asked the Secretary of State for Defence what percentage of British arms exports are sold to developing countries.

It has been the policy of successive Governments not to divulge the value of defence equipment trade between the United Kingdom and individual countries or groups of countries.

Does my right hon. Friend agree that the developing countries are now spending a great deal more on arms than on education or health? Does he agree that that is neither good for them nor for peace? Will the Government change their minds and seek to reduce rather than increase the arms trade?

I have a great deal of sympathy with everything that my hon. Friend has said. However, I must tell him that when the Government took an initiative at the recent special session of the United Nations and put forward a draft programme for disarmament, a considerable amount of resistance came from the developing countries. The way to make progress is through agreement with them and other supplying countries.

Does the Minister agree that the main criterion in such decisions is the interest of the United Kingdom and of NATO? Is China considered to be a developing country by his Department in that regard?

I am not sure that we have considered China's special status. Applications for sales of defence equipment to China are regarded on a case by case basis.

Is my right hon. Friend aware that arms supplied to some developing countries are used not for defence but for repression, as happened when arms were supplied to Iran recently? Chieftain tanks were used in the streets of Teheran to suppress popular demonstrations. Will the Minister consider imposing conditions on the use of arms which are supplied to developing countries in order to prevent that?

The Government take into account a whole series of criteria, with which my hon. Friend will be acquainted, before they agree to sell arms to anybody. We have made considerable efforts to persuade Governments who are buying arms that might be used for such purposes to use non-lethal equipment for not control, as our Government do in Northern Ireland.

asked the Secretary of State for Defence when last he paid an official visit to the British Army of the Rhine.

On 14th November.

Is the Secretary of State aware that much of the BAOR equipment is much too old and that BAOR is short of spare parts and ammunition? Is it true that during the recent NATO manoeuvres the British infantry was distinguishable from the infantry of every other country involved by the fact that it had to walk?

The hon. Gentleman may have been too influenced by certain press accounts, but it is a fact that a number of our infantry battalions are not provided with vehicles—not for economic reasons, but because their role in the Fifth Field Force does not require it. Inevitably, there are always allegations of shortages of equipment, and so on, but it is a fact that in the present year 54 new items of equipment are being introduced into the Services generally. On my recent visit I sensed the Army's satisfaction with the fact that new equipment, such as Clansman and Milan, is due to come into operation this year.

What is the current balance of payments cost of our presence in Western Germany, what progress, if any, has been made towards an offsetting agreement with the West German Government, and is not this one of the factors that need to be dealt with before we even consider joining a European monetary system?

I do not see the direct relationship between this matter and the European monetary system. I cannot give my hon. Friend the exact figure, but the offset arrangement with the German Government was announced to the House about a year ago, and is still in force.

How has the right hon. Gentleman the effrontery to claim that he put together a package to improve Britain's defences when he knows that for the past four years he has been a member of a Government who have inflicted untold harm, not only on BAOR but on all British defence forces? The only question is whether he has done more damage to their morale than he has to their equipment.

The reason that I put together a package of improvements was that I was relying on facts. I do not deal in the kind of rhetoric which, unhappily, the right hon. Gentleman has acquired from some of his hon. Friends.

asked the Secretary of State for Defence what consideration he has given to extending job experience schemes currently being promoted by the Government to the Armed Forces.

I assume that the hon. Member is referring to the work experience schemes which are managed by the Manpower Services Commission as part of the youth employment programme. The Ministry of Defence has been considering how it can usefully participate in these arrangements. As a first step we are about to launch certain pilot schemes involving trainees in the civilian industrial field.

I give a halfhearted welcome to that reply. May I press the right hon. Gentleman further and say that, at a time when tens of thousands of young people are out of work and the Armed Forces are short of manpower, a six-months' work experience programme with the colours would be valuable experience for those young people or, as the Manpower Services Commission puts it, would

"help young people gain in maturity, self-reliance and self-esteem."

I accept a great deal of what the hon. Gentleman says. We must wait to see how these pilot schemes go before we push further ahead in that general direction. There could be considerable controversy if we were to use the Armed Forces for some of the schemes which the hon. Gentleman has in mind. The Ministry of Defence makes a considerable contribution to employing young people and also in improving the quality of the national work force in future through our apprenticeship scheme, which is doing extremely well and is at a very high level. We intend to maintain that scheme in future.

asked the Secretary of State for Defence if he is satisfied with the state of Great Britain's air defences.

The air defence forces of the RAF are well-equipped and manned by skilled and dedicated professionals. I am satisfied that these forces represent a strong deterrent to any potential hostile intruder in United Kingdom air space, and that they are capable of playing their full part in the NATO air defence system. We are, of course, always seeking to improve these forces to match the continually evolving threat which they face.

But what are the Government doing to remedy the serious lack of United Kingdom-based fighters, what percentage of the new Tornados will be based in the United Kingdom, and when will all the planes based in the United Kingdom be in service?

The Government are busy trying to restore the air defence capacity of this country, a capacity that was dismantled and discarded by the Conservative Government. There are now more aircraft defending the skies and the integrity of this country than when the Conservatives left office. The aircraft primarily in the air defence role are Phantoms ordered by a Labour Government, which are two to three times more effective than the Lightnings which the Conservatives left us to defend the country. Furthermore, we are increasing the number of Bloodhounds and Rapier ground-to-air missiles. I know that many Conservative Members do not like the facts. They would rather dwell in their own fantasy world, but the fact is that the Labour Government are restoring the air defence capability in this country. As a result the right hon. Gentleman, his hon. Friends and the people of this country can sleep a little more soundly in their beds than was the case when the Tories left office.

Is it true that the Royal Air Force is apparently 250 pilots short? If so, where is the shortage? Is it in line aircraft?

It is true that we suffer deficits, particularly in junior officer pilots. The Royal Air Force board has decided to take certain steps to remedy this situation. I hope that we shall resume fairly rapidly our full complement.

For how long could this country survive conventional air attacks—for five days, or less?

A little longer than it could have done on 1st March 1974.

I appreciate the assurances given by the Minister about the state of our defences, but does he not agree that the "Deep Throat" episode and the fact that the Tories jumped on the bandwagon of the original story have done a great disservice to our national security and to the RAF?

I think that it is always a matter for regret when Members of Parliament, or anybody else, seek to put numbers to the strength of our Air Force when the right hon. Member for Chesham and Amersham (Sir I. Gilmour) well knows that the numbers of fighters and bombers remain classified information.

The Opposition do not take the Minister very seriously, but he should not trade too much on that matter. He must know that his original answer was absurd. Is it not the case that the air threat to this country has risen immeasurably in he past four years and that we are therefore very much less ready to meet it?

The fact that we have a growing threat to this country was very well known when the right hon. Gentleman was Secretary of State for Defence. It is a matter for regret that he did not take these necessary measures, and a matter for even greater regret that, now that the Labour Government are restoring our air defence capacity, he has not the grace to recognise that fact.

If the air threat to this country was so well known in 1973–1974, how does the hon. Gentleman explain the then defence review, which cut our air defences?

Primarily the reduction in terms of the Royal Air Force was in its transport capacity as a direct result of our withdrawal from the Far East. The defence review and the measures that followed give a complete answer to the right hon. Gentleman's distortions. The air defence capacity of this country is better today than the capacity we inherited when the right hon. Gentleman left office.

asked the Secretary of State for Defence if he will make a statement on British progress with cruise missile, laser beam and particle beam technology.

As I have stated on many occasions, we have no plans either to develop or to acquire cruise missiles. Limited research studies are taking place to enable us to participate in alliance discussions. As regards laser and charged particle beam technology, we are watching with interest developments in the United States and the Soviet Union but we have no similar programme of our own.

Will the right hon. Gentleman explain how he will deal with the SS20 without the cruise missile? Is it not essential that Britain should keep ahead in advanced weapon technology, and what co-operation is being achieved with the United States over these various weapon systems?

As the hon. Gentleman knows, the United States cruise missile programme is still under development. It would be wrong to assume that any particular weapon would be appropriate against a particular weapon on the other ide. Therefore, his suggestion does not necessarily follow.

asked the Secretary of State for Defence what are the prospects for employment in Royal ordnance and other factories, in the light of recent developments in Iran.

Recent developments in Iran have not led to any reduction in the level of Iranian business with the Royal ordnance factories, nor, so far as I am aware, with any other factories. Consequently there has been no change in the prospects for employment.

Will the Minister assure the House that contingency plans exist in case of cancellation or default of arms orders from our customers in the Middle East? Will he also give an assurance that should these materialise there will be no loss of employment but that it may well lead to re-equipment of Her Majesty's Forces earlier than originally programmed?

I cannot give the hon. Gentleman the last assurance for which he asks. Obviously we are hoping that the present orders will continue and have no reason to believe that that will not be the case. Regarding the Royal ordnance factories, the orders for Iran are being pre-financed.

Has my right hon. Friend seen the letter in The Times last week, written by a businessman who said that on his last visit to Iran, where he had been going for many years, he discovered that because of the statements made by the Secretary of State for Foreign and Commonwealth Affairs there was a definite coolness towards him on the part of Iranian business people? Is it not clear that we should be careful about supporting dictatorial regimes, because it does not necessarily help British business? Is it not time that we took an independent attitude on these matters?

I did not see the letter to which my hon. Friends refers. I am sure that he will be aware that the Prime Minister recently sent a message to the Shah urging him to continue with his programme of liberalization and that—despite the recent turn of events in Iran —the Shah has again publicly reiterated his firm intention to do so.

Will the Royal ordnance factories be receiving extra orders for anti-aircraft and anti-armour missiles which are needed by British operational units in Germany?

There is a Question appearing later on the Order Paper about orders for surface-to-air missile systems.

In spite of what the Shah has said, is not my right hon. Friend aware that there is recent evidence that torture and repression are still continuing under this tyranny? Does it not trouble him at times that this tyranny is being upheld by British arms?

Questions about the current political situation in Iran, or any other country, are best answered by my right hon. Friend the Foreign Secretary.

asked the Secretary of State for Defence how many British Service men there are at present in Germany; how many of these can receive the special English language television service provided for them; and what is the annual cost of this service.

There are about 62,000 Service men in Germany and by mid-December about 17.000 of these, plus their dependants, will be able to receive the service. The running cost of the service in 1978–79 is estimated to be £700,000.

Is the Minister aware that the people of Wales will be surprised that so much money is to be spent on a relatively small number of people in Germany, to enable them to receive these television services, when the Government are dragging their feet and waiting until 1982 before introducing a comprehensive Welsh language service for the 750,000 people in Wales? Would the Minister be surprised to learn that the people in Wales will see this as a verification of the dictum that power appears to grow from the barrel of a gun?

I am sure that the people of the Principality would not begrudge the money that we are spending for the comforts of Service men and their families in Germany—any more than people in any other part of the United Kingdom. The implications of a Welsh language programme are not for me but for my right hon. and learned Friend the Secretary of State for Wales. In introducing a television service for our troops in Germany we are seeking to improve the lot of the Service man and his dependants, who have to face the dual problem of the language barrier and frequent separation due to the Northern Ireland commitment. I should make it clear that the BOAR service is not a special language service. We are simply making it possible for Service men to receive programmes which would be available to them were they serving in this country.

Will my hon. Friend be a little more forthright than was the Secretary of State earlier and agree that the balance of payments cost involved in keeping the troops in Germany is about £600 million a year—

Order. That may well be. If the hon. Member wishes to ask such a question he should place it on the Order Paper. This Question is about the television service.

Will the Minister tell us whether the Service men stationed in Germany have made representations about the fact that they lose money when their units are sent to carry out emergency duties in Ulster—

Order. The hon. and gallant Gentleman is also straying. He is over the side of the ship.

The first part of this Question asks

"how many British Service men there are at present in Germany"—

Order. I realise that. But the Question is also linked to the provision of the television service. We had better move on.

asked the Secretary of State for Defence what are the latest figures available for the cost of recruiting a soldier, sailor, and airman respectively; and what steps he is taking to reduce recruitment through prestige town centre recruiting offices and to make use of jobcentres for recruiting.

In the financial year 1977–78, 38,237 men and women joined the Services. In this period the total cost of recruitment was approximately £26·16 million and the average cost per recruit £684. Separate figures for the Navy, Army and RAF were £637, £675 and £763 respectively.

Does not my hon. Friend agree that these figures are unacceptably high? Are there not two main factors operating against recruitment? First, there is the terrible apartheid which operates in the Forces between officers and other ranks—[interruption.] Oh, yes. Tory Members do not like it, but it is true. This apartheid operates in terms of pay, pensions and conditions. Does not my hon. Friend agree that the use of prestige town centre offices is highly uneconomic? Does he realise that these prestige offices are usually empty while the potential recruits are at the jobcentre further up the road?

I agree with my hon. Friend to the extent that the average cost per recruit is too high. The Department is bending every effort to reduce the cost. As for the prime town centre site argument, it is necessary for the Armed Forces to have an adequate shop window in main centres of population. A review is taking place in the Department to see whether we can maximise the facilities offered by jobcentres and economise to the maximum on the cost effectiveness of the recruiting system.

Is the Minister aware that the best aids to recruitment are neither jobcentres nor recruiting centres but the presence in our midst of large numbers of contented, high-spirited, soldiers, sailors and airmen who are proud of the job they do? That is what brings in the recruits. Is he further aware that he will get better recruits when he pays these men more?

The standards enjoyed by our Armed Forces are a major factor in any recruiting results. I can tell the hon. Gentleman that the cream of our society is still queuing up to join Her Majesty's Forces. We have no shortage of applications. Our difficulties lie in the criteria which are applied to that substantial number of British citizens queuing up to join the Forces.

In view of the answer given by my hon. Friend to a Written Question on 16th November, at c. 364, may I ask him to hold an internal inquiry with a view to informing the House why there is such a disparity between those who volunteer to join Her Majesty's Forces and those who are accepted?

The Written Answer referred to by my hon. Friend demonstrates what I have just said. There are substantial numbers of the cream of our society queuing up to join the Forces. I agree that it might be a useful exercise for the Ministry of Defence to conduct a review to discover why a substantial number of people attempting to join the Forces are denied the opportunity.

In dealing with recruitment, may I ask the Minister to pay tribute to the connection between county regiments and the county recruiting areas from which such regiments draw manpower? Will the Minister have words with the Secretary of State to try and ensure that county regiments keep their headquarters—I think particularly of the Devonshire and Dorset Regiment—within the counties? Is he aware that it does recruiting no good to have a county regiment in the South-West with its headquarters somewhere in the Midlands?

I agree that the county affiliations of many famous regiments in the Army are important factors, both in the maintenance of morale and the extent of our recruitment. The detailed problems of the regiment to which the hon. Gentleman has referred can best be dealt with by my hon. Friend the Under-Secretary of State for Defence for the Army.

asked the Secretary of State for Defence what is the current recruiting target for 1978 for the Army; and how successful it has been to date in meeting that target.

Since April this year, the Army has recruited some 15,000 men and women. This figure shows an increase over the corresponding figure for last year of about 2,000 and reflects a significantly increased target for 1978–79. The numbers recruited nevertheless fall short of this target. It has never been the practice to give details of recruiting targets.

Does the hon. Gentleman agree that the best "recruiting sergeants" for the Army are the current serving officers and men, and the extent to which they are satisfied or dissatisfied with their current terms of service is reflected in the recruiting figures?

I do not disagree with anything that the hon. Gentleman has said. Conditions of service are extremely important. The Government have already recognised the Armed Forces as a special case as regards pay awards. A forward commitment was made in April 1978 to restore the full updated military salary in two approximately equal stages by April 1980. That means that the award on 1st April 1979 will be substantial.

Is my hon. Friend aware that young people are marrying much earlier, and that for the young married man who joins the Army there is the additional problem of the payment of the child benefit to his wife? Unlike his civilian counterpart, the benefit cannot go to the mother direct but has to be paid through the soldier's pay. Will my hon. Friend give consideration to this problem and ascertain whether he can make arrangements for soldiers' wives— especially when the husbands are serving overseas— to receive child benefit direct as in civilian life?

That matter has not been brought to my attention before. It is an interesting matter and I undertake to give it consideration.

As recruiting is directly related to pay and conditions, how will the Government's 5 per cent. pay policy be related this year to the Armed Forces?

The forward commitment that the Government gave this year was specific. The forward commitment was to recover the 18 per cent. short fall in two years plus whatever is the going rate. I am not privy to what the Armed Forces Pay Review Body will recommend to the Prime Minister in March 1979. We shall all have to wait and see what the board recommends before there can be any announcement.

Is my hon. Friend aware that the only real way to deal with conditions in the Services is to encourage trade union organisation in the Armed Forces and the setting up of effective collective bargaining machinery?

That is becoming a hackneyed question. We encourage those in the Services to join trade unions so that they are ready to establish themselves in civilian employment at the end of their service. Beyond that we have no evidence that there is great demand for trade unions in the Armed Forces.

Does the hon. Gentleman agree that the good recruiting figures, welcome though they are, are no adequate substitute for the many trained and skilled men who are leaving the Army and the other Armed Forces? Does his right hon. Friend the Secretary of State regard this as another one of his greatest achievements, or does he intend, at last, to do something to stop the disastrous exodus?

The facts are as the right hon. Gentleman has conceded. Recruiting figures have risen considerably this year. We are still short of target because of the increase in strength of 6,000 men for the Army announced earlier in the year by my right hon. Friend. Furthermore, we concede that more people have left the Army by PVR than we consider desirable. The forward commitment of the Government on pay and conditions will, I am sure, have a stabilising effect. When next April comes and the Armed Forces realise that the Government have made a firm commitment and are carrying it out, I am sure that the situation will improve still further.

What is the good of the hon. Gentleman saying that the forward commitment is having a stabilising effect when he knows that the exodus is continuing and that there is no stabilising effect?

I said that the pay award this year has had the effect of bringing about an improvement. When the Armed Forces realise next year that the Government have given a firm commitment to the Armed Forces and that they intend to honour it, we shall see a vast improvement.

asked the Secretary of State for Defence whether he is yet in a position to approve the sale of the Harrier aircraft to the People's Republic of China.

We are considering the Chinese requirements for Harrier. Before a final decision is reached we shall need to obtain the views of our allies.

Can the Chinese Government be certain that subject to the views of our allies—it is widely reported that they are not opposed to the sale—our Government will be willing to sell the aircraft?

The position was fully explained to the Vice Premier on his recent visit. I have seen many expressions of view attributed to other Governments in the press, but my experience is that Governments prefer to express their views through their accredited representatives rather than through the columns of newspapers.

Will my right hon. Friend explain exactly what is holding up the sale of these aircraft? As I understand it, the Chinese are anxious to buy them. We have obvious employment and financial interests in selling them. There are no NATO objections. What is the difficulty?

The situation is simple. It was only recently that we had some clear indication of Chinese likely requirements and, therefore—

Not true.

It is true. I have read about Chinese interest in the Harrier since 1972. However, it is only in the past few days that we have had a clearer indication of their requirements. The necessary consultative machinery is now being invoked.

Is the right hon. Gentleman aware that the bear is at its most dangerous when one shows fear of it?

All right, Goldilocks.

Will the right hon. Gentleman assure us that the Government's hesitation is in no way influenced by any fear of upsetting the Soviet Union? Is he able to give us an indication of what reservations have been expressed by any of our allies?

I think that the right hon. Gentleman knows from his previous experience that it is not helpful if consultations take place of a private character and they become public. The fact is that consultations are taking place. The Prime Minister has made it clear that we shall not be influenced in our decision. He has made it clear from the Dispatch Box that we shall make our decision when we have gone through the necessary consultative processes.

asked the Secretary of State for Defence if he is satisfied with the performance of the Royal Naval Pay and Records Office at HMS "Centurion" Gosport.

Yes, Sir.

Is the right hon. Gentleman aware that for over a year the staff of the unit have had to live under the threat of a possible move of the unit to Glasgow? Is he aware that the move would be extremely expensive and disruptive, as has been admitted by the Government? Does he agree that it is shameful that the Government should pay such little regard to the proper functioning of defence services and those who give loyal service to them?

I agree that it is undesirable that any Ministry of Defence employee should have had to endure the period of uncertainty to which the hon. Gentleman refers. I hope that it will be possible to make an announcement by the end of the year about areas of work to be dispersed to the St. Enoch site.

Is it not the Royal Naval Pay and Records Office that is responsible for the handling of the case—I have sent the Minister the particulars —of the Dorset officer who, having been taken on for eight years on the understanding that at the end of that period he would receive a £6,000 gratuity, found his service dispensed with after 7¼ years with no adequate reason given? Will the hon. Gentleman reverse that unjust decision?

I have no knowledge of the case to which the hon. Gentleman refers, but I undertake to investigate it and I shall be in touch with the hon. Gentleman.

asked the Secretary of State for Defence if he met Vice-Premier Wang Chen during his recent visit.

I held no formal meeting with Vice-Premier Wang Chen, but I met him informally on two occasions.

In view of the answers that my right hon. Friend has already given about consultations with allies on the selling of Harriers that Vice-Premier Wang Chen requested, is he aware that United States Government officials have stated that they see no reason for discussions not taking place within COCOM? Will he, therefore, consider consulting the United States on a bilateral basis and not going through the whole formal procedure?

These are matters for consideration, but, as my hon. Friend knows, the conduct of these international arrangements is the responsibility of my right hon. Friend the Foreign Secretary. It is not simply a bilateral matter between ourselves and the United States. Many other countries are involved in the COCOM arrangements.

How many extra jobs will be created if the Chinese requirements for Harriers are met?

Until full contractual arrangements as to the time scale and the numbers are concluded, I do not think that a precise answer could be given to a question of that sort.

Does my right hon. Friend agree that the new-found enthusiasm of the Tories to arm Communist China has a certain piquant interest? If, as is very likely, there is a rapprochement between the Soviet Union and the developing new politicos in China, does he think that the Tories' interest will continue to be the same as it is now?

My hon. Friend asks me a very difficult and almost impossible question. The turns of Opposition policy are so fast that I would hesitate to predict so far ahead.

Is the right hon. Gentleman seriously telling the House that the Government were surprised by the Chinese desire to buy Harriers? If not, why have not the consultations with other Governments taken place before the Chinese visit?

I do not think that anyone is surprised. What might have been of some surprise to other people is that the purpose of the Vice-President's visit was far wider than defence equipment. A very satisfactory agreement, covering a range of industrial equipment, was concluded at the end if his visit. The Government were not surprised that a request was made about Harrier, but one cannot consult allies until one has some idea of the size and character of the request, and, as I have indicated, that come only very recently.

asked the Secretary of State for Defence, what was the expenditure on defence, expressed in per capita terms of numbers employed in the defence services, both civilian and military, in the last financial year.

It was £10,900 in 1977–78, on the same basis as the figure of £9,900 which I gave to my hon. Friend on 16th March last, but updated to 1978 survey prices and reflecting final outturn for the year.

Is it not true that the corresponding figures for the Health Service are about £5,500 and for local authority education services £6,500? Do not these figures demonstrate the hypocrisy of the Opposition when they claim that defence cuts have cost 200,000 jobs in this country, while at the same time they ask for massive cuts in other areas of public expenditure which would he far more destructive of jobs?

I quite agree with my hon. Friend in pointing out the discrepancy in some of the criticisms that we receive from the Conservative Benches. But I must also tell him that I do not see a great deal of relevance in comparing the total cost per capita of employees in defence, which uses expensive and sophisticated equipment, with that in other sectors, where obviously the cost of the equipment is less.

What savings, at the expense of the cream of our society, does the right hon. Gentleman make when he sends Service men, stationed in BAOR, on emergency tours in Ulster at a lower rate of pay?

The hon. and gallant Gentleman knows that these Service men do not have a lower rate of pay; in fact, they get an additional element of pay, quite properly, when they are serving in Northern Ireland. But when they are in Northern Ireland they do not qualify for the local overseas allowance, for the simple reason that they are not in Germany, where it is calculated and paid. The reason that they are in Northern Ireland, as I think the House generally agrees, is for the maintenance of security there, which is a vital matter.

Why does the Secretary of State answer these Questions from his hon. Friend the Member for Luton, East (Mr. Clemitson) in a way which is guaranteed to undermine the commitment to the Armed Forces? Is it not a fact that the reason why the average figure is so low is that the number of people in the Armed Forces— and, indeed, the civilian element as well— had declined so substantially under his own Government's administration? If that were not the case, the figure would be a good deal lower.

It is quite clear that this figure, as the Question requires, is based on both civilian and military manpower. It would be quite wrong for me to seek to re-write hon. Members' Questions. We sometimes have enough trouble in answer- ing them without wanting to re-write them as well. If the numbers were greater we should also need to buy additional equipment for the extra numbers. Therefore, I do not see the relevance of the hon. Gentleman's comment either.

asked the Prime Minister if he will list his official engagements for Tuesday 21st November.

In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others. This evening I hope to have an audience of Her Majesty The Queen.

During the course of the Prime Minister's visit, will he pause to reflect upon the rather wretched Ford strike? Does he not agree that Ford has no part in this strike in reality, and that apart from the £ 450 million that it will have cost the company in lost revenue, the cost to public funds has been enormous? Will he now give an undertaking that, provided Ford continues to quote better deliveries and lower prices, he will not give instructions to his Departments that they are forbidden to purchase Ford vehicles? If not, will he say why not?

I often reflect on the Ford strike and the consequences of it, including the fact that, if the workers accept the latest offer—that is. their present rate of pay plus 17 per cent. —it will probably mean that over the next 12 months they will be no better off than if they had avoided a nine-weeks' strike and had accepted 5 per cent. I often reflect on that.

Has my right hon. Friend had an opportunity to contact Chancellor Schmidt about his recent speech on the expansion of powers of the European Assembly? Will he say that Her Majesty's Government remain determined to keep to the undertaking, made during the debate on the direct elections? Will he say to Chancellor Schmidt that we do not agree with what he has said?

No, Sir, I have not contacted Chancellor Schmidt about it. I dare say there will be some discussion on the matter at the next European Council. We shall continue to enunciate the policy, as my hon. Friend says, that we have enunciated so far. Whether there is any change in Chancellor Schmidt's position will become clear when we have our discussions.

May I ask the Prime Minister a question about the bakers' strike. Is he aware that the general secretary of the Bakers' Union is threatening those who stay at work that he will use the closed shop legislation to see that they are sacked? Will the Prime Minister condemn those threats?

I have been checking and it is clear that the union cannot use any closed shop legislation for this purpose. The closed shop is a matter for agreement between the employers and the employees. I understand that the employers have said that they would not insist on a closed shop in this particular case.

So the Prime Minister clearly condemns those threats and the use of his own Government's legislation in that way?

At the risk of misrepresentation by the right hon. Lady, which I have no doubt I shall get, I do not believe that it is sensible for me to utter obiter dicta on every industrial dispute that arises and so inflame what is taking place, and I refuse to do so.

Does not my right hon. Friend agree that, if Ford had settled in the early days of the negotiations, that would have avoided a dispute? Bearing in mind that Ford has made a statement that it could absorb the increase without increasing prices, would not that have been a better way of dealing with the problem?

I have not conducted these negotiations with the Ford company and I do not think that the House of Commons is a very good place in which to conduct them—nor, indeed, at the Dispatch Box. Increases in earnings have certain profound consequences on the rate of inflation, on growth and on investment. It is my responsibility to point that out. It is the responsibility of those who negotiate on both sides of industry to see how those particular national consequences fit their individual situations.

asked the Prime Minister if he will dismiss the Secretary of State for Defence.

No, Sir.

Is the Prime Minister aware that, thanks to his Government, this country can no longer maintain its commitments to NATO in full? Is he further aware that the Royal Air Force is short of 200 pilots, that skilled men are leaving the Services at record rates and that our soldiers cannot even get enough for such items as boots and pullovers? If we are to go on with this Mad Hatter's tea party, will he agree to pay £7,000 to get rid of the dormouse?

I really begin to wonder whether the hon. Gentleman is in the pay of the Soviet Union. If I did not know that he was vice-chairman of the Conservative Party's defence committee, I should believe that he was, because rarely have I heard such a travesty of the arrangements which affect our Forces today. It is well known that the Royal Air Force is much stronger now than it was five years ago. It is well known that the Phantom aircraft which have replaced older aircraft are far more efficient, and there are more of them.

Which one is that?

The hon. Member for Chertsey and Walton (Mr. Pattie) will be aware that there has been an improvement in recruitment, but it is unsatisfactory that too many experienced men are now leaving the Forces. I hope that can be corrected.

Did the Prime Minister hear the Secretary of State for Defence answer questions about the Harrier aircraft a few minutes ago? If so, does he agree that, if we sell these aircraft to the Chinese People's Republic on the basis that it is the enemy of the Soviet Union, that will make meaningful disarmament talks between ourselves, the United States and the Soviet Union more difficult? Does my right hon. Friend recall the importance that he placed on these talks when he made his excellent speech at the United Nations special session on disarmament?

The position about the supply of defence equipment is extremely political. Therefore, we consider it very carefully in conjunction with our allies. However, we would not allow our relations with any other country to be dictated by a third party. If we are discussing these matters, I can understand the reaction of the United States, for example, in the matter of the supply of MIG 23s to Cuba. All these sensitivities have to be taken into account. I made clear to the Chinese vice-premier that we did not wish to become just an arms supplier to China but that there were big and important commercial undertakings that we would like to explore. I am glad to say that he appreciated that particular matter. We handed to him an agreement, which I understand is to be initialled, which will provide for about $10 billion worth of trade between both our two countries by 1985. I think that is as important as the supply of Harriers.

Does the Prime Minister agree that it is bad for the morale of the Armed Forces for them to hear the Prime Minister once again exhibit his complete ignorance of what goes on in defence? Is he aware that his Government have not bought any new Phantoms but that, under him, they have just changed their role? Therefore, his answer was totally inaccurate. What are the Government proposing to do about preventing or putting a stop to the present disastrous exodus of highly skilled and trained men from all three Armed Forces because they are not being paid sufficient money?

I understand that the exodus of some of the skilled men relates to the fact that they have not vet fully appreciated that there will be a substantial increase in pay in April 1979 followed by another in April 1980 to bring them fully up to the general level of civilian pay. It is important that that should be understood.

asked the Prime Minister if he can now make a statement on the discussions that have taken place with the Trades Union Congress representatives about wage guidelines and inflation.

I refer my hon. Friend to the statement made by my right hon. Friend the Chancellor of the Exchequer on 15th November.

Does my right hon. Friend agree that many trade unionists are prepared to accept that an incomes policy is an important ingredient in the control of inflation but that they are not prepared to tolerate wage restraint in isolation? Does my right hon. Friend further agree that the control of wages, prices, profits and investments are all part of the mix and that attention should be focused on elements other than income if we are to reach an understanding with the trade union movement?

Yes, Sir, I would certainly accept that. As my hon. Friend knows, it has never been part of my approach to this matter that incomes or earnings are the sole cause of inflation— many other elements enter into it—or that we should neglect the factors to which he referred. But he will allow me to remind, not him perhaps, but others, that inflation is now half of what it was a year ago when the Government called for a 10 per cent. increase in national earnings. That was one of the reasons why it seemed appropriate that we should ask for this ambitious objective on this occasion.

Does the Prime Minister agree that trade unionists living in rural areas in particular are very concerned about the price of petrol? Will he confirm or deny the stories circulating today that the Government intend to abolish the road fund licence?

I believe that there is a Written Answer on this matter. [Interruption.] Perhaps hon. Gentlemen might care to hear the end of my sentence. It is not unusual to have Written Answers on this matter.

On this major matter?

I am delighted to hear the new Leader of the House in good voice. We look forward to the touch of elegance which he will add to our proceedings from now on. Perhaps I can break the veil of secrecy by saying that the proposal will be spread over a period from now until 1983, and I have a feeling that there will be a substantial number of opportunities to ask questions of this Government between now and then.

I recognise that in the past three or four years the trade union movement and the Government have produced between themselves and employers a result which has been greatly to the benefit of this country; and I understand the Government's present attitude. But does my right hon. Friend appreciate that it is difficult for many strong supporters of the Goverment to talk in terms of restraint on wages when, by direct Government policy mortgages are allowed to rise to their present level thereby creating problems outside the control of ordinary people? People are prepared to co-operate, but they want to see some action taken the other way.

If there had not been a certain amount of uncertainty about the prospects for this winter, mortgage interest rates would not have had to go up. All these things interact on each other. As my right hon. Friend said, it may be difficult to understand, but the general understanding is that if we do not succeed in one part of the economy, we have to take countervailing action in another part. I believe that is being understood more by the public generally. The best possible way during this winter is to have a substantial moderation in the level of wage settlements. If we do that, our present success in economic growth, in employment, with unemployment going down again this month, in the retail price index, in exports and in investment— that is the result of what has happened during the past 12 months—will continue.

May I thank the Prime Minister for having, no doubt inadvertently, appointed me as a member of his Government, but let me assure him that I would rather be a shadow in the house of the Lord than a leader in "the tents of ungodliness".

I should like to say with what delight we welcome the hon. Gentleman to his new post. I have a feeling that there will be a great deal of sport in the House over the next few months, or as long as he lasts. His ambition is likely to remain fulfilled for a very long time.

On a point of order, Mr. Speaker.

Order. Unless points of order arise out of Question Time, I normally take them after statements.

My point of order arises out of a reply given by my right hon. Friend the Prime Minister, who confirmed that the Government have decided to announce, by means of a Written Answer, their decision to phase out the vehicle excise duty. That subject is clearly of major importance, not only to West Wales and rural areas but nationally. It seems wrong that there is no immediate opportunity for the House to question the appropriate Minister on the proposal.

That is not a point of order. The Government of the day are always free to choose their own way of giving information to the House. Obviously we cannot discuss it now, but there will, no doubt, be plenty of opportunities later.

Further to that point of order, Mr. Speaker—

Order. I have already said that it is not a point of order. I have ruled, I hope quite clearly, that it is not a point of order for me.