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Commons Chamber

Volume 757: debated on Monday 22 January 1968

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House Of Commons

Monday, 22nd January, 1968

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Oral Answers To Questions

Ussr (Mutual Property Claims)

1.

asked the Secretary of State for Foreign Affairs whether he will now make a statement about the negotiations with the Union of Soviet Socialist Republics for the settlement of mutual property claims.

The Anglo-Soviet Agreement concerning the settlement of mutual financial and property claims was signed on 5th January.

Is the Minister aware that an agreement on this difficult subject will be generally welcomed, if it is a satisfactory one? In this connection, will he say why the Government have agreed to pay over to the Soviet Government half a million pounds from assets in this country which otherwise would have been available to meet the claims of British claimants?

This was a very difficult issue, but, by common consent, it was desirable to find a settlement in circumstances where many claimants had been waiting as long as 28 years. As I told the House on 17th January, the money was not paid over until the 12th of the month, after the agreement had been signed.

With regard to the gold entrusted by the Governments of the Baltic States to Britain, since no British Government have recognised de jure the incorporation of the Baltic States in the U.S.S.R., can we have an assurance that, in the event of self-determination, restitution of the amounts will be made to the independent Governments of the Baltic States?

I do not think that I could give such an undertaking. This is a practical agreement which recognises the realities, although its terms make no difference to the Government's policy of withholding recognition de jure of the incorporation of the Baltic States in the Soviet Union.

North Atlantic Treaty Organisation

2.

asked the Secretary of State for Foreign Affairs if he will give consideration to the question of withdrawing from the North Atlantic Treaty Organisation; and if Her Majesty's Government would give notice of denunciation in April, 1969, under Article 13 of the Treaty so that the United Kingdom could withdraw from the North Atlantic Treaty Organisation by 1970.

Would the Minister not agree that, now that we have abandoned our dreams of a world military rôle, we should come to terms with ourselves by getting out of N.A.T.O. and out of Germany? Will he not accept that we shall be forced to do it in a few years, and we might as well act now, thus saving some prestige and a great deal of unnecessary sacrifice for the British people?

I cannot accept that premise. I want to make it clear that we remain firmly committed to the Atlantic Alliance as the basis of our security, as my right hon. Friend the Foreign Secretary made clear in his speech in the debate last Thursday. We believe that progress in improving relations with the countries of Eastern Europe can best be made in close consultation with our allies, and N.A.T.O. has an important role to play in this.

Is the Minister aware that his Answer is very acceptable to right hon. and hon. Gentlemen on this side of the House? If, in particular, the Foreign Secretary is concentrating British policies more and more on Europe, as seems to be the case, surely he should find ways and means of increasing our help to N.A.T.O. rather than decreasing it.

Do not our obligations in N.A.T.O. lead us at times into difficulties with friendly Powers in South East Asia like Cambodia and Laos when the United States violates their neutrality?

I cannot see the connection between the events of which my hon. Friend speaks and the existence of the N.A.T.O. Alliance, the geographical limits of which are very precisely drawn.

Is the Minister aware that many of his hon. Friends, who do not care tuppence for the future of this country if they can get their prescriptions for nothing, are peculiarly susceptible to Soviet propaganda, which will increase this year, that we should withdraw from N.A.T.O.? May I reinforce what was said by my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home)? The right hon. Gentleman's reply has been welcomed on these benches.

While the hon. Member for Hertfordshire, South-West (Mr. Longden) may not be susceptible to Soviet propaganda, obviously he is susceptible to propaganda from other quarters. I repudiate his very insulting remarks about hon. Members on this side of the House. In facing up to the economic circumstances in which the country is now, we not only are doing the right thing but have the support of the nation.

Will the Minister point out to his hon. Friends that the Warsaw Pact is stronger than ever and that, until there is some sign of a reduction of forces in Central Europe, we should maintain the shield of N.A.T.O. as strong as it is now?

I do not think that there is evidence suggesting that my hon. hon. Friends need any education in this subject. The admirable speech of my right hon. Friend the Foreign Secretary last Thursday was, I thought, loudly applauded in all quarters.

33.

asked the Secretary of State for Foreign Affairs if, in view of the Government's policy to plan on the basis that there is no likelihood of a Russian attack in Europe, he will put forward at the forthcoming discussions of the future of the North Atlantic Treaty Organisation proposals for a reducation in its armed forces.

At their meeting in December at Brussels, North Atlantic Treaty Organisation Ministers agreed that one of the future tasks of the Alliance would be to intensify studies of disarmament and practical arms control measures, including the possibility of balanced force reductions.

If America and France can unilaterally withdraw their troops, why cannot we? Is a reduction of one brigade anywhere near good enough?

I do not think that unilateral reductions in forces would be appropriate in view of the considerable forces which the Soviet Union and the Warsaw Pact Powers maintain in Europe. We welcome and do what we can, as do our allies, to seek mutual reductions in forces, and I very much hope that we can go forward in that direction.

Would the Minister give a categorical assurance to the House that no plans are being made in the Ministry of Defence to withdraw half our forces from Germany?

The hon. Member asked me about plans in the Ministry of Defence. He must address that question to the Minister in charge of that Department.

Is the Minister aware that if limited fighting broke out in Europe there are good reasons for believing that it is more likely to be at sea than on land? When the Royal Navy is withdrawn from Singapore and the Persian Gulf, will he consider making a substantial naval contribution to N.A.T.O., especially in the Mediterranean?

As a former Minister in the Department my hon. Friend realises that strategic questions of that sort are best addressed to the Minister of Defence.

Does the Minister accept the flat statement in the Question that there is no likelihood of a Russian attack in Europe? If not, why did he not dispute it?

If we took upon ourselves the task of rewriting all the Questions put down as well as giving the Answers, that would be a rather long task. I accept that the danger of Soviet attack is very much less than it was some years ago, but equally I think that the role of N.A.T.O. has not been unimportant in that happy development.

Overseas Information Services

5.

asked the Secretary of State for Foreign Affairs to what extent overseas information officers are qualified in the commercial field.

Trade promotion is a major element in the work of information officers and a considerable part of their training course is devoted to commercial publicity. This includes discussions with the Board of Trade and the Committees of the British National Export Council.

:I thank my hon. Friend for that Answer, but is it a fact that information officers are doing an increasing amount of commercial work, and will he give particular attention to appointing commercially qualified personnel in those posts in future?

It is indeed the case that our information officers are doing an increasing amount of commercial work, and I think that the House would applaud this as being in line with our overall policies. Certainly we shall bear in mind, for this reason, ensuring that information officers are particularly well-qualified in this sphere.

Is not the whole trouble the fact that Her Majesty's Government are not qualified in the commercial field?

6.

asked the Secretary of State for Foreign Affairs if he will now announce a decision on the future level of overseas information services.

In view of the importance of our overseas information services in supporting export promotion and in sustaining Britain's position abroad, Her Majesty's Government have decided that, despite the need to reduce public expenditure as a whole, our overseas information effort should be maintained at about the prevent level of activity for the next four years.

Ought we not, however, to increase our information services, especially in those areas where we are reducing our military commitments?

There is a great case for doing so if our means allowed. I think that it has been generally recognised on both sides of the House that our information services have a most important role to play in maintaining Britain's influence abroad, but for the moment I am afraid I can hold out no hope for natural expansion.

Will the Minister give some indication as to which of the recommendations made by Sir Harold Bealey have been or are about to be implemented?

Our decision on expenditure and the level of activity is broadly in line with the recommendation that Sir Harold Bealey made at the end of his inquiry.

Disarmament

7.

asked the Secretary of State for Foreign Affairs if he will make a statement on the results achieved by Ministers of State responsible for disarmament since October, 1964.

Both of my right hon. Friends have displayed great skill and tenacity in the search for progress in the field of arms control and disarmament. Under their leadership the United Kingdom has played a full and influential role in international negotiations, notably on the non-proliferation issue.

Does the Foreign Secretary recall that the Labour Party Manifesto of 1964 promised the nation that first and foremost would come the Labour Government's initiative concerning disarmament? Will the Foreign Secretary remind the House what that initiative was?

Yes. Will the hon. Gentleman recall that we seem to be getting very near to the signing of a nonproliferation treaty? Will he recognise this as a very great benefit for mankind, and that the British Government have played a large part in achieving it?

Cyprus (Un Peacekeeping Force)

9.

asked the Secretary of State for Foreign Affairs what initiatives he proposes to take in the United Nations with a view to ensuring a more positive role for the United Nations peacekeeping force in Cyprus.

In accordance with the Security Council's unanimous Resolution of 22nd December, 1967, the United Nations Secretary-General is discussing aspects of the Cyprus question with the parties concerned, including the role of the United Nations Force. The Secretary-General has the full support of Her Majesty's Government in the exercise of his good offices.

I congratulate my hon. Friend on standing by Her Majesty's Government in the United Nations, but will he bear in mind that, as we do not seem to have sufficient to look after our vital interests overseas, there is a limit to what we can spend on looking after other people?

Yes, I recognise that. But it still remains the case that we have an interest in preserving peace wherever it may be. I think that most people would agree that we get very good value for money in the light of the contribution that we make to the United Nations force in Cyprus.

United Nations (Fourth Committee)

10.

asked the Secretary of State for Foreign Affairs whether he is satisfied with continued British participation in the affairs of the Fourth Committee of the United Nations; and if he will make a statement.

The Fourth Committee is one of the main Committees of the General Assembly and includes all members of the United Nations. We intend to continue to take a full part in its work.

Whilst being fully sympathetic with the wishes of the Gibraltarians not to be ruled by a Fascist dictatorship, may I ask whether my hon. Friend will bear in mind that this Committee can be a useful channel for directing world opinion against the Government of South Africa on its unfortunate attitude towards the South-West African mandate?

It would not be right to be drawn into the particular issues which my hon. Friend has raised; but it is clear that, while the recommendations of the Fourth Committee are not mandatory, we attach great importance to them as representing the majority of the member States. We consider each one on its merit and we consider fully what useful part the Fourth Committee can play.

Why does not the British representative on the Fourth Committee vote against the use of force against Rhodesia? Surely, whatever the British Government may think, they do not believe in the use of force against Rhodesia?

I do not think that the individual issue of Rhodesia arises on this Question. As I say, we consider what we shall do on the merits at the time.

Does my hon. Friend agree that the British representative on this Committee has one of the most difficult tasks at the United Nations, and will he give him our support?

Yes. I am glad that my hon. Friend has said that. I want to pay great tribute to the work recently done by my hon. Friend the Member for Oxford (Mr. Luard), who has put up a truly magnificent performance in most difficult and sometimes trying conditions.

Will the Government do more to point out to this Committee that its decision on Gibraltar was contradictory to the principle which it usually voices so vocally about self-determination?

That was said very clearly. It was said by my right hon. Friend the Foreign Secretary and repeated many times in the course of the debates in the Fourth Committee before Christmas.

Non-Proliferation Agreement

11.

asked the Secretary of State for Foreign Affairs whether he will make a statement on progress towards a non-proliferation agreement.

46.

asked the Secretary of State for Foreign Affairs what progress has been made by the Eighteen-National Disarmament Committee in Geneva towards the achievement of a non-proliferation treaty; and if he will make a statement.

A new draft of the Treaty, revised to take account of the views expressed during the previous session of the Eighteen-Nation Disarmament Committee and including an agreed Safeguards Article III, was tabled by the co-Chairmen at the opening meeting of the Committee's new session at Geneva on 18th January. The draft text of the Treaty is now therefore complete and is open for general debate in the Eighteen-Nation Disarmament Committee and later in the United Nations. Copies of the amended text will be placed in the Library of the House as soon as possible. Her Majesty's Government greatly welcome this development, in which we have played our part. We hope that it will lead to early and final agreement on the Treaty.

I am sure that the whole House welcomes the news given by my right hon. Friend, but could he be more specific about when he thinks the Treaty might be signed?

It is too early yet to give a date. My hon. Friend will know that it is intended, by the middle of March, to report from Geneva to the United Nations when further sessions will be held. I hope that it will not be long before a very large number of countries find themselves able to sign and later ratify this Treaty.

Will the right hon. Gentleman give us an assurance that Her Majesty's Government will not be a party to anything in this Treaty which would discriminate against or between existing members of the European Community?

I am not sure what is meant by "discrimination as between the members of the European Community". Certainly as a country interested in the development of the European Community, we have consistently taken the line that their special circumstances must be borne in mind in the drafting of the Treaty. Whether all the members of the Community become signatories is a matter on which I cannot speculate.

South East Asia Treaty Organisation

12.

asked the Secretary of State for Foreign Affairs what proposals he has made for changes in the rôle of the South East Asia Treaty Organisation.

We shall be amending our force declarations to the South East Asia Treaty Organisation as our forces in the area are run down. But no proposals for changes in the rôle of the Organisation have been put forward by any of our partners in the South East Asia Treaty Organisation, and we see no reason to seek them ourselves.

Will my right hon. Friend agree that, as we run down our forces, our rôle should be more towards helping nations to stand on their own feet economically than from a security point of view?

As I said the other night when winding up the debate, I believe that to be profoundly true, and we will do that. But it does not mean that we need at the same time to seek any change in the rôle of the South-East Asia Treaty Organisation.

is the Foreign Secretary going to negotiate these reductions or give our allies a flat statement?

I am afraid that the hon. Gentleman has got the whole thing wrong. The situation in S.E.A.T.O. is that forces are declared, but, unlike N.A.T.O., forces are not necessarily committed.

Vietnam

13.

asked the Secretary of State for Foreign Affairs what further British action has been taken to seek an end to the Vietnam war.

14.

asked the Secretary of State for Foreign Affairs what representations were made to the United States Government in relation to the war in Vietnam during the last 12 months.

We have been, and remain, in close contact with other Governments concerned, including the United States Government, about ways and means of bringing the Vietnam war to an end. The House will understand, however, that I cannot reveal details of these private exchanges.

Is it not tragic that at a time when the Government of North Vietnam have said that once the bombing stops there will be negotiations, there is no sign of talks beginning? Is my right hon. Friend aware that many of us genuinely fear that instead of negotiations, and a stop in the bombing, the Americans will step up the war in the illusion that they can win an outright military victory?

My hon. Friend may fear that, and I have tried many times to allay his fears without very much success. May I assure him that I am in the closest contact with what is going on. I think that this is a very good moment for all of us who wish to see the hostilities to be allayed to keep quiet and allow the consultations and conversations to go on.

It is all very well for my right hon. Friend to say that we should keep quiet. Indeed, for most of the period of this Government that is what one has done, but is there any point in going on with public support for a American action in Vietnam if our influence appears to be diminishing to the extent where even Mr. McNamara is sacked because he has reservations about it?

I think that my hon. Friend is miles wide of the mark in the last thing that he said, but I am bound to say that if we want to bring the war to an end, if we want to stop the bombing, and if we want to get the parties to the table, this is the moment to allow the consultations and investigations that are going on to continue, and I simply do not think that my hon. Friends will help by the kind of comments they are making.

There were parts of Mr. Trinh's speech which were encouraging; there were other parts which were not so encouraging. One has to find out what is the significant part. I really do suggest that this is the moment above all when we would do most good by allowing these investigations to go on.

Will the right hon. Gentleman accept that after the announcement made by the Government last week, which caused such shock in the United States, Singapore, Australia and New Zealand, whatever influence we had on policy in the Far East has been quickly diminished?

No, Sir, I do not think so at all. I have good reasons for knowing that this is not so, and I say to hon. Gentlemen opposite what I say to my hon. Friends, that if we are concerned with using our influence to bring the hostilities to a close, to stop the bombing, and to get the talks started, this is, above all, the moment for us to allow such consultations as are going on to continue without being messed up by too much talk from here.

Has it been made clear to the United States Government that even though Her Majesty's Government have not so far dissociated themselves from American action in Vietnam, if they step up the war there we shall dissociate ourselves from them?

I am most certainly not willing to answer hypothetical questions like that. I trust that nobody will step up the war. I trust that both parties, including Hanoi, will try to de-escalate, and try to get to the table.

Is it not quite clear that the American Government are doing everything they can to seek a political settlement, and is not by far the best place to try to find peace in Vietnam the United Nations, and not by activities from the Left-Wing of the Labour Government?

I do not see much point in that question, but I am certain that the Americans are very willing to go to the table and to talk if the others will, but I repeat that at what could be a critical moment I do not think that we are doing much good in this House by exchanging this kind of polemics.

Surely the Americans have been grossly offended by what we have decided to do about withdrawing our Forces from east of Suez, and would they be re-offended if we now took action and asked them to get out of Vietnam, since it is impossible to gain a military victory? Would it not also please de Gaulle and allow us to get into the Common Market?

I think that I disagree with every part of my right hon. Friend's tripartite question. I do not believe that the Americans were deeply offended. I think that they understood. I do not think that there is any question of the second part, of my asking them to get out of Vietnam, and I think that my right hon. Friend, as an ex-Minister of Defence, and, if I may say so, as a very patriotic one, ought to look at the origins of why the Americans are there. As for the third part of the question, I shall deal with the Europeanisation of our policy without the kind of considerations which my right hon. Friend has introduced into the question.

Will the right hon. Gentleman say whether his right hon. Friend the Prime Minister is likely to raise this matter of the Vietnam war during his visit to Russia, and the possibility of action being taken to bring the two sides to the conference table?

I think that it would be very foolish of me this afternoon to indicate what issues my right hon. Friend will be discussing in Moscow.

Rhodesia

16.

asked the Secretary of State for Foreign Affairs what representations he has made to the Portuguese and South African Governments concerning the breaking of sanctions against Rhodesia; and what representations he has made to the South African Government about the continuing entry of unauthorised armed South African Government personnel into British territory in Rhodesia.

We have taken up these matters in each case at the diplomatic level. These exchanges are necessarily confidential.

Would not my right hon. Friend agree that the time has come to internationalise the supervision of sanctions and the investigation of sanction breaking, thereby increasing effectively the pressure on South Africa and Portugal? Would he not agree that it is intolerable that foreign troops should be allowed to operate uninvited on British territory?

I agree very much with my hon. Friend's intention, but he knows that it is for the Security Council to decide whether any member of the United Nations is fulfilling its obligations under a mandatory resolution. The Secretary-General has reported that policies pursued by South Africa and Portugal have strengthened the economic position of the illegal régime and fortified it in its defiance of the international community. We cannot purport to act for the Security Council.

As the British Government have instituted a blockade of Portuguese ports, and recently insulted South Africa over the arms ban, does the right hon. Gentleman think that any such representations would have any effect at all with those two governments?

I think that the representations which we have made have had some effect, but I understand all the difficulties.

37.

asked the Secretary of State for Foreign Affairs what further representations he has made to the Portuguese Government regarding the officially recorded 350 per cent. increase in Portuguese imports from Rhodesia and the 180 per cent. increase in Portuguese exports to Rhodesia during the first eight months of 1967; and with what results.

I agree that there have been substantial increases in Portuguese trade with Rhodesia, although not of quite the same order as the hon. Member has quoted. He will know that we are in regular touch with other Governments including the Portuguese Government regarding breaches of mandatory sanctions. The hon. Member will also be aware that the Portuguese Government challenge the validity of the Security Council Mandatory Resolution.

Did not the right hon. Gentleman say that the Government were facing up to the economic situation of the country after three years of Labour rule? How can we believe that as long as this country, and this country alone, bars trade with this valuable market and surrenders it to our foreign competitors?

The hon. Gentleman is nowhere near correct in saying that this is the only country which has restricted its trade with Rhodesia. Carrying out what we deem to be a moral policy involves sacrifice to trade. Surely that was clear from the outset of these sanctions.

Is is not time that my hon. Friend reminded Portugal that she is our oldest ally and that unless she is a little more friendly in future we must start considering a revision of that long-out-of-date treaty?

The Portuguese Government are well aware of our views about sanctions and about the part which they are not playing in enforcing them.

38.

asked the Secretary of State for Foreign Affairs what further representations he has made to the Japanese Government regarding the officially recorded 54 per cent. increase in Japanese exports to Rhodesia in the first seven months of 1967; and with what result.

The hon. Gentleman will be aware that we are in regular touch with the Japanese Government as regards breaches of mandatory sanctions. In addition my right hon. Friend, the Foreign Secretary took the opportunity of raising this question when he was recently in Tokyo.

A fat lot of good that did. Would not the right hon. Gentleman agree that it is about time that we abandoned this farce? If many of his hon. Friends object to a change of policy in this matter, could not he get the Patronage Secretary to exclude them from meetings of the Labour Party at which Rhodesia is discussed?

The only conclusion I can draw from that is that the hon. Gentleman's supplementary was not in his mind when he tabled the Question. The House may be interested to know that the figure which he quotes today, of 54 per cent., is only just above half the same figure which he quoted for Japan last October, so we are moving in the right direction.

Have the Japanese Government protested to Her Majesty's Government about the fact that British ships carrying Rhodesian food, fruit and vegetables and calling at Durban and Cape Town are being stopped?

I am not aware of that. If the hon. Gentleman will send me details I will see that they are looked at.

Middle East

17.

asked the Secretary of state for Foreign Affairs whether he will make a statement on the Middle East.

Not today, Sir. I think it would be more convenient for the House if we await the Foreign Affairs debate which is to take place later this week.

Can my right hon. Friend give any up-to-date information on the plight of the 220,000 new refugees on the East Bank of the Jordan during the winter months?

I think that it will be better if we take this into account during the much wider debate which we are to have, starting on Wednesday, rather than do it by question and answer. This does not mean that I do not agree with my hon. Friend that this is a very important question, but it is part of a much wider complex, and, if he agrees, I would rather deal with it when I speak later in the week.

Is it true, as stated inThe Timesand other newspapers today, that certain of our allies in the Gulf have offered to meet the cost of maintaining a British military presence there?

That does not seem to arise out of this Question, and in any case I would not ever be called on to answer for the truth of what I read in the newspapers, includingThe Times.

21.

asked the Secretary of State for Foreign Affairs what steps he now envisages to ensure the full implementation of the United Kingdom Resolution on the Middle East carried unanimously in the Security Council.

It is not for Her Majesty's Government to decide on the manner of its implementation. The Resolution of the United Nations explicitly recognised this in appointing a Special Representative of the Secretary-General to go to the area to begin discussions with the parties concerned. While his mission is in progress I do not think it would be appropriate for me to comment further. But as the House knows Her Majesty's Government are keeping in close touch with all concerned.

I congratulate my right hon. Friend on his great contribution to getting this Resolution passed, but does not he agree that it is rather disappointing that so far little action seems to have followed the passing of the Resolution!

I am obliged to my hon. Friend for the first part of his supplementary question. I ask him not to be too anxious or gloomy about the second part. I believe that the mission is proceeding very well at the moment, and I have great hopes that we will succeed in getting the beginnings of a settlement there.

Can the right hon. Gentleman say anything about the reactions to this Resolution by Israel and the Arab countries?

The great thing about it was that when we brought through this Resolution—it was the first time for a long period that a British resolution had got unanimous assent—we also got the acquiescence of both the Arab countries and the Israelis to it, and Dr. Jarring is now operating in the area with both. I think that the best thing we can do at the moment is to wish him very well. I am in touch with both the Arab countries and the Israelis, and have great hopes that he will be able to begin the process of solving this very difficult problem.

Is my right hon. Friend aware that I would like to add my voice to those who wish to congratulate him and the Government in securing this remarkable unanimity in the Security Council last November? But it is now two months since the United Nations Security Council Resolution was passed, and I understand that the Resolution placed no time limit on Dr. Jarring's mission. The Security Council would doubtless wish that it should not be unduly prolonged, because there is real danger of new hostilities breaking out.

I thank my hon. Friend for what he said. I entirely agree with him about the mission. My view is that time is not on the side of a solution, and the longer we take over this the more difficult things will get. On the other hand, remaining as I do in close touch, I think that for the moment patience is probably the right virtue to preserve.

32.

asked the Secretary of State for Foreign Affairs whether, in pursuance of their policy of seeking to secure peace in the Middle East, the British Government will seek to bring about direct talks between Israel and her Arab neighbours.

31.

asked the Secretary of State for Foreign Affairs what is the policy of Her Majesty's Government with regard to support for direct peace talks between Israel and the Arab States.

While direct talks between Israel and her Arab neighbours are certainly not to be excluded, Her Majesty's Government have always taken the view that it would be unrealistic and therefore unconstructive, to wait upon them before seeking to make progress towards a settlement.

Would my right hon. Friend agree that the only possibility of a lasting peace is direct talks between the two parties and that, therefore, it would help if Her Majesty's Government made their position clear in this and did their best to get the two parties together?

This, of course, is one of the most difficult questions that we will ever have to cope with. I have discussed it with Arab statesmen and Arab friends. I discussed it with Mr. Eshkol when he was here last week. It remains my view that the best thing we can do at the moment is to encourage Mr. Jarring in his mission and let the question of direct talks emerge from that. I have no doubt that, in the end, this will have to emerge, but I am pretty sure that if we tried to force that at the beginning, we may very well spoil any chances of a settlement.

May I ask my right hon. Friend to be realistic? Is it not a fact that on practically all occasions previously two contending parties have come together with a view to settling their differences? Does he not think that by some remarks of his he might encourage a settlement in that way—perhaps under the auspices of the United Nations?

I think that I am being realistic. I believe that the Israeli authorities understand that I am and I am sure that some of the Arab authorities understand that I am. I am sure that at this moment the right thing to do is to encourage the United Nations mission to go on with this work. Let us move step by step.

United Kingdom Embassies (Compensation For Damage)

18.

asked the Secretary of State for Foreign Affairs whether agreement has now been reached with the various countries involved for compensation for damage to United Kingdom embassies during the Middle East crisis.

The Governments of Tunisia, Libya, Qatar and Bulgaria have either already paid for the cost of repairing British embassies and other official property in their respective countries or have agreed to do so. Notes reserving our rights to compensation have been sent to the Governments of the Lebanon, Iraq, Kuwait, the United Arab Republic and Syria.

Since the latter information was given in another place as long ago as 25th July, may we take it that the Government will take active steps to press their claim to compensation against other Governments?

Yes, we shall certainly press this claim. It is very unfortunate that embassies are damaged in this way. It interferes with the whole basis of normal international relationships between States.

United Arab Republic

22.

asked the Secretary of State for Foreign Affairs what progress has been made towards the normalisation of relations with the United Arab Republic since the exchange of ambassadors.

I am glad to say that normal diplomatic relations have now been resumed. The re-establishment of embassies in the two capitals has enabled us to renew regular contact on both bilateral and multilateral matters not only to our mutual advantage but giving, valuable opportunities for discussing wider issues.

Is my right hon. Friend aware that many of us strongly support the action of opening diplomatic relations? This has already been vindicated by results. Can my right hon. Friend give us any evidence that anything has been achieved over the question of ships in the Suez Canal?

I do not want to offend against the rules, but I believe that there is a later Question on that subject. I should like to say, however, that relations have also been opened with the Somali Republic, and I believe—and have every reason to hope—that they will shortly he opened with a number of other countries who broke off relations with us at an earlier stage.

European Economic Community

23.

asked the Secretary of State for Foreign Affairs if he will make a statement on the latest situation arising from Great Britain's application to join the European Economic Community.

42.

asked the Secretary of State for Foreign Affairs what action he now proposes to further the application of the United Kingdom to join the European Economic Community.

I have nothing to add to my statement in the House on 20th December.—[Vol. 756, c. 1267–9.]

What is the Government's attitude to the recently reported proposals from the German Government, and also the proposals put forward by the Benelux countries?

I have just been to Bonn and have discussed with the German Government their thinking and ours. I would prefer not to go into the matter any further today. As for the Benelux proposals, I have only just received them and am now studying them.

Will the right hon. Gentleman pay particular attention to parliamentary opinion, which is overwhelmingly in favour of closer association between Western Europe and this country, as shown by the Declaration of Paris, representing 90 per cent. of the electorate of Western Europe?

Is the Government investigating any further the question of amalgamation with other nations, in view of the proposed entry into the Common Market failing? Has he considered the question of what is to happen after? Will he tell us whether he is investigating such a position?

The hon. Member is my political neighbour on whom I have some designs. The question of amalgamation with neighbouring powers occasionally enters my mind, but in the sense in which the hon. Member puts the question, the answer is "No".

South Yemen

24.

asked the Secretary of State for Foreign Affairs if he will make a statement on Great Britain's relations with the new People's Republic of South Yemen.

Her Majesty's Ambassador, Mr. R. W. J. Hooper, arrived in Aden at the beginning of this month and has presented his credentials to the President of the People's Republic of Southern Yemen. Our relations with Southern Yemen are normal and friendly and we naturally hope that they will continue so.

I should like to wish Mr. Hooper all good fortune in his mission, but have negotiations yet started concerning possible economic aid from Britain after the present six months, and will Parliament be kept closely informed?

Yes, of course Parliament will. The answer to the first part of the supplementary question is "No".

Can my right hon. Friend tell the House what is the security of British subjects in this territory, and can he further tell the House whether the refinery is continuing to operate satisfactorily?

The answer to the first part of that question is "Yes" and the answer to the second part is also "Yes, quite satisfactorily".

I could not quite hear what the right hon. Gentleman said. Did he say that the answer to the first part of my hon. Friend's supplementary question was "No"? If so, does he recognise that a great deal of the first six months under which the promised £12 million in aid to the South Yemen has gone and that it is therefore necessary to get on with the question of deciding how much aid to give in the future? Will he recognise—as he has said—that while we are hard put to it to find any money to protect our own interests £12 million is a very high figure?

I know the right hon. Gentleman's preoccupation with this question. The answer that I gave is factually correct; we have not been asked nor have we ourselves started to think about anything beyond that period.

Are there any signs that South Yemen is being swallowed up by President Nasser, in accordance with the predictions of the right hon. Gentleman opposite?

36.

asked the Secretary of State for Foreign Affairs what consultations he is now holding with the People's Republic of South Yemen about the payment of aid to that country in the second half of 1968.

41.

asked the Secretary of State for Foreign Affairs what financial agreement has been reached with the Government of South Arabia.

As we have had to abandon Commitments to our friends because of poverty, would it not be folly to hand over further large sums of money to a Government which climbed to power over British bodies and which threatens subversion in the Persian Gulf?

I certainly do not accept the latter part of that question. If the hon. Member gets rid of his prejudices and looks at what is happening in the area he will see how wise we were to reverse his right hon. Friend's policy. The answer to the Question, as I told the right hon. Gentleman earlier, is that we are not for the moment engaged on such negotiation.

Are the local authorities of the South Yemen likely to co-operate with British interests once this aid is withdrawn?

I am not quite sure what is meant by the question of aid being withdrawn. We have agreed to carry over for a period, and we are doing that. What is very clear is that we have commercial interests there. They are operating. I very strongly urge right hon. and hon. Gentlemen opposite who purport to be very concerned about our commercial interests that they should encourage this newly independent Government to co-operate with us and should not make these snide remarks about them.

The right hon. Gentleman will realise that the South Yemen Government have made an offer to the Russians that they should have a base in Aden. That is public property. He will recognise that, as I said just now, we are very short of money for our own purposes in the Persian Gulf. Ought he not in the interests of this country to open negotiations, I do not say to cut the £12 million to nothing but at least to reduce it, so that the South Yemen in future can rely more on the help of neighbours than on the help of Great Britain?

I could not disagree with the right hon. Gentleman more and I shall be very happy to debate that with him later this week. When he says that it is public property, he simply means that it has appeared in some newspaper. We have, as he well knows, and as friends of his and mine have recently told him, considerable commercial interests in that area. I simply do not think that he is doing them any good by the kind of remarks which he is making.

Does not my right hon. Friend think that the most contemptible basis for a foreign policy is spite and that that is all that we have had from hon. Members opposite in their attitude to this new country?

Does not the right hon. Gentleman recognise that he told Parliament that he would review this £12 million in six months? All that I am asking is that he should do so and come before Parliament with a recommendation. I suspect that he would come to Parliament with a recommendation for a reduction.

Let us leave this for debate. All I ask the right hon. Gentleman to do is to recognise that this is a new independent Government in an area where it is in our interests to encourage them. I do not believe that the right hon. Gentleman is doing that from the Opposition Front Bench, but I know that he would be doing it if he were sitting on this Bench.

Spain (Gibraltar)

25.

asked the Secretary of State for Foreign Affairs what discussions have recently taken place or are planned with Spain over Gibraltar.

39.

asked the Secretary of State for Foreign Affairs whether he will make a statement on the progress of the talks with Spain about Gibraltar.

On 1st December, 1967, we agreed to a Spanish suggestion that the opening of talks on Anglo-Spanish relations, including the question of Gibraltar, should be postponed until the New Year. The actual date for the opening of the talks has not yet been settled.

Since we have let down Britain's friends in the Middle and Far East recently, what assurance will be given to the Government of Gibraltar that we intend to back her people against Spain? Is the hon. Gentleman aware that Gibraltar has been very patient and now wants positive action taken against the Spanish blockade?

Without for a moment accepting the hon. Gentleman's assumptions, I would say that we have already made clear exactly where we stand on the question of sovereignty, but I think that the House will agree that the people of Gibraltar are living in difficult circumstances and that it is wise to talk about this issue, among others, with Spain if we can alleviate their condition in any way.

Has my hon. Friend any guarantee that the talks with Spain will result in any alleviation of Gibraltar's position? Is he not aware that the anti-British and anti-Gibraltar propaganda between the talks taking place gets stiffened by the Spanish Government and that they do not halt it?

It is very seldom that one can guarantee before beginning talks that they will be successful, but this is no reason for not engaging in them, particularly when we have made clear the limitations of the discussions.

Would it not be in the interests of the Gibraltarians themselves if talks were initiated again between Spain and ourselves on this Gibraltar question and some compromise solution considered, rather than things being allowed to drift as they are at the moment?

I do not think that we should talk at the moment of compromise. However, I entirely agree with the hon. Gentleman that talking is a sensible and, as we hope it will turn out, a constructive course to follow.

Why do not we tell all concerned that the people of Gibraltar have made up their minds through the normal democratic machinery—if they understand what that means—and that that is simply the end of the matter?

Because most of us on this side, and often on the other, believe that talking and trying to deal reasonably with Governments is always the best policy, whatever the circumstances and whatever the Governments may be.

35.

asked the Secretary of State for Foreign Affairs what representations were made to the Spanish Government about the Spanish warships which lay off Gibraltar.

None, Sir. The Spanish warships which have been anchored off Gibraltar in recent weeks have not interfered with shipping or infringed local regulations.

As the Government do not react to these things, how can we hope to convince the Spanish authorities that the Government will not falter over Gibraltar as they have faltered in other directions?

If Spanish warships did not comply with local regulations then, of course, we should take the necessary action.

Indonesia

26.

asked the Secretary of State for Foreign Affairs what progress he has made in his discussions with the Indonesian Government regarding compensation for British assets seized in Indonesia.

I understand that good progress is being maintained in the negotiations between the individual British companies concerned and the Indonesian Government. Most companies are seeking to negotiate agreements for the return of their properties rather than for the payment of compensation. Her Majesty's Government are helping whenever required.

Would the hon. Gentleman agree that the sums involved are considerable—about £200 million—that the negotiations have been marked by intolerable delays and that, in many cases, Her Majesty's Government's letters have not been acknowledged or answered? Does the hon. Gentleman see a satisfactory solution emerging in the near future?

I do not think that there have been intolerable delays, although I understand the impatience of companies which must negotiate these difficult and and often complex deals. It is significant that already there have been agreements on the resumption of operations between a number of firms. We are satisfied that progress is being made, but we will certainly push as hard as we can.

Suez Canal

27.

asked the Secretary of State for Foreign Affairs whether, in his discussions with other interested States about the means of ending the loss and damage suffered by the economies of this and other countries resulting from the continued unlawful closure of the Suez Canal, he has treated the consent of the United Arab Republic as a necessary precondition to the reopening of this international waterway.

57.

asked the Secretary of State for Foreign Affairs what progress he has made in his efforts to secure the re-opening of the Suez Canal.

The Special Representative of the United Nations Secretary-General is engaged on the task laid upon him by the Security Council Resolution of 22nd November. In appointing him U Thant asked Governments to give him their full co-operation; of course he has ours. Until Mr. Jarring has reported to the Secretary-General it would be wrong for me to say anything that might be construed as prejudicing his mission.

While appreciating the limitations on the right hon. Gentleman, may I ask whether it is not a fact that Egypt's refusal to clear the Canal or allow it to be cleared involves a breach of her international obligations? Would he at least assure the House that action to clear the Canal will be taken before it is irretrievably silted up?

It is for the right hon. Gentleman to take authority and responsibility for his own remarks. On the whole, knowing as I do what is happening, I would rather not be drawn into that debate.

28.

asked the Secretary of State for Foreign Affairs what action he now proposes to take to secure the release of the British ships detained in the Bitter Lakes.

75

asked the Secretary of State for Foreign Affairs whether he will make a further statement about the British ships at present immobilised in the Suez Canal; and what proposals have now been made by Her Majesty's Government to the Government of Egypt to secure their release.

We are in constant touch with the United Arab Republic authorities over this. Her Majesty's Ambassador in Cairo has now been given the programme for survey work in the Canal which has also been handed to General Odd Bull. I hope that this will lead to the release of the in the reasonably near future.

How long would the work to clear the southern end of the Canal take once it was allowed to start? Will the right hon. Gentleman use all his influence to secure that that work is set on foot at once and the ordeal of these crews and relief crews, for whom we all feel the greatest admiration, brought to an end?

I am not sure about the ordeal of the crews and relief crews. I am in close touch with them. Of course, I am using all the influence I have to get the ships out. Whether they will come out by the southern or the northern end has still to be resolved, but I have great hopes that they will be out in the reasonably near future.

Sea Bed

29.

asked the Secretary of State for Foreign Affairs what steps he is taking to bring the seabed beyond the continental shelf into the ownership and control of the United Nations.

After a discussion of these complex issues at the General Assembly last December, the United Nations set up an ad hoc Committee to study the peaceful uses of the seabed. We expect to take an active part in this work.

Have any proposals yet been made to this committee by Her Majesty's Government?

We welcome the Maltese initiative in raising this, and we cosponsored the resolution which led to the setting up of the committee. However, since this was done only just before Christmas, it is too early yet to expect any progress within the committee.

South Africa (Supply Of Arms)

30.

asked the Secretary of Suite for Foreign Affairs what representations he has had about modifica tions to the arms ban on South Africa; and what reply he has sent.

I have nothing to add to the statement made to the House by my right hon. Friend the Prime Minister on 18th December—[Vol. 756, c. 926]—and the speech made by my right hon. Friend the First Secretary of State on 19th December.—[Vol. 756, c. 1152–8.]

Was any hint given to the South African authorities that the arms ban would be re-examined in 1968? How many jobs have been lost through the revolt of the Left-wing, which prevented this re-examination?

I do not think that the second part of the question arises at all. The South Africans know that they are quite free to buy things here, but we, like everybody else, are bound—if we recognise any moral obligations at all—to observe the resolutions of the United Nations, for which, if I might remind the hon. Gentleman his Government voted.

Would my right hon. Friend include in any replies which he may consider sending to the South African Government the strongest representation about the present trial of 25 South-West Africans there and express the repugnance of the whole of this country to this monstrous travesty of justice and denial of human rights?

Does not the right hon. Gentleman recollect that our representative at the United Nations was specifically instructed by the last Government to exempt arms for the external defence of the sea routes of South Africa? Was that not a wise precaution and does he not agree that, with this lifeline to Europe now coming around the Cape of Good Hope, we should take precautions to protect it in all circumstances against interference?

My predecessor, the right hon. Gentleman, for whom I have a great admiration, managed on that occasion to face both ways at once, which is something which I cannot do.

What evidence has my right hon. Friend that the Opposition and leading businessmen in this country are reassuring the South Africans that they would resume negotiations and arms sales to them? Would he deprecate such action in this matter?

As I see no chance of this Government going out of office, I do not see how the question arises.

Bahrain (United States Ships)

34.

asked the Secretary of State for Foreign Affairs why, and under what treaty, two United States destroyers and a tender are stationed at Bahrain as their home port.

There are no United States destroyers stationed at Bahrain. The only United States naval ship stationed there is a tender, the flagship of the Commander, Middle East Force, United States Navy. By agreement with the Ruler of Bahrain the headquarters of this force has been at Bahrain since 1959.

Since the ships certainly have been there and since we are spending £12 million this year on military installations alone in Bahrain, are we not entitled to ask the Americans for a substantial financial contribution?

We have made clear what our attitude is to our continued presence in the Gulf. It is for the Americans to decide what rôle they wish to perform.

Consolidated Fund Bill (Second Reading Debates)

I wish to make a brief statement, which may be helpful to the House, about the procedure for debates on the Second Reading of Consolidated Fund Bills.

As I promised, I have been giving careful thought to the question of the order of speakers and subjects when we have debates on the Second Reading of Consolidated Fund Bills, which I realise are precious occasions for back benchers. The House will remember that the method of "first come first served" led to some confusion last Session—and, in any case, means queuing up outside my office before whatever time we fix for the receiving of names and topics.

I have been consulting hon. Members about this question and I gather that the best and fairest method of determining priorities in these debates would be by ballot. I understand that, by and large, this commends itself to the House.

I would suggest therefore the following: at any time from the announcement, in the Business of the House, of the date of the debate, and up to 10 o'clock in the morning on the day before the debate takes place, hon. Members would hand in to my office their names and the topics that they would wish to raise. The ballot would be for name plus topic, and not just name. Any one hon. Member would hand in only his name and his own topic.

The ballot would take place on the morning of the day before the debate and a list giving the order of names as they came out of the ballot, together with subjects, would be posted, as usual, in the "No" Lobby as early as practicable thereafter. Other hon. Members would be able, as is the present practice, to speak in the debate on the topics which interested them. I think that this would help hon. Members, would avoid ambiguity, and would avoid hon. Members having either to queue at or rush to my office once the date of the Second Reading of the Consolidated Fund Bill had been announced.

Perhaps I should take the opportunity of reminding the House that the first Consolidated Fund Bill of the year, which embraces Supplementary Estimates only and not the whole field of administration, is of limited scope and that topics raised in that debate must be within the scope of those Supplementary Estimates.

On a point of order. While I feel sure that the House will be grateful for the very careful consideration which you have obviously given to the representations which have been made to you, Mr. Speaker, you mentioned that you had consultations with some hon. Members on this matter. That being so, might I ask if you have considered, in making this statement, this point, which I believe to be of great importance: that when we proceed on the basis of a ballot the element of chance is greatly increased, whereas, in the past, when we have submitted to the Speaker of the day a subject which we thought to be important, the final decision has always rested with the wisdom of the Speaker himself, as well as the order in which subjects are taken?

In the light of the statement which you have made today, can you say whether, in fact, it will still be possible for us to rely on Mr. Speaker's wisdom as to the order in which subjects are to be taken?

I must clear up a misconception in the hon. Gentleman's mind. What we are substituting is merely a 'allot in place of the chronological order f acceptance of subjects. The House has never given Mr. Speaker the power of arranging, in order of priority, the subjects which hon. Members wish to raise on the Second Reading of the Consolidated Fund Bill. Indeed, it is a power which Mr. Speaker would not want. I believe that it might derogate from the power of back benchers to raise their own subjects.

What we have to decide is whether we allow the priorities to be fixed by either the method of the order in which the office is notified, which led to confusion the last time, or by pure chance. From what I have gathered as a result of talking to many hon. Members, what I have suggested seems to be the fairest method.

Further to my point of order. While thanking you for clarifying the position, Sir, may I ask you to clarify one further point? Does this mean, then, that it will still be possible for a considerable number of hon. Members to ballot for the same subject; that the new procedure will not in any way prevent those hon. Members—who may be very numerous—who are particularly interested in one subject from having time allotted commensurate with the interest that is being shown?

Nothing in the proposals would prevent any hon. Member from seeking to raise any topic which he wished to raise, and which was in order, on Second Reading, even if other hon. Members wished to raise the same topic.

On a point of order. I welcome your statement in principle, Mr. Speaker, but, for clarification—since you said that hon. Members had been consulted—can you give some details about how hon. Members were consulted? I was not consulted. I think that it might have been better for the House to have had a short debate and for there to have been a free vote of the House so that the issue could have been decided one way or the other.

I wish to make it perfectly clear, first of all, that there is nothing in what I have said which would prevent the House, if it so decided, from having a free debate on the suggestion I have made. It would, of course, be manifestly impossible for Mr. Speaker, with the best will in the world, to consult every hon. Member; and I regret that I did not consult the hon. Gentleman.

Lest there might be some misunderstanding, could you make it clear, Mr. Speaker, that no Privy Councillor was consulted? I was not consulted.

I do not intend to enter into a discussion on the vexed subject of Privy Councillors as distinct from other hon. Members.

On a point of order, and for clarification, is your statement on this a comprehensive one, Mr. Speaker, so that it takes up the whole of the time alloted for the debate on Second Reading, or are you proposing only that the first few hours, or whatever the time might be, should be decided by ballot?

The whole of the debate on Second Reading. It is substituting the ballot for priority fixed by the time an hon. Member went to Mr. Speaker's office. Let me be frank about this. Varying points of view have been put to me and what I have put to the House is what I have gathered to be—to use an unfortunately hackneyed phrase—the consensus of opinion among many hon. Members. It is for the House to decide whether or not to accept what Mr. Speaker has suggested; or to follow, for example, the suggestion of the hon. Member for Fife, West (Mr. William Hamilton) to debate the issue. That is not a matter for Mr. Speaker. It is a matter for Members who are much more powerful than the occupant of the Chair.

Business Of The House (Supply)

Ordered,

That this day Business other than the Business of Supply may be taken before Ten o'clock.—[Mr. Crossman.]

Education Bill Lords

Referred to a Second Reading Cornmittee.—[ Mr. Crossman.]

Orders Of The Day

Supply

[6TH ALLOTTED DAY],— considered.

Civil Estimates, Supplementary Estimates 1967–68

Class Iv, Vote 2

Transport Boards

Motion made, and Question proposed,

That a Revised Supplementary sum, not exceeding £30,000,000, be granted to Her Majesty out of the Consolidated Fund, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1968, for the expenditure of the Ministry of Transport in grant to the British Railways Board, the London Transport Board and the British Waterways Board in respect of deficits on their revenue accounts.—[Mr. John Morris.]

3.40 p.m.

During the short time that I have been in the House, Supply days have been used, by and large, to discuss other items. We have taken that opportunity to discuss matters of very real and relevant significance for the country's future. On this occasion, however, we have decided to use the time, as it was originally intended, to discuss Supply. I believe that there is no more important or vital aspect of our present position than the economic crisis, and a Supplementary Estimate of the order of £30 million is quite clearly a matter of great significance.

The total amount referred to in the Vote is £168 million, which is an increase of £30 million. When in June, 1967, we discussed the British Railways deficit of £153 million which makes up almost all this amount, several hon. Members on this side expressed alarm at what was taking place; at the sheer size of a deficit of £153 million; and, more important, at the fact that the Government appeared to be making no significant changes of policy which could reduce the amount. Sadly, our worst fears have been realised and, once again, we find ourselves with an enormous deficit. The plain fact is that the British Railways deficit is now assuming the dimensions of a national disaster.

We have to consider that recently we hive been discussing a policy to reintroduce prescription charges which involved a great deal of controversy and trouble, and was related to a sum of £25 million. We have to consider the very real alarm and misery which will stem from the Government's decision to reduce expenditure on Scottish housing by £7 million over a period of two years, which is only one-fourteenth of the amount of this year's railway deficit. We have to consider the dangers to our national security and to our substantial assets east of Suez because of a recent Government decision in that regard; and that all our defence capability there could have been continued in the 'eighties, and not the 'seventies, if we were able to take the amount represented by just one year of the deficit.

Consideration of all those aspects gives some idea of the amount of money of which we are now speaking. The fact is that this year's deficit is equivalent to 5s. per week every week for the average family. In effect, what we are doing is paying an extra insurance stamp of 5s. every week just because of the deficit.

We on this side are not in any way trying to suggest that the elimination of the deficit is easy: on the other hand, when hon. Members opposite and people outside talk about the social consequences of action on the railways we should also remember the importance in social priority of a sum of over £150 million. It is a very substantial amount. We therefore believe that at a time of economic stringency, at a time when the Government are very carefully scrutinising all items of expenditure, when nothing is sacrosanct and sacred cows no longer exist, we should look very carefully at the deficit relating to this Supplementary Estimate and at all aspects of our policy.

The importance of the amount is not just a question of money. In our debate on 26th June last, I was very impressed by the speech of the hon. Member for Central Ayrshire (Mr. Manuel), who often speaks in our railway debates. On that occasion he made a very sensible and important statement. The hon. Gentleman then said:
"The railwaymen would be jubilant if they managed a substantial reduction in the deficit. It would give them greater heart and give greater impetus to the success of British Railways than anything else."—[OFFICIAL REPORT, 26th June, 1967; Vol. 749, c. 135.]
That is absolutely true. The existence of a substantial deficit has a very devastating effect on the morale of railwaymen. The one real asset the railways have are the men who work on them. There could be no greater body of people so committed heart and soul to the future of this great industry.

We shall have to ask many questions about this Supplementary Estimate, and I hope that the Minister will answer them fully. The first and obvious one must be why there has been such a very substantial error in calculations, and what steps are being taken to prevent this happening in the future. We often have under-estimates—our debates in recent years have seen several examples in which the overspending of money has caused major controversy—but we now have a major overspending of £30 million in one year, and when we have such a major difference without any significant changes of policy taking place in between questions must be asked.

These are not just my own fears. The Estimates Committee, when considering a memorandum submitted by British Railways only a few weeks ago, pointed out in a Report published in December that it was very alarmed. In page 7 of its Report we read:
"Your Committee feel bound to point out that Supplementary Estimates for the British Railways Board are becoming a regular occurrence. Apart from the disturbing picture this presents of the failure of the railways to pay their way"—
that is obvious—
"there appears to be a continuing inability on the part of those concerned to make accurate estimates. For example, in their Eighth Report for Session 1966–67 the Estimates Committee reported to the House an increased deficit for the British Railways Board, due largely to a loss of freight receipts caused by the economic climate. This is virtually an identical account to that which Your Committee are now reporting. While accepting that the present economic situation was difficult to forecast, Your Committee consider that the British Railways Board should have been able, as a result of their experience last year, to make their estimates for the current year more realistic."
That is a very carefully worded and very sensible comment. We might not think such a major mistake so disastrous if it had not happened before, but, as the Committee points out, we now have exactly the same question arising and exactly the same explanation given, though the same sort of disaster has happened in a previous year.

Our first question, therefore, is: what steps are the Government taking to make sure that this will not happen again? When the Government are thinking in terms of very tight budgeting and of trying to work out amounts to the nearest £1 million in so many social spheres, we must know what steps they intend to take to make sure that a mistake of £30 million will not occur again. The Government's answer to that question is one in which every hon. Member and every taxpayer will have a very real interest.

The second question that we on this side are entitled to ask is whether the Government consider that this is a matter that will not arise again, but that there will be an improvement in the financial position of British Railways. When we recall that my hon. Friend the Member for Worcester (Mr. Peter Walker) pointed out in our June debate that we have made a capital investment of £1,200 million in British Railways over the last 10 years, it seems incomprehensible that we should have a deficit which has been growing under this Government and which, looking to the immediate future, appears likely to continue to grow.

It is worrying if we take into account the reasons given by the British Railways Board in statements to the Estimates Committee. All the reasons given for this Supplementary Estimate and the size of the deficit would appear to be factors which are not improving, but are getting worse. We look at the four essential reasons which British Railways gave in the statement, contained in Appendix 2 of the Report on pages 44 and 45. The first reason was an absence of upturn in the level of economic activity.

Do hon. Members on either side of the House, having heard the Chancellor of the Exchequer and other Ministers including the Prime Minister speaking in recent debates, consider that this factor will disappear as a result of the Government's economic policies? The slashing of Government expenditure and the further dampening measures on the economy which we all know are to come, but we do not know exactly when they will come, will unquestionably have a serious effect on the level of economic activity.

I well remember listening to speeches by hon. Members opposite in which they said that it was possible to have a growth rate not of 5 per cent. such as we had in the last two years of Conservative Government, but of 6 per cent. by investment programmes. Then we had the National Plan, which suggested 4 per cent., and later the former Chancellor spoke of 3 per cent. Under the present Government the economy has hardly grown at all. On average, it has been a growth of 1 per cent. and the prospect for the future is that things will get worse. Do the Government estimate an improvement in this factor in the immediate future? I cannot see a remarkable upturn in economic activity. We must discount this factor when we are looking for an improvement.

The second reason given to the Estimates Committee was that coal traffic has been hit. Hon. Members opposite are constantly reminding us that the future of the coal industry is not so bright as it once was. This is a vital factor for British Railways. As the Minister pointed out on 26th June, one-third of the freight receipts come from coal and about 90 per cent. of the freight total comes from coal and steel. Can we look for an improvement here? In all previous debates on the railways we have had the unknown factor of a White Paper on Fuel Policy, but this is now available. Despite devaluation, it seems that it will be the basis of fuel estimates at least over the next five years.

The White Paper tells us that the amount of coal required between now and 1970 will fall by about 20 million tons per year. Here is another factor in which the coal industry is heading for a rapid contraction and this unquestionably will have a very considerable effect on British Railways. This was given as a reason for decline. The Supplementary Estimate this year and looking to the immediate future makes it a factor which can only deteriorate. Every estimate made by this Government about the amount of coal which would be required and consumed has, unfortunately, proved over-pessimistic. If we have the suggestion of a 20 million ton reduction over the next few years, it might be more serious. We can see no sign of improvement here. The third reason was that iron and steel has been seriously affected by the recession. I suggest that the recession will not disappear. From the meagre reports by the British Steel Corporation now that the industry is under public ownership, there seems no immediate prospect of a considerable improvement in the iron and steel industry. To that extent the Government cannot look for much progress.

The fourth factor, a smaller one in total, is the question of industrial stoppages and disputes. It was pointed out to the Committee that £2 million had been taken up by disputes over freight terminals and also the dock strike and the A.S.L.E.F. strike. Although we have been given an assurance that industrial relations would flourish under the present Government, I think that it was right of my hon. Friend the Member for Worcester to point out in a recent speech that industrial relations on British Railways are not flourishing and morale is perhaps at an all-time low.

In all this tale of gloom presented to the Estimates Committee, there was one hopeful factor. It was the statement that freightliner business had been improving and the amount received from it in one particular case had been an underestimate. We on this side of the House have consistently pointed out that the whole freightliner network, planned and financed by the previous Government, offers an enormous potential for British Railways. Is it not a tragedy that tomorrow in Standing Committee we shall be starting proceedings on the Transport Bill which will take away from British Railways total control of the freightliner system, which is the one real growth factor? We can see on the basis of present Government policy no wonderful improvement in the situation; in fact, we see it getting worse.

When we have a deficit of £150 million, when we see the situation getting worse at a time of economic stringency this is a matter of very real concern for every Minister, for the Cabinet, for every hon. Member and for every taxpayer. When he was speaking of the problem in the debate on 26th June, the Parliamen- tary Secretary to the Ministry of Transport pointed out that there were two essential tasks. He said that the first was a question of accountancy and how to look at the figures. The second was a question of remedying the underlying causes. There is no question that on looking at the accountancy the Minister has kept his promise, because in the Committee tomorrow we shall be starting on a remarkable Bill which will change round the accounts of British Railways very considerably.

The best summary of this new situation was given in the magazine Modern Railways, in the January issue, by Mr. Fiennes, who is known to the Minister. The heading was:
"They have shuffled the deficit under the rug."
This is the whole basis of the policy which the Government are bringing forward under the Bill. They are changing the figures round. Instead of a deficit it will be called a loan or a grant.

On a point of order, Mr. Deputy Speaker. I wonder how far we can pursue the matter of legislation in this debate. There will be an opportunity in Committee in the next few weeks. I am concerned about, whether it can be discussed now.

In this debate hon. Members are entitled to discuss the Supplementary Estimates and anything which reasonably arises from the Estimates.

I am well aware that these are facts which the Parliamentary Secretary does not want to hear and matters which he does not want to have ventilated in the House. If he cannot see the relevance to the estimates of what I have been saying, the future of British Railways is much more gloomy than we thought.

This matter is uniquely relevant to the question of the Supplementary Estimates and what the Government intend to do about the problem. Not only do we consider it directly relevant to this debate, but I hope that the Minister will reply to it. If he is to shelter behind a question of order to avoid answering questions, we shall take the strongest exception.

The hon. Gentleman said that, first, we had to get accounting right; he is doing that by shuffling the deficit under the rug. What about the second thing he would do to remedy underlying causes of the British Railways' deficit? This is something we have not seen happening. All that has happened has been talk about new grants, loans and subsidies. There has been nothing about the fundamental weaknesses and causes of this trouble. Instead of taking no action, which would have been preferable in present circumstances, the Government have been taking actions which we believe to be entirely wrong.

How are we to get rid of Supplementary Estimates such as this and of the British Railways' deficit? One way which the Minister suggested was by getting at underlying causes. There is another way; that is, to ruin those in competition and to try to make life so difficult for them to compete with British Railways that the deficit may be reduced by forcing traffic on to the railways. I look at the history of previous Budgets tax pressures, the £350 million annual extra tax put on road users and present plans for further taxes of £40 million on road users. It might seem to those looking at the Supplementary Estimates that this is what the Government have in mind—that they are trying to solve the problems of the railways by making life impossible and uneconomic for those who compete with them. This is the wrong course of action and one that we shall bitterly oppose.

The National Plan, the most unique contribution by the Government to the wastepaper drive, surprisingly enough had some useful things to say about British Railways, the deficit and the Supplementary Estimates that we are considering. It suggested that the railways working investment might be eliminated by 1970 if certain things were done—if there was substantial progress in implementing the closure proposals, if a start was made on the process of concentrating on selected trunk routes and if there was co-operation with the unions in increasing productivity and on the question of train manning. We believed that it was a sensible policy and could have been achieved.

But there was a fourth factor at the foot of the page, one which the people who drew up the National Plan con sidered uniquely relevant, the question of investment. They said that they believed that investment should be £135 million annually looking over the next few years, and that this would not be an enormous increase against the vast sums which were spent on investment in the railways by a previous Government.

I put a third question to the Minister on the question of these Supplementary Estimates. Does he see any hope of Estimates like these not being brought before the House without a substantial programme of real investment in British Railways? The fact is that although the Government apparently have millions of pounds to spend on all kinds of nationalisation in the field of transport, when it comes to investment I believe that they have been starving the railways of much-needed investment which could lead to the kind of policies and service which could eliminate deficits and prevent this kind of Supplementary Estimate coming before us.

I remember the Minister of Transport speaking about this crucial factor of modernisation which is vital for providing morale. At the conference of N.U.R. branch secretaries in June last year she said:
"The railways have been the cinderellas of transport for a long time now. I cannot wave a magic wand and produce a glass coach or a golden crown for railwaymen."
In the Second Reading debate I pointed out that the Minister had selected the framework of a glass coach, but, unfortunately, through weakness and obsession with ideology, had succeeded, where Prince Charming failed, in transforming the embryo glass coach into a pumpkin. We can see this happening no more relevantly than in the field of investment.

The National Plan said on page 129 that £135 million of investment was considered in real terms to be the basis of the future. What has happened?

Order. I think that the hon. Gentleman was right in saying that he is entitled, in considering the Supplementary Estimates, to deal, if he thinks it proper, with any matters that may involve legislation, but it does not seem to me that in dealing with the Supplementary Estimates one can deal with the question of investment.

I can appreciate, Mr. Deputy Speaker, that at this point it might appear that I was going away from the subject.

I was trying to point out that one of the reasons, I believe, for our having this Supplementary Estimate is a reduction which the Government made in the investment programme, and I am anxious that they should take steps to stop future Supplementary Estimates of this kind. We have recently had word of a further reduction in investment. It was that sole point that I was hoping to make, and also to give figures.

We cannot deal with hypothetical questions about possible future Supplementary Estimates. We can deal only with the Supplementary Estimate before us.

On a point of order, Mr. Deputy Speaker. I ask for your guidance. The House of Commons is faced with a disaster, that it should be asked to provide another £30 million on top of the already very large estimated deficit. The House would surely, I submit, be grossly negligent in its duty if it did not ask for assurances from Ministers that this will not happen again. We are not here just to put a rubber stamp on a disgraceful state of affairs. We are here also to ask for remedies.

There are obviously some limits to what the House can discuss in debating the Winter Supplementary Estimates. As I understand the position, the House is entitled to discuss whether this Supplementary Estimate for £30 million is justified or not and whether the House should approve it or not. In considering that, it is possible to discuss whether any legislation is desirable or not. However, I do not think that we can discuss hypothetical questions as to whether future Supplementary Estimates may or may not be put forward as a result of the Government's present policy. We must confine this debate to whether the House should approve or disapprove the recommendation by the Government for a Supplementary Estimate of £30 million.

Further to the point of order, Mr. Deputy Speaker. I am very sorry to have to pursue the matter. [Interruption.] Perhaps it would be better if the Joint Parliamentary Secretary were in the Chair. My point—it comes very much out of what you have just said, Mr. Deputy Speaker—is that we are dealing with this present Supplementary Estimate and the House has to decide whether to support it or vote against it.

For my part—I do not know about my right hon. and hon. Friends on the Opposition Front Bench—I would willingly vote against the Supplementary Estimate unless the Government are able to adduce arguments to show that this disgraceful state of affairs will not be repeated. It is very much upon that that I seek your guidance.

Obviously, the Chair has to be reasonable in allowing limits of debate on Supplementary Estimates, and I will do my best in that regard. I think that we have to be careful not to go very much wider than the question whether this particular Supplementary Estimate is desirable or not. Within certain limits it is permissible, in my view, for the hon. Member to ask what the consequences of this Supplementary Estimate might be, but not to any great length.

I am extremely grateful, Mr. Deputy Speaker. This has been due to my inexperience in the House and on the Opposition Front Bench. It is such a wide subject, on which we feel so strongly, that we are inclined to go outside the limit. However, I will keep strictly to what you have suggested.

I believe that one of the reasons for the Supplementary Estimate was the cutting of the British Railways' capital investment during the year that we are considering, which I believe has reduced the competitiveness of the railways. When we consider that the 1967 Estimate was £104 million and that in July, 1966, the capital expenditure was reduced by £14 million, I suggest that this was directly relevant.

What attitude should we take? We might be prepared to say that a mistake was made, but we would forget about it and approve the Vote were it not for the feeling that we have that exactly the same thing is being done again. Written Answers were given on 20th December last, particularly in column 414, showing that the electrification of the Crewe to Glasgow line is being indefinitely postponed by the Minister. We on this side believe that one of the basic factors accounting for the Supplementary Estimate was the postponement of modernisation schemes. Looking to the future, we are given no confidence when we see exactly the same thing being done again.

Mr. Archie Manuel