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Commons Chamber

Volume 974: debated on Wednesday 28 November 1979

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House Of Commons

Wednesday 28 November 1979

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Private Business

Sheffield General Cemetery Bill

Lords amendments agreed to.

Oral Answers To Questions

Foreign And Commonwealth Affairs

Helsinki Agreement

1.

asked the Lord Privy Seal what regular steps his Department takes to monitor breaches of the Helsinki Agreement by other countries.

Instructions have been given to British embassies in the Soviet Union and Eastern European countries to monitor and report regularly on implementation. Information is also exchanged regularly with our partners in the North Atlantic Treaty Organisation and the Nine. A summary of the results will continue to be made available to the House at six-monthly intervals until the review conference in Madrid next year. I am making the latest such report in a pursuant reply to my hon. Friend the Member for Chislehurst (Mr. Sims) today.

Is my hon. Friend satisfied with the progress made in persuading the Soviet Union to fulfil the pledge in the Helsinki Agreement that there would be a much freer flow of information into and out of the Soviet Union and inside it? Which British newspapers, and how many copies, are freely and openly available in Moscow? What is the Minister doing to increase the number of British newspapers on sale?

We are not satisfied with the progress made, although there has been some improvement since the Helsinki conference. However, there has not been enough improvement and that will be pursued at the Madrid review conference next year.

I understand that British newspapers can be found, but often only in tourist hotels. A preference appears to be given to the Morning Star, which we would not all think to be justified.

Has any monitoring been done in Britain as regards breaches of the Helsinki Agreement? Is there any evidence that dissident workers who have published pamphlets attacking either their own management or the Government, have been dismissed?

Anglo-French Co-Operation

2.

asked the Lord Privy Seal what discussions he has had with the French Foreign Minister on the possibilities of increasing co-operation between Great Britain and France.

I took part in the discussions that my right hon. and noble Friend had with the French Foreign Minister on 19 November during the recent Anglo-French summit meeting.

As Franco-British relations appear to be stuck in a groove, would it not be a good idea for our two countries to co-operate by putting forward schemes for European co-operation? Perhaps we could co-operate with them on defence and on their nuclear programme and by using our reserves of coal and oil to make Europe stronger and safer.

I agree that Anglo-French co-operation should be increased. The scope for collaboration in nuclear energy was touched on by my right hon. Friend the Secretary of State for Energy during discussions with the French Minister in the margins of the recent Anglo-French summit. We are certainly ready to play our part.

I hope that I did not misunderstand the Lord Privy Seal. Was he referring to civil nuclear power co-operation as regards the talks held at Downing Street? I certainly hope so. Was there any discussion of the French ban on imported British lamb? What was the attitude of the President of France to our representations and his position vis-á-vis the EEC?

Naturally, I was referring to civil nuclear power and that is why I referred to my right hon. Friend the Secretary of State for Energy, rather than my right hon. Friend the Secretary of State for Defence. The right hon. Gentleman will agree that the subject of any conversations at summit meetings cannot be discussed. However, the subjects that the right hon. Gentleman has raised will no doubt arise later during Question Time.

Namibia

4.

asked the Lord Privy Seal if he will make a statement on the progress of the latest round of talks concerning Namibia called by the United Nations Secretary-General.

5.

asked the Lord Privy Seal whether any agreement has been reached between the five Western States and the Government of South Africa on a date for the termination of South Africa's illegal occupation of Namibia.

The Under-Secretary of State for Foreign and Commonwealth Affairs
(Mr. Richard Luce)

The United Nations Secretary-General arranged consultations in Geneva from 12 to 16 November between senior United Nations officials, the five Western Powers and representatives of the parties to the Namibia negotiations. There were useful discussions of the proposal for a demilitarised zone on Namibia's northern border. I hope that this proposal will contribute to a solution of the problems holding up implementation of the United Nations plan for elections under United Nations supervision and control and, of course, South African withdrawal.

Is the Minister aware that there is considerable scepticism about whether Mr. Sam Nujoma represents properly the view of all the peoples of Namibia and that there is great apprehension about the arrangements to be made to contain SWAPO forces during a ceasefire and/or an election? Will the Minister ensure that our representatives take into account the representations of all parties within Namibia, including the multi-racial parties?

It is for the people of Namibia and no one else to decide who should be their representative. As regards the containment of SWAPO activities, that is precisely the point of the proposals for a demilitarised zone. Its purpose is to provide for the anxieties expressed in certain quarters about maintaining security during the holding of free and fair elections. On the last part of the hon. Gentleman's question, the internal parties are not parties to the ceasefire discussions, but, in terms of holding elections in Namibia, they are equal with any other party taking part in the elections.

I agree with my hon. Friend that it is for the people of Namibia to decide who is to form a Government, but why does the United Nations hold firmly to the view that only SWAPO is, or can be, the legal Government of Namibia? Is it not time for a change in that direction; and cannot the Government do something to ease us towards that?

The Government's view is that it is for the people of Namibia to decide. One development that it is important to acknowledge is that all the parties to the problem of Namibia have accepted that there should be United Nations-supervised elections under United Nations authority. That is an important political basis on which to proceed.

Will the hon. Gentleman ensure that he is not carried away by the South African propaganda which is, regrettably, espoused in the House? Is it not clear that the South Africans have no intention of allowing a stable Government and a peaceful settlement in Namibia? Will the Minister recall for discussions the Government's representative in Luanda, since he can personally report on the regular marauding of South African troops into southern Angola?

I have no intention of being carried away by anybody. As the hon. Gentleman knows, the South African Government took part in what the Secretary-General of the United Nations regarded as useful discussions about a demilitarised zone. As long as they are prepared to continue discussions, one must assume that they are interested in a negotiated settlement.

Does my hon. Friend agree that the future of Namibia may depend to some extent on a peaceful conclusion to the problem of Zimbabwe-Rhodesia?

I accept that the two issues are inter-related. If we can make progress on one, it may assist us in making progress on the other.

The Minister has reported some progress, but it is not very specific and we are all aware that the negotiations have taken an exceptionally long time. Can he tell us a little more about the present area of disagreement to be negotiated and when the next stage in the negotiations will start?

The right hon. Gentleman will recall that in the spring of this year the major outstanding matter on which there was an impasse was the question of security and the provision of security for the holding of free and fair elections in Namibia. Since then, there have been extensive consultations about how we can overcome the problem. That is what led to the concept of a demilitarised zone, which is the subject of discussions at present. As a result of the discussions in Geneva, the United Nations Secretary-General has proposed that there should be further detailed discussions about that idea, subject, of course, to the acceptance by all parties of the concept of a demilitarised zone.

Gibraltar

6.

asked the Lord Privy Seal if he will make a statement on the future of Gibraltar.

Following the meeting in New York on 24 September between my right hon. and noble Friend and the Spanish Foreign Minister, we are continuing to seek a way of resolving the present differences with Spain over Gibraltar. It must be consistent with the British pledge to respect the wishes of the people of Gibraltar with regard to their future. The maintenance of restrictions by Spain makes the search for a mutually acceptable solution more difficult; their removal would make progress easier.

Will the Lord Privy Seal say how he sees the future democratic representation of Gibraltar, perhaps on the French model? Has it been considered in regard to the House? How does he see it in Europe?

What possible justification can democratic Spain have for maintaining the border restrictions introduced by the dictatorial regime which has been replaced?

On the first part of the hon. Gentleman's question, we do not have any plans to have Gibraltar represented in the House. I entirely agree with what the hon. Gentleman said in the second part of his question. There seems to be no justification for the continuance of the restrictions.

Will the right hon. Gentleman give the House an unequivocal assurance that in no circumstances, whether for alliance, convenience or any other consideration, will he disregard the inalienable right of people to self-determination?

That assurance was fully contained in the answer to the original question.

Is my right hon. Friend aware that, having spent from 1969 to 1975 under siege in Gibraltar, I know more about the problem than any other hon. Member?

I thank the hon. Gentleman. Have we not reached the time when the Government should, as a matter of urgency, consider holding talks with Spain? We keep hearing of talks about talks, but we never get to the stage of having talks that will do something towards removing the dreadful situation of the 200 yards and the barrier gate separating the Gibraltarians from their Spanish friends in La Linea, and the Spaniards in the Campo area from their relatives and friends in Gibraltar.

I agree that my hon. Friend probably knows more than any other hon. Member about the problem and that it is high time that progress was made. My hon. Friend will understand that we have had other matters on our mind, but we are hoping that we shall be able to make progress before long.

Does not the right hon. Gentleman think it sensible to point out to the Spanish that, if they wish to enter the EEC, one of the essential planks must be the freedom of movement of workers both ways and that it will not be acceptable for them to regard Gibraltar as not being part of that sort of arrangement?

I agree with the hon. Lady. She may be aware that when I was in Gibraltar I said that it was unthinkable that two parts of the Community could subsist with a frontier closed between them.

Latin-American Refugees

7.

asked the Lord Privy Seal if he will raise in the United Nations Commission on Human Rights the position of political refugees in Latin America.

The United Nations Human Rights Commission will hold its next meeting in February 1980. We shall consider what matters might be raised at this meeting nearer the time.

Does the Minister agree that the position of political refugees in Latin America is still of the utmost gravity? Would it not be more advantageous to the United Kingdom in making representations if we had not phased out the admission of political refugees from Latin America?

Will the Minister consider the case of Virgilio Bareiro, former director-general of the National Telecommunications Corporation of Paraguay, who has been refused political asylum in this country in spite of having been imprisoned without trial in Paraguay for 15 years?

The special admission programme is a matter for my right hon. Friend the Home Secretary, but the hon. Gentleman will know that there is no reason why Latin American refugees should not apply to come into this country. They will be treated on their merits, as are refugees from all over the world. If the hon. Gentleman writes to me about the case that he mentioned, I shall look into it.

Will my hon. Friend not let concern for political refugees in Latin America disguise our concern for political refugees much nearer home in Europe who seek to get out of East Germany and elsewhere and are shot down in the process?

While entirely agreeing with my hon. and learned Friend, may I point out that we should have a programme for the admission of refugees that is the same from whichever quarter they come. There should not be special privileges for one set of refugees as opposed to another.

Few of us would disagree with the conclusions just drawn by the hon. Gentleman, but how does he justify the advice that his Department has given to the Home Office that it is now safe for Chilean refugees in this country to be returned to that foul regime in Chile? Why does the hon. Gentleman take such a benign attitude towards that regime?

We are not returning any refugees to any country. They either gain admission here or they do not. A number of Chileans here now wish to go back to Chile, and that could be because the human rights record of Chile is now, in many cases, no worse than that of some of the other offenders in Latin America.

The House will treat with great scepticism the last remark by the hon. Gentleman. Will he not reconsider the rather petty and callous decision that the Government have made in respect of the Latin-American political refugee programme? Does not the hon. Gentleman realise that that decision has condemned dozens of people, whose only crime was to speak against the dictatorship, to perpetual imprisonment and possible torture?

The hon. Gentleman's prejudice should not lead him to views of scepticism such as he has expressed. Genuine refugees can still seek exile in this country and are likely to be given it, but there is no need for a special programme. The hon. Gentleman should know that such a special programme is the responsibility of my right hon. Friend the Home Secretary and not mine.

Southern Rhodesia Act

8.

asked the Lord Privy Seal what reaction he has received from the front-line Presidents at the passing of the Southern Rhodesia Act and if he will make a statement.

The Presidents of the front-line States were informed of the contents and purpose of the Southern Rhodesia Bill at the time it was introduced. None of them made any formal comment about it to Her Majesty's Government. The debate at that time gave hon. Members the opportunity to discuss all aspects of the Rhodesia question. Since then, the Patriotic Front has accepted our proposals for the transitional period before independence and discussions are now proceeding on a ceasefire. I shall make a further statement when there are significant developments to report.

Could not the Lord Privy Seal be a little more forthcoming? Could he say, for example, what arrangements have been made during the transitional period for the peaceful return of all refugees and political exiles from Zambia, for example, to Southern Rhodesia in time for the elections? What further representations has he made about the constant bombing and infiltration into Zambia by the Rhodesian forces at a time when we are trying to organise a ceasefire?

The hon. Lady will remember that we stated earlier that we shall facilitate the return of refugees as soon as we can. On the second point, the hon. Lady may have been in the House last week when I answered a private notice question on this point. We deplore all violence by either side at this very delicate stage of the negotiations. We are very close to an agreement and anything which endangers that is thoroughly to be deplored.

I fully appreciate that the process of negotiating takes time, but is my right hon. Friend aware that there is growing anxiety on the Zimbabwe-Rhodesia/Salisbury side about the delay in implementing the dateline that his right hon. and noble Friend laid down? Could my right hon. Friend tell us how much further this dateline will be stretched?

Naturally we want to proceed as quickly as possible. Everyone will accept that. Equally, my right hon. Friend will probably concede that the date was postponed because of what happened in Zambia last week. I cannot give a dateline, but I can assure my right hon. Friend that we are as anxious as anyone to proceed as quickly as possible.

Have the Government accepted the principle of a Commonwealth peacekeeping force? If not, why not, particularly in view of the fact that Bishop Muzorewa is now increasing his private army to 25,000 at the expense of the taxpayers in Rhodesia?

The hon. Gentleman has a fairly short memory. In view of what he said during the debate on the Southern Rhodesia Bill, I should have thought that he would have been more careful in his present comments. He will appreciate that we are discussing these matters at present. We had a three-hour discussion with the Patriotic Front last night and another two-hour discussion this morning and I shall be returning to discuss matters with them as soon as questions and the statement have been dealt with. I hope that the House will understand the position if we confine discussions on the ceasefire to the Lancaster House discussions and wait until we make a statement in the House.

United States Secretary Of State

9.

asked the Lord Privy Seal when he, or his noble Friend the Secretary of State for Foreign and Commonwealth Affairs, intends next to meet Secretary of State Vance.

My right hon. and noble Friend will meet the American Secretary of State on 13 and 14 December in Brussels at the NATO Council meeting, and on 17 December when he will accompany my right hon. Friend the Prime Minister on her visit to the United States.

Will my hon. Friend urge the Foreign Secretary, when he meets Secretary of State Vance, utterly to deplore the events that are taking place in the United States embassy in Tehran? Further, will my hon. Friend urge his right hon. and noble Friend to use all his endeavours to achieve the adoption of a firm and united Western response, to what is no more and no less than primitive blackmail?

The United States is in no doubt about our support in the agony which that country is going through over the occupation of the American embassy in Tehran. Together with our friends in the Nine we have played, I believe, a useful function in helping the Americans in Tehran. We shall continue to assist the United States in any way that we can.

On a less important but none the less important matter, could the Foreign Secretary ask Secretary of State Vance whether he agrees with the leader in the New York Times regretting, from the point of view of the West, what this Government are doing to the BBC's external services?

There are many people who have to ask others to do other things. Having not seen that leader I cannot respond to the hon. Gentleman's question.

When the Foreign Secretary sees Secretary of State Vance will he bring to his attention the refugee situation on the Thai border? Is my hon. Friend aware that I visited those camps less than a month ago and all the prospects point to a build-up of refugees running into hundreds of thousands in the not too distant future? Those refugees have no prospect whatever of going back to their homes for a long time to come. Does my hon. Friend appreciate that this puts a tremendous burden on the Thai Government who will need all the support they can get from America, this country and the whole of the Western world?

The decision of the Thai Government to accept these refugees was a courageous and humane one. We have offered to help them to discharge the resulting responsibilities in any way that we can both through the EEC and directly. I am sure that the United States will also respond. I shall draw what my hon. Friend has said to the attention of my right hon. and noble Friend.

When the Foreign Secretary meets Secretary of State Vance will he assure him that many of us who deplored the deposing of Mr. Mossadeq in 1953, and were against the regime of the Shah, nevertheless deplore the action of the Iranian students in imprisoning American hostages for the purpose of terrorism and blackmail? Will the hon. Gentleman assure the Foreign Secretary that he has the support of all Members of the House in obtaining the early and safe release of the hostages?

I am grateful to the hon. Gentleman for what I am sure will be the sentiments of the whole House. Unless we can be sure of the security of diplomatic staff, it will be almost impossible to conduct business between States, whatever their differences.

Is consideration being given to withdrawing all Western embassies from Tehran? If not, why not.

For the present I believe that the presence of our embassy and other Western embassies in Tehran is nothing but helpful in the short-term crisis that persists. However, the situation is being kept under close review.

There will be many matters that the Prime Minister and the Foreign Secretary will wish to discuss with Mr. Vance when they go to the United States. I hope that they will convey to him the Government's statement on their sense of outrage about events at the American Embassy in Tehran. The Opposition certainly share that feeling as we regard this as an outrageous breach of international law. Will the Government make it plain to Mr. Vance how much they appreciate the American Government's helpful intervention at one stage in the protracted London conference talks, with their offer of financial assistance in order to help solve the difficult problem of the purchase of under-used land in Rhodesia by Africans?

I am sure that both the Prime Minister and the Foreign Secretary will be grateful for and feel strengthened by that assurance from the right hon. Gentleman about support in the Tehran embassy matter. I shall certainly pass on our thanks to the Americans for their helpful attitude over land in Rhodesia.

On a point of order, Mr. Speaker. I must register a protest on behalf of many hon. Members who feel that it is outrageous that questions to the Foreign and Commonwealth Office should be cut short at this time.

I am obliged to the hon. Member, but I must point out that I do not control that.

European Community

Council Of Foreign Ministers

37.

asked the Lord Privy Seal when he next intends to meet the Foreign Affairs Ministers of the EEC.

38.

asked the Lord Privy Seal when he next intends to meet his colleagues in the EEC.

39.

asked the Lord Privy Seal when he next expects to attend a meeting of the EEC Council of Ministers.

Can the Lord Privy Seal give an assurance that he will take the initiative and raise the question of international co-ordination of aid to Kampuchea and other countries which are in dire need? The individual efforts of separate Governments seem to be inadequate to meet the challenge.

I entirely agree with the hon. Member that this is a desperately serious problem. He will be aware that Britain has done more individually than most other countries. He will also be aware that on 30 October the Community decided to give a further £16 million for famine relief in Cambodia as its contribution to a world-wide effort to save the Cambodian people.

Will my right hon. Friend convey to his colleagues in Europe, if necessary before his meeting with them in December, that if a suitable settlement to the problem of our net contribution to Europe is not agreed in Dublin, this issue will not go away? This House will not permit it to do so. Will he also advise his colleagues in Europe that if there is protracted wrangling on this issue it will do great damage to the European cause in the United Kingdom, even among its most firm supporters?

I agree with my hon. Friend. This issue will be discussed tomorrow and the next day in Dublin by the Prime Minister. It is a most serious issue and if it is not solved it certainly will not go away.

Will the Lord Privy Seal confirm that the meeting on 18 December is formal as distinct from the informal meeting in Dublin this week? Nevertheless, will he assure the House that any agreement reached in Dublin on any matter which has not been debated in this House and has been requested by the Scrutiny Committee, will be debated before the substantive Council of Ministers meeting on 18 December or any other date that may apply?

I am not sure how informal tomorrow's meeting will be. I am not sure that that is the best description of it. The hon. Member will be aware of the answer that my right hon. Friend the Chancellor of the Duchy of Lancaster gave on this matter. That answer was satisfactory.

When the Lord Privy Seal or the Foreign Secretary meet their colleagues in the EEC will they take the opportunity, not least in response to the obvious bipartisan feeling in the House on this issue, to ask those colleagues when Western Europe as a whole will adopt a concerted, effective and resolute position on the situation in Tehran?

That has already been done. My hon. Friend probably will be aware of the statement that the Nine issued on Tehran when we met last week. The Nine have been concerting their action very effectively and helpfully in Tehran, and I understand that the American Government have expressed their gratitude.

Surely the right hon. Gentleman must be aware that these meetings of Ministers are either formal meetings of the Council, whose decisions have the force of law, or they are not. Surely the forthcoming meeting in Dublin is not a formal meeting in that sense?

It may or may not be, but it is an extremely important meeting and that is what I was seeking to convey.

Will my right hon. Friend find an early opportunity to make clear to our European friends that if there were a disruption of oil supplies from the Middle East we would, of course, in the interests of our European partnership, wish to help out? However, will he also make clear that there would be no question of our selling oil at below world prices, any more than we would expect to buy German cars or French wine at below world prices?

I agree. Of course we will help our Community partners. We already export to the Community about 28 per cent. of our production, but it would be impracticable and disadvantageous for us to attempt to sell oil at below its market price.

When the Council of Foreign Ministers meets in its political co-operation role—and that was the point with which my hon. Friend the Member for Fife, Central (Mr. Hamilton) began—will the Lord Privy Seal ensure that he is satisfied that the collective responses and voices that are supposed to come out of Brussels are sufficiently timely and sufficiently strongly expressed? Like many hon. Members on both sides of the House, I was barely aware of the statement made about the position in Tehran as reflected in the communiqué from Senator O'Kennedy, speaking on behalf of the Nine. Obviously there can be occasions when it is useful to have a concerted voice, but I certainly hope that the Lord Privy Seal will take the view that an individual voice can supplement the concerted voice. I hope that he will take that point on board, not only in relation to Tehran, but other matters, such as Cambodia, on which we feel strongly.

On a minor point, I do not think that this particular O'Kennedy is a senator. I take the right hon. Gentleman's point, but we do not have any control over the publicity that the statements of the Nine are given by the media over here. We issued a strong statement. Our attitude has been helpful and our support for the Americans has been unequivocal. Anything that we can do to ensure that our attitude is more widely understood, we shall do.

40.

asked the Lord Privy Seal when his noble Friend intends to meet his European counterparts; and if he will make a statement.

41.

asked the Lord Privy Seal whether his noble Friend has any plans to meet his European ministerial colleagues in the immediate future.

42.

asked the Lord Privy Seal when his noble Friend expects to meet his European Common Market colleagues.

43.

asked the Lord Privy Seal when his noble Friend expects to meet his EEC counterparts.

44.

asked the Lord Privy Seal when his noble Friend expects to meet his EEC colleagues.

My right hon. and noble Friend will meet his EEC colleagues at the European Council in Dublin tomorrow and on Friday.

Order. I propose to call first those five hon. Members whose questions are being answered.

Can my right hon. Friend say what political initiatives the Foreign Secretary will submit to his colleagues as a way of contributing to resolving the imbalance of the United Kingdom contribution to the European budget? Does he not agree that the extension of the regional fund and the possibility of the introduction of the rural fund might be steps in the right direction which would also bring benefits to this country?

Of course that is true. However, my hon. Friend will understand that at the meeting in Dublin the Foreign Secretary will not play the principal part. It is a meeting of Heads of Government. It is not for us to take a political initiative on this point. We have made clear what we seek from our partners. The Commission has put forward two papers, and we are Seeking a broad balance.

Will my right hon. Friend ensure that his office has the fullest consultation in advance of these meetings with our European parliamentary colleagues and the leadership to ensure that we retain the best advantage from any initiatives taken by the European Parliament?

Certainly. We remain in as close touch as possible with our Members of the European Parliament, who have an important role. We try to meet them when they are here and to provide as much briefing for them as they want or need.

Bearing in mind that the Prime Minister now recognises that Britain is being fleeced as a result of our contributions to the Common Market, and the damage that it has already done to British trade and industry, does not the right hon. Gentleman think that it is about time the Foreign and Commonwealth Secretary told his European colleagues that enough is enough?

The hon. Gentleman has his facts wrong. As I told the right hon. Member for Battersea, North (Mr. Jay) last month, the best way to gauge our trading performance with the EEC is to compare the export-import ratio of our bilateral trade. This was 82 per cent. in 1972 and 83 per cent. in the first nine months of this year.

Does my right hon. Friend expect that any further progress will be made at the meeting in the development of a Community foreign policy? If not, why not?

I do not expect any further development in the Community foreign policy. I think that the answer to my hon. Friend's question "Why not?" is that there will be so much else to discuss—in particular, our very important budget problem.

As our gross domestic product will suffer a more severe fall than that of any other member State next year, can we expect the Foreign and Commonwealth Secretary to follow up the Prime Minister's assertive words by pointing out to his counterparts in the Community that this country can no longer afford both the Conservative Administration and the costly common agricultural policy? Will the right hon. Gentleman's noble Friend ask them to say which they prefer?

I do not think that my right hon. Friend the Prime Minister has put it in quite those terms. We have made it clear that when, for reasons that are well known to the House, we have had to cut public expenditure, compared with what it would have been, a contribution or subscription of more than £1,000 million is unacceptable to us.

Does my right hon. Friend agree that if there is any case for an enhanced regional fund, or for the idea of my hon. Friend the Member for Bodmin (Mr. Hicks) of a rural fund, those funds can best be paid for and administered on a national basis and not an EEC basis?

Can the Lord Privy Seal shed any light on the proposals emanating from the Federal Republic of Germany about changes in energy policy? Can he give any indication of the Government's response?

No Sir. I cannot help the hon. Gentleman on that. I have seen reports, but we have had no representations.

What problems does it create for the right hon. Gentleman in answering questions in the House when it is his noble Friend the Foreign and Commonwealth Secretary, and not a member of the elected House of Commons, who attends the meetings with the Foreign Secretaries of other countries?

The hon. Gentleman has his facts wrong. In fact, I do attend the meetings of the Foreign Ministers.

Will my right hon. Friend tell his colleagues in Europe that the United Kingdom budget deficit with our friends in the EEC must be reduced to zero, and not a penny less? [HON. MEMBERS: "More."] I am sorry—not a penny more. If our colleagues in Europe want to set about the destruction of the Community, which most of us favour—lest there be ambiguity, I add that I mean not its destruction but its continuance—the best thing they can do is not to bring about a balance in the United Kingdom's budget contribution?

My hon. Friend has expressed our objective. Perhaps he has put it rather more starkly, but certainly our objective is a broad balance. We believe that we have an unanswerable case. We hope that our partners will recognise that case and that we shall gain an equitable solution in Dublin. I agree with the implication of my hon. Friend's remarks, that if such consultation is not forthcoming that will be damaging to the Community.

How can the Lord Privy Seal maintain his attitude about trade with the EEC, as the figures for the first nine months of this year show that our deficit is running at £3,211 million? If this is continued at the same rate for the 12-month period, we shall end up with a deficit of £4,280 million, compared with £2,247 million last year.

It is true that our performance last year was better; it was 86 per cent. But what I was asked to do was to compare this year with 1972, before we entered. For those two years, the figures that I gave were correct.

Is the right hon. Gentleman aware that the Government's attitude seems slightly ambivalent? They say that they want changes in the CAP, but when it comes to the point they will not vote even for a gesture in that direction. We should regard it as totally reprehensible if any kind of deal were done that gave way on any other aspect of British policy.

Our attitude is not ambivalent. We have made quite clear where we stand. The hon. Lady will know that the modifications proposed by the European Parliament would have had little effect on agricultural spending, which is determined by the decisions taken at the price fixing. Therefore, we did not believe that that was an appropriate way in which to tackle our problems, much as we sympathise with the Parliament's aim.

At the Council my hon. Friend the Financial Secretary to the Treasury made it quite clear that we should vote to reject the Parliament's amendments only if the Council would agree to an accompanying text expressing sympathy with the Parliament's wish to cut some expenditure, and agreeing that early action was needed to secure a better balance within the budget.

I shall call one more hon. Member from either side of the House, because five questions are being answered together.

Does my right hon. Friend agree with the leading article in the Financial Times recently on the question of the EEC summit in Dublin? That article ended with the advice to my right hon. Friend the Prime Minister that a capacity for compromise was not a sign of a lack of courage.

I missed that leading article, but I am sure that the sentiments it expressed were impeccable.

Will the right hon. Gentleman make it quite clear to his counterparts in the EEC that the assurance given by my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen), the previous Foreign and Commonwealth Secretary, that no further powers would pass to the European Assembly, still stands, and that he and the Government will resist any attempts by the European Assembly to usurp any powers of this or any other British Government, or of this Parliament?

We have expressed our views on this matter often enough. As far as I know, the European Parliament has no plans to usurp any powers of any sort.

European Parliament (Elections)

45.

asked the Lord Privy Seal what progress is being made on discussions concerning the common system of election to be followed for the next election to the European Parliament.

Article 138(3) of the Treaty of Rome provides that the European Parliament shall draw up proposals for elections by direct universal suffrage in accordance with a uniform procedure in all member States. It goes on to say that the Council, acting unanimously, shall then lay down the appropriate provisions which it shall recommend to member States for adoption in accordance with their respective constitutional requirements. The European Parliament has not yet drawn up proposals.

Will the right hon. Gentleman give an assurance on behalf of the Government that, as it is adopted by the other EEC countries, they will accept a proportional representation system of election to the European Parliament? Will he consider proposing on behalf of the United Kingdom the regional list system, as outlined by the previous Labour Government?

We rule out nothing. But there is a long way to go yet, and we must see what the European Parliament proposes before we can give any assurances.

In deciding their attitude on this contentious issue, will the Government be concerned to strengthen or to weaken the European Assembly?

I do not think that that is a matter that would come into our consideration. It seems to me that either electoral system might—I am unable to come to a judgment on this matter.

Will my right hon. Friend beware of the seduction towards PR in European terms? Is it not already apparent that the Members of the European Parliament are having an identification problem, without PR on a regional basis?

I am not sure that I entirely accept what my hon. Friend says. I do not believe that people who are elected under PR necessarily have an identification problem. Having voted for PR in the House several times, I think it unlikely that I would express my hon. Friend's point of view. That does not alter the Government's view that we must wait to see what the European Parliament proposes before we can make any decisions.

As there is no actual proposal, I understand the Lord Privy Seal not wishing to over-commit himself, but all the same should it not be made plain to the Governments of Europe who will be considering this matter and the members of the European Assembly that there is a strong view among hon. Members on both sides of the House against the introduction of proportional representation either in the European elections or domestic elections? Is not that not quite contrary to the absurd propositions put forward by the President of the Commission, who obviously also has an influence in these matters?

It is not for me to enter into these internal Labour Party squabbles. I appreciate what the right hon. Gentleman said. Certainly the House and the last Parliament made the majority opinion on this matter perfectly clear in the votes.

Overseas Development

World University Service

50.

asked the Lord Privy Seal what amount is being provided from the aid programme to the World University Service for scholarships and training for refugees.

Grants to the World University Service (United Kingdom) for the training of refugee students are expected to total £2,965,000 in the current financial year.

Does the hon. Gentleman accept that the reduction in grant to the World University Service, coupled with the proposed increase in fees for overseas students, means that many fewer refugees will be able to be helped in the future? Will the Minister and his Government give special consideration to the case of the refugees who, unlike other overseas students, do not have Governments or families at home who can reasonably be expected to support them? Will the Government allow a reduction in the fees for these refugee students and treat them effectively as home students for the purpose of fees?

The matter of fees is of course one for my right hon. and learned Friend the Secretary of State for Education and Science. The hon. Gentleman may know that the programme is available only to those genuine refugees from countries which are below the income levels which bring them within our aid criteria. As such, the number of them depends much more on circumstances than he perhaps realises.

Does my hon. Friend accept that this country has a long and honourable tradition of helping refugees? Is there not a great deal to be said for what the hon. Gentleman advanced? Will the Minister please not tarnish the reputations of either the Government or the country by too readily giving way?

I would say to my hon. Friend that there is no change in the arrangements for those who are already on courses here. However, the numbers accepted in the future will depend upon the criteria that I have just given to the hon. Gentleman.

Despite the Minister's answer, does he not agree that one of the best ways of assisting Third world nations is to help with the education of their students? Therefore, is it not disgraceful that the reorientation unit of the World University Service, which co-ordinates the education of students, especially refugee students, and assists with obtaining jobs for them in the Third world when they have completed their studies, now finds that it has no money for next year? Is not that a totally nonsensical cut in public expenditure? Will the Minister reconsider the position?

As I explained, there has not been a cut of the kind that the hon. Gentleman alleges. The programme for next year has not even been agreed. He must accept that the number depends very much on the numbers who apply.

Tanzania

51.

asked the Lord Privy Seal if he will give extra aid to Tanzania to allow for costs of removing Idi Amin from Uganda.

As the Tanzanian economy was doing well before Amin invaded the country, and as the removal of Amin was welcomed by all the countries in the world, why is it that the British Government, along with many other Western Governments, have refused to help to pay for the cost of removing him?

I think that the answer is very simple. We can all feel a certain relief that President Amin has gone. However, it does not follow that aid programmes financed by the British taxpayer should be increased to finance the military enterprises of another Government.

What would be the cost of removing Tanzania from Uganda? Will we be expected to pay for that?

If it is true, as the hon. Member for York (Mr. Lyon) said a moment ago, that all countries in the world welcomed the removal of Field Marshal Amin, where is he now?

Will the Minister, given his replies this afternoon, confirm that a generous aid programme for Tanzania will continue despite the attack made upon the Tanzanian Goverment by Lonrho recently? Will he confirm in that respect that the Foreign Office and the Overseas Development Administration have received a communication from Cooper Lybrand in Tanzania to explain that it dissociates itself from the recent Lonrho attacks on Tanzania and say that its own audit has not yet been completed?

Our total aid last year to Tanzania was about £14 million and we would expect it to be slightly higher this year. We are reviewing the whole of our aid programme, as the right hon. Lady knows. Decisions will be taken and will be announced to the House. They will not be influenced by the Lonrho company.

Will my hon. Friend look very critically at aid to Tanzania as long as she maintains a blockage on her borders with Kenya through both Tanzania and Uganda?

Because of our economic circumstances we are having to look critically at the whole distribution of our bilateral aid programme. There are many factors which must be considered in the case of a country such as Tanzania. However, I think that it is in the interests of this country that Tanzania should have stability and reasonable economic progress.

Human Rights

52.

asked the Lord Privy Seal if he will make a statement on his policy on aid and human rights.

Our aid policy takes into account considerations of human rights and with this in mind we keep under review the situation in individual recipient countries.

Given the very serious position of refugees from the military dictatorship of Latin America, particularly Chile and Argentina, will the Minister inform the House of the legal advice given to the Government about the recent statement of the United Nations High Commission for Refugees? Will he seek, in the light of that, to change the Home Secretary's decision to end the special programme for refugees from Latin America?

I do not think that that arises specifically from the question on the Order Paper.

We are honouring existing commitments with Chile, inherited from the previous Administration, on scholarships for refugee students. The matter of human rights is part, but can only be part, of the considerations which we must now consider before deciding on the distribution of our aid programme.

Although I recognise the need for cuts in the aid programme, is my hon. Friend aware that many Government supporters are concerned lest the cuts should not form part of a coherent aid strategy? Will he ensure that his Department only makes cuts which will not do long-term damage to the effectiveness of the aid programme?

We had to make a contribution this year, out of the promised aid programme, towards the Government's search for economies. That was absolutely right and inevitable. Now we must go on, exactly as my hon. Friend indicated, to look searchingly at the future level of the aid programme, its distribution and the principles which should be applied. That is the purpose of the review which is now taking place.

Has the Minister received any representations from War on Want about the damage being done in these countries to which we are giving aid by the unscrupulous advertising of powdered baby milk with the consequent death and disease which results? If he has, what does he propose to do about it?

I think that I have written to the right hon. Gentleman on this subject in the last few days. This is a complicated problem, which we are looking at. If the hon. Gentleman wants further information, perhaps he will table a specific question.

Will the human rights which my hon. Friend is reviewing in the context of the general review of the aid programme include the human rights of British subjects and institutions that have been expropriated without compensation? Will he ensure that, in future, where massive British aid is going to any country which has adopted a policy of this kind, such aid has as its first claim the compensation of British citizens and institutions?

Different situations need different handling. However, I agree that, when deciding on the distribution of our aid programme, the treatment which a possible recipient country accords to British individuals and British interests is certainly an important factor.

What representations have the Government made to recipients of overseas aid where they believe that there has been a violation of human rights?

We do not believe that it is sensible to generalise too much about human rights. We believe that it is the job of the British Government to try to make the world a slightly more decent and humane place. Where there are flagrant violations, we consider in each case how best we can improve the situation. We have done this in the case of several Eastern European countries and in the case of several countries in the developing world.

Foreign And Commonwealth Affairs Questions

On a point of order, Mr. Speaker. I wonder whether it would be appropriate now to raise with you the format of Foreign and Commonwealth Office Ministers Question Time and, in particular, how it is broken up between the Foreign and Commonwealth Office in general, overseas development matters, and the EEC. The way that matters worked out today was that EEC questions got nearly two minutes each, overseas development questions got only about half a minute each, and questions relating to the whole of the rest of the world, including Rhodesia, got only about 35 seconds each. There seems to be a strange imbalance, which is not satisfactory.

The hon. Gentleman has raised a matter that I know concerns the House very much. I am the servant of the House. I have to follow the Order Paper. However, this is a matter that hon. Members ought to pursue through the usual channels that are available to them.

On a point of order, Mr. Speaker. Since the reorganisation of the ODM inside the Foreign Office, we understand that we table questions to the Lord Privy Seal, but I took it that the answer would still come from the Minister for Overseas Development. Has it been intimated to you, Mr. Speaker, that the reason why the Minister for Overseas Development has not replied today is a change of procedure, or simply that he is away today?

Perhaps I may tell the House that I have taken points of order before the statement as a most exceptional course. It is very unfair when there is a statement to be made. I say that in order that this is not taken as a precedent.

Secondly, which Minister answers questions is, as the hon. Gentleman knows, not my responsibility.

European Community (Council Of Ministers' Meetings)

On a point of order, Mr. Speaker. I think that it will be within your recollection and that of the House that when EEC statements were made by the previous Government, by Mr. Frank Judd, he always prefaced his statements by saying that the business statement had been deposited in the Vote Office a number of days previously. The business statement is not now in the Vote Office. I hope that it will be possible for it to be there on future occasions, and I hope that you will see to it that it will be there.

Further to that point of order, Mr. Speaker. One hundred copies were deposited at 1 o'clock yesterday.

On a point of order, Mr. Speaker. I went to the Vote Office and asked for a copy of the statement. I was told that none was available. I was directed to the Government Whips' Office. I talked to a Whip there and he said that it is not the practice to issue such statements.

Perhaps I may say that I think that there must have been a slip-up in the Vote Office. The Minister of State responsible for overseas aid is abroad.

With your permission, Mr. Speaker, I will make a statement about the main business to be taken by Ministers of the European Community during December. The written forecast of business was deposited in the House on Tuesday 27 November. At present, eight meetings of the Council of Ministers are proposed for December.

The Fisheries Council will meet on 3 and 4 December and is expected to discuss the report of the high-level group of officials and third country agreements.

The Transport Council will meet on 6 December and is expected to discuss Commission reports on the economic and financial situation of the railways and on railway integration; proposals on Community and bilateral road haulage quotas and the liberalisation of own-account road goods transport. The Council is also expected to consider a Commission memorandum on air transport; consultation procedures on civil aviation matters; the draft directive on aircraft noise, and amendments to the tanker safety directive.

The Agriculture Council will meet on 10 and 11 December and is expected to discuss the common organisation of the markets in sheepmeat, wine, potatoes and ethyl alcohol. The Council may also consider aspects of policy regarding agricultural structures; the proposed revision of the sugar market; surpluses in the dairy sector; production refunds for the starch industry; beef import arrangements for 1980, and subsidies paid on Italian imports of feed grain.

The Finance Council will meet on 17 December and will discuss such follow-up action as is necessary in the light of decisions reached at the European Council. Ministers will also consider the Commission's draft annual report on the economic situation in the Community for 1979–80 and its annual economic review for 1979–80.

The Environment Council will meet on 17 December and is expected to discuss the proposal to reduce Community use of chlorofluorocarbons; the draft directive on air quality standards for lead and the draft directive setting health protection standards for levels of sulphur dioxide and smoke in the atmosphere.

There is also expected to be a progress report on the draft proposals setting emission standards and quality objectives for the pesticides aldrin, dieldrin and endrin.

The Foreign Affairs Council will meet on 18 December and will review any need for follow-up action arising from the European Council. Ministers are also expected to consider Community measures to combat the crisis in the iron and steel industry in 1980; arrangements for the next phase of the EEC/Cyprus association agreement; proposals for the annual review of Community staff pay and a Commission report on the outcome of the negotiations with the Council for Mutual Economic Aid. In addition, the Council is expected to discuss proposals on the co-ordination of training and mutual recognition of qualifications of midwives and Community imports of synthetic textiles from the United States. Progress in the Portuguese accession negotiations is likely to be discussed in the margins of the Council.

The Research Council will meet on 20 December and is expected to resume discussion of the proposed Community research programmes on fusion and biology-health protection and also the programme of the Community's joint research centre.

The Energy Council is expected to meet in the first half of December on a date still to be arranged. No firm agenda has been agreed, but the Council may consider proposals to assist coal production and consumption in the Community and member States' oil import targets for 1980.

I am sure that we all want to thank the Lord Privy Seal for that fascinating and illuminating account of the manifold activities of the European Community during the coming month. However, first, assuming that there is no rearrangement of these Councils after the Dublin summit, and assuming that British Ministers will still be wishing to attend these Councils, may I particularly draw the right hon. Gentleman's attention to the importance of the Finance Council on 17 December, at which Ministers are to discuss the annual report on the economic situation in the Community?

May I particularly draw to the right hon. Gentleman's attention—I hope that he will draw this to the attention of his right hon. and learned Friend the Chancellor—the quite appalling forecast for the whole of the EEC's economic performance in the coming year, in which unemployment is expected to rise to record levels, and in which inflation, again, along with very high interest rate policies, is expected to be at a very nearly record level?

Can the right hon. Gentleman somehow introduce into this important body some serious consideration of ways in which we can prevent ourselves, collectively, from being forced to deflate our economy and to increase unemployment every time there is an increase in Arab oil prices? I hope that the right hon. Gentleman will put these things very strongly to his right hon. and learned Friend the Chancellor.

I agree with the right hon. Gentleman that it was not an outstandingly fascinating statement. However, he will also agree that it is he who is always pressing me to make the statement orally. I think that there are quite a lot of advantages to its being made in a written form. I shall certainly draw what the right hon. Gentleman has said to the attention of my right hon. and learned Friend the Chancellor—who, in fact, heard what he said.

Will my right hon. Friend tell the Minister who will be attending in Brussels on transport matters that it is nonsense that when we are coming up to the seventh anniversary of having been a member of the European Community, it is still discussing lorry quotas? Is it not a fact that the British transport industry should be allowed to have complete freedom to traverse the roads of Europe? Is it not nonsense to have the almost quarterly quota figure for British transport?

There is a great deal in what my hon. Friend says. I will draw the attention of the Minister of Transport to his remarks.

The Lord Privy Seal mentioned the Finance Ministers' meeting on 17 December. Will the Ministers take any action on the consequences of the Dublin summit? Will the Lord Privy Seal say, for example, what happens if we do not get £1,000 million wiped off our subscription? What will the Ministers do, when discussing the annual economic review, to stop the West Riding wool textile industry bleeding to death? There has been total inertia by the EEC over action on such matters as outward processing. There is great concern in the industry. Will the case be pressed strongly?

I will look into the second part of the hon. Gentleman's question. As he may know, there have been various developments. On the first part, I cannot say whether the Finance Council will discuss the consequences of the Dublin meeting until I know what are those consequences.

Will my right hon. Friend persuade the Council to discuss urgent matters to a greater extent and to give them priority? Is it not a fact that the supply of energy resources to Europe should be a major priority if supplies fail from OPEC and other sources? Will my right hon. Friend, on transport policy, encourage our representatives to discuss the extent to which the Community has an important role to play in determining the future of air traffic control and Euro-control?

The last point that my hon. Friend mentioned will be coming up fairly soon for discussion. As I said earlier, on energy, we already export 20 per cent. of our oil production to our Community partners. My hon. Friend will appreciate that our production is not great enough to supply the whole of Europe if there was a breakdown in the Middle East.

In view of the disgracefully biased, tendentious and provocative remarks of the right hon. Member for Stepney and Poplar (Mr. Shore), is the Lord Privy Seal aware that all tests of public opinion in this country have shown substantial majorities in favour of proportional representation? Given that the official position is—as he has described—that the Council must await proposals on a uniform structure from the Parliament, is it not sensible for the Council to make preparations in advance? Will he so propose?

That is as it may be. I think I can be fairly confident that almost the only matter that will definitely not be discussed next month is proportional representation.

What are these margins of the Council in which it is proposed to discuss the Portuguese accession? Is this a new Community institution? Will what transpires in the margins of the Council be reported to this House?

It is not a new institution. It is similar to references to "behind the Chair" or "the usual channels", or matters discussed at lunch. All it means is "not on the Floor of the House". Whether it is reported to the House depends on what is decided in the margins.

Will my right hon. Friend ask his right hon. Friend who is attending a meeting to discuss aircraft noise to press on his fellow Ministers the need for a joint initiative in attaining a reduction in aircraft noise around major international airports in the Community, such as Heathrow? The ever-increasing amount of noise is causing a great deal of worry to residents in all parts of the Community.

I should declare an interest. I share entirely the views expressed by my hon. Friend. He knows the difficulties. We will do what we can.

Will the right hon. Gentleman take note that the Scrutiny Committee has already requested a debate in the House on many of these subjects? It would be wicked for Ministers to take a decision before those debates have taken place.

As the hon. Gentleman knows, we would not dream of doing anything so remotely wicked.

May we hope that when the Energy Ministers meet next month there will be real progress on a more constructive basis for moving faster towards self-sufficiency in oil in Europe, in view of the political and strategic threats that may disrupt the whole Western economy if progress at a faster rate than the 5 per cent. reduction at present proposed is not achieved?

My hon. Friend puts before the House what would be a very desirable objective. I see no possibility of its being attained in the immediate future.

Since, in his first innings, at Question Time today, the Lord Privy Seal was bowled middle stump by my hon. Friend the Member for Waltham Forest (Mr. Deakins), on the issue of the powers of the European Parliament, would he like to answer, in his second innings, the question that was put to him? Do the Government fundamentally believe that the powers of the Assembly or Parliament should be increased or decreased? This is a matter of great consequence.

If I was bowled, it is merely because the hon. Gentleman's question, with all respect, did not admit of a sensible answer. There was no way that it could be answered sensibly.

Bad umpiring, as the hon. Gentleman says. I give the same answer that I gave to the hon. Member for Inverness (Mr. Johnston). The powers of the European Parliament was not one of the subjects that I talked about in my long statement. As far as I know, it will not be discussed in the coming month.

Will my right hon. Friend seek to ensure that one of the subjects that could be profitably discussed by the Transport Ministers is the Channel tunnel and the contribution that the Community might make to a project that would be of enormous advantage to this country and, I believe, to Europe as a whole.

As my hon. and learned Friend knows, my right hon. Friend the Minister of Transport is considering this matter now.

With regard to the discussion on iron and steel, will the right hon. Gentleman give an assurance that the Government will not agree to any weakening of the Davignon anti-crisis measures? On shipbuilding, will the right hon. Gentleman, in view of the extremely unsatisfactory outcome of the discussion on scrap-and-build at the ministerial Council on 20 November, ask for that subject to be inserted on the Foreign Ministers' Council agenda for next month? Will the Government, instead of simply commenting on and reacting to other countries' proposals, put forward and press positive and urgent proposals to help an industry in grave crisis?

I will consider putting the matter on the agenda. I can make no promises. The right hon. Gentleman knows the attitude that we have taken on steel aids over the last few months. I see no reason why that action should change.

Order. I must inform the House that I have an exceedingly long list of hon. Members who have indicated to me that they hope to take part in the major debate later. They will not all be able to do so. I am telling the House now. This is bound to control the number of hon. Members who are called to put questions. If questions are brief, I will call all of them.

With regard to the fisheries meeting, will my right hon. Friend ask his right hon. Friend to find out from the French Government what subsidy that Government are paying to the French fishing industry for fuel costs?

Does the right hon. Gentleman agree that in the event of failure at the Dublin summit one of the sanctions that the Government must take is not to attend any of these meetings?

With regard to the shipbuilding scrap-and-build policy, is the right hon. Gentleman aware that the Ministers responsible for that area have consistently and repeatedly, from the Dispatch Box, made a commitment to the scheme? Will the right hon. Gentleman appreciate that thousands of jobs are at stake? Will he insist that the matter is put on the agenda at the meeting in December?

I am sure that what the hon. Gentleman says about my right hon. and hon. Friends is true. I cannot give an absolute commitment until I have consulted them.

While thanking the Lord Privy Seal for attempting the usual arrangements, may I ask him whether he is aware that the Council of Ministers has promoted a regulation which will enable a £1,000 million fund to be made available for the development of atomic power and research? Can he say at which Council meeting this will be discussed? Will he also assure the House that, as the Scrutiny Committee has recommended a debate, the matter will be debated here before it is discussed and decided at the appropriate Council?

I will give the second assurance, since I think that it relates to a decision rather than to a debate. I assume that the answer to the first question is the Energy Council.

Will the right hon. Gentleman ask the Minister of Transport to seek the advice of the German Minister of Transport when he attends the Transport Council on how the latter can persuade his Government to give to the railways a subsidy nine times the size of the subsidy in the United Kingdom? Will he see that his right hon. Friend brings back that advice to the Government to ensure that British Rail does not have to consider the options of rail closures which it seems still to be considering, in spite of the denial by the Minister of Transport earlier this month?

I am sure that my right hon. Friend is always ready and willing both to talk and to listen to his German counterpart.

Will the right hon. Gentleman take the initiative at the Council of Ministers to ensure that the inequitable agreement with the third party of the Farces is rediscussed in order to protect the Aberdeen fishing industry? Will he also seriously consider beginning a discussion on the multi-fibre arrangement on which a great deal needs to be done to make sure that it is tightened up?

I will draw what the hon. Gentleman said in the first part of his question to the attention of my right hon. Friend the Minister of Agriculture for the meeting which takes place next week.

Since the right hon. Gentleman said that the next meeting of Agriculture Ministers is to discuss what I think he called the services in the dairy sector, and, bearing in mind the fact that the Community is currently spending £3,000 million on disposing of surplus dairy products, will he assure the House that he will protect the British doorstep milk delivery system and that to that end the Government will remain adamant in keeping out French ultraheat-treated milk?

I can assure the hon. Gentleman and the House that the Government are very well disposed towards the present milk delivery system and that they have no plans to see it altered.

In view of the right hon. Gentleman's remarks in answer to my opening question, may I be allowed to assure him that we value these monthly statements on EEC business and would certainly wish them to continue, and that our scepticism relates far more to the nature of the business than to the value of the oral statement?

Ballot For Notices Of Motions For Friday 14 December

Members successful in the ballot were:

Mr. Tony Speller.

Mr. George Foulkes.

Mr. Ian Lang.

Economic Policy

Before I call the Chancellor of the Exchequer, I underline to the House the fact that it is an impossible task to call every hon. Member who will seek to catch my eye or those of the Deputy Speakers. I urge right hon. and hon. Members not to come to the Chair to see whether they are likely to be called. I know that they will be too interested in the debate to want to leave the Chamber while it is on, but it will be a great consideration for those of us in the Chair if hon. Members do not come to us to find out whether they will be called.

3.53 pm

I beg to move,

That this House supports the economic policies of Her Majesty's Government.
At the outset of what I think is our first major economic debate since the Budget—

I dare say that there will be a number of such debates over the next few years, and the hon. Member will have the opportunity to take part in them.

I welcome this opportunity to set in perspective the measures announced on 15 November. The immediate reason for the action that I took then was the fact that it had become clear that in the most recent period the underlying growth of sterling M3 was beyond the target rate of 7 to 11 per cent. that I had announced at the time of the Budget. There were two principal causes for that—the higher than expected public sector borrowing requirement in the first half of the year, and the persistently high level of bank lending.

The House will remember that the PSBR had always been expected to be high in the first half of the year because of the timing of the Budget measures, but the delays in collection of telephone bills and value added tax, both caused by industrial disputes, helped to increase it in that period by up to £1,000 million. In addition, the monthly growth of bank advances in each of the three months to October had averaged about £700 million.

In those circumstances, it was clearly essential to take the action that I took to re-establish and maintain firm control over monetary and fiscal policy. Of course, the increase in minimum lending rate was no more welcome to the Government than to anybody else, but as soon as it became clear that such measures were needed we did not hesitate to act.

The market judgment of those measures has been clear. Confidence in the gilt-edged market was immediately restored at the new higher level of interest rates and substantial sales of gilts were made, including the whole of one new issue, of £1 billion. Since then, steady but smaller-scale demand for gilts has persisted, including tenders for today's new issue. This and the part payments due from the stocks sold last month have secured a substantial contribution to funding the borrowing requirement.

The measures, as I said at the time, were designed to maintain the Budget strategy. They were a necessary but manageable response to the situation, and I am confident that the House will agree that there was no alternative. Certainly it is worth remembering that the right hon. Member for Leeds, East (Mr. Healey) said on 9 November 1978:
"If the Government were to … fail to take timely action when necessary and lose control of the money supply, the sufferings of the whole of the British people, whether mortgagors or not, would be infinitely more serious than suffering brought about by increases in mortgage rates".—[Official Report, 9 November 1978; Vol. 957, c. 1233.]
The immediate reasons for our action were, however, only a symptom of the more serious economic weaknesses which we had inherited. As I said in my Budget Statement, the rise in prices and wages was accelerating, output was flat, public spending was rising faster than the country could afford, monetary growth was excessive and the balance of payments was in substantial deficit. Indeed, the economic indicators that have become available since the Budget confirm that the judgment which I then pronounced dealt much too kindly with the shambles of our inheritance. The deterioration in the current balance of payments in the first half of this year is now seen to have been much greater than seemed likely even at the time of the Budget. Certainly it was far worse than the right hon. Member for Leeds, East anticipated when he published his last Industry Act forecast last autumn. He then predicted that the current account would balance in the first half of this year. In the result, the deficit was almost £2,000 million.

That deficit reflects for the most part the very rapid rise in imports—a symptom of the economy's poor supply response to the pre-election consumer boom engineered by the right hon. Member. [HON. MEMBERS: "Oh."] The growing benefit—this is a figure to which Labour Members would do well to listen—from North Sea oil, worth approximately £7 billion to the current balance of payments this year, has been more than swallowed by the deficit on other transactions.

Does not the right hon. and learned Gentleman agree that he has published a forecast in which he predicts that, under his policies, although output will fall by 2 per cent. and the revenue from North Sea oil will be a great deal higher, there will be a deficit on current account of £2 billion?

That is a measure of the depth of the difficulties that we inherited from the right hon. Gentleman.

The right hon. Gentleman went on seeking to blame his misdeeds on the previous Administration during his entire time in the Treasury. Let me take one other example of the difficulties that he left us. The PSBR was larger, certainly, than his own estimate—that is, the one for last year. That may or may not be significant, but, more to the point, the PSBR last year—for 1978–79—was almost twice as much as it had been in the preceding year. It was that increase in the borrowing requirement, deliberately undertaken, which was the matter of real concern.

It has also become clear since June that the final outturn for last year's wage round was every bit as bad as we had feared. The last disastrous winter of the Labour Government left us with an increase in average earnings of 16½ per cent—far in excess of the growth in productivity. At the same time, world oil prices have risen more rapidly than seemed likely. Both those factors have combined with monetary growth, which was already too high. Thus, probably the most dismal feature of our inheritance was an inflation rate that was already into double figures and rising fast.

In the light of the depressing conditions that we inherited, the essential tasks that faced us were clear and remain the same today. First, we must concentrate on the defeat of inflation. Secondly, we must restore to the economy a balance between the resources that we produce and those that we consume. In particular, we must secure a balance between public and private spending. We must increase the ability of the economy to supply more goods and services.

When are the Government going to cut public expenditure? A host of people are outside the Palace of Westminster at present complaining about cuts, but, as I understand it, there has been an increase. For instance, there are 30,000 extra people doing jobs for local authorities. When do the Government plan to cut public expenditure so that the people waiting outside have something to come and talk about?

I am grateful for my hon. Friend's support, but he must understand that the reduction in spending plans for the current year, which was already almost two months under way, to return to the level of spending in the last complete fiscal year was a substantial achievement. We shall be debating the public expenditure White Paper or Papers in due course.

There can, I hope, be no quarrel with the objectives that I have described, and there should not be room for argument about the central policies necessary to achieve them. In each case no sensible alternative is available, and certainly no sensible alternative is offered by the Opposition.

I must get on a bit.

In the fight against inflation there is no alternative to strict control of the money supply, and that must be supported by a firm fiscal policy. That principle is widely accepted in this country and overseas.

Indeed, the right hon. Member for Leeds, East adopted monetary targets when he was Chancellor of the Exchequer. He also committed himself to limiting the size of the public sector borrowing requirement, and in that respect, as in so many others, there is no alternative to the policies that we are following. I expect that the right hon. Gentleman will have no difficulty in agreeing to that. I was accordingly surprised to hear him in a radio interview on 12 November, three days before my announcement on 15 November, apparently expressing the opposite view. He was reported as saying that I should
"be prepared to make good the shortfall in demand by more government spending or more tax cuts".
That is a remarkable statement and no doubt the right hon. Gentleman will explain it to the House. It was made at a time when there was manifest difficulty in coping with the amount of borrowing, and the right hon. Gentleman was urging an increase in expenditure. The House will certainly expect an explanation.

The right hon. and learned Gentleman made clear in the document that he published last week that he is planning for a substantial increase of about £1 billion in the public sector borrowing requirement next year. As I shall explain later, in my view that increase is too small.

The right hon. Gentleman should look more closely at the forecast that we published last week. It was made crystal clear that it was not a forecast or plan for the outturn of public sector borrowing next year. Decisions about that have yet to be taken.

The House will notice that, as in the broadcast that I quoted, the right hon. Gentleman is urging us to increase public expenditure, and that is a remarkable prescription.

The measures that I announced on 15 November were necessary to implement the monetary and fiscal targets we set ourselves. The rolling forward of our present target range for the growth of sterling M3 to cover the 16 months from mid-June 1979 to mid-October 1980 will avoid building into the target for the new period the excess growth in the recent past, while allowing a reasonable period to offset that excess.

The advance payment of petroleum revenue tax will reduce the public sector borrowing requirement by £700 million this year, offsetting the effects of the Post Office dispute and delays to VAT receipts. It will bring the estimated PSBR back to the Budget estimate of £8·3 billion.

Many people have expressed surprise at the fact that I did not take direct action to control specifically consumer credit lending. As I explained to my hon. Friend the Member for Ravensbourne (Mr. Hunt) on the day that I made my statement, there were a number of reasons for that.

First, consumer credit is a relatively small proportion of the total—16 per cent. of domestic lending by the clearers, including acceptances, and 12 per cent. of lending by all banks. Those figures include the amount outstanding on bank credit cards. Secondly, consumer credit lending has not been growing significantly faster than other forms of lending. For example, in the last year the amount of lending outstanding to persons by the clearers, other than for house purchase, grew by 28 per cent. Their total lending outstanding grew in the same period by 23 per cent., or 26 per cent. if acceptances are included. Thirdly, direct intervention in the working of any market will inevitably mean distortions as ways are found around the controls. If I acted to tighten hire-purchase controls or restrict credit card lending, there might be a temporary impact, but there are many other channels for credit to consumers and after a while there might be little continuing effect.

Uncomfortable though it is, the way to reduce the demand for credit is by means of interest rates. They bite equally on all forms of credit, including consumer credit. I should add that my decision to take no direct action last month on the growth of consumer credit did not mean that I was unconcerned by it. It is particularly important at a time of stringency within the total of bank lending that the needs of more important sectors are met first.

However, success in restraining monetary growth without relying on unacceptably high interest rates depends on continued efforts to limit Government borrowing. If we are to avoid putting excessive weight on monetary policy, as we must, we must follow fiscal policies that are consistent with our other objectives. I am surprised that the right hon. Gentleman, who apparently criticises me for putting excessive weight on montary policies, should at the same time be prepared to urge, so he tells us, further expansion in public spending. No doubt he will explain that.

Does the right hon. and learned Gentleman agree with the Financial Secretary that taxation might well have to increase next April? Will that be through increases in VAT or personal taxation?

Even the hon. Gentleman will have to await my Budget before getting an answer to the second part of his question. As to the first part, it is plain, and there should be no misunderstanding about it, that if public sector spending continues to expand uncontrolled—and we are taking steps to control it—and if public sector pay continues to expand uncontrolled and at very high levels, the alternative of higher taxation will have to be faced. That is why it is important for people to recognise the need for responsibility in pay bargaining in the public as well as in the private sector.

If the private sector is not to face an excessively high tax burden of the kind that the hon. Member for Blackburn (Mr. Straw) referred to, public spending must be held firmly in check. That is no doubt why my predecessor, in his letter of intent to the International Monetary Fund in 1976, undertook to reduce the public sector borrowing requirement and, to that end, reduce the share of resources taken by public expenditure. It was a commendable undertaking. He cut public spending, but as soon as the IMF's back was turned promptly allowed it to rise again.

Between 1977–78 and the present year, 1979–80, the Labour Party planned to increase public spending by more than 8 per cent. That is a measure of the task to which we had to address ourselves, and about which my hon. Friend the Member for Northampton, North (Mr. Marlow) asked me a moment ago. The Opposition know that very well. The fact is that those spending plans for the current year could not have been sustained without a very large increase in taxation. Indeed, even with a large increase in taxes, those plans would still have had to be sharply cut, even by a Labour Government.

In view of the outlook for the level of total resources likely to be available in the economy, the previous Government's planned growth in public spending was totally unrealistic. It is high time for the Labour Party to make clear to the House and the country where it stands on that issue. Does it still stand by its spending plans made while in Government? The right hon. Member for Heywood and Royton (Mr. Barnett), whom we are always glad to see twinkling in his place, has the courage to admit that the plans made by the Government of which he was a member called for spending that was too high and which had to be reduced. At least before the election the right hon. Member for Leeds, East made the same admission.

On the other hand, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), apparently speaking on behalf of the Shadow Cabinet in this place, criticised the Government in sentence after sentence and paragraph after paragraph for daring to tamper with any one of the previous Government's spending plans. Yet on Monday of this week that right hon. Gentleman led the attack on the present level of interest rates. He sustained that attack on high interest rates as only he can do without saying one word about the level of public expenditure.

The House is entitled to know the answer to some questions. Where does the Labour Party stand on these matters? If it is agreed—I am not sure whether it is or not—that economies in public spending are necessary, where would the Labour Party make those economies? Would it try to prevent the State from taking a rising share of output or not? If, on the other hand, the Labour Party opposes all economies, where does it suggest that the extra money will come from? Will Labour Members stand by their plans or not? If so, how would they find the money to pay for them? Those plans represent £3·5 billion in today's prices—another 8p on income tax, VAT at 20 per cent., or higher rates? Or is it to be all three?

The day will come for the Labour Party to begin offering the country some answers to those questions. Let there be no doubt about the present Government's position—

I understand the right hon. Gentleman's impatience. Perhaps he can encourage his right hon. and hon. Friends to answer some of the questions I have put.

Once again, there is no sensible alternative to the policies that we are following. The White Paper introduced by my right hon. Friend the Chief Secretary demonstrates our determination to curb public spending in the interests of firm fiscal policy. Moreover, there should be no doubt that our fiscal policy will be maintained consistently with our monetary stance. With that objective in view, we shall continue to keep all our policies under review, including our plans for public expenditure.

If the major need for reducing public sector spending is accepted, is it not the case that, with the projected level of national production this year, the percentage of public expenditure as a percentage of gross national product is likely to rise? That indicates that the cuts in the next years will have to be even greater, however unpopular they may be, in order to get on top of the situation.

I understand my hon. Friend's wisdom. We shall have to maintain pressure on public spending for the reason that he gives.

There are some who argue in these circumstances, as the saying goes, that monetarism by itself is not enough—as though monetarism by itself represents the totality of the Government's policy. Nothing could be further from the truth. Alongside the policies that I have been describing, it is, at least, equally important, as Labour Members will understand, that there should be realism and responsibility in pay bargaining. In the context of a firm control of the money supply, excessive pay settlements can only jeopardise output and employment. Once again, there is no alternative to that proposition.