to follow other noble Lords who have spoken on defence, although one cannot entirely disentangle it from foreign affairs. I wish to speak only on a limited range within foreign affairs. In 1950 His Majesty's Government was kind enough to send me to the School of Oriental and African Studies in London to learn Swahili preparatory to 10 years with my husband in what is now Tanzania. My travels took me to Zanzibar

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and Kenya as well, and later we went to Aden for several years. It was therefore a great pleasure to me to be able to go to Kenya for a month this summer, very shortly after the attempted air force coup. The origins of this coup are still partly obscure, but it has left Kenya virtually without an air force and made her more vulnerable than before to the notorious trilateral alliance of friendship and co-operation between Libya, Ethiopia and South Yemen.
First, I have no doubt whatever of the warm and friendly feelings of the people of Kenya towards ourselves; and many, as soon as they knew one spoke their language, were overwhelming in their welcome. In particular, this was noticeable on Lamu Island, where my husband and I spent most of our time, and on Pate Island, where we were made most welcome. I had no doubt that on the Kenya coast there is a deep loyalty to President Arap Moi's government, and also of their apprehension of the danger presented by the trilateral alliance of friendship and co-operation. It would give me great comfort if the noble Lord who is to reply can say that we are ready to provide Kenya with facilities for any training schemes that she may desire for her reconstituted air force.
Of course one can detect behind this Libyan activity the hand of the USSR and its puppet, Cuba—as also behind the projected Mauritius, Seychelles, Malagasy alliance. Together, the trilateral alliance and the projected alliance pose a threat to the security of our oil routes and to the stability of the Governments of the Sudan, Somalia, North Yemen, Kenya and Uganda. Perhaps also one should add Tanzania, where President Nyerere has announced that this is his final term of office. In spite of asking many different people, including Tanzanian friends, I have not been able to discover the name of any possible candidate as his successor as president who lives in Tanzania. This again is a weakness which must be noted. It worries my friends as much as it does me. All these countries and, indeed, India have but one desire. It has been made explicit by India: their wish is that the Indian Ocean should be made a peace zone. This is something, I venture, which we must support, both in the interests of our friends and of ourselves.
What can we do for our friends? I have mentioned the School of Oriental and African Studies. The recent university cuts have seriously reduced the number of lecturers and students, and especially those students from the poorer countries overseas, who cannot afford to come. Does this really help anybody? May I also ask how many within our foreign and Commonwealth service can speak Swahili, which now, after Arabic, is the most spoken African language?
I had a conversation with an officer of the World Bank who was most concerned about the financial state of Kenya, which is dangerously near the brink of collapse. Surely we must keep stable or increase our material and technical aid and friendly support to the countries of Eastern Africa. It is clear that Russia is attempting to set up a series of client states throughout the world. We gave these people independence. We ask nothing but friendship. Their independence is threatened, and we must be alert and ready to do anything we can that they may desire to help them.
All these problems are fraught with the greatest difficulty. I see no easy solutions. I can only say
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"Istakfar allahi"—as we say in Swahili—"I take refuge with God".
8.33 p.m.
Lord Paget of Northampton: My Lords, I want to make two short points and one slightly longer point. The first concerns Zimbabwe. When this Government came to power there was a multinational Government in Zimbabwe under Bishop Muzorewa which had recently been confirmed by quite a convincing election. Lord Carrington, who was then Foreign Secretary, refused to recognise that election and insisted on another which quite inevitably, we all knew, would return the man with the biggest clout. That was Mr. Mugabe, the leader of the Shonas. When he got back there was, of course, a tribal war. It has been running ever since. It was foreseeable and inevitable.
That is not what I am really concerned with at the moment. But I am concerned about our unfortunate air force officers. We asked them to help the Mugabe Government. We asked them to accept Zimbabwe citizenship which Zimbabwe felt necessary—and understandably necessary—for the leaders of its armed forces. Those men—distinguished officers, British in reality—have been arrested, tortured and held incommunicado in order to try to get them to confess that they conspired to sabotage their own planes. The thing is quite too fantastic for anybody at all to believe it. Are we submitting to this? Are we going to supply aid—even a pennyworth of aid—to Zimbabwe until those men are released? I very much hope not.
The next point I want to make is with regard to the Falklands. I certainly agreed with the noble Lord, Lord Gladwyn, when he referred to the astonishing luck which we had. That in no way derogates from the great courage and professional skill which we had, too, but to get away with it was astonishingly lucky. I hope we shall learn the lessons. In a general way. one learns far more from what one does wrong than from what one does right.
The first lesson which I think we should learn lies in the field of defence. The day of the surface ship is over. The advantage of the two-dimensional vehicle, either the submarine or the aeroplane, in combat with the surface ship has moved quite enormously. We knew—I do not say that Mrs. Thatcher knew, for at that point she was determined and certainly was not interested in any facts that would affect her decision which was already taken—and the Navy knew all about the Exocet. Well, not all about it. The only thing they did not know about the Exocet was that two-thirds of the warheads would not go off. That was the important fact. If they had gone off, then the disaster of first magnitude to which the noble Lord, Lord Gladwyn, referred would have certainly overtaken our fleet. But two-thirds of them did not go off.
The second lesson which I think we ought to learn is that the responsibility and the authority of the Sea Lords and Air Command should be increased so that never again will a Prime Minister, described as the only hawk in her Cabinet, be in a position at 12 hours' notice to commit a force in the reckless manner in which this force was committed. We must never push our luck to this extent again. It came off this time and it is marvellous and encouraging that it did, but never again must we be in that kind of position.

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Lastly, there is a political lesson to learn, the very old one: not to commit ourselves to untenable positions. Those are positions from which one must extract oneself before the challenge becomes too humiliating. Our great and very distinguished feat of arms—do not let me detract from it; I enjoyed it and it was a tremendous performance—has left us with a prestige commitment which was untenable in the first place and which will become more and more untenable as Argentinian arms techniques advance and as, within certainly the next two or three years, she becomes nuclear armed. When one talks about the inhabitants of the Falkland Islands, even now it would be much cheaper to give each family £1 million to go and settle wherever they fancied in the world. Believe me, families with £1 million in hard currency are very welcome anywhere they like to settle. Even today that would be much the cheapest solution.
Now may I turn to the point with which I wish to deal a little further; namely, the Middle East. We are under great illusions in our part of the world as to what the Middle East is really like. The Middle Eastern question is not a dispute between Arabs and Jews; it is a great deal older than that. It is a division between the Persian Aryans and the Semite Arabs; it is a division between the Sunni and the Shi'ite; it is a division between tradition and revolution. All these divisions have held the Middle East in chaos for a thousand years.
There is nothing new in this. Within that chaos the assassins are hard at it. The Crusaders knew them. Indeed, the Assassins added their name to our language. They are a movement of Moslem heretics. They have worked all the time over the past 1,000 years within the Moslem faith. We have seen them in the Sudan. We have seen them wherever we have been—these Moslem heretic assassin groups, devoted to a religious and fanatical belief that they will win eternal life in heaven if they obey the command to assassinate. Fear of the man who controls the assassins has guided much of the Middle East policy.
The PLO are assassins. Not all of them, of course, but they are masters of the assassins. It is the assassin group within the Palestinians that controls, rules and conducts them and to a considerable extent intimidates, too, the rulers of the Arab states. That is what one is up against. In 1948, they found themselves either leaving or being driven from Palestine. There was not a single Arab country willing to take them in—not one. Egypt would not take a single one, because the Arabs understood the assassins. They would not come out and deny them as patriots and their religion, but they just did not want them. The only country which had them was Jordan, because they were there. It did not take very long before Jordan expelled them, if Jordan was to live. Then they were driven into the Lebanon and, like cuckoos in the nest, they took over Lebanon—and, oh dear! were they hated. They were hated worse than the Jews. The massacres we have been hearing about were the Lebanese people seeing their chance. Nothing was clearer in the Middle East than that there could be no peace while the Lebanon was an assassins' base. Mr. Begin had the wisdom to see this and the courage to deal with it. That is the real story of what has been happening.
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Again, I have been critical of the noble Lord, Lord Carrington, although like everyone else in your Lordships' House, we both like and admire him very much. But I did not admire him as a Foreign Secretary. At that time he was chairman of the Common Market Foreign Ministers Association. He came to the astonishing decision, to my mind, that the Common Market should have a foreign policy. I do not think that a trading committee is very good at having a foreign policy. At Venice it appeared that they did have a foreign policy. It became Common Market foreign policy that Israel should accept not only an assassins' state on her borders but also within her borders. The Common Market who put forward that policy did not have a single member prepared to commit a soldier or a guinea to supporting it. I do not think that sort of antic from a Foreign Office is very helpful. All it does is to get the contempt of the people you seek to support, without being prepared to provide anything more than support, and the rage and fury of the other side. Never were relations so bad between us and Israel as when this policy was produced. It is also profoundly annoying to the people who are really carrying the baby and taking the responsibility for what is happening—and that was the Americans. General Haig was very angry indeed and it led very much to his resignation. Now we are losing our best friend there.
The Israelis went into Lebanon, rightly, to do what was necessary. The assassins had to be destroyed. In a brilliant military campaign they were driven into Beirut. Then, as has happened so much, there were the screams for a cease-fire and a plea not to storm West Beirut. Then there was the reckless policy of trying to persuade the Arabs, each in their turn, to take their bodies of assassins. The Arabs objected very much, and very wisely, but eventually they had to get in, and now they are very busily trying to keep those assassins isolated. They can play with guns inside their camps but cannot do anything else, and it will not be long before we are hearing about assassinations of Palestinians by their Arab hosts. The poor devils—if they cannot go where they want then they will survive where they are. It is like the grey squirrel; if he gets about he will always assassinate the local inhabitants. There is only one way of dealing with him and that is by extermination. That is the position with these bands of assassins which we are distributing around the Arab world.
Lord Hankey: My Lords, if the noble Lord, Lord Paget of Northampton, will allow me to intervene, he has made a very interesting speech about the Arab-Israeli conflict, but what about Begin's intention to assume total control of the West Bank and probably of Gaza as well? What is going to happen to the very great number of Palestinians who live there? I do not believe that they are all assassins.
Lord Paget of Northampton: My Lords, as far as those people are concerned, first there is no doubt in my mind that Begin will take control of the West Bank, and I have not the slightest doubt, either, of his right to do so if he wishes Israel to live. That West Bank is absolutely essential to military control and defence. With regard to the Palestinians living there, by whom are they going to be governed? Will they be governed by Israel or will they be governed by the

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assassins? If they are to be free from fear and the assassins within them—and this has always been the difficulty wherever they have gone in the Arab world—it will mean very tough ruling indeed of the West Bank. This is the grim alternative—military control of the West Bank. Israel's life depends upon it. It is not realised how thin Israel is there, and how completely vulnerable is her commercial capital to guns from the West Bank. She is within artillery range of the West Bank. The situation is really totally untenable militarily.
Again, any nation that tolerates an assassin society within its borders either destroys those assassins or is destroyed itself. This is Israel's situation. I believe that Israel will live. I believe that she has the will to live. But this is certainly a time when she needs to count her friends.
8.49 p.m.
Lord Weidenfeld: My Lords, I would like to join with others in congratulating the maiden speech of the noble Lord, Lord Maclehose of Beoch, whose great distinction and knowledge of an area of mounting importance to the world is a great gain for your Lordships' House and will enrich future debates.
Of all the five rounds in the Arab-Israeli conflict, the Israeli operation in the Lebanon has proved, and will continue to prove, the one most passionately debated. There are basically two plausible attitudes that one can take; complete denunciation without regard to root causes and outcome, or justification on grounds of pre-emptive self-defence. What I think is not tenable is to denounce the invasion and then seize on some of the results and hail them as openers of options and fresh opportunities. This is roughly what Her Majesty's Government and the Labour Party have done.
I myself incline to believe that the Lebanese operation will have a cathartic effect upon the region's problems, that the net gains will outweigh the net losses and that a degree of cautious optimism is thoroughly justified. A week in Jerusalem talking to leaders of Government and Opposition, and a brief visit to East Beirut from where I have just returned, have done nothing to change my mind. There is a deep awareness in Israel of the seriousness of what has happened in the Lebanon, and in the Middle East as a result. The man in the street, the soldier on leave, the decision-maker behind his desk, they all share in the anguish of participating in a war costly in lives and demonstrably vicious in its exhibition of man's inhumanity to man.
Never has a war been fought in so glaring an arc-light of media coverage and attention to gruesome details of sectarian hate; while a world of onlookers shuddered, it was an equally severe shock for Israeli civilians. It was a culture shock for many soldiers. The raw recruits of the kibbutzim, the youngsters fresh from school and the older reservists used to waging defensive wars in battle formation, suddenly came face to face with complex patterns of blood feuds, gang warfare, tribal vendettas—forced to intervene here, to strike there, to choose and arbitrate between remorseless enemies around them.
As a demonstration of Israeli democracy at work the press and television journalists of Israel, far from lagging behind, have been in the forefront of the investigation of transgressions, wherever they
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occurred. Of course, there has been dismay about what may have been felt to be the over-reaction of the foreign media, a strong feeling that double standards were at work which have defied all codes of fairness. But, even so, no attempt was made to minimise, in terms of absolute condemnation, the horrors of Sabra and Chatilah.
I say absolute condemnation because it might be tempting for some friends of Israel to compare her code of practice with that of others, her adherence to law with the rule of the rack and the reign of the thumbscrew in neighbouring lands, the slaying of thousands of President Assad's opponents in Syria, the killing of prisoners of war in Iraq and Iran. Jews and Israelis are as sensitive as anyone when it comes to weighing the statistics of death and destruction. The judicial committee in Jersualem now in session will report by the end of January. It has already shown, by its sweeping powers and by the integrity and toughness of its three judges, that it means business and that its results will be impressive and conclusive. To prejudge these results now is grossly unfair. To speculate about the fate of certain public figures sub judice only means indulging in that basest of all political blood sports—character assassination.
The first tangible net gain of the campaign has been the destruction of the military infrastructure of the PLO. The dispersal of the High Command and of the principal cadres of the PLO's military wings has made that organisation inoperative in terms of military confrontation with Israel, while the dispersal of its political bureaucracy among various Arab states of diverging interests has also, I submit, made the PLO politically far less effective. No amount of accolades, red carpets, joint press conferences or private audiences with leaders, temporal or spiritual, can alter this significantly.
The second tangible benefit of the Lebanese campaign is that we can now look forward with greater confidence than before to a restructuring of the Lebanon as a state with an independent Government. When the procedural wranglings are over there is every chance that the remaining PLO militants, Syrians and Israelis will leave the country by the end of the spring. Everyone I spoke to in the Israeli Government assured me that Israel is anxious to withdraw behind the international frontier. Of course, a security arrangement for Southern Lebanon with the Lebanese is an important pre-condition, and one which would be of benefit to both countries and to the region as a whole. It could be an extension of the original armistice agreement of 1948, or a special compact between Beirut and Jerusalem with American co-operation, but, whatever its status, the agreement must ensure that the Lebanon will not become once again a base for operations against Israel, and thus guarantee in turn the Lebanon's immunity from renewed Israeli incursions. Let those who still question the legitimacy of the Lebanese operation ponder on these figures. Israel captured intact, or destroyed, close on 500 heavy artillery pieces, guns, Katyuschas, missile launchers, et cetera. The whole of the British army in 1982 has, according to the Institute of Strategic Studies, 875 comparable weapons.
Before the foreign forces leave the Lebanon a harsh and hazardous winter lies before us—hazardous because I fear the clans and factions in the Lebanon

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still have men within their midst with vengeance in their hearts and murder on their minds; and harsh because tens of thousands of Palestinians in the South are short of shelter and clothing. At the moment it is the Israeli Army who are pressing for durable houses, while the Lebanese wish to provide tents and indeed are bulldozing existing makeshift dwellings of the displaced Palestinian families. I think the European Community should make its voice heard and seek to convince the Lebanese Government that, whatever the ultimate settlement of the Palestinians, a goodish proportion of those who wish to remain and become permanent citizens should be allowed to do so.
Israel's security arrangements with the Lebanon may be a first step towards normalisation. Those who are impatient for complete peace must understand the delicate position of President Amin Gemayel. He needs the goodwill of the Syrians, the money of the Saudis, the confidence of the Arab world, to assume his country's habitual role as the premier trader and broker in the area; but he must not overdo it. To be regarded as the ally or protege of Israel is one thing. To denounce the Jewish state from the rostrum of the United Nations as the sole perpetrator of woe and evil is another. Bluntly, for all one's sympathies with the dilemma of the moderate Arab, has the time not really come when the gulf between overt hostility and whispered recognition, between forensic fireworks and furtive friendliness, could be narrowed?
When President Amin Gemayel assigns to Israel the guilt for all that has befallen the Lebanese, does anyone in the know really believe him? How many Arab leaders are ignorant of the fact that it was the President's late brother who, as long ago as 1975, urged Israel to intervene? On the eve of the civil war he told Shimon Peres, then in government, "You will have to march into Beirut sooner or later, so why not sooner". Peres declined. I submit that, if the Israelis suddenly decided on unilateral withdrawal, the Lebanese leader would be a desperately worried man.
To those Middle East leaders and their friends abroad, Arabs and Arabists, who point out that in politics excessive courage is a foolhardy and lethal luxury, and cite the murders of King Abdullah and President Sadat, one is tempted to predict that in the annals of history the risk-takers for peace will not only make a better moral showing but will also be seen to have achieved more in practical terms than either fainthearts or rejectionists.
The hope for a workable settlement in the Lebanon, however fragile, the destruction of the military infrastructure of the PLO, and the withdrawal of all foreign forces should pave the way for a resumption of the peace process and bring the parties to the conference table. The Reagan plan has been commended by all sides here tonight in your Lordships' House, and elsewhere in the country. It is a subtly balanced, politically mature, constructive document. It has the imprint of Reagan and Schultz, but there are echoes of Gunnar Jarring, Rogers, Allon and plenty of Kissinger, all encased in the framework of Camp David. At its most ambitious, it is a discourse on methods and prescription for ultimate peace. At its most tentative, it is a position paper of American preferences.
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The surface reactions to the Reagan plan showed subtle differences. The Israeli rejection was instant and complete. The Arab reaction at Fez was one of muted approval, though the reservations expressed seemed to negate the very essence of the content. The crux of the Reagan plan, by which it stands or falls, is whether King Hussein can speak for the Palestinians. If he can, if he is prepared to enter the conference chamber accompanied by Arab leaders of the West Bank and Gaza who accept the reality of Israel and its right to live in security, the Israeli Government will, I am convinced, sit down and negotiate. The King still has enormous prestige and the fact that he did not follow Sadat at Camp David Mark I strengthens his hand, for he has escaped the stigma and opprobrium of the Arab world. Yet, unlike others, he has never been a faint heart nor a rejectionist. His position was far more difficult than, say, that of the Saudis, who in my own opinion, could have been much more positive peacemakers in the past.
King Hussein has been explicitly denied a mandate to speak for West Bank Palestinians by the Arab summit of Rabat in 1974, but, once he is reconfirmed as spokesman for Arab Palestine, his role could be decisive. In such a constellation, my understanding of the attitude of Israel is this: they would argue that so far we have had statements of different positions or preferences. Most Arabs want a Palestinian State, and some would opt for a linkage of a West Bank-Gaza entity with Jordan—an option which is favoured by Washington and, to a large extent, by the Israeli opposition parties. The Begin Government would prefer no transfer of West Bank and Gaza sovereignty. Indeed, some of its members would even want outright incorporation. These are all different positions, options, and they are all open for negotiation, according to the Israelis, without precondition, within the framework of Camp David and after a transitional period of three to five years of gradual self-government.
To those who may ask why Camp David Mark II should be any more positive and yielding than its predecessor, the answer is, I think, the Lebanon and the diminished role of the PLO. The Israelis are hopeful that a new leadership of the West Bank will emerge. They say there is already quite recent evidence to this effect. To the hardened doubters anywhere, I would submit this: is it not reasonable to assume that the people on the ground would wish to be represented by their own leaders, free from threat and intimidation, in the knowledge that King Hussein is on their side? Would they not prefer their native notables to those exiled veterans of a hundred ambushes, kidnaps and hi-jacks who have failed to recover a single inch of territory or particle of independence? However, should the PLO leadership in exile decide to abjure its covenant and accept the reality of Isreal in all formality, it should not be excluded from the conference table, but should sit side by side with the local leaders of the West Bank and Gaza and those from across the Jordan river.
Where Europe and Britain can help is in bringing about this stage by encouraging King Hussein, by encouraging the Palestinians on the ground and those PLO leaders who are in favour of peace, and by reassuring Israel of their good faith.

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Britain has no shortage of channels and links with the Arab world, but it has some ground to recover if it wishes to regain its influence with the Israeli Government, whose goodwill is quite pivotal in this enterprise. Our relations with Israel, always on a zigzag course, have, since Menachem Begin has been in power, resembled a snakes and ladders board—"up" in the era of James Callaghan and David Owen, "down" under Mrs. Thatcher. In spite of the right honourable Lady's well-known sympathies for Israel, she has lost many friends in Jerusalem and, while Lord Carrington's brief visit did much to restore the ties of better days, his successor, the present Foreign Secretary, admittedly a newcomer to the Middle East, seems to have plunged relations to near freezing point. I am told that of the 30-odd conversations that the Israeli Foreign Minister has recently held at the United Nations, the talk with his British counterpart, in tone even more than in substance, was perhaps the chilliest.
The resumption of the talks is the time, and the conference table is the place, to begin to exert all our persuasive powers and influence with the parties. That will be the testing time and testing place for Israel to show that, relieved of immediate threats to her security on her northern as well as her southern border, she can bring sacrifices to bear and make substantial concessions.
This will be the opportunity for the Palestinian Arabs to redress the errors of 1947, 1967 and 1973 and, for once, to improve rather than worsen their position by replacing the three "Noes" of Khartoum—no recognition, no negotiation, no peace—with their positive opposites.
What Britain and the Europeans must do requires true even-handedness and a sensitive awareness that in approaching either side one is dealing with suspicious minds, fine-tuned ears and outraged self-respect. To the Israeli consensus the mere mention of a Palestinian State, whether by means of a Freudian slip or pious wish, is just as obnoxious as are the terms Judea and Samaria or a roll-call of Jewish West Bank settlements to a forum of Arab nationalists. Yet one day, when the dust has settled, perhaps the right of Palestinian Arabs to political self expression and the right of Jews to settle anywhere within historic Palestine must and will be reconciled.
The Reagan plan, by distancing itself from the West Bank Gaza State, does not imply a denial of Arab independence and political self-expression. All it does is underscore the perception that there is no room for more than two states—one Jewish, one Arab—in the whole of Palestine on both sides of the Jordan.
Only a large enough territory offers its inhabitants security, the room to develop and deploy resources and to achieve security for itself and for its neighbours. The West Bank, linked to Jordan, provides space for settlement and expansion and allows for a symmetrical solution of the vital security needs of Arabs and Jews. The symmetry lies in the fact that as soon as peace occurs—breaks out, as it were—there will have to be open borders, because the only way for the citizens of Nablus and Hebron to reach their relatives in Gaza, Nazareth, Bethlehem and East Jerusalem would be through Israeli territory. Access to free ports in Haifa and Ashdod would be implicit. In exchange, Israel could justify her right of surveillance and protection against surprise attack, through having
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strong points on West Bank territory up to the Jordan River. Such arrangements, for which there are precedents elsewhere, are one thing when they affect only a very small part of a large commonwealth, and another thing when they mean demilitarisation of an entire state.
We must calm tempers and not consciously, or inadvertently, arouse passions by arousing false hopes. It is puzzling why so many European leaders from Pym to Palme and Pertini to Papandreou still cultivate the legend of the PLO's political gains in Beirut when, in fact, it is the manifest loser. Whether the Reagan plan succeeds in its present form or in a new variant, if the parties can be brought to the conference table, then not only will some of the suffering and horrors of the war in the Lebanon not have been in vain, but an opportunity—perhaps the last opportunity for a very long time—will be within our grasp to end the "Thirty Years War" of our time.
9.9 p.m.
Lord Hankey: My Lords, we have listened to a very interesting and constructive speech by my noble friend Lord Weidenfeld. I do not want to go further into the middle East question today, but I should like to make two points. First, I hope that Lebanon—a most beautiful country with delightful people—will be able to progress now that it is liberated from the terrible scourge of the armed Palestinians who have led that country a most terrible dance.
Secondly, I want to stand up for my noble friend Lord Carrington, because I think that he was quite right to see the danger coming and to try, together with other European colleagues, to find some sort of way of making a negotiated solution by drawing the Saudi Arabians and others into this terrible question. I do not see how else the process of Camp David could be carried forward. Indeed, at that time I recall that the United States had not got around to formulating their policy under their new president, and that there was really a diplomatic vacuum in the Middle East. I think my noble friend Lord Carrington was absolutely right to do what he did and he had bad luck to fall through the thin ice as regards the Falklands. In my view he was a very good Foreign Secretary.
That brings me to the Falklands. I want to try to draw a few conclusions about the Falklands not locally—because we still await the Government's paper—but against a worldwide background. The first point is that somehow we must avoid letting potential aggressors misread our intentions or underestimate our strength. The noble Lord, Lord Home of the Hirsel, made a very good point in this connection. I think that President Galtieri was sincere when he said that he never expected us to react forcibly to the Argentinian attack. Many of the Argentine prisoners that we took apparently said they had been told that there would be no fighting. Undoubtedly Senor Costa Mendez, the Argentine Foreign Minister, has a terrible responsibility in this respect. However, perhaps our announcement of the removal of HMS "Endurance" came at a particularly unfortunate moment, and, anyhow, I do not think that we ought to have said that we were going to remove it.
This is a general question of making our own position and strength sufficiently clear for our intentions not to be misunderstood. I do not think that

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Hitler and Ribbentrop ever thought that the British and French would do more for Poland than they did for Czechoslovakia. After being well treated as German Ambassador in London, Herr von Ribbentrop, who became the Foreign Minister in Berlin, was certain that after the defeat of France, the British would make peace. Perhaps that was one reason why Hitler was quite unprepared in the summer of 1940 for an amphibious operation across the Channel. I never could understand why he was not ready. The magnificent gallantry of the RAF saved us anyway; but that does not affect my main point, that Hitler very dangerously underestimated our power, our guts and our determination. I believe that that was one contributory reason why he started the war. The other reason, of course, was that Soviet Russia helped him to divide Poland.
Therefore, my first main conclusion is that if we appear to our enemies to be weaker or less determined than we really are when it comes to the big crunch, a war may start almost by mistake. This problem poses very real difficulties for the Foreign Office and the Ministry of Defence. We must indeed try to settle international disputes by negotiation and show ourselves to be reasonably reasonable. You cannot ask allies and friends across the world to aid and abet an attitude of total intransigence. But equally the diplomats—and this hinges on what my very distinguished noble friend Lord Maclehose was saying—need firm backing from the Government and, in the Falklands and places like that, from the Ministry of Defence just in case things go wrong and in order to make sure that the other side does not think that it can take matters into its own hands as Galtieri did.
Looking back on 38 years as a diplomat, I think also that we want a bit of "mum and dad" about it. Mum can be reasonable to Johnnie, kindly and understanding, but when it comes to the crunch, she says "Gosh, Johnnie, if you do that, look out what dad's going to do to you". Moreover, there is a correct time for everything. To think that we could or should discuss sovereignty with Argentina now, after what has happened in the Falklands, as the recent United Nations resolution did, is really idiotic and completely inept.
I want to return to the importance of our not appearing to be weaker than we are. What could be better for the Russians, with their vast nuclear arsenal on land, at sea and probably in space, than a large movement in the West in favour of unilateral nuclear disarmament? Even if we did not disarm in a nuclear way, there might be such a failure of determination in our Government that the Russians would misread our intentions. I think that the unilateral disarmament movement—the Peace Ballot in the 1930s—had just that effect on the Germans and on Herr Hitler. The whole far Left has been encouraging many moderate people with high ideals to back the movement for unilateral disarmament. In a very notable speech some time ago my noble friend Lord Chalfont—and he knows what he is talking about—showed that the unilateralist movement has had much encouragement from the Communists and fellow travellers. Noble Lords will recently have read how a Soviet dissident, who was chucked out of Russia for favouring multilateral disarmament, has been advising that
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unilateral disarmament on our part would be an absolute disaster for the cause of peace.
Marshal Sokolov's book on Soviet Strategy is not encouraging. It is a very interesting book. It can be got from the Library and is well translated by the Americans. This particular book is not very well written because it is a combination of articles by various generals and Soviet experts. The book makes it clear in several sections that the Russians have no intention of losing the advantages of the first strike if it really comes to the big crunch.
If we had to face any major war nowadays without nuclear weapons, I think that we should face certain defeat, either by bombing or by the blackmail threat of it. I cannot easily think of any action or attitude by ourselves or other Western powers more certain than unilateral disarmament to provoke war and defeat, with the destruction of all our democratic and spiritual ideals. Having dealt with Russia and lived behing the Iron Curtain for years, I really know what I am talking about. One only has to look at Poland to see what Soviet domination would bring. I do not think that the noble Lord, Lord Jenkins of Putney, or any of the other noble Lords who have spoken about this, would enjoy the state of affairs that would ensue. Please remember that the Soviet submarine stranded last year near a Swedish naval base apparently had nuclear torpedoes. I am very relieved indeed to hear that at least one of our ships in the Falklands campaign apparently had some nuclear weapons on board. We might not know when they will be needed.
This brings me back to the Navy and the Air Force. One major requirement of NATO is that the United States should be able to send troops and supplies across the Atlantic in huge quantities at the very beginning of any conflict and that the oil suplies and other materials needed to keep the armed forces and industries of the NATO countries going should be brought with equal security round the Cape of Good Hope and across the Atlantic.
In the light of the Falklands and of the losses which we suffered in quite a small campaign, I am absolutely sure that for this immense task to be carried out in face of a far larger and more effective submarine force than Herr Hitler ever had, we must need more escort vessels and also more aircraft carriers, more seaborne long-range air cover out in the oceans, and more early warning radar than anything we now possess.
I am amazed to see from a written reply yesterday in another place that no fewer than 16 frigates and two destroyers are to be withdrawn in the next two years. This will be part of a total of 28 ships and five auxiliaries which are to be withdrawn. In the light of this reduction, I cannot see that the present programme of ship construction, welcome as it is, can possibly meet our vital needs as now revealed. Incidentally, I look forward to seeing how the Government will assess our need for more submarines. It was our submarines which kept the Argentine navy at home.
I want to say a word about the vital importance of bases both here and overseas. As we no longer have Simonstown, which was lamentably enough given up by the Labour Party some years ago, I think we must keep the Falklands and all other outposts such as St. Helena, South Georgia, and islands in the Indian Ocean. Do not let us weaken on any of these. Please do

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not forget that Russia has a naval base in India, and naval facilities in ports in East and West Africa as well as an outpost in the Antarctic.
I recall that in the Falklands campaign Gibraltar, Chatham and Portsmouth were all vitally necessary to get our ships ready for the Falklands. It was absolutely amazing that our ships were able to get away and to be effective at vast distances at such short notice. But let us face it, it was only done with the aid of the bases I have mentioned, Gibraltar, Chatham, Portsmouth and of course Devonport, and probably others as well. I refuse to believe that any of them could be less necessary in a major war. It seems to me now that it would be sheer folly to scale them down or abolish them. And, for heaven's sake, I hope that the Foreign Office will not be too weak or compliant about Gibraltar, which has been British longer than it was ever Spanish and is full of most loyal British subjects, besides being in a vital strategic position. I say this although I have served in Spain and have many Spanish friends. I still think this is an absolutely essential British interest, and that we should stick to it by hook or by crook.
If we do not want to lose the next war, or appear so weak that it may start by mistake, then we have to hold our own everywhere in co-operation with our allies and to provide the ships, arms, and bases necessary for this purpose. There are times when the requirements of national security as we now see them in the light of the quite testing Falklands campaign are more important than reducing public expenditure. I personally think that deflation has anyhow gone quite far enough. I urge that building more ships and equipment would give employment, save our shattered shipbuilding and steel industries, and stimulate other industries in engineeering, electronics, armaments and other equipment right through industry. It would save many millions of pounds in unemployment insurance and the social services, and would stimulate growth and exports in all the new technologies on which our industrial growth and economic recovery must really depend.
In foreign affairs it would show our friends and enemies that we mean to defend our interests and NATO interests effectively. Considering that the Russians gained control, in the times of President Carter and the Labour Government here, of Afghanistan, Aden and the Red Sea entrance, Mozambique, Angola and Ethiopia with most of Eritrea, without the Western powers doing anything to stop them, it might reasonably be hoped that our determined action to make ourselves stronger would at least make the Kremlin more careful. We cannot go on losing cold war battles in this way. And who better to build up our strength than our Iron Lady?
Among my conclusions from the Falkland's affair I come much closer to home, to Ireland. As usual when we are up against it, the Irish tried to stab us in the back at the United Nations. Please take careful heed; there really must now be no possible question of any Irish settlement which would weaken our control of the coast of Northern Ireland near which our ships and submarines have to pass when going in and out of the Clyde. If Soviet submarines were able to lurk there—as they seem to practice lurking in Swedish inlets and as German submarines lurked off the West Coast of Ireland in the last war—they might succeed in follow-
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ing our Polaris submarines and the effectiveness of our nuclear deterrent might be fatally undermined. Therefore, I urge that we must keep control of Northern Ireland, and as the population is now again shown to be 60 per cent. Loyalist, I see no democratic reason why we should not do so.
9.27 p.m.
Lord Soper: My Lords, I wish to be associated with the acclamation offered to the noble Lord, Lord Maclehose, on the occasion of his most trenchant maiden speech. On the last two occasions on which defence has loomed in your Lordships' House, I presumed to profess and advocate the pacifist position. I warn myself on the highest authority that I am not necessarily heard for my speaking much, but I shall detain your Lordships for a brief time in assessing, at least in three areas, further reasons which seem substantial to me for the furtherance of the pacifist argument and its ultimate necessity.
I begin by referring to the ominous and thoroughgoing examination by the noble Lord, Lord Chalfont, of the deterioration in the present situation, with its accompanying dangers of an outbreak which the deterrent hitherto has apparently been sufficient to avoid. Let me add to that the apocalyptic references of my noble friend Lord Brockway, a problem not unknown to a theologian, the difference of course being that whereas it was divine injunction that provided the opportunity of apocalypse in the past, we now have our own do-it-yourself kit. That is not a frivolous remark; it bears witness to the ever-growing terminal condition, so to speak, of our present arms race and the calamity, the holocaust, which would supervene unless the race can be halted and, in its place, constructive peace programmes can be undertaken.
The pacifist case, as I see it, rests on the proposition that the avoidance of war does not demand an absolute and final rejection of every form of violence. What it does is claim that the repudiation of the weapons of war is the only effective method of defence against that holocaust, should it arise. In that regard my noble friend Lord Brockway has given evidence of a quite remarkable change that has taken place among ordinary people throughout the world. There can be no mistaking the ebullience of the claim for disarmament of various kinds, how widespread it is and how permeating it is of communities which hitherto have been averse to it or prevented from advocating it. It may be of interest to your Lordships to know that the. Patriarchate in Moscow now issues in English—I receive a copy of it every month—a pamphlet into which the peace proposals that have been mentioned today have found their way, and they are now widespread. This may be a very small thing, but it is a radical change, as I have every reason to know, and as I am sure your Lordships, too, will know.
The change in the situation which prompts me to advocate, with greater strenuousness if possible, the argument for pacifism lies in the very fact of the widespread dissemination of information and advocacy about the needs for disarmament. But here I find two very great difficulties, and I should not be honest if I did not mention them. I cannot believe that multilateral disarmament is a programme. It is an achievement, and it is an achievement that can be

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forthcoming only when the fear of the hypocrisy or duplicity of the other side can be removed by a stronger emotion. So long as we claim that multilateral disarmament depends on the fact that we cannot trust the Russians, and that they cannot trust the Americans, and that neither of them can trust us, and so forth, it seems to me that any programme must begin elsewhere. Psychologically it does not seem to me to be a very difficult case to make that great achievements in disarmament must be the outcome of unilateral action of some description, which can remove that fear and can introduce into the situation a greater sense of confidence.
That is why in one sense I entirely would want to support unilateral disarmament as the way in which you initiate a programme which carries with it the necessary dynamic to overcome that fear which now possesses both sides, and all sides. But here, again, to be honest, I find difficulty. It seems to me that if you ask for unilateral disarmament in the nuclear field, and at the same time believe yourself still to be attached to a NATO organisation in which nuclear arms proliferate and are normal, then it is rather like joining a cricket team and agreeing to play provided that there is no fast bowling; and that to me is unacceptable. I do not believe that it is necessary for us to limit the concept of disarmament to nuclear weapons. I think that by so doing you imperil the outcome as much as you further it.
That brings me to the moral argument. I should like to begin here by a reference to Wittgenstein—if it is not impertinent—and his first incarnation, where he asserts that that which cannot be said clearly is strictly senseless. I find that a warming thought as I read of the various words that are used in the moral argument. Let me begin with one that is found in the working paper sponsored by the Church of England. It is that the just war, which is further canvassed, I think rather unfortunately, stops short at the use of indiscriminate weapons, and the fact that the nuclear threat provides an indiscriminate result means that it cannot be regarded as part of a just war. Well, that is all very well, but what about Dresden; was not that indiscriminate? The word "indiscriminate" is here a senseless word until it is applied to a degree, or to the abolition of discrimination, or to indiscriminate faculties that are exercised by those who drop bombs or spread nuclear, or indeed bacteriological, weapons.
I come now to a second word which, again, in general terms it seems to me is senseless. The right reverend Prelate the Bishop of London advocated action. I apologise for referring to this in his absence. I did not have an opportunity of saying it while he was still here. Now I am all for action, but action is a generic word which covers a multitude of virtues as well as a multitude of sins. It depends on what the action consists of. It depends whether is is an action to take away life or whether the action is to sustain it.
I come now to a further word, and here again I refer to the right reverend Prelate the Bishop of London, who the other day said that he believed that there was a distinction between that which is morally good and that which is morally acceptable. I cannot follow such a convolution, because I think that, strictly speaking. the only thing that is morally acceptable is that which is morally good. In all this usage of words we are
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concealing, it seems to me, the fact that the precise meaning of war today is the commission of all the sins; and, therefore, morally speaking, there is no way in which you can baptise war, even with the hosepipe of necessity.
I know that this sounds highfalutin, perhaps ridiculous, to some, and so completely idealistic as to be impossible of any practical outcome. I only want to make my witness again to the fact that I take very seriously the quite awful prospect that we may slither, if we do not plunge, into such a disaster as will put an end to everything that we hold dear. We have become so accustomed to taking that risk that we have become impervious, it seems to me, to the alternative risk.
In a very few days, on Armistice Day, we shall gather to remember the Armistice, and unless there has been a radical change due to changes in the hymn book, which I very much doubt, we shall sing,
"Oh God. our help in ages past";
and when we get to the second verse, we shall sing:
"Sufficient is Thine Arm alone, And our defence is sure'".
I find it increasingly impossible to subscribe to the principles and teachings of the Christian faith and even to contemplate in general terms—for that is the only way in which one can contemplate it—the practice of that which is totally averse to, and contrary to, the spirit of Christ.
This, of course, is an argument which applies to those who accept the Christian faith. This House officially does. I attend its prayer meeting regularly, and apart from one or two references to "the Lord of Hosts", as to which I demur, it is an essentially Christian undertaking. For that reason I hope your Lordships will not think it impertinent if, once again, I pay my tribute to that which sustains the faith: the way of non-violence is ultimately the only one which can succeed in bringing peace.
9.38 p.m.
Lord Gisborough: My Lords, I was lucky enough to be able to visit China in March, and I felt it would be appropriate to say a few words about my experience there. We encountered great friendliness from those we met, and most of the population seemed by nature to be happy and smiling. We were generously looked after, and were shown every consideration and friendship. But when one sees the low standard of living at all levels that inevitably goes with communism, one wonders what on earth makes Left-Wing socialists in the West aspire to reduce their own countries to such poor standards.
In China, no one has anything but basic needs. Peasants work seven days a week, and there are no paid holidays. Health care has to be paid for; education is free. Wages are low, from about £60 a month for a very senior manager or general in the army, to £15 a month for a basic worker or soldier. With controlled prices and allocated living accommodation, they can live on this, but there are no luxuries, no choice and very primitive housing. Having said that, there are not many beggars to be seen. Needless to say. no one owns a car. Peculiarly, the ratio of pay of four to one from top to bottom compares with, in Britain, an after-tax difference of spendable wages of about five and a half to one. The difference in Russia, by comparison, is 40 to one.

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There is vast unemployment in China, and they get no unemployment benefit. There is also a vast underemployment. For example, on a 330-acre farm run by a production brigade, there were 263 dependent households. On the farm that we saw, and which was the pride of the province, the new brick houses were of a design perhaps some 500 years out of date by Western standards.
Crime is on the increase, as elsewhere in the world; but when one sees the Left-Wing assault against the police in this country, it is interesting to see what happens in China. An offender is first criticised by a public security bureau officer, who is in effect their policeman. If the offender's attitude is not correct, the officer can then fine him on the spot. The miscreant can appeal, but it is to the public security bureau, the same people; and it is the same bureau which can then punish the miscreant. Only severe crime goes before a judge and a committee of the commune.
Many of the young that we met seemed dissatisfied and they were quick to tell us so—as were the officials quick to stop them from talking to us. They made clear their disenchantment with the whole system. They are all well aware of how much better is everyone else, living in capitalist countries, in South Korea, North Korea, Taiwan, Hong Kong and so on. As contacts with the West increase, so will the young increasingly want change and a better standard of living. Just as the old leaders want to retain power and to uphold the principles of the revolution which they won by the agony of the "Long March" and dare not hand over to the young in case they do not do so. so the young ones say that they did not do the "Long March" and are far more interested in better conditions than in ancient dogma. Thus, the octogenarian leaders, while extolling the virtues of retirement and handing over to the young, are tending individually to cling on to their own jobs and to die in office.
Some of our group—it was an IPU group—declared that there had been great progress in the last 10 years, and that in a few years Chinese cheap labour would create a commercial threat to the West on a par with Taiwan, Korea and Japan. I find this difficult to believe. The political system will never allow efficient production and the quality of the goods will never be good enough. For example, we were shown an old petrochemical works and were told that it made a profit. It did, indeed; but the cost of the crude oil and the price of the products were controlled and bore no relation to world prices.
But China expects to become much more active in world trade. It expects increasingly to export, for example, oil, coal, handicrafts and light industrial products, while importing heavy industrial and manufactured goods, clothes and food. The opening up of the country has also been demonstrated by the increase of tourism, and China will have had a million visitors in 1982. They desperately need foreign currency and could thus offer the prospect of huge import opportunities. The difficulties of selling to China are well enough known and great efforts and cost are too often rewarded by no orders. But we can help our firms to export if we help China to export and earn currency. I hope that one day China will have a more active trading outlet in the United Kingdom. In particular, I should like to see a Chinese pavilion at the
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Royal Show, so enabling them to advertise their products, and we could the more easily make contacts to sell our agricultural technology—which is a field in which we should be able to be of great value to China.
My Lords, last and most important in our tour came our visit to Hong Kong. The business activity of Hong Kong accounts for no less than 40 per cent. of the foreign currency earned by China, and its continued prosperity is therefore of vital importance to the Chinese Government. They are well aware of that. They drive a hard bargain. An example is the sharing of the Peking—Hong Kong air route with Cathay Pacific. The Chinese have 47 flights and allow Cathay three flights in the week. They will not allow Cathay to enlarge their aeroplanes. In Shanghai, ships are built for Hong Kong owners. In Peking, there is a new hotel built and financed entirely by a Hong Kong entrepreneur, who yet owns only 49 per cent. of the equity. During the next 10 years, he will get his return and thereafter the hotel will become the sole property of the Chinese Government.
If Hong Kong does not flourish, they have a great deal to lose. The Chinese have a very long history, stretching back 6,000 years, of which they must be proud. Therefore, it is not surprising that they resent the political existence of Hong Kong and Macau, however dependent they are on them as a trade window. They will never agree that the treaties are internationally legal and it would be surely better to avoid dissension by discussing that point. Anyhow, they can move in by force any time they care to do so. They would have preferred to avoid discussing 1997 altogether. The Chinese have enough problems to solve without solving something that does not appear to be a problem to them, and which can only become a problem if they are forced to discuss it and take the inevitable stance of demanding sovereignty. Unfortunately, as we all know, western capital needs a politically safe minimum 15 years for continued development schemes. Indeed, if the Chinese were to take over Hong Kong, they would find themselves with appallingly complex problems of management and of integration with the mainland economy. Already young girls working for Hong Kong firms near Canton on piece rates, making widgets and earning as much as senior management, have created waves of social problems on the mainland.
So the important aspect for China is to have a face-saver so that they can feel that they have won a diplomatic victory and won the sovereignty of Hong Kong without disturbing the administration or confidence of Hong Kong. I think one answer would be for them to be given the right to give notice of revocation of all the treaties and the return of Hong Kong at any time from now on, but on one main condition: that the lease would then terminate exactly 20 years after the notice was given. This 20 year minimum period, starting at any time, would allow the Hong Kong population adequate notice at any time and would allow the continuation of development schemes even after notice was given, and would essentially maintain confidence that there would never be a sudden entry by the Chinese.
Further, that 20 years would give adequate time for the Chinese to assess and discover the effects on their own country of Hong Kong being run down. The Chinese have passed the dogma of Mao to some

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extent; they have condemned the cultural revolution and have become pragmatists. Two factors would have to be met before the Chinese would be likely to give that notice. One would be if their exports were to make them independent of their earnings through Hong Kong. The other would be if living standards on the mainland became in equilibrium with those in Hong Kong. Neither is likely to happen.
The Chinese have suggested sharing the adminis-
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tration of Hong Kong, with their officials working alongside the present administration. Joint administration would badly shake the fragile confidence as well as impeding efficient government. Finally, the matter of Hong Kong students was brought up in the very finely delivered maiden speech of the noble Lord, Lord Maclehose—a speech which, if I may say so, was a model of brevity and clarity. I believe that we must look again at this matter of students, if only as a hard matter of self-interested investment for Britain.
9.48 p.m.
Lord Hatch of Lusby: My Lords, I wish to address myself solely to one sentence in the gracious Speech which has scarcely, if ever, been mentioned since the opening speech of my noble friend the Leader of the Opposition, Lord Cledwyn. The sentence reads:
"They are committed to a substantial programme of development aid concentrated on the poorest countries".
That seems to me to be a very ironic, if not hypocritical, description of the policy of the present Government since it was elected in 1979.
It has become a truism to assert that foreign policy is the extension of domestic policy; but I should like to try to persuade the noble Lord who is to wind up this debate—as I have a succession of his predecessors—that what I am talking about tonight is not simply morality—although I hope in this House that we do not exclude morality—but hard economic fact. This Government, when they were elected, put into practice a domestic policy which has been broadly described as that of deflation. They cut public investment; they reduced social services; they diminished the standard of living of a large number of British people. They decreased employment and stagnated production. So it could hardly be expected, with this domestic policy, that the foreign policy of the Government would be that of a self-confident British nation taking part in the great drama of the 20th century. And, indeed, it has not been so.
I give as my first theme the famous words of John Donne, "No man is an Island, entire of itself". We in Britain are not an island, entire of itself. We have a part to play in world affairs which we cannot escape, even if we wish to do so. But where do this Government stand in the face of the realities of the international village within which we are all living? We have heard very little of this today. We have heard a great deal of the conventional, nationalist outlook: that the nation state is a personality to which we all owe automatic loyalty, that we have a national policy which must override all other considerations.
It is of course the responsibility of the Government in foreign policy, as in other policies, to think and act on behalf of the interests of the British people. But what are the interests of the British people? Are they separated from the interests of people in other parts of the world? I would suggest that there is a growing number of British people—particularly British young people within the Churches, if I may say so to the right reverend Prelate opposite—who recognise that Britain has a special part to play in the obscenity of the present era of human history, an obscenity which can be outlined in these figures. In 1981, 17 million children under the age of five died, very largely as a result of malnutrition. That is, over 45,000 children per day are dying for lack of, what? For lack of the kind of things which the 31 million unemployed in the Western industrialised world could have supplied. That is the obscenity of which I speak. Could there be a more horrific, ironic contrast than millions of children dying on the one hand and millions of men and women unemployed on the other?
And yet—may I emphasise to the noble Lord the Minister that I am not talking simply about charity—it is the policy of the present Government, and has been
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their policy since the day they were elected, to cut the overseas aid programme of this country. It has been cut by more than any other item in Government expenditure, with the exception of housing. In this year alone, that figure has been cut by 11 per cent. In 1979. when the Government were elected, overseas aid totalled 1.10 percent. of public expenditure. This year the figure has fallen to 0.82 per cent. I suggest that in this period of three and a half years the Government can be accused of conniving at this horrific situation, in which children, men and women are dying for lack of that sustenance which could be provided if the Government's policy was so designed as to use the resources which are available.
To those who have spoken on the security angle may I give just one quotation to show the connection. Robert McNamara, who I do not need to describe in this House, said only in July of this year at the Brookings Institute:
"I believe that the US buys more security by spending a dollar on development assistance than on military hardware."
This Government have followed their domestic policy into foreign policy. They have taken the Ministry of Overseas Development within the Foreign Office and therefore it comes within the purview of this debate—wrongly I believe, and disastrously I believe, but it has done so. Therefore, the Minister speaking for the Foreign Office is responsible for that part of foreign policy. May I ask the noble Lord the Minister just one auxiliary question, because I believe there may be some confusion. May I ask him whether the British contribution to the International Development Association has been reduced this year? Why I ask that question is because we know that the American contribution has been reduced—so much so that the World Bank president himself. William Clausen, had this to say about the IDA programme, which has been cut by 35 per cent:
"This is not a trimming programme. This is an amputating programme."
In another place it was stated last week that the British contribution has been cut; this was not denied by the Government spokesman. But as I understood it, if the noble Lord the Minister will recall, when I asked a question along the same lines not very long ago I was at least given the impression that there was to be no British cut in the IDA programme. The IDA programme is of tremendous importance to the developing countries because it is that programme which provides for the soft loans, which are interest free and the capital of which does not have to be repaid for 50 years. So I ask the noble Lord the Minister that specific question.
Let me go on to talking the language of so many of Her Majesty's Ministers. At the time when the present Government took over, the aid programme of the outgoing Government was to be increased by 6 per cent. per year instead of being decreased by 15 per cent., as it has been under the present Administration. When there was a Labour Government it was estimated that the aid programme itself provided at least 40,000 jobs to British workers each year—and that was a conservative estimate. That figure, of course, is out of date. Can the noble Lord the Minister update the figure, and tell us today what is the number of jobs provided by the British overseas aid programme?

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My Lords, can I get this through to the Government: The Government have a difficult task to perform, but they themselves can recognise that overseas aid is investment to the advantage not just of the recipient country but also the donor country. Can I get it through to Ministers that overseas aid is part of the oil which can lubricate the wheels of world trade and get world trade moving again? I know that Ministers have a very difficult task in persuading the electorate of that argument, but it is their responsibility, it is also our responsibility; but it is primarily the Government's responsibility. And yet it is the Government which have virtually destroyed that promising, hopeful endeavour which the Labour Government had put into operation from 1977 onwards, the programme of development education.
Let me just give your Lordships some very bald figures. The United Kingdom last year spent 0.3 pence on development education—that is educating the British people into the need for, and the self-interest of, overseas aid. The Swedes spent 23.6 pence, the Danes 6.9 pence. The Germans, the Belgians, the French, the Italians, the Dutch, even the Americans, all spent a great deal more on convincing their own people of the necessity for, and the self-interest of, overseas aid than did this Government. What do the Government intend to do about the tragic, horrific situation that I have spoken of in the world? What part are they going to play in educating the British public into the realities of our responsibilities?
In passing, may I say that, although it is very early days, following our debate of two years ago about the use of the fourth channel, I am encouraged with the beginnings of the fourth channel. They have shown some initiative; they have been innovative; they have included within their programming some observation of the realities of the world in which we live, not the narrow confines of the nationalist spirit of this Chamber.
If I may return to the point that I quoted at the beginning of my speech, unless the Government can recognise the kind of world in which we are living, unless they can recognise the relations that we have, whether we like it or not, with the millions of people outside these islands, then John Donne's forecast will come true and his abjuration to you might well at least give you cause to pause when he says:
"Any man's death diminishes me. because I am involved in mankind; And therefore never send to know for whom the bell tolls".
If I may paraphrase, not only does it toll for thee, it tolls for our children and our grandchildren.
9.50 p.m.
Lord Briginshaw: My Lords, in terms of academic debate one may be able to subtract economic mention from the title of our discussion this evening. In reality I suggest that it is impossible. Even an attempt becomes ludicrous. It is a question of priority as to how one places actuality, but it is for sure that the first action of the dynamic of our title is economic. I have no desire to pre-empt my remarks in tomorrow's debate on the Address in your Lordships' House.
We have experts in all possible spheres of total defence armed forces. Have we the same volume of
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expertise in the totality of the matters worrying us with regard to the defence of our people in all the ramifications of what is entailed and may we not find that our present policies are misdirected and are an actual danger to our defence and basic national interests? I am suggesting with some confidence that there must be another and better way than the one we are at present taking. It may mean leaving aside at this moment matters of strict dogma.
The Times has recently been publishing editorial coverage in a number of "lessons" concerning the British Government's defence posture. It might be better to speak of the defence postures of successive United Kingdom Governments since 1945. I refer particularly to The Times issue of 4th November 1982. One can extract some positive features from its efforts. At least it begins to refer to the previously unthinkable concerning NATO. It said that since 1945 Britain had shed a world-wide capability upon which a 250-year-old maritime strategy used to depend. By 1971 most military resources were concentrated on NATO's central front and the Eastern Atlantic. It then went on to apply a critical analysis of the period 1945 to 1971. Yet it put forward a general continuity in fresh wrappings and nothing in policy direction really changed, whereas I am, with many others, trying to give voice to a fresh, but simple, suggestion; one of total reappraisal of defence policies which have manifestly failed, and taking into serious and urgent consideration the critical situation facing the peoples of the United Kingdom and of the world right now. There must be another way, and I am optimistic enough to believe that it can be found.
I do not profess to be a pacifist, although I greatly respect the pacificist views held and expressed by noble Lords in this House and elsewhere. I would not seek to argue that dialogue between unilateralists and multilateralists is irrelevant or ought not to go on. but time is so obviously short that I do seek—and so should we all—to get urgent and positive movement in an increasingly dangerous world situation. That means that in the United Kingdom we need to unravel our own premises.
I do not suggest that there is no such thing for a nation to establish as a just defence structure. That is the kernel of the matter. What do we mean by a just defence structure? Who and what are we defending? For me, it is the national interest of the whole British people, priority being given to their survival, which is simply the defence of the real wellbeing of the people of the United Kingdom and definitely not the continued operation of policies which lead to the possible incineration of our country and the annihilation of the British people. Such is not a policy of national defence, but a policy of lunacy.
Our grasp in regard to defence structure must never get beyond our just requirements or abilities. This means that the prime concentration must be on our economic strength. We must assess that our standing in world affairs is always ultimately controlled by this factor. It is, I suggest, our failure to accept such simplicities that has landed us with the contradictions which now face us, which in turn now threaten the very existence of our people—I refer particularly to the increasingly rapid pace and extent of our de-

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industrialisation, and the pursuance of policies which seek to turn back the pages and actuality of history, instead of participation in a universal development of historical opportunities in establishing a new world order. Failure to follow such paths and possibilities has produced a weaponry which, but for the discovery and extraction of our oil resources in particular, would have bankrupted our country. We have already wasted billions of pounds gained from these resources by playing politics and indulging in doctrinal sales of national assets to the detriment of our national security. A classic example is the Britoil doctrinal sale. By these and other similar acts we loosen our control-grip of our North Sea assets.
So economic strength and pro-human and intelligent direction by our rulers is the supreme prize and necessity. Yet the whole structure of the military defence world systems which we have so elaborately constructed is built on sand and must eventually collapse unless we, by our own misplaced efforts, hasten our own demise as humanity by bringing them into action or we really seek settlement and accommodation in world affairs. In this our Government have a responsibility to get beyond a revival of cold war rhetoric, tactics and negatively dangerous posturings and turn to a real expression of patriotism in ending the give-away of British interests in the base interests of doctrinaire positions. Successive Governments have done this since 1945. We have been caught in the traps of our own ideologies. We have given away many of our first inventions in science and technology. We cannot be serious if we glibly talk of our way of life in a context in which there is not life—a context of mutual annihilation. It remains a truism in the world of today that we either live together or we die together.
10.14 p.m.
The Marquess of Ailsa: My Lords, I will be very interested to learn whether Her Majesty's Government have had any further thoughts regarding their policy towards the Horn of Africa and its neighbouring countries and ocean. Since I asked that question in June this year, during the last Session, certain events have taken place. Early in July Somalia was invaded by Ethiopia. At the outset every endeavour was made to give the impression that this was the work of Somali dissidents who were only aided by Ethopia, these dissidents being under the impression that they had only to enter Somalia for the Government of President Siad Barre to fall. In this they were totally mistaken. The Somali people, whether or not they like the Government they have, certainly do not wish for any Government that is supported by Ethiopia, and they have made that completely plain.
The invasion that took place was one of the acts that has taken place under the tripartite pact of Aden, Libya, South Yemen and Ethiopia working together. The object of this pact is to create revolutionary cooperation; the purpose is to create disability and insecurity for all its neighbours. That is its purpose.
Recently I visited Somalia and while there I had the opportunity of meeting the president of that country and various members of his Government as well as going to the front and meeting his commanders in the field and seeing his troops in the field. To me there was very clear evidence of a very strong Ethiopian
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presence. I was able to see, and I have outside, photographs of Ethiopian prisoners. Equally, I was able to see a large number of documents, some of these being personal letters, others being identification papers from Ethiopian soldiers. There were orders written on message pads, exhortations in Russian on message pads as well as instruction manuals which were very clearly written in the Russian language. These manuals dated from about 1980–81; there was nothing for 1982. I was also able to see a number of captured armoured vechicles, ordinary cargo vehicles, artillery and normal infantry weapons, all of a very recent origin and nothing earlier than 1980 in issue.
The Somali army, while it has to date been able to stop the invasion, has not as yet been able to throw the Ethiopians entirely out of Somali territory, the main reason for this being its total lack of modern equipment. The Somali army has not been re-equipped in any major form since 1977.I understood while I was there that American weapons were coming to hand, and that their soldiers were being trained in their use. I just hope that these weapons were the right weapons and were in sufficient quantity because, as it stands, the Somali army and Somali people know that they are under constant threat, since the Ethiopians are supported, under the pact of Aden, by the Libyans, who I understand are providing the money, and by the South Yemenis who are providing trained pilots.
I might add that, I understand, the Somalis can put only eight or nine aircraft into the air at any one time. Nobody has ever been able to tell me how many Ethiopian planes come into the air. The artillerymen, who are on a daily basis bombarding the Somali positions, are South Yemenis. Down to battalion level the Ethiopian army has Russian advisers. Behind them there are somewhere in the region of 15,000 Cuban regular troops. These Cubans, I admit, have not yet crossed into Somalia, but they are there behind, ready to act as a long-stop. All the time the Somalis are waiting for another attack. This attack may come either in the North to take Berber, an important port which may be used by the Americans for their redeployment, or they may take Mogadishu in the South, or they can, if they so desire, cut Somalia into two by severing the road links between the North and the South of that country. This is, as of today, how the situation stands.
All this has played havoc with the Somali economy. They have done their best to try to make sense out of their economy, but they have now had to go on to a war footing which, as we all know, makes life exceedingly difficult. Just to add joy to these proceedings, Libya, in its wisdom, has decided to try to make things more difficult by sending forged currency into Somalia. All these dissidents that we hear about are paid and are given large sums of forged currency, with the sole intention of having this circulated into the Somali economy to try to bring it down.
Are Her Majesty's Government prepared to take any positive action to show that they support Somalia just now in its time of trouble?—more positive action than just saying how horrible it is, but that it is somebody else's job. Before leaving this point I must say at once how pleased I am to learn that Her Royal Highness Princess Anne was able to go right up to within five miles of the border between Somalia and Ethiopia. We all owe her a great debt of gratitude for

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her courage in taking on and performing this arduous task. It has done a lot of good for us in that country. Recently a junior Minister went to that country, but more needs to be done, because we must try to win the hearts and minds of the people of Somalia, in fact of the people within not only Somalia but the Sudan, Egypt and other countries in that area because they are beset with difficulties which we here find it hard to comprehend.
One thing which Her Majesty's Government could, and in my view should, do is to endeavour to get a settlement of the border dispute which goes on between Ethiopia and Somalia. This dispute goes back a very long way, well into the depths of the Colonial days. It is true that the Ogaden was finally made over to Abyssinia only in 1954, but the border has never been resolved. If that question could be settled, much of the steam of the trouble that pervades the area would be taken out, and that would go a long way to settling the area. I have heard that the Somali Government have no territorial claims over the Ogaden. that they are only concerned that their fellow Somalis who live in that area may live their life as they are accustomed to do. and live it as equal citizens with whoever else lives there.
Another aspect at which I feel Her Majesty's Government could look is the aid currently being given to Ethiopia. At present, much economic and material aid is being poured into that country and. from what I am able to learn, they are only laughing at us for giving it to them. I have heard accounts on good authority, but whether they are true I know not, that a great deal of grain, for example, which has been supplied by the West to Ethiopia has been sold on to the Soviet Union. Many of the other supplies are being used to bolster the Ethiopian economy so as to allow it to carry out what it calls resettlement within the Ogaden; what it calls "resettlement" we might call genocide.
There is a deliberate programme by the Ethiopians of making life for Somalis who live in the Ogaden—they are the natural inhabitants of that country—intolerable and unliveable. Their herds are destroyed, their wells fouled and they are rounded up and transported elsewhere in Ethiopia. There is a programme of trying to encourage Somalis from the Ogaden who have fled into Somalis and who are now in refugee camps, to return so that they may be resettled in other refugee camps elsewhere in Ethiopia. We seem to support this.
To me there is an even more sinister programme going on. Most of us were brought up to believe that Ethiopia was at least basically a Christian country. Now there is a deliberate programme of eliminating all religious leaders, whether Christian. Moslem, or whatever, with a desired effect of creating a simply godless society. Are Her Majesty's Government prepared to go on supporting that kind of Government? I have recently heard that in this country certain companies are helping to improve the ports of Massawa and Massara, which are currently used by the Soviet navy. How kind we are to the Eastern bloc!
I do not wish to keep your Lordships for much longer, but I should like to turn for a few minutes to what I term as the Soviet influence, which lies behind much of what is going on within the Horn of Africa
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and in the Indian Ocean. I think that it is clearly known—I should be surprised if it were not—that the desire of the Soviet Union is to have control in some way or other of all the countries in Africa and in Asia, in certain parts of Arabian Asia. In this regard she has instigated the creation of the pact of Aden, of which I have already spoken—a pact including Libya, Ethiopia and South Yemen. There is also within the Indian Ocean what they like to term the zone of peace, which includes the Seychelles, Mauritius and Madagascar. I am always intrigued that within the zone of peace the only people who may be accepted in this matter are those who believe in the Marxist-Lenin ideals. The rest of us are deliberately excluded and. if possible, driven out. I am certainly aware that the intention of the zone of peace is to deny to ourselves—Great Britain—as well as the West, the use of the island of Diego Garcia by the American Rapid Deployment Force, while at the same time the same peaceful Marxists-Leninists are prepared to allow their facilities to be used by the Soviet navy.
I now turn back to the mainland—the Horn of Africa, Somalia, Sudan, Egypt, North Yemen and Oman. Because they do not wish to come under the influence of Marxism-Leninism, they are under threat. I feel it is essential that we, or Her Majesty's Government, show that we are prepared to give positive political and practical support to those countries that wish to be free, and wish to show that they have freedom under the law—not by the gun.
10.34 p.m.
Lord Gifford: My Lords, I make no apology for devoting my speech tonight to southern Africa-southern Africa where there has been building up over the years a confrontation between the forces of apartheid and the forces of those who wish to win, or who wish to retain, their freedom. At the heart of that confrontation at the moment is Angola, where I have recently been travelling—a country which is far too little visited and too little known. In relation to southern Africa, there are features which are perhaps unlike other zones of conflict around the world. In the first place, the United Kingdom has a very direct responsibility for the future of southern Africa. We are one of the five members of the contact group which is seeking to negotiate the implementation of the United Nations resolution for the independence of Namibia; we are a major trading partner of South Africa itself; and we are much more closely involved than we are in many other theatres of war.
Secondly, in perhaps no other area of conflict around the world are the issues so clear as to where justice and morality lie. On the one hand, we have the South African force occupying Namibia in defiance of international law and in defiance of the International Court of Justice—a presence which I do not think any country in the world, including ourselves, accepts as lawful. And in South Africa itself we have the one remaining Government which is set up on the basis of racialism. There really can be no doubt whether we should be on the side of apartheid or whether we should be on the side of those who are struggling for their freedom against it.
That regime has suppressed great leaders, like Nelson Mandela, now in his twentieth year of imprisonment; and has brought about the death of

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young men of great promise, such as Steve Biko and Neil Aggett, who met their death in gruesome situations in police stations. There is a new constitution being put forward which is said to be more liberal and more democratic, but which is really a confidence trick. It maintains racial separation, it maintains the Bantustan policy, where 13 per cent. of the land, little fragments of it, is to be set aside, on the basis of racial division, for 80 per cent. of the population.
But in recent years, particularly since the winning of independence of Mozambique, Angola and Zimbabwe, there has been a more gruesome development. There has been a desperate escalation of violence and of terror, orchestrated by the Republic of South Africa, against a number of neighbouring states. Angola was invaded in August 1981 by a large force of some 11,000 South African troops. An area of South Angola, in the Province of Cunene, remains under South African occupation. I visited the province next door to Cunene, the Province of Huila, which is having to contend with the flood of Angolan refugees fleeing from what has become a hell in the province where they live. They have recorded 130,000 displaced people who have made that flight some 200 miles to the north and who are having to be accommodated, sheltered, fed and healed in camps for displaced persons. The danger of an escalating war hangs over the whole of that country.
It is not just Angola. In Mozambique, on the other side of Africa, a different strategy is being pursued. Armed bands are being recruited, trained and flown in by the South African forces. They call themselves the Mozambique Resistance Movement, but they are a creation of the South Africans. Their tactic is partly to create terror in Mozambiquan villages and partly to commit acts of sabotage by means of sophisticated saboteurs along the communication lines between Zimbabwe and Mozambique and the sea. In Zimbabwe itself, a similar tactic is being pursued. South African troops have been killed inside Zimbabwe and were said to be on an unauthorised mission. Acts of sabotage against the Zimbabwe air force have been carried out, acts which could have been possible only with sophisticated South African weaponry. Even the Seychelles, out in the Indian Ocean, has been the subject of an attempted mercenary coup. One asks in those circumstances: who are the terrorists?
There are not just acts of military warfare; there are acts of direct assassination. Many noble Lords in this House will have mourned the murder of Ruth First, a great fighter against the evils of apartheid, murdered by a letter bomb while at work in Mozambique. In Zimbabwe, in Lesotho, in Zambia, in Swaziland, in Botswana, similar acts of murder, of explosion, of deliberate assassination of leaders of the African National Congress have been perpetrated. That being the state of affairs, let us look to the responsibility of the United Kingdom. We look, of course, immediately at the situation over the negotiations for the independence of Namibia. During recent months there has been expressed a number of reports of optimism about the progress of those negotiations. I spent a long time earlier last month with Paulo Jorge, the Foreign Minister of Angola—incidentally, a white man. I say, "incidentally" because one of the exciting things about
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both Angola and Mozambique, in particular, is how the question of colour has become totally incidental and how multiracial, non-racial, partnership has become reality. Paulo Jorge did not share the optimism of those reports.
Many aspects of the Namibian independence process have yet to be agreed. There is no agreement as to the form of the electoral system for the elections to the constituent assembly; there is no clarity about the composition of the United Nations assistance force and, above all, there is no sign of a cease-fire—which is the very first step in the independence process. But what is happening is that the negotiations have been stalled and sidetracked because of the obsession of the United States with the presence of Cuban troops in Angola.
Cuban troops entered Angola at a time when South African forces. South African columns, were pushing through the country and approaching the capital. Luanda. That was in 1975. Since then, there have been talks and attempts to consider reducing the number of Cuban troops, but every time that is considered there is fresh aggression in the South from the South African forces. I met members of the Cuban assistance force. They are not sinister figures. They have given great assistance to the Government of Angola, both in military and technical ways. They are a supportive force; they in no way control anything; the one watchword of the Angolan Government is that it should be Angolans who run the country, neither Cubans, because they happen to be the allied force nor, for instance, the United States because it happens to be Texaco and Gulf Oil who are exploiting the oil resources of Angola. They wish to be a non-aligned nation and I believe that the United Kingdom Government recognise that and are anxious to have fruitful and positive relations with them.
But what we have to ask ourselves is this. What is the contact group doing? What are the other members of the contact group, including ourselves (who do not, I believe, share this obsession with Cuban troops in Angola), doing to change the aberration of the United States? When is pressure going to be taken away from this issue of Cuba and Angola and brought back to where it needs to be applied—that is to say, upon the Republic of South Africa—so that we shall discover whether South Africa really is willing, as it claims to be, to allow free and fair elections in Namibia?
In Angola they are acutely conscious of the might of the South African military machine and that it could be used to escalate the present aggression still further. What Paulo Jorge said to me was this: "We are not going to allow our country to become another Lebanon. If there is an escalation by South Africa, we will call in the support of our allies to defend our territorial integrity". That is a measure of the menace which hangs over that country.
In the longer term we shall have to come to terms with the bitter struggle between the mass and the minority in South Africa itself. We shall have to realise that it is in both our political and economic interests to support the struggle for freedom, to isolate South Africa and not to be a party—as we were only last week—to a vote in the International Monetary Fund which gave assistance to those who wished to continue the policies of white supremacy.

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There have been reports that we might try to play one issue off against the other; to allow South Africa to give way to independence to Namibia in return for some guarantee that apartheid is secure in South Africa. We cannot make such deals. Not only would it be immoral, but the people of South Africa themselves will not let us. The existence of a Government which relies on racism, which divides people according to black and white and Indian and coloured according to their origins and their colour, infects the whole world. It gives courage to racialists in our own country, and we have the duty to use the considerable influence that we possess to ensure that that regime becomes consigned to the dustbin of history before there is more bloody and bitter confrontation in Southern Africa.
10.48 p.m.
Lord Mayhew: My Lords, our debate began with a distinguished speech from the noble Viscount, a feature of which was his bold and fresh defence of NATO's flexible strategy. I think that it was the first time that a British Minister argued that, in the event of imminent defeat in conventional war in Europe, a single nuclear shot carefully selected as to its size and as to its target, possibly accompanied with a warning in advance, might not provoke nuclear retaliation and might bring the fighting to an end. I hope that I am doing the noble Viscount justice.
Viscount Trenchard: My Lords, this matter is extraordinarily important. The noble Lord has very nearly done me justice. I actually asked the question whether, if NATO did this, the aggressor would retaliate, whether he would escalate and whether it was in his interests. I leave the House to answer.
Lord Mayhew: My Lords, I think that the noble Viscount is being needlesssly defensive because I was going to agree to the extent that it is impossible to say that retaliation would be certain. It would be impossible to say that such action might not in fact bring the hostilities to an end. What I missed in the speech of the noble Viscount was a declaration that it was the policy of Her Majesty's Government to avoid being placed in a situation where such a decision might have to be taken. I missed in his speech any argument that a NATO strategy which has to rely on the first use of nuclear weapons is an unsatisfactory strategy which needs to be changed. That is certainly the position of those of us on these Benches. I had hoped that the noble Viscount might agree with the Supreme Allied Commander, General Rogers, when he drew attention to the unsatisfactory nature of having to rely on the possibility of using nuclear weapons first.
Viscount Trenchard: My Lords, I can only ask the noble Lord to read Hansard carefully. Never at any point in my speech did I say that this was the key to defence. Indeed, I would merely ask him to read the speech in its full context. I was prepared to speculate on his line in the event of all sorts of other things having failed.
Lord Mayhew: My Lords, the last thing I want to do is in any way to misrepresent the noble Viscount, but I want to make it perfectly clear that we on these Benches regard this strategy as wholly unsatisfactory
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and as something which needs to be changed. We cannot understand why it should come about that NATO has this inferiority in conventional weapons. I think the gap is often exaggerated. If one reads with care the publication of the International Institute of Strategic Studies, the gap is not so wide as is sometimes assumed and it is not, in our view, unbridgeable. We find it extraordinary, when the Western countries are so much more advanced in technology, including military technology, than the Russians—and the experience of Israeli operations in Syria convinces us still more of this superiority of Western military technology—when we lead the Russians so strongly in GNP and when we do not have their problem of two fronts, with China on the other side of them, that we should be conventionally weaker than the Soviet Union, and we are not content with that situation. It is because we believe there has not been the political will to have a proper conventional balance in Europe—because we have tried to get defence there on the cheap.
We on these Benches also see a danger that, as things stand now, the decision to use nuclear weapons first might be taken at too low a level, in conditions of fighting where there is some danger of our forward nuclear weapons being overrun. We were sorry that the noble Viscount did not pay attention to the constructive proposal we put forward for a battlefield nuclear weapons-free zone in Central Europe. It is not a major proposal. The difficulties are obvious. Verification would be difficult. It would not mean that the zone could not have nuclear weapons exploding in it from outside, nor that nuclear weapons could not be quickly moved into the zone in the event of fighting. All these things we concede. Nevertheless, it does remove the possibility of a low-level decision to use these battlefield nuclear weapons, perhaps in danger of being overrun, very much too early. We are sorry that the noble Viscount appeared, from what he said, to rule out this concept. This is the greatest danger of a nuclear war. Always the arguments are conducted in the belief that the first nuclear strike will be an SS20. a Minuteman or something like that; but the first nuclear weapon to be exploded in a war will almost certainly be either a nuclear depth charge or one of these small, nuclear, battlefield weapons. And that is why we pay great attention to this proposal.
Another feature of the debate has been the number of stirring defences of Mr. Begin. This was a surprise, I think, to some of us. I have never concealed my own view of Mr. Begin since, 36 years ago, I was a junior member of a Government which very rightly put a price on Mr. Begin's head. I agree with Sir Harold Wilson, a longstanding and loyal friend of Israel, who recently said publicly that in his view Mr. Begin was an evil man.
I must avoid the temptation of getting into the Middle East debate, but I would like to make it clear that so far as these Benches are concerned, we stand four square for the maximum security of Israel within her recognised frontiers—but we also utterly condemn the invasion of Lebanon and the bombardment of West Beirut, which completed the killing of 17,000 Lebanese and Palestinian civilians. We utterly condemn, too, the appalling massacre at the camps inside West Beirut. We also condemn the colonisation of the West Bank and the brutal repression of

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the Palestinians there. It has not stopped; our attention may have been diverted by the appalling massacres in Beirut, but in fact there are still scores of unarmed civilians—sometimes demonstrators, sometimes passers-by—shot by the Israeli defence forces or by Israeli soldiers.
In this debate, the most challenging and provoking of all the speeches, I found, was that of the noble Lord, Lord Chalfont, which was very keenly listened to by noble Lords and seemed to win a great deal of agreement. He spoke of the rift in the alliance, which is surely the most immediate, topical and important subject in almost the whole field of world affairs today. The noble Lord, Lord Chalfont, listed the rifts. He mentioned the steel quarrel, the pipeline quarrel, the American vote on the Falklands, and the flow of American arms to the IRA. I confess that I expected him to follow with some polite criticisms of the United States Administration, or with a polite request that President Reagan might mend his ways. But I do not believe I am doing the noble Lord an injustice when I say that I did not hear any criticism of the policies and actions of the United States Administration in these and other matters.
Instead, we had some criticism of the European reaction to the rifts. The noble Lord, Lord Chalfont. said that at best it has produced a tendency to equate the Soviet Union and the United States; a kind of dangerous neutrality. At worst, he said, it creates a poisonous atmosphere of anti-Americanism in Western Europe. I take a different view, with great respect, from the noble Lord on this. I do not believe that the Europeans are to blame in this way. I am a strong supporter of NATO, but, as I think, we have watched a series of extraordinarily foolish actions by the United States Administration which has created strong and entirely well-justified criticism in Western Europe.
I cannot go through all the examples but will take the most important of all—the question of United States' strategic nuclear policy. We on these Benches accept that while the Russians have nuclear weapons the West must have nuclear weapons too. But it is one thing to support an effective Western deterrent and quite another to approve the preposterous scale of current United States production of nuclear weapons. An effective nuclear deterrent, after all, is one that is invulnerable and can inflict unacceptable damage on an adversary; that is an effective nuclear deterrent. It can thus quite reasonably be argued that a single Soviet or American missile submarine of the smaller type carrying, say, 100 warheads on station is an effective nuclear deterrent—100 warheads; and yet the Americans are now in the process of increasing the number of their strategic warheads from 9,000 to 15,000.
This is lunacy, dangerous lunacy. They are building a strategic nuclear capability some 50 times larger than is necessary for an effective nuclear deterrent. The Russians are doing so too. Let me risk the wrath of the noble Lord, Lord Chalfont, and maybe of the noble Viscount too, by comparing their attitude of the two great powers in this regard. Why are they both doing it? Why do they both build up this absurd overkill? Both reply that they must match the other's build up; both reply that the other is planning a protracted
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nuclear war; both reply that the other thinks it can win a nuclear war.
Viscount Trenchard: My Lords, the noble Lord earlier put great faith in the International Institute's figures of comparison, and I know that he has read them carefully, the last two years' reports. I know they have confirmed clearly the great swing that has occurred, and is still going on at the present time, towards the balance tilting in favour of the Soviet Union, heavily in the intermediate area, nearer equal in the strategic.
Lord Mayhew: My Lords, may I ask the noble Viscount, what is he arguing? Is he arguing that if you already have a fantastic overkill of fifty times the deterrent needed, the fact that the other side has sixty times means that you must have sixty times?
Viscount Trenchard: That is why we back the American moves to multilateral disarmament, my Lords. The fact that the allies spent less in all areas on defence and declined as a percentage of their GDPs was not matched by the Soviet Union, which built up its arms in the opposite direction. The reversal of that may lead to multilateral disarmament, which is what we all want.
Lord Mayhew: My Lords, with great respect to the noble Viscount, how likely is it that this build-up of overkill on both sides creates the conditions for multilateral disarmament? Does it not increase tension, increase suspicion on both sides? How far is it possible for people who believe in the necessity of their own country's overkill to go to the negotiating table and negotiate it away with the other side? I think it very unlikely.
Lord Chalfont: My Lords, will the noble Lord help me, and I think some other Members of the House, in one respect? In comparing the two sides in this way, and leaving aside whether there is overkill or not, does he agree that one side, one alliance and one power, is aggressive and the other is defensive?
Lord Mayhew: My Lords, I think that is a little over-simple, May I come to that later. What I am arguing is that the building up of fantastic overkill both by the Soviet Union and the United States is not, as the noble Viscount suggested, a happy prelude to multilateral disarmament, but it creates exactly the opposite atmosphere; and, what is more, that people, Soviet and American leaders, who are supporting the overkill, who are dedicated to creating the overkill, are on the whole by that fact less well qualified to get rid of the overkill by negotiations at the conference table. It means, in my view, that any Soviet or American negotiator who thinks that his country's overkill adds to its security should not be allowed within 100 miles of Geneva, because he does not understand the way that nuclear weapons have transformed the whole problem of disarmament and security; he does not

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understand that there is a stopping point in the number of nuclear weapons needed for deterrence; he does not understand that both sides have nothing to lose and much to gain by rapid agreement to sweep away this overkill capacity. It is little wonder, in view of what I am saying, that discouraging reports have come from Geneva.
I am challenged by the noble Lord, Lord Chalfont, to say that one side is aggressive and the other defensive. I believe that is a little simple. Let me again risk his wrath by comparing the Soviet Union and the United States. Let us compare the most typical and most important matter in the Arab-Israeli conflict. One of the major features of recent events in Palestine has been the remarkable restraint shown by the Soviet Union. We have all said hard things about the Russians and—rightly—about their foreign and defence policies.
We have rightly pointed to Afghanistan and called the Russians aggressive and expansionist. But let us suppose for one moment that the Russians had acted in relation to the Arabs as the Americans have been acting in relation to Israel. Let us imagine that President Brezhnev, after saying that he would ensure Arab military supremacy in the region, continued lavishing arms and money on Arab countries after they had illegally invaded Israel and were bombarding Tel Aviv from the air, sea and land. What would we say? We would say that the Russians were outrageously aggressive and a menace to world peace. Yet we know, and no one can deny it. that President Reagan has guaranteed Israel military supremacy in the region and continued lavishing arms and money on Israel after it had invaded an Arab country and was bombarding Beirut from air, land and sea.
These may not be popular things to say, but I am challenged by the noble Lord, Lord Chalfont, to say that one side is aggressive and the other defensive. I challenge him to apply that to the recent events in the Middle East to the disadvantage of the Soviet Union.
Lord Chalfont: My Lords, since the noble Lord insists on suggesting that he might incur my wrath, is he aware that it is not my wrath that he incurs but my astonishment? Is he now telling the House that, in the view of the Liberal Benches, the Soviet Union is not an aggressive, expansionist and imperialist power when compared with the United States of America? Is he denying on behalf of his party that the Warsaw Pact is an aggressive organisation and that the North Atlantic Treaty Organisation is a defensive one? I shall be most grateful for a straight answer to a straight question.
Lord Mayhevv: My Lords, the answer is "no," and that I entirely agree with the noble Lord. He said that one side was aggressive and the other defensive. I said that that was too simple. I gave a single example, which I stand by, where it is not quite correct to say that one side is aggressive and the other defensive.
However, it is not only in the Middle East and not only American nuclear policy. I do not mind criticising the United States Administration. Europeans are not second class citizens. We are not satellites of the United States. Wherever we look, we see in the American Administration, the speeches and actions of President Reagan, whether over the Middle
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East, the pipelines, the vote on the Falklands, the sanctions against Poland, nuclear weapons, the law of the sea or arms for Taiwan—I do not have time to go into that now—a long catalogue of folly. Why should Europeans feel guilty about criticising the United States Administration? We support NATO and we support the United States, but we have our rights.
I conclude on this far more important point. It is no wonder that the West is divided, but it is not the fault of the Europeans. It is the fault of the United States Administration. The reaction of Europeans should not be weasel words or stringing along. Not at all. They should examine these issues on their merits and reach an agreed European view on them. They should try to get the European view greater weight within the alliance, ensuring that Europe's calmer and more experienced attitude on these major problems carries more weight; resisting measures to escalate the cold war—and I was so glad to hear the noble Lord, Lord Home of the Hirsel, saying that he thought that reconciliation between East and West should be our objective—and pressing for a serious commitment by both sides to nuclear disarmament. I believe that I am speaking for these Benches in what I have said and that I am speaking for quite a large section of European opinion. I believe that, to the extent that Her Majesty's Government follow this road, they will get support from these Benches.
11.10 p.m.
Lord Stewart of Fulham: My Lords, a great many different opinions have been expressed on many topics, but we are all unanimous, I think, in congratulating the noble Lord, Lord Maclehose of Beoch, on his excellent maiden speech. It was a special pleasure for me to listen to him, having profited from his wise advice when we both worked together at the Foreign Office. Since then I, like many others, have admired from a distance his most impressive career in Hong Kong and the great services rendered to Hong Kong, to Britain and to mankind at large by the success he had there. I would add the hope that the Government will decide to follow at least some of the advice that he gave. We on these Benches listened with particular interest to what he said about a more favourable attitude towards citizens from dependent Commonwealth countries who come here as students. I would particularly commend that advice to the Government.
I want to begin what I have to say by reference to the Falklands, because I believe that it is not only important in itself, but that it contains certain lessons that govern the conduct of foreign policy as a whole. In the first place, we are now up against, as one always is after a victory of any kind, the problems that victory brings. We have to decide what the future of the islands is to be and Britain's future relation to them. But we ought not to allow the fact that we have now got some rather difficult problems to solve to start us wringing our hands and regretting that we ever sent the task force at all. That would be a most disastrous mistake.
If we had not sent the task force, the Falkland islanders would now be ruled by an arrogant, successful dictatorship which had no regard at all for either their wishes or their interests. We could not look to anyone to come and help, since we ourselves had not been prepared to play our part. The whole world

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would have drawn the conclusion that, as far as resisting aggression is concerned, "You can count Great Britain out". These would have been very dangerous results, and we should bear them in mind if ever we are worried about the inevitable results of having sent the task force. We now have problems to solve.
I think that we are right in saying that negotiations cannot begin yet. That is partly for emotional reasons which are perhaps difficult for even those foreign countries most friendly to us fully to understand. However, now let us consider the following. If we say—and I think that we are justified in saying it—that we cannot begin the negotiations yet, then we must answer the questions: When? How soon? We cannot for ever go on saying, "Not yet". We must understand why some countries—old friends and members of the Commonwealth—genuinely well disposed towards us, were not prepared to do more than abstain. Indeed, the Prime Minister when speaking particularly with reference to the French abstention, spoke as if abstention was a mark of real goodwill.
Why is that? It is because most of the nations in the United Nations feel, "Well, we all know that sooner or later this matter has got to be talked about, negotiated and agreed on", and they do not feel prepared to give a vote which might suggest that they think that negotiations can be put off for ever. That is the lesson that we have to learn from that vote: that, understandable as our own feelings are, in the end we must come to the negotiating table. One of the things we must do when we get there is to ensure that there is a proper status for the islanders; that is to say, that they have real self-government, enjoyment of all the ordinary human rights and a certainty that their country will not be overrun by people brought in from outside.
Many permutations of a solution have been offered. When the war was on the Government themselves went a very long way with a proposal for a United Nations administrator, which the Argentines, if they had had any sense at all, would have accepted on the spot. I wonder whether the Government still stand by proposals of that kind. We know that they are not ready to answer that question at present, but it is a question that will have to be answered.
However, whatever solution is adopted, whatever arrangement over sovereignty is reached, it must be one that makes sure that the islanders themselves have all that we understand by the real substance of liberty and human rights. For my own part, I still take the view, which I expressed in the several debates that we had when the war was on, that we have to think of this problem as part of the whole problem of the Southwest Atlantic and, indeed, the Antarctic: that we must have some kind of international grouping jointly responsible for the development of that part of the world. That must be reconciled with the human rights of the islanders.
It seems to me, then, that the whole Falklands episode illustrates this point about foreign policy. You will not get anywhere if you are not resolute in meeting present difficulties. If we had not been resolute at the time of the invasion, we should be nowhere at all now, with nobody except a victorious Argentine Government deciding what is to happen to the Falklanders. But in the long run you do not get anywhere unless, in
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addition to being resolute and firm in dealing with an immediate emergency, you have some vision and imagination for the future. To take a dead view like, "We have won back the islands; there they are; that is that", is also not the right answer.
I believe that this runs throughout foreign policy. Possibly one of the reasons why human affairs are, on the whole, so unsatisfactorily run is that so few human beings possess the qualities to enable you to be firm in meeting a present emergency and the qualities that enable you to show vision, imagination and so on for the future. However, that is what we must try to do, and it does not apply only to the Falklands.
Talking of vision for the future, when the noble Lord, Lord Maclehose, was speaking I was reminded of an occasion in 1929 when, as a young student, I attended a meeting of the General Assembly of the then League of Nations. I heard the Chinese delegate make a speech drawing attention to the article in the covenant of the League which said that there were certain treaties that were generally accepted as being out of date and that one of the League's jobs was to deal with this problem and try to bring the situation into line with reality. I think that I was one of the very few people in the hall who was actually listening because I had come there as a student and it was all new to me. The delegates had heard this speech over several years and were giving it no more than a polite show of attention. It is interesting to speculate that if it had been taken seriously, if the West had realised how deeply the Chinese felt about the unequal treaties, and had understood that in 1929 or earlier, we might have a very different situation now.
Of course, the Falklands episode has provided one of the points of strain between the United States and ourselves, and between the United States and Europe, which the noble Lord, Lord Mayhew, was listing with, I thought, perhaps rather unnecessary relish recently. It is true that there are a number of points on which we have disagreed, and have been right to disagree, with the United States. I do not think I find their vote incomprehensible, but I still think it was a profound mistake, even while realising what their special problems are on that side of the world. In the long run making it quite clear which side you are on is, on the whole, fairly sound policy.
I found it difficult to sympathise also about the pipeline and one or two other matters, but I do not believe that any of these differences, which we have simply got to live with for the present, ought to be allowed to undermine the reality of the Atlantic Alliance itself. This is so large and obvious that at times one almost hesitates to state it because one wonders, is there anybody who cannot be aware of it?
We are ourselves a democracy, and although the scholars can argue as to the exact meaning of that word we have a fairly good idea what we mean by it. It is our great good fortune that the most powerful country in the world is also a democracy. It does not run its democracy quite in the same way as we do, and we naturally think we run ours rather better, but on things that really matter it is a democracy. The other great power in the world is emphatically not, and from time to time makes no bones about saying what a sham it thinks our democracy is. In that situation an alliance between ourselves and the United States and the other nations is of course an enormous advantage, and it would be complete folly to try to weaken it in any way.

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That brings me to what, in a sense, must be the main topic of any foreign affairs debate, the East-West question. Like the noble Lord, Lord Mayhew, I was especially interested in the speech of the noble Lord, Lord Home, and his use of the word "reconciliation". May I say that a member of the Conservative Party needs to be in enormously good standing to be able to use the word "reconciliation" about the Soviet Union and be sure of getting away with it. I do not know what the noble Baroness may say when she hears of it. but perhaps the noble Lord may feel that that does not matter very much.
I reckon that this must be an objective of policy. It is once again, dealing with the East-West question, an example of the point I was trying to make earlier; the importance of combining firmness in the immediate difficulties of the situation and a degree of vision and imagination for the future. In the immediate situation when the two alliances face each other across an enormous heap of weapons, and when there are a large number of causes of disagreement spreading, as we have heard in this debate, all over the world—the Horn of Africa, Poland, Afghanistan, Europe, Asia, Africa—it is plain enough that we have to be resolute in that immediate situation. It has to be quite clear that our alliance has both the power and the will to defend itself.
I am not going to attempt to add up the figures of armaments on either side, still less to engage in some of the speculations, which are becoming increasingly fashionable, as to how long this country would last after so many bombs of such and such a size had been dropped on it, and so on. I believe there is a great deal of argument there where people are claiming a degree of certainty that, in the present state of knowledge, is not available and I do not believe ever will be. What I am quite certain of is that it would be wrong for this country to put itself in the position where it had both deprived itself of nuclear weapons and had behaved towards the United States in a way that threw great doubt on the validity of the alliance. That would put us in a position of enormous risk; and as to the Soviet Union, I will say no more than that, in the light of what we have seen them do. I am not prepared to expose my country to that risk. One does not need to be a rabid cold warrior to remember right back to the attempt to seize West Berlin, and the whole series of subsequent aggressions and threats. One has only to look at the position of all the countries in Europe that border on the Soviet Union, all of them reduced to a greater or lesser degree of subjection (except Norway and Turkey, which belong to NATO), to realise that it would not be sensible to behave on the assumption that there are no risks to be run and that we need not bother to defend ourselves.
We must, therefore, continue to maintain our defences, but I put this question to the Government: when they have added up conventional defence, our present nuclear defence, Trident and whatever they are considering by way of the future of the Falklands, are they happy about what it is all going to cost? If it will cost a lot, that cost must be met, and I do not think it is wise at the same time to go around talking about tax cuts in the near future. They may not find that it adds up. And I have always rejected the idea that some members of the Conservative Party have; namely, that
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you can always pay for necessary defence by reducing the social services. If the situation is such that our defence burden will increase, it should be increased in a way in which people contribute according to their ability, and trying to pay for it out of the social services is the exact opposite of that.
I listened very carefully—I always do—to the speeches of my noble friends Lord Brockway (we appreciate that he cannot be here at the moment). Lord Jenkins of Putney and Lord Soper. All I can say is that I, for my part—and I do not think I am alone in this—cannot agree to the proposition that we should take action that will make us virtually helpless in comparison with the Warsaw Pact, and that is what it amounts to.
Lord Jenkins of Putney: I do not know what the view of my two noble friends is on the point, my Lords, but the proposition which my noble friend Lord Stewart has just asserted is not one I have put forward; neither do I believe in it.
Lord Stewart of Fulham: My Lords, I understood my noble friend to believe that this country should not own or make or possess any nuclear weapons itself or have any nuclear weapons on its territory from any other country.
Lord Jenkins of Putney: That is a different proposition.
Lord Stewart of Fulham: I do not think it is, my Lords. It greatly weakens our own defence and puts us at odds with our most powerful ally.
Lord Jenkins of Putney: That is the difference between us. my Lords; whether that is or is not a position of defencelessness. I take the view, which I tried to enunciate at some length, that to de-nuclearise ourselves does not create a defenceless position. That is not a position I support. All I am wishing to do is to recognise the difference between myself and my noble friend, but to state what the difference is.
Lord Stewart of Fulham: My Lords, if my noble friend can persuade people that we can deprive ourselves of all our nuclear weapons and put ourselves at odds with our most powerful ally and not be at risk, he may try to do it, but he does not convince me, and I do not think I am alone in that regard.
What, then, ought the approach to be? It is, first, that we maintain adequate defences, and I gave a warning comment about the cost of that. Secondly, the Government should press on vigorously for agreed verifiable disarmament. It sometimes seems that the Government do not give the impression of having their heart in the search for agreed verifiable disarmament. We usually have to extract information about how negotiations are going by way of Question and Answer. I hope that perhaps the noble Lord, Lord Belstead, will be able to say how they are getting on. I recall asking a Question a little while ago about progress towards a complete test ban treaty and being told that certain technical problems had been referred to a working party. Have we got beyond that? I wish the Government would put more life, more enthusiasm, into their approach to this problem.

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Then, in addition to immediate defence and the search for agreed verifiable disarmament, there is the search—as the noble Lord, Lord Home of the Hirsel, put it—for reconciliation. I suppose that in a sense that means an attempt to get back to what we all hoped for when the Helsinki Agreements were drawn up. I believe that it is possible to have not real understanding and friendship between groups of nations whose ideologies are so different, but a sufficient recognition on both sides of the folly of waging war against one another so that they will seriously decide to live with each other; to take the argument a little further back, to what used to be called coexistence. How are we getting on with that? I believe that the talks in Madrid have just begun, and in a sense they are a continuation of Helsinki. The right reverend Prelate the Bishop of London referred to the Madrid talks. Can the noble Lord, Lord Belstead, tell us what is to be the British Government's contribution to those conversations?
It is of course true that what has happened to Poland and Afghanistan does not, to say the least, inspire confidence in regard to conversations with the Russians. But perhaps the Government can tell us what they feel should be the right stance of European Governments towards events in Poland and Afghanistan. There was recently a rather unkind article in, I think the Economist, pointing out that we were criticising America for its vigorous reaction to events in Poland, but did not appear to be willing to do anything ourselves. I know that it is an extremely difficult question to answer. What do you do when you have a great tyrannical power tyrannising over its neighbours, and you are not in a position simply to stop it? Are other measures likely to make things worse? Perhaps we may have the Government's feeling on that.
I see that I have already spoken for too long, but lastly I want to take up matters that were raised by my noble friend Lord Cledwyn of Penrhos at the beginning of the debate, and more recently by my noble friend Lord Gifford—the questions of aid to the third world, the developing countries, and our attitude towards South Africa. There is here another example of what I call the need for vision in tackling longer-term problems. It is necessary that we should at present have a firm stance on defence, but by itself it is not enough.
As my noble friend Lord Hatch of Lusby pointed out, the Government's record on aid is not encouraging. Yet we know that it is in some of the most poverty-stricken parts of the world that the danger spots are likely to arise. Can the Government tell us whether their record on aid is to be improved? Are they going to make any attempts to improve the world's monetary system? We had the example recently of the IMF granting a loan to South Africa. Not only should it not have done that, but we should be considering more positively what changes ought to be made in the organisation of the International Monetary Fund. It does not at present do enough to help the poorest parts of the world, and that ought to be at any rate one of its functions.
The point that I have been trying to make throughout is that we stand in a position where we must be resolute. As we defended the Falklands, we must be prepared to defend ourselves and our alliance in
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Europe and elsewhere. But there are great problems for the future. In particular, the problems of race and of world poverty face us, and our resolution in the present will be to no purpose if we have not the vision for the future.
The Lord Bishop of Norwich: My Lords, before the noble Lord sits down, I should like to ask him one question, if it is right to do so. In the light of his very encouraging and warming speech, is it right now to believe that there is a shift in official Opposition party policy about, the vexed question of nuclear disarmament of a unilateral kind? If I understood the noble Lord correctly, he was taking a multilateral stand openly and boldly.
Lord Stewart of Fulham: My Lords, the right reverend Prelate is quite right about the stand I was taking. The answer to his question is, "No".
11.35 p.m.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, this has been a wide debate, with speeches from many of your Lordships who have great experience of the problems which confront us today, and this was evident especially in the speech of the noble Lord, Lord Maclehose. We have been fortunate today to have had the benefit of the views of the noble Lord, who has served both Hong Kong and Her Majesty's Government so well for so long. The noble Lord governed Hong Kong during 10 of the most dramatic and successful years in the eventful history of that territory, and his speech today has been of great value to our determination to try to find a way of ensuring the future stability and prosperity of the territory.
The gracious Speech records the great importance which Her Majesty's Government place upon the Commonwealth. The noble Lady, Lady Kinloss, spoke of the need for training a reconstituted air force in Kenya; and, indeed, the noble Lady spoke with her knowledge of that part of Africa. The Government share that view of the noble Lady. Indeed, my right honourable friend the Secretary of State for Defence visited Kenya in September and discussed a range of defence issues, including training, which we already provide for Kenyan armed forces; and he also discussed possibilities for the future.
Perhaps I should explain that I have been absent from your Lordships' House because I have just returned from representing the Government at the South Pacific Conference, and from all-too-brief visits to Australia and New Zealand. The message with which I came away from that visit was the determination of the independent island states of the South Pacific to maintain their freedom and their wish for Britain, together, of course, with Australia and New Zealand, to be associated with maintaining the stability of that vast region of the world. I am therefore particularly glad that although, of course, the aid programme, which was referred to towards the end of this debate, is always under pressure, our bilateral aid to the countries of the South Pacific is among our highest programmes in per capita terms, and at a time when Britain's contributions to multilateral aid also are ever-increasing.

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We are showing our concern for the difficulties of developing countries, and particularly for the difficulties of the least developed, during the present recession. Nonetheless, the noble Lord, Lord Cledwyn, and, indeed, the noble Lord, Lord Hatch of Lusby, were critical of our aid levels. Britain is above the average of the OECD aid donors. We are in fact the fifth largest giver of aid. in volume terms, in the whole world; and as a result of the statement of my right honourable friend the Chancellor of the Exchequer yesterday, there will be an increase in the net overseas aid programme of this country, next year, of £85 million. So unlike the noble Lord, Lord Hatch, I do not see the reference to aid in the gracious Speech as being in any sense hypocritical; and I would add, in answer to the noble Lord's question, that Britain has met its full obligations under the IDA.
I also came away from the visit that I paid to the South Pacific with a very strong conviction about the value of the Commonwealth. Across geographical and other boundaries of the world, the'countries of the Commonwealth share many institutions and beliefs which rely, ultimately (do they not?) upon the principles of freedom and justice. But, of course, freedom and justice flourish only where people are ready to defend them.
The gracious Speech therefore makes clear that the first duty of Government is the security of the nation. We in the Western Alliance have a twin aim: to defend freedom in the face of the Soviet military build-up, which is unquestionable; and to work constructively for the elimination of international tension—and with it to work, as my noble friend Lord Home said, for reconciliation, where it is possible, in the face of the Soviet policies of interference and repression.
In his speech my noble friend Lord Trenchard referred to the contribution which Britain is making to fulfil our duty to NATO and to maintain our readiness to respond to threats out of Europe. If I may reply to the noble Lord, Lord Stewart of Fulham, yes, we are certainly satisfied that we can and will pay for our defence budget. As an integral part of our security policy, we also support the negotiation of arms control agreements. Without re-starting the argument, despite what the noble Lord, Lord Mayhew, had to say, the United States Government has taken an imaginative lead in the negotiations over the START and INF arms reduction talks in Geneva, and NATO is united in its support of the United States commitment to negotiate balanced reductions in current nuclear weapon levels. At the same time, NATO stands firm by its decision to modernise its intermediate nuclear forces, if the Russians are not prepared to negotiate an equitable and genuine agreement.
The noble Lord, Lord Cledwyn, asked about the progress of the talks. The talks in START and INF between the United States and the USSR are being held in confidence but, perhaps I may say, on the MBFR talks, that the West have met a main stated requirement of the East for firm commitments by all members of each side for conventional force reductions from the outset. But those reductions are to be balanced and verifiable, and we now await a response by the Soviet side to that initiative which was taken by the West in the month of July. My noble friend Lord Home made the point that regular and
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mutual verification would be something which would now be well worth close study. I assure my noble friend that we will certainly closely examine my noble friend's interesting suggestions.
We have also made plain our views on the Soviet Union's human rights record. In recent years, we have witnessed a sustained campaign by the Soviet authorities against the right of political and religious expression and of freedom of movement, and in Poland the repressive measures of the authorities have been met by consistent condemnation from the Atlantic Alliance.
These examples of repression are all likely to be critical issues at the conference to review the implementation of the Helsinki Final Act which reconvened in Madrid today. If I may reply to the right reverend Prelate the Bishop of London, I would like to take this occasion to reaffirm the commitment of Her Majesty's Government to the Helsinki Final Act. We shall continue to impress on the Soviet Government the need to observe their commitments agreed at Helsinki seven years ago, for their present performance affronts basic human values and serves to weaken international trust upon which the CSCE process ought now to be able to build.
If I may turn to Europe, I join my noble friend Lord Trenchard in saying that whatever view, historically, the British people may have taken of their relations with Europe, today we cannot ignore our close ties with the Community. As your Lordships know, the reasons for this are both political and economic: the contribution of the Community to peace in Europe; the consolidation of democracy in countries where it might otherwise be threatened; and the far greater influence which the countries of Europe can have in political co-operation than they would ever have individually. These are all political considerations. And. on the economic side, there were put very vividly by my noble friend, first, the tariff-free market of 270 million people; then nearly half our exports now going to the Community; and then our membership of the Community being a key factor in attracting foreign investment, upon which it is assessed that one-fifth of jobs in manufacturing industry depend.
There are of course many problems. Your Lordships have drawn attention to the lopsided budget arrangements which weigh heavily upon us, and are the result of the common agricultural policy. The Government very much has this concern. It was a major achievement that at the last Foreign Affairs Council we were able to resolve the outstanding problems of our refunds for 1982. We are also working to tackle the longer-term problem urgently, for whatever the virtues of the CAP in principle, in practice the Community really has to find some way of limiting the enormous amount of surplus production and the cost of disposing of it. Only then can there be a better balance in the budget, and that of course very much affects the interests of this country.
My noble friend Lady Elliot of Harwood identified some interesting ways in which the regional and social policies of the Community can be developed. Certainly we shall look closely at what my noble friend said, but we will look at it—and do not let us forget this, my Lords—in the context of the fact that outside the Community we would be at the mercy of some very chilly economic and indeed political winds.

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Within it, as I think my noble friend was saying, we can and we will work with our partners to secure control over our future.
May I turn to the Falklands—about which a good deal has been said in the debate this afternoon—and indeed the situation in the islands and the vote last week in New York. As to the United Nations resolution, which called on the United Kingdom and Argentina to resume negotiations on the sovereignty dispute, this was a cynical and hypocritical affair, coming as it did from a country which only seven months ago severed diplomatic relations and broke off negotiations to launch an armed invasion of the Falklands. I realise that the noble Lord, Lord Kennet. does not take the same view, but after the fairly lengthy exchange between the noble Lord and my noble friend Lord Beloff, I do not think that I will add to that except to say that the resolution, even in the watered-down form in which the Argentines were finally compelled to present it, remains totally unacceptable to the British Government, and we were glad that more than 60 members of the United Nations refused to support it.
My noble friend Lord Orr-Ewing made a very interesting and thoughtful suggestion about a reference to some form of arbitration. If I may say so, after peaceful and lawful occupation since 1833, and in the view of most certainly the Government and all the people in this country, there is no question about the sovereignty of the country; it is arguably not a matter for us to refer, and it is something on which the Argentines should take the initiative if they think they ought to do so. But of course the difficulty is that the record of Argentina so far as arbitration decisions are concerned has been very bad indeed in the past. Of course I shall draw the attention of my right honourable friend to what my noble friend has said, but I just make the point that there is that very great difficulty if one looks at the record of the other side in that kind of matter.
The noble Lord, Lord Stewart of Fulham, spoke of the need to have one's rights resolutely defended and then to look constructively to the future. Much remains to be done simply in the terms of letting the islanders recover emotionally and physically from the Argentine invasion and occupation. But the islanders once more enjoy essential services. Mine clearance remains a major problem, but at least mined areas have now been fenced off and clearly marked. Large quantities of building materials, fuel and other essential supplies and equipment have been shipped out. More supplies are on the way. Work has begun on providing new permanent housing. The airport has been given essential immediate repairs and has been extended. The longer-term development of the islands is of course very much needed. The recommendations of Lord Shackleton's report—and we are indebted to him for all the work he has done—are being very carefully considered, both in the Falkland Islands and by the Government. The Civil Commissioner has now reported on the islanders' views, and the Government hope that we shall soon be in a position to take decisions on the future economic development of the islands.
The noble Lord, Lord Cledwyn of Penrhos, asked me about the allocation of the additional £622 million for 1983–84 included in the Statement made by my
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right honourable friend the Chancellor of the Exchequer on extra costs following the Falklands action. The scale and the cost of the future garrison on the islands will depend upon the level of the threat posed by Argentina. As we all know, they have yet clearly to notify their intentions towards the islands. In these circumstances, it is not possible to estimate how, and how soon, the costs which undoubtedly are going to have to be incurred in the immediate future can in fact be decreased.
The noble Lord, Lord Hankey, referred to Gibraltar and expressed the hope that the British Government would remain firm in the commitment—which is firmly in the preamble to the constitution of Gibraltar—that Gibraltar will not pass to another rule unless this is the wish of the people of Gibraltar. I gladly repeat that undertaking today. I add that we hope that the new Spanish Government will lift the restrictions on the frontier as soon as possible, as was agreed at Lisbon in 1980. We remain fully committed to the Lisbon process.
The situation in Hong Kong is, of course, entirely different. Indeed, the problem there and the successes of that territory are unique, as the noble Lord, Lord Maclehose, pointed out in his speech. As your Lordships know, meetings in Peking to follow up the Prime Minister's visit have now begun. The agreement reached during the Prime Minister's visit to start these meetings was a very considerable achievement. The content of those meetings must of course remain confidential. The issues are complex and the talks will take some time, but the will is there. The important result of my right honourable friend's visit is that, despite the differences of view on the question of sovereignty, both we and the Chinese are on record as sharing the common aim of wishing to maintain Hong Kong's stability and prosperity. I believe that these differences can be reconciled and that an agreement can be reached which will be acceptable to Britain and to the people of Hong Kong.
In his speech the noble Lord, Lord Maclehose, spoke about the problems facing Hong Kong over the multi-fibre arrangement. I am pleased that the European Commission intends now to resume negotiations with Hong Kong on 16th November, and we hope for an agreement satisfactory to both sides. The noble Lord also spoke about students from Hong Kong. I hope he will not mind me saying that none of us should run away with the idea that in some way there is now no support for students from overseas in this country. Over 30 per cent. of overseas students last year were in fact funded from Government money. It is worth keeping that in mind. Having said that. I know that there is a problem. I realise that the Hong Kong Government have taken an initiative. I realise also, in answer to the noble Lord, that there is a recommendation in the Overseas Students Trust report. Immediately the trust reported in the month of June, we set up an interdepartmental committee to look at all the recommendations of the trust report. That committee is still sitting, but I hope very much that we shall be in a position to report shortly to your Lordships' House on our conclusions regarding the report.
I turn now to the Middle East, the subject of many of your Lordships' speeches, reflecting the wide shock at the tragic events in the Lebanon. Despite the recent

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progress in Beirut, the urgent need remains for the withdrawal of all foreign forces. We support the United States' efforts to bring that about, and it will be no easy task. In Southern Lebanon, UNIFIL remains in place and could play a useful role in future peacekeeping arrangements. Its mandate was recently renewed for a further three months, and in Beirut the multinational force is assisting the Lebanese army to restore its control in the city. The Lebanese Government has asked for a British contribution to the force. We are giving this request serious consideration, but we must bear in mind our heavy commitments elsewhere—notably, in the Falkland Islands.
The noble Lord, Lord Cledwyn of Penrhos, asked about the help which the British Government are giving to rebuild shattered Lebanon. We have now given £4 million through various channels as humanitarian aid to victims of the conflict, and we are also considering, together with our partners in the Ten, what contribution we can now make to the efforts which will be co-ordinated by the World Bank. We have urged the Arabs and the Israelis to seize the opportunity presented now by President Reagan's initiative. We realise that the initiative does not offer either side all they would wish, and neither is it identical with our own approach. But it is a well-judged and realistic attempt to stake out the middle ground between the parties and has generated momentum. We have been disappointed at the outright Israeli rejection. There is much in President Reagan's proposals that the Israelis should find reassuring; in particular, his firm commitment to Israeli security, which is a sentiment we heartily endorse.
We have encouraged the Arab side to look hard at their own position. Their objectives are now defined, and although we do not endorse all of them, it is useful to have them on the record. The process of reconciling differences is under way; it is better than a stalemate. King Hussein has the key role in all this. We have kept in the closest touch with him. Indeed, my right honourable friend the Foreign Secretary left this morning for talks in Jordan. King Hussein's discussion with the PLO on the best way of enabling the Palestinians to express their political rights is an example of the practical thinking which can with perseverance clear the way to a negotiated settlement.
The message of Venice that each side must accept that the other has rights continues to be valid, and we shall remain active in the search for a compromise. But it must be compromise based on the even-handedness of that approach. I hope that the noble Lord, Lord Wells-Pestell, will accept that assurance. The noble Lord also asked whether we sought a demilitarisation of the whole area. The point made recently by my right honourable friend in another place was that an independent Palestinian state, if one was created, would clearly need to be demilitarised so that Israel's security ws not threatened, and that a lower level of forces in the whole region would be of benefit to all concerned.
The right reverend Prelate the Bishop of London asked about Cyprus.
Lord Cledwyn of Penrhos: My Lords, before the noble Lord sits down, can he say whether or not the
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Government have decided to accede to the request for British troops to go to the Lebanon?
Lord Belstead: No, my Lords, we have not yet decided that. We are obviously considering it in the ambit of the caution we must have and which I explained. We are obviously considering that very seriously.
Lord Gladwyn: My Lords, before the noble Lord the Minister finishes with the Middle East, can he say something about the possible attitude of Russia and the Soviet Union?
Lord Belstead: My Lords, I do apologise to the noble Lord, Lord Gladwyn, who said that the interests ol' Russia should surely be taken into account.
Lord Gladwyn: In the long run, my Lords.
Lord Belstead: Yes, in the long run. Obviously what the noble Lord says is wise and far-seeing, but the matter which is upmost in the minds of the British Government at the moment is that we very much hope that Israel will come to see that her interests are better served by exploring every avenue possible that might lead to a lasting peace. In doing that. I think it is fair to say that Russia has not given any pointers as to what she would like to see happen in the Middle East. It was for that reason that I was silent on the question of Soviet Russia.
If I may now turn to Cyprus and answer quickly about four questions, the right reverend Prelate the Bishop of London spoke on this intractable problem. We believe that the inter-communal talks under the auspices of the United Nations Secretary-General—in the chair of which is Mr. Gobbi, who has done indefatigable work in these difficult talks—offer the best hopes of progress towards a settlement of the Cyprus problems. Following the tabling of the Secretary-General's evaluation last November there has been some, if limited, progress from which we find that we have drawn some encouragement.
Discussions in Washington between the seven economic summit countries, plus representatives of the European Commission and the Presidency, are continuing at the moment on the definition of an agreed framework for East-West economic relations. Considerable progress has been made and we hope that these questions will soon be settled. Should agreement be reached, this should make it possible in the future to avoid unilateral actions that prejudice the development of common western positions and appropriate policies on East-West economic relations. We also hope that such an agreement will help bring closer a resolution of the dispute on the pipeline.
I was sorry that my noble friend Lord Beloff felt that the effectiveness of the Wilton Park Conference Centre is being reduced. I share with my noble friend his regard for Wilton Park conferences as being a unique and successful information activity of the Foreign and Commonwealth Office. Certainly, as with all Government funded bodies, it is the case that we are seeking to ensure that Wilton Park is run cost effectively and efficiently, but before renewing the lease next year and after a comprehensive review. At the same time, we have decided to renew the lease for seven years, a longer period than before, and will be spending a

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substantial sum on capital improvements. We hope that, with the co-operation of the Academic Council, Wilton Park will therefore have an assured future on the basis that the Government have recently outlined.
Finally, on southern Africa, I was asked by Lord Cledwyn and Lord Gifford where we stand on a Namibia settlement. Most issues connected with Security Council Resolution 435 have now been resolved. The timing of implementation of the United Nations plan for Namibia will, however, depend largely on the negotiations of the United States with Angola and South Africa, on regional security issues in general, including the withdrawal of Cuban troops from Angola. I would repeat words spoken by my right honourable friend the Foreign Secretary in another place, that the crucial question is not whether the so-called linkage exists. Of course there is a linkage in Security Council Resolution 435, but the crucial question is whether a further reserve of political will on both sides can be found to clear away the few remaining obstacles.
Inevitably, a reply to this debate has fallen short of many of the questions that have been asked, and perhaps I may write on the ones to which I have not replied. I have probably had to refer more to the past than to the future. Therefore, a final word on the future. Through our membership of the Atlantic Alliance and within the EEC we will in the future work for greater security and stability in Europe. We will ensure, as the gracious Speech says, that the Commonwealth remains a force for peace. Through the United Nations we will continue to contribute wherever we can. and especially for a settlement in Namibia. In the Middle East, as I said, my right honourable friend is now engaged in talks with King Hussein, a key figure in that troubled area. In Hong Kong. Gibraltar and in the Falkland Islands there are problems, all of a very different nature, to be solved, but Britain faces those problems with confidence in one thing, confidence in the people of those territories, as I believe they have confidence in us. So we embark on a new parliamentary Session determined to work for security and prosperity, upon which our freedom ultimately depends.
The Earl of Perth: My Lords, before the noble Lord sits down, may I ask whether the Government will consider in future giving two days to this debate? There have been a number of very important speeches in the last three hours, but only a handful of your Lordships to listen to them. It is midnight, no dinner has been available, and it seems to me that this is an unnecessary hardship to inflict on your Lordships' House at the beginning of the Session.
Lord Belstead: My Lords, I shall draw that to the attention of my noble friend the Chief Whip. It is, of course, a matter for the usual channels.
Lord Hatch of Lusby: My Lords, I did not want to interrupt the noble Lord, but at the beginning of his reply he appeared to me to slide very quickly over his answers concerning aid. Will he now elaborate on them and dispel certain ambiguities which appeared in
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the words that he used? May I ask him two questions in order to clarify certain matters? He mentioned a statement made yesterday by his right honourable friend at the Treasury about added aid next year. Can he tell the House whether this will change the Government's announced intention of reducing overseas aid by 11 per cent. in the year ending March 1983? Secondly, can he say specifically whether the British Government are paying as much, more, or less to the IDA in the current financial year?
Lord Belstead: My Lords, I do not know the answer to the second question. All I do know is the answer that I gave to the noble Lord, that we have fully discharged our commitments to the IDA. I repeat, fully. I do not have the figures. If the noble Lord does not believe me when I say fully, then the noble Lord must go away unsatisfied.
Lord Hatch of Lusby: My Lords—
Lord Belstead: I shall not give way, my Lords. The answer to the noble Lord is absolutely straightforward. We have fully discharged our commitment to the IDA. I am delighted that we have done so. Indeed, we shall do our very best to fulfil our commitments to j what is called the special assistance programme of the IDA in 1984. As regards the noble Lord's first question, I was talking about the increase in cash terms—£85 million—in the next financial year for our aid programme compared to the present financial year.
The Earl of Swinton: My Lords, on behalf of my noble friend Lord Cockfield, I beg to move that this debate be now adjourned until later this day.
Moved, That this debate be now adjourned until later this day.—(The Earl of Swinlon).
On Question, Motion agreed to. and debate adjourned accordingly.

Epsom and Walton Downs Regulation Bill [H.L.]
The Chairman of Committees acquainted the House that (pursuant to the resolution of 14th October last) the Bills had been deposited in the Private Bill Office, together with the declarations of the agents; the Bills were accordingly presented, read a first time, read a second time pro forma, and reported from the Select Committees and the Unopposed Bill Committees with amendments.
Cornwall County Council Bill [H.L.] County of Lancashire Bill [H.L.] Hampshire Bill [H.L.] Nottinghamshire County Council Bill [H.L.]
The Chairman of Committees acquainted the House that (pursuant to the resolution of 14th October last) the Bills had been deposited in the Private Bill Office, together with the declarations of the agents; the Bills were accordingly presented, read a first time, and then read a second time pro forma, and reported from the Select Committees on opposed and unopposed provisions with amendments.

British Waterways Bill [H.L.]
The Chairman of Committees acquainted the House that (pursuant to the resolution of 27th October last) the Bill had been deposited in the Private Bill Office, together with the declaration of the agent; the Bill was presented, read a first time, passed through all its remaining stages pro forma, and sent to the Commons.
House adjourned at seven minutes past midnight.