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Commons Chamber

Volume 977: debated on Monday 28 January 1980

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House Of Commons

Monday 28 January 1980

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Oral Answers To Questions

Industry

Manufacturing Industry (Investment)

1.

asked the Secretary of State for Industry what was the level of investment in manufacturing industry during the most recent 12-month period for which figures are available.

9.

asked the Secretary of State for Industry if he will make a statement on the current trend in investment in British industry.

Investment by manufacturing industry in the 12 months ending September 1979 is estimated at £3,791 million at 1975 prices, seasonally adjusted. The Department's survey of manufacturers' investment intentions published early this month shows a likely 6 to 10 per cent, fall in the volume of manufacturers' capital expenditure.

Does my right hon. Friend agree that business men will invest in new plant and machinery only if they believe that they will be able to sell the output at a profit? What steps will the Government take to increase demand in manufacturing industry so that investment will be encouraged in that way?

I agree with my hon. Friend's presumption. There is no shortage of demand in the country. Much demand is being met by imports, and world demand is still wide open to our exports—with all the difficulties that we appreciate.

Does my right hon. Friend agree that investment will not rise with MLR at 15 per cent.? Does he further agree that the only way to get MLR down is to ensure that the public sector is prevented from taking the bully's share of the cake? Does he agree also that the best thing that we can do to encourage investment is to ensure that the public sector is diminished?

I agree with my hon. Friend. However, we should remember that it is not only the quantity of investment that leads to growth in output. There is great scope for getting more output of what the customer, both at home and abroad, demand from our existing investment.

What is the meaning, or point, of seasonal adjustment when comparing annual totals, one year with another?

The short answer to that is that I do not know. That is an interesting question, of which I am delighted to be the focus, and I shall take an opportunity to inform myself on the matter.

Does the right hon. Gentleman recall that at the time of the Budget we were told that the money that was being given back in tax rebates was to be used, in the main—the Government hoped—for industrial investment? Will the right hon. Gentleman tell the House why that hope has not been fulfilled?

The hon. Gentleman's time scale is totally wrong. It must take time for the greater reward that flows from lower taxation on risk capital to be translated into more risk taking. The House is aware that the conditions that are consequential upon the legacy from the previous Government are deeply un-favourable for that.

British Steel Corporation

2.

asked the Secretary of State for Industry when he expects to meet the chairman of the British Steel Corporation.

In view of the meeting that the right hon. Gentleman held with steel union leaders on 19 January, and the statement that he made following that meeting, will he make it clear, next time he meets the chairman of the BSC, that he utterly rejects Lord Denning's judgment that the steel workers are involved in a political strike against the Government?

The hon. Gentleman knows that Ministers must not comment on judicial decisions.

Is my right hon. Friend aware that the longer the hope persists, fostered by articles in the responsible press, that the Government will in some way provide more money to enable some sort of solution to be achieved, the longer the strike will continue?

I agree with my hon. Friend. It is unreasonable to expect the taxpayer to find more money to supplement the earnings of the steelworkers when opportunities are on offer for them to increase their earnings.

Will the right hon. Gentleman insist that Sir Charles Villiers should uprate the 15 million tons per annum production target for BSC steel, on the ground of strategic necessity for the country?

I should hesitate to challenge BSC's estimate of the demand for its product. That estimate is made after taking into account the quality of the product, its price and its delivery against that which is offered by powerful competitors all over the world.

If my right hon. Friend cannot comment on Lord Denning's judgment, perhaps he will comment on the remarks of Mr. Bill Sirs, arising out of that judgment. Mr. Sirs said that he believes that Parliament has to deal with secondary picketing in the context of the Employment Bill, notwithstanding the fact that the Opposition and the TUC have said that they do not want the Bill.

As my hon. Friend knows, that is a question for my right hon. Friend the Secretary of State for Employment.

Has the Secretary of State received from the British Steel Corporation an estimate of its borrowing require- ment under the policies that the Government have set for it for next year? In particular, has he heard the widely circulated report that the borrowing of BSC next year is likely to be about £900 million, and not £450 million? Does not that make nonsense of the Government's stance?

If the BSC management decides that the external finance limit, the cash limit, is in danger, it is its duty to tell me so. It has not done so up till now. Whatever the pressure upon the cash limit, it would still be unfair to ask the taxpayer to find even more money to supplement the earnings of the steel workers.

Since the Secretary of State and the chairman of the British Steel Corporation are agreed that 60,000 men in the steel industry, and consequentially others in the coal industry, are to lose their jobs by the autumn, what estimate has the right hon. Gentleman made of the cost of that to the community, and what plans has he for alter native employment?

It is not primarily the chairman of the British Steel Corporation—let alone I—who is making these decisions. They are consequential upon the demand for British Steel's products. It is idle to expect the corporation to manufacture at a profit steel that nobody will buy. The cost of reduced employment cannot be estimated without assumptions about how many will be out of work and for how long. The Government accept the obligation to try to meet the social implications of rapid employment changes.

3.

asked the Secretary of State for Industry what was the loss per man employed by the British Steel Corporation in the year to March 1979.

In the year to March 1979 the loss per man employed by the British Steel Corporation was £1,660. It is estimated that for the year to March 1980 this will rise to over £1,800.

Is not that figure one further strong reason why the hard-pressed British taxpayer should not be asked to make further subsidies to those working in the steel industry?

My hon. Friend makes a fair point. We can play around with numbers as much as we like, but the extent to which this amount of public money has gone to the steel industry is clear from the figures for which my hon. Friend has called today.

Is it not misleading to speak of the loss per man, as if the men themselves were in some way responsible for the losses? Will the Minister tell the House how much of the loss incurred in the year in question was due to investment decisions by the board which proved, in retrospect, to have been expensive mistakes?

The hon. Gentleman knows that that is an impossible estimate to make. As I said earlier, however much we like to play around with the numbers, the fact cannot be challenged that the industry has received substantial assistance from the taxpayer. There comes a time when we have to cry "Halt".

To what extent does each week of the strike reduce the funds available for any wage settlement? What is my hon. Friend's estimate of the weekly cash flow drain of such a strike?

What my hon. Friend says in that sense is correct. Clearly this is a cash drain on the corporation. The present estimate is that the cost of the strike is about £10 million a week.

Does the Minister agree that, in the present situation, as we see it, it would be better to use EEC money to fund the redundancies that are expected, and to use the money that the Government have for redundancies to help the steel workers?

Wherever there is an opportunity to use EEC funding for redundancies, we shall take it. But, as the hon. Gentleman is fully aware, these things need to be looked at on a case by case basis.

Is it not extraordinary that Labour Members never cease to knock the EEC, except when they want money from the EEC to bail out British companies? Does my hon. Friend agree that this is a good example of where the EEC could help with substantial amounts of money?

My hon. Friend's enthusiasm for these matters is well known, but it is fair comment to say that this is one area in which all hon. Members recognise that there is a job to be done and that the Community can help in this difficult situation.

Since figures are available—the hon. Gentleman's Department has given them over the past five years and they represent 73 per cent. towards investment and only 27 per cent. towards labour—would not a more realistic question be what is the loss per chairman, rather than what is the loss per man?

The right hon. Gentleman has indicated the danger of playing around with selective statistics. As to the loss per chairman, the right hon. Gentleman has played his part. We have played ours.

Cbi

4.

asked the Secretary of State for Industry when last he met the Confederation of British Industry.

My right hon. Friend last met the CBI on 3 December 1979.

Is the Secretary of State not expecting to meet the CBI to consult it, and the Secretary of State for Employment, about the effects that recent court decisions are having on industrial relations, and hence on industry? Will he emphasise to the CBI that these decisions causing, as they do, understandable ill-will between the trade unions and the courts, are bad for the rule of law, bad for industrial relations and very bad for our industry?

My right hon. Friend will meet the CBI as he thinks appropriate, and, indeed, his right hon. Friend the Secretary of State for Employment, if that is appropriate. The hon. and learned Gentleman heard what my right hon. Friend said about the most recent decision.

Is my hon. Friend aware that many member firms of the CBI are concerned that the steel strike will lead to a delay in the completion of new industrial premises that would have been completed by 1 August of this year and rank for regional development grant? Because of that delay will he extend the period?

I do not think that we can extend the period. What my hon. Friend says is correct. This is one of the many consequences of the strike.

When the Secretary of State next meets the chairman of the CBI, will he discuss the difference in treatment given to capital investment by nationalised industries compared with that given to private industries? Nationalised industries are not able effectively to finance their capital investment. For example, British Rail is required to take the whole cost of a ship within one year's cash limit instead of being able to finance it over several years.

I am not sure of the example on which my hon. Friend is drawing when he talks of one ship. As he knows, we are trying to establish the activities of the nationalised sector on a thoroughly commercial basis.

Following the hon. Gentleman's reply on regional aid, may I ask why the period cannot be extended to take into consideration the number of days of the strike? Why cannot the period be extended by that number of days?

If the hon. Gentleman is asking that every time we have a strike there should be an extension of the period, I have to tell him that that is not practicable. There is also the public expenditure consideration. As always, he and his hon. Friends are asking for more taxpayers' money to bail out an industry in circum stances such as we have in the present steel strike.

Microprocessors

5.

asked the Secretary of State for Industry what is his estimate of the amount of public funds currently expended on (a) the application and (b) the production of microprocessors in industry and commerce; and if he will make a statement.

Commitment under the microprocessor applications project is now £16·7 million. The sum of £10 million has been committed under the microelectronics industry support programme for support of manufacturing facilities capable of producing microprocessors.

Will the right hon. Gentleman accept that the bulk of expert opinion is that in the production of microchips we cannot compete with the Japanese and the Germans, and that far more money should be spent on the application side and to encourage users?

It is wrong to assume that only those businesses of whose activities the Government are aware, let alone only those that receive grant-aid from the taxpayer, are using microprocessors.

Is my right hon. Friend yet in a position to tell the House whether he will bring to an end the Inmos venture, started by the National Enterprise Board? Has he looked at that yet? Can he make a decision on it?

The NEB has only just passed to me its recommendation about the second phase of Inmos.

What thinking has been done by the right hon. Gentleman and his Government about future employment? We are likely to have a vast number of unemployed as a result of the microchip revolution. What measures are the Government likely to take to overcome this serious problem?

I do not expect to convert the hon. Gentleman at a stroke, but it is my view that if only adaptability were encouraged instead of obstructed by the trade union movement we should have continuous very near full employment.

Can my right hon. Friend confirm that a total of about £27 million from public funds has been made available for these purposes? If the application of microprocessors is as beneficial as people say it is, should not private industry be doing this for itself?

I agree with both parts of my hon. Friend's question. I repeat that only a fraction of those firms which are investing in microprocessors in their own interests are known to the Government, let alone grant-aided by the taxpayer.

Will the Secretary of State reconsider his rather stupid attack upon the trade union movement? Is it not the trade unions, unlike his hon. Friend the Member for Surrey, North-West (Mr. Grylls), which support, for example, the development of the microchip industry, through the NEB? Is not the real criticism that, far from facing adaptation or change, the trade unions and their members face unemployment as a result of the right hon. Gentleman's policies? That is what they oppose.

If the hon. Gentleman is not careful, I shall send him my 7,000-word lecture entitled "Conditions for Fuller Employment" which I tried to summarise effectively in the four-word thesis "Jobs occur if allowed". The fact is that in this country, by well-intentioned intervention, by over-legislation, by over-regulation—and, no doubt, by bad management, but also by uncomprehending obstruction by the trade unions—we have far fewer jobs, far less prosperity and far lower pensions than we could have.

Small Foundries (Capital Loan Scheme)

6.

asked the Secretary of State for Industry if he intends to implement the recommendation in the report by the Economic Development Committee for Foundries calling for a capital loan scheme to assist small foundries; and whether he will make a statement.

The Government have noted this recommendation and will make their response to the foundries EDC in due course.

Does the Minister have any proposals for restructuring the industry? More to the point, what has been his response to those foundry owners who are seeking Government aid in order to introduce a closure programme, at the cost of 25,000 jobs? Will the hon. Gentleman clearly understand that his Government have no mandate for an industrial policy that is destroying Britain's industrial base and making areas such as the Black Country fit only for stock brokers and landowners to live in?

As I said in my original reply, we are looking at the EDC report. Bearing in mind that under the previous Government the ferrous foundry scheme went ahead, with a great expansion of the industry, without proper relationship to the marketing prospects for foundry products, the hon. Lady should be the last person to suggest that we should take urgent action to sort out the problems created by her Government.

Will my hon. Friend bear in mind that it is a question not simply of the quantity of castings produced but of the quality, and will he discuss with the EDC necessary steps towards improving the quality, in view of the difficulties that have been experienced by customers and the increase in imports?

I note what my hon. Friend says about this matter, which I know he follows closely. This is part of the argument in favour of the previous ferrous foundry scheme. I am sure he will agree that if improvement in quality is not related to effective marketing it is counter-productive.

Does the hon. Gentleman realise that there is serious concern about the rundown in the foundry industry, and that we are becoming far too dependent on imports and losing many skills not only in foundry making itself but in the allied trade of pattern making? Will he give an urgent response to the EDC report?

I note the hon. Gentleman's point, but he should recognise that the import problem is relatively small in this industry. That is not the key argument here. The problem has been that of overestimating the marketing prospects, which suggests that one must examine the position very carefully before putting in taxpayers' money.

British Steel Corporation And British Leyland

8.

asked the Secretary of State for Industry what is his latest estimate of the total amount of public funds which will be made available in the financial year 1979–80 to the British Steel Corporation and British Leyland.

The British Steel Corporation's cash limit for the 1979–80 financial year remains £700 million. The Government will provide finance to cover BSC's net external financial requirements up to this limit.

In April 1979 my right hon. Friend's predecessor authorised the provision of £150 million of public funds, in the form of equity capital, to meet British Leyland's requirements for the financial year 1979–80. This money has been paid.

I am grateful to my hon. Friend for that reply. Is he satisfied that that is the best way to invest over £850 million in British industry? What hope can he give the taxpayer for the years to come?

The question of British Steel is very much with us at present. It has been part of the Government's policy, as it was of that of the previous Government, for BSC to work as rapidly as possible to a profitable position. My hon. Friend will know very well that BSC's external finance limits for next year are set at £450 million, which is a considerable reduction on the present year.

We have recently looked very closely at British Leyland's corporate plan, and we have judged that it is right to put in more public funds for the coming year.

Can the Minister tell us what the foreign competitors of British Steel, about whom we hear so much, are putting into their industries, particularly in relation to the claims constantly made by the trade union now on strike that bigger subsidies than the subsidy going into BSC for current accounting are going to those foreign industries, whose productivity is being used as an argument in the strike?

It is true that in the past years most, if not all, of the European steel industries have been aided in some way. But I have looked at the figures and, although comparisons are not easy, I can find no suggestion to support what the hon. Gentleman says—that more money has gone into British steel. Secondly, on the Continent there are already steel industries which are back in profit.

Imports

10.

asked the Secretary of State for Industry if he will make a statement on the effects on domestic industry of the level of import penetration of the United Kingdom market.

An increasing level of import penetration clearly has serious implications for British industry; but this is as much the result of our industrial weaknesses as the cause.

Will the Minister cease being so complacent at a time when excessive imports, which we cannot afford, have destroyed our motor cycle and typewriter industries, and half our footwear and car industries, leading to the closure of factory after factory, with the consequence of putting people on the dole? Will he consider, as part of a package to rescue British industry, negotiating with our international traders, with a view to reaching an agreement similar to that reached with Japan? Will he consider negotiating with West Germany, which sends us goods costing £1½ billion more than those we export to that country? If it is right for Japan, why is it not right for West Germany?

Once again the hon. Gentleman is taking his party line, which is to erect some form of barrier against imports. British industry is perfectly capable of competing with German, or any other, industry. Our approach to import penetration is to try to do our best to encourage British industry to become fully efficient and competitive. That is the answer to imports.

Does my hon. Friend agree that the reason why British industry is not competitive is that it takes many more people to produce goods here than it does in the countries of most of our competitors? Is it not time that the Opposition got down to encouraging productivity instead of complaining in this way?

My hon. Friend might also have said that our wage rates are lower. If we had the same productivity as our competitors, we could compete and have higher wages.

Is the Minister not aware that the main element of productivity is capital investment? How can he possibly increase productivity if he denies investment, through the National Enterprise Board, to BSC and other major industries?

Does my hon. Friend agree that every cloud has a silver lining? In that respect, one positive effect of import penetration has been the improvement in our trade balance with non-EEC countries.

Yes, there has been a switch of our excess trade with the Common Market to trade with non-EEC countries, which has been one of the contributory factors.

Is the Minister aware that, while it is true that we are in the black with the rest of the world, the trade deficit with the EEC has reached such proportions that last year in manufactured goods we were in deficit to the tune of £2,500 million? The hon. Gentleman says that he understands that there is not a subsidy for steel, let alone an unfair one, in other countries. Does he not realise that in West Germany coking coal is subsidised 30 times as much as it is here?

I did not say that there was no subsidy. I said that there had been subsidies in all industries, and I remind the House that steel industries on the Continent were coming back into profit.

Post Office

11.

asked the Secretary of State for Industry whether he has yet completed his review of the Post Office monopoly.

I am grateful to my right hon. Friend for that reply. The negotiations and discussions on telecommunications seem to have been taking a considerable time, and it is hoped that his Department has not overlooked the future of the Post Office mail monopoly, since the service continues to decline and the price continues to increase.

Has the right hon. Gentleman also not overlooked the fact that the Post Office undertakes deliveries to places which are not economic, most of them in rural areas represented by Tory Members? Is it his intention to cut these services.

The answer to the first part of the hon. Lady's question is "Yes, I am aware of it". All factors are being considered by me.

Will my right hon. Friend, as one aspect of his review of this monopoly, instruct the Post Office to stop pursuing threats of prosecution and other legal action against well-intentioned volunteers who, at Christmas time, seek to organise some form of well-meaning local free delivery service of cards and parcels to old-age pensioners?

I am sure that the chairman of the Post Office will read what my hon. Friend has said, but I certainly do not intend to instruct him.

Will the Secretary of State assure us that before he makes any final decision about the postal monopoly he will consider the views of the Post Officer Users National Council, which includes many major private sector industrial organisations which are totally opposed to the views espoused by his hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne)?

Motor Vehicles (Manufacture)

12.

asked the Secretary of State for Industry what has been the total number of motor vehicles, including passenger vehicles, manufactured in the United Kingdom in 1979; how this compares with each of the previous 10 years; and what are the latest forecasts for the next decade.

An estimated 1·48 million vehicles were produced in the United Kingdom. This figure is lower than that in any of the previous 10 years. Forecasts of future production are not available.

I shall publish in the Official Report a table of the comparative figures for a 10-year period.

How much have the fall in car production and the rise in imports adversely affected the balance of payments, adversely affected the steel industry and caused a loss of trade in the steel and car component manufacturing industries?

My hon. Friend is correctto draw attention to the consequences for other industries of the decline of the British car industry. However, without further notice, I am unable to give him, the statistical figures for which he asks.

Do not the figures that the Minister has given, and the question by his hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) indicate that something needs to be done to control the flood of cars coming into this country, which is affecting both the vehicle manufacturers and the steel industry? Do not we need quota controls for cars coming into this country from both inside and outside the EEC? Is not that the only way in which we can produce sufficient investment to raise our productivity and meet competition from abroad?

The most effective way to control imports, which is what the hon. Gentleman is asking for, is for British producers to produce more cars of the right quality and at a price the consumer is prepared to pay.

Is my hon. Friend aware that the MG car accounts for over 50 per cent. of British Leyland's current exports to the United States? Will he look into the legal obligations of BL to maintain a supply of this distinctive sports car? Would my hon. Friend be happy to see taxpayers' money used to pay for any legal expenses that may be incurred if events take their course?

My hon. Friend asks me whether I will look into the matter, and I shall certainly do so.

Does the hon. Gentleman agree that one of our problems is that over the years workers at British Leyland have consistently been knocked both by the press and by Conservative Members, totally unjustifiably. Does he agree also that it might be a good idea for Conservative Members to buy British Leyland cars? On one issue, and one issue alone I find myself in agreement with Sir Michael Edwardes. I have had a British Leyland car ever since I began to drive cars, and I have found them—

Unfortunately, the knocking of the British car industry is done by the customer. The British customer is the king and we should not fail to recognise that fact. I do not know whether the hon. Gentleman read the story in today's newspapers about the ex-British Leyland worker who is in some what troubled circumstances and will have to sell his Datsun car.

The following is the information:

Vehicle production figures over the last decade are as follows, together with car import penetration figures:

Year

Total vehicle production

Of which: cars

Import penetration (cars)

Thousands

Thousands

Per cent.

19692,1831,71710
19702,0991,64114
19712,1981,74219
19722,3291,92124
19732,1641,74727
19741,9371,53428
19751,6481,26833
19761,7061,33338
19771,7141,32845
19781,6071,22349
19791,4791,07156

Rolls-Royce Ltd

14.

asked the Secretary of State for Industry when he expects to meet the new chairman of Rolls-Royce Ltd.

When that meeting takes place what will the Secretary of State tell Rolls-Royce Ltd., and, indeed, other leading British exporters, about the availability of steel in the coming months? How will he explain his lassitude in not intervening in the steel dispute?

If this matter arises, which it may do, doubtless the chairman of Rolls-Royce Ltd. will explain his difficulties, and I imagine that he will have explained them to British Steel Corporation. The hon. Gentleman points to yet another consequence for British industry if the strike continues for long.

How soon will the Minister be able to act upon the pledge that was given to me by the then Secretary of State for Trade and Industry in 1971, that the Government would encourage private investment in Rolls-Royce as soon as possible?

I hope that we shall not keep my hon. Friend waiting too long. At the moment I must confess that there are no immediate plans to do so.

Titanium

15.

asked the Secretary of State for Industry if he will make a statement on the progress of his negotiations to involve the private sector of industry in the development of a British titanium capacity.

I understand that the National Enterprise Board is continuing actively to seek further private sector participation in the project.

Has not this taken some time to be effected? Is not the truth that the private sector does not particularly want to be involved in the project? Is not this a matter for concern, and, given our trade relations with the Soviet Union, is not this question of a British titanium capacity all the more urgent?

I accept the general thrust of the second part of the hon. Member's question. A new company, Deeside Titanium Ltd., has been formed, consisting of the National Enterprise Board, Rolls-Royce and Imperial Metal Industries Ltd. Planning permission has been sought to build a new plant at Shotton in North Wales. I hope that the hon. Member will welcome the move in that direction.

Is not the fact of the matter that Rolls-Royce is the monopoly purchaser of this commodity in this country and is not prepared to pay a commercial price for it?

I take note of what my hon. Friend says, but the fact is that Rolls-Royce is prepared to put money into this project.

Is it expected that this smelter will begin production in 1982? Is it not true that there would be no chance of meeting that starting date without the encouragement and funding of the National Enterprise Board?

I do not think that the hon. Member really needs to make a great meal of this. He should be the first to welcome the fact that about 280 jobs will go to his part of the world.

Mexborough And Wombwell

16.

asked the Secretary of State for Industry how many new jobs have been created in the Mexborough and Wombwell employment exchange areas over the past 12 months.

Does the Minister realise that unemployment is still rising in Mexborough in spite of the fact that the area has become a scheduled development area? Is he aware that we want some action—more jobs in Mexborough? When will the Government provide more jobs not just in Mexborough, but throughout the country, in order to reduce unemployment?

All the Government's economic policies are designed to produce a climate in which jobs will be created, new businesses will start and there will be business expansion.

Nationalised Industries (Guidance)

18.

asked the Secretary of State for Industry what guidance he gives to the nationalised industries, for which he is responsible, about the needs to work in the interests of the taxpayer.

Department of Industry nationalised industries are set financial objectives and, where apt, external financing limits, intended to encourage efficiency in the interests of taxpayers, customers, employees and the economy.

I thank my right hon. Friend for that reply. Does he agree that the act of delivering taxpayers' money to the nationalised industries is itself a form of intervention? Does he agree also that his role of guardian of the taxpayers' interests may well require some form of intervention? Will he make it clear that he sees it as part of his role, as Secretary of State for Industry in a Conservative Government, positively to intervene, if by intervention we mean hiving off to the private sector facilities which the State corporations cannot or will not keep going?

I should like to agree with my hon. Friend as much as possible, but I still do not think it right to tell management in the nationalised industries how to manage. I did not invent the concept of nationalisation, and I do not support it. Nationalised industries are immunised from the process of spontaneous change which competition and the fear of bankruptcy impose upon the private sector. It is difficult enough for any Government to cope with nationalised industries. At least we are reducing the scale of nationalisation.

Will the Secretary of State concede that when a nationalised industry makes a profit the Tories claim that it is because it is holding the taxpayers to ransom, and that when it makes a loss they say that it is inefficiently run? Would the right hon. Gentleman like some further comments on his Government's policy of direct intervention in the nationalised industries? They have forced the gas industry to in crease prices over and above the level which the management of that industry requested.

No, I did not want any more comments on our nationalisation policies. However, I note the hon. Member's opinions.

If my right hon. Friend believes, quite rightly, in leaving management to manage, will he at least try to ensure that there is proper management in the nationalised industries? Will he look at Sir Charles Villiers very quickly?

One must acknowledge the inherent difficulty of managing these giant corporations, immunised as they are from the threat of bankruptcy, which is the ultimate protection of the consumer. Many of the chairmen of the nationalised industries were appointed by my predecessors, and of course we keep an eye on the need to change them as the necessity arises, or as the end of their individual terms of appointment occurs.

Will the Secretary of State be more specific? He indicated that he wants the management of nationalised industries to manage. Will he tell us why the Government have not allowed that to happen in the gas industry? Why did they order that management to do something that it did not want to do, namely, to increase gas charges?

Much as I enjoy debating these questions, I must point out that that is a matter for the Secretary of State for Energy.

Steel Industry

19.

asked the Secretary of State for Industry if he will make a statement of the effects upon industry generally of the dispute in the steel industry.

In the weeks ended 12 and 19 January, it is estimated that production in manufacturing industry was about 2–3 per cent. less than it would have been in the absence of the British Steel Corporation dispute. Most of this loss of output was attributable to lack of production at BSC itself.

Does the Minister agree that if there is to be any kind of regulation of secondary picketing it should be done by legislation, passed through Parliament, and not by judicial fiats from the Court of Appeal? Is he aware that that ruling flies in the face of the recent judgment of the House of Lords in the McShane case, which means that Lord Denning has fallen over his feet once again?

My right hon. Friend has made it clear that it would not be proper for this matter to be discussed by the House at this time. If the hon. Member wishes to see this issue dealt with in legislation, he should support the Government's Employment Bill.

Will my hon. Friend comment further on the wise remarks made by the hon. Member for Rotherham (Mr. Crowther), who regretted the many mistakes made by successive Governments in investing in the steel industry? Does he agree that the hon. Member was making the case for denationalisation, because he was making the case for more independence and more diversity in the decision-making of the steel industry?

Order. Will the hon. Member be kind enough to wait until the end of Question Time, or does he feel that he must make his point now?

I am inclined to agree with my hon. Friend. At present the Government try to "double guess" management, and generally management is much more capable of deciding these things for itself.

Order, I have been listening very carefully. My predecessor in the Chair, the late Lord Selwyn-Lloyd, gave a ruling on 4 December 1973, on a similar situation to that which faces us now. He said:

"It can be argued that the judge has made a mistake, that he was wrong, and the reasons for those contentions can be given within certain limits"—[Official Report, 4 December 1973: Vol. 865, c. 1092.]
What is wrong is to impute any motive at all to judges acting in responsible office.

Order, I shall take this up at the end of Question Time because it could be important for us later in the week as well as today.

If the hon. Gentleman raises his point of order, that will preven another question from being asked.

I am sorry, Mr. Speaker, but this is extremely important. I ask you, Mr. Speaker, to ask the hon. Member for Sheffield, Hillsborough (Mr. Flannery) to withdraw the word "rigging".

I did not like the word "accomplices". The House will be aware that any imputation of motives against a judge is out of order. Reference to a judgment and criticism of it may be made.

May I make it plain, Mr. Speaker, that I did not use the word "rigging"? The hon. Member for Staffordshire, South-West (Mr. Cormack) should apologise. I said "rigged up an industrial relations Act of their own". What is the present position of the secondary pickets who are on strike in South Wales? What will happen to the British Steel Corporation if the situation worsens any further as a result of what has happened during the past few days?

The hon. Gentleman is expecting me to answer questions that I am not qualified to answer. I can tell him that an application for leave of appeal has been granted. I suggest that he awaits the outcome.

Later

On a point of order, Mr. Speaker. In view of what has happened earlier, may I ask whether there is any redress for an hon. Member who has asked a question and who then hears another hon. Member deliberately, grossly—outrageously, indeed—misquote that question? If that happens when Question Time is almost over, and when it is impossible for the hon. Member to correct the misquote, does he have any form of redress?

Order. The hon. Member has found a form of redress by raising a point of order. He has made his point of view quite clear.

On a point of order, Mr. Speaker. When I replied to the hon. Member for Sheffield, Hillsborough (Mr. Flannery), I inadvertently used a wrong word and I may have misled the House. The question concerned the Denning judgment, and I said that application for leave to appeal had been granted. I should have said that aplpication for leave to appeal has been filed.

Prosecutions (Authorisation)

33.

asked the Attorney-General what plans he or the Director of Public Prosecutions has to shorten the time taken by the Director of Public Prosecutions to consider whether to recommend or authorise prosecutions.

This is kept under constant review. The time varies according to the complexity of the case and other factors, including the need for further inquiries, and, in certain cases, to consult counsel. It is hoped that very soon the Director's professional staff will be up to its full complement of 72.

How can the right hon. and learned Gentleman claim that the matter is kept under constant review when, as recently as 22 November 1979, in a written reply he was unable, as was the Director of Public Prosecutions, even to supply the average time taken to consider the cases that are submitted? Does not that indicate that the Director's office is incompetently managed?

There is no way of calculating the average time without spending an appalling amount of time in doing so. Some cases are simple, some cases have to be referred to counsel for their opinion, and other cases are put before a professional officer. If the last course is taken, there is a delay of two or three weeks until the officer is able to get round to the cases because of his workload. The average would tell us nothing.

Given the need for urgency in these matters, has my right hon. and learned Friend seen the words attributed to Mr. Arthur Scargill, namely, that Lord Denning's judgment should be "totally ignored"? Will he recommend an urgent prosecution?

I have not seen the statement accredited to Mr. Scargill, and therefore I am not in a position to answer the question.

Does the right hon. and learned Gentleman agree that the delay in bringing cases to trial is a dis- grace to our judicial system? Is he aware that many innocent people who are acquitted, such as Mrs. Lightly last week, whose case is now well known, have to wait as long as eight months, by which time they often suffer from a nervous breakdown and are punished in a way with which the law cannot deal?

I think that the hon. and learned Gentleman is referring to delay between charging and final disposal. That is something that always causes anxiety to my right hon. and noble Friend. We are doing everything that we can, by increasing the number of courts, to reduce that delay. However, the increase in the number of criminal charges has been so enormous over the past few years that, inevitably, the delay is much greater than either of us would like to see.

Miss P Lamble

35.

asked the Attorney-General why the Crown offered no evidence at the recent trial of Miss P. Lamble under the Official Secrets Act.

The police investigation established a prima facie case against Miss Lamble and thus she was properly arrested and charged. Her statements later, however, indicated that she might not have intended to act in a manner prejudicial to the safety or interests of the State. This was one of the matters I took into consideration when the matter came before me for my consent for the case to proceed.

If the learned Attorney-General believed Miss Lamble's statement that she wished merely to draw attention to the incompetent security procedures at SIS, why was it necessary to keep her in prison for more than a month? What action has been taken over the allegations that she made?

The police investigations established a prima facie case. Her statement indicated that she might not have intended to act in a manner prejudicial to the safety or interests of the State. That required further inquiries. When inquiries had been completed I decided that it was not a case in which I should consent to prosecution. Her representatives did not dispute the statement made in court by counsel for the Crown that she had behaved unwisely and had placed herself in the predicament in which she found herself.

I appreciate that when it has been decided not to proceed against someone it is sometimes embarrassing to embark on a public discussion of why he, or she, might have been proceeded against. However, does the right hon. and learned Gentleman appreciate that a number of recent decisions have given rise to public anxiety? Has he considered the possibility of appointing an official, similar to the Parliamentary Commissioner, or the Law Society's lay observer, who could consider the files, not necessarily publicly, and give an independent judgment on the way in which they should be handled?

In many cases, especially of this sort, there may be a public interest aspect. Responsibility for that has been placed upon the shoulders of the Attorney-General of the day. I shall consider the right hon. and learned Gentleman's suggestion when I come to consider future action.

How came it that a statement was made by an accused person in custody and she was charged, and only then were investigations made to ascertain whether the statement was true? Surely the proper procedure should have been for her explanation to be properly investigated before she was charged.

There is some difficulty in answering the hon. Gentleman's supplementary question, because there are certain matters which it is not in the public interest to disclose and with which I am unable to deal. Miss Lamble made a statement, and later she made a second statement. As I have made clear, that was only one of the matters that I had to consider when deciding whether to consent to prosecution.

Law Of Property (Title To Goods)

36.

asked the Attorney General if, in the light of the judgment of Mr. Justice Slade in Winkworth v. Christie Manson and Woods Ltd., and Another, to the effect that the title of goods of a resident in England and Wales may be lost if the goods are taken to a foreign jurisdiction without the owner's consent and transferred without his knowledge to another person in circumstances which are sufficient to confer valid title on the transferee, he will seek to amend the law of property so as to provide that, notwithstanding the domestic law of any such foreign jurisdiction, it shall not be possible to transfer title to goods in such circumstances without the express or implied consent of their owner.

No, Sir. I am satisfied that there is no practicable alternative to the long-established rule of English private international law which was applied in the case to which the hon. Gentleman refers.

Will the right hon. and learned Gentleman be prepared to offer this complex problem for consideration by the review body on the export of works of art?

One of the difficulties that is so often found when dealing with cases of this sort is that of deciding between two innocent parties. It is axiomatic that in those circumstances both cannot win. This case was referred to the Law Commission for its views. Its reply was that there is no practicable alternative to the present rule.

Picketing

37.

asked the Attorney General if he will make a statement on his consideration of the law relating to picketing.

The Government have indeed reviewed the law on picketing, and their current proposals resulting from that review are contained in the Employment Bill now before the House.

Is my hon. and learned Friend aware that Mr. Scargill has now called for civil disobedience? Is he aware that this second-rate revolutionary has only a small number of people who support him, including a handful of Labour Members, and that his views are opposed by the overwhelming majority? Is he satisfied that the proposals in the Bill to which he has referred, as well as the present law, provide adequate protection for those who want to mind their own business and go about their work normally?

There are two important elements in my hon. Friend's supplementary question. Whatever view one may take about them, I hope that everybody will share the view that they are of the greatest importance. I have not seen the statement attributed to Mr. Scargill. However, if anybody is advocating civil disobedience, that is of the utmost importance. I am sure that we shall all wish to see exactly what was said before expressing a view about it.

My hon. Friend asks whether the Government are satisfied with the law in general. The answer is "No". There are two respects in which those who picket in furtherance of a trade dispute are favoured compared with others, namely, sections 15 and 13 of the Trade Union and Labour Relations Act 1974, as amended. My right hon. Friend the Secretary of State for Employment and the Government have shown that they are not satisfied with either. Current proposals for changing them are contained in the Bill that is before the House.

Since the Bill was presented—[Interruption.] I hope that the House will realise the importance of this issue. I have been asked a question and I propose to answer it. Since the Bill was debated in the House there have been serious developments. Certain cases have come before the courts, and clearly my right hon. Friend wishes to give the most careful and urgent consideration to those cases and the matters that have developed from them.

Is the hon. and learned Gentleman aware that all my right hon. and hon. Friends regard as more serious the statement made by the Prime Minister the other day on a television programme with Brian Walden, namely, that the proposals that are being put before the House are only interim measures and that the Government will consider introducing proposals on picketing? That must be regarded as more serious in terms of good industrial relations than anything that Mr. Arthur Scargill may have said.

I do not think that the hon. Gentleman listened to the second half of my answer. Obviously the developments of recent weeks have raised new and very serious questions. My right hon. Friend the Prime Minister has indicated the importance which the Government attach to those questions and the urgency with which they will be considered.

Order. We were one minute late in starting questions to the Attorney-General. I shall therefore call one more hon. Member from each side.

In view of the current argument about the effect of calling out the private steel sector, will my hon. and learned Friend consider whether

"furtherance of a trade dispute"
should be more restrictively defined in future legislation?

That is one of the questions that we must consider. I am sure that the people of Britain will want us to consider the whole issue very carefully before we express our views. The decisions that are taken will affect every aspect of life in this country for a long time to come.

My hon. Friend's point will be considered, but it would be idle at this stage for anyone to express views about what the answer to that question—or any aspect of it—should be.

Does the Solicitor-General agree that many people fear that Lord Denning's judgment, which was made at the weekend, has hardly helped the matter? Many people also fear that that judgment will provide more explosive material in an already dangerous minefield. Lord Denning has made the law even more uncertain, and he is therefore bringing the law, and the rule of law, into disrepute. Will the Solicitor-General advise his noble Friend that, although hon. Members may have respected Lord Denning in the past, the time has now come for him to retire?

Order. Such remarks should be made only when there is a motion on the Order Paper. Judges are not to be criticised unless there is a substantive motion before the House.

Many people have fears that arise from the present situation. No purpose is served by concentrating on criticism—direct or indirect—concerning a judgment the text of which the hon. and learned Member for Abertillery (Mr. Thomas) has probably not seen. No copy of that judgment was available when I came to the House.—[Hon MENBER: "The Times"] If the hon. and learned Member for Abertillery thinks that that is sufficient, I beg to disagree. The issue is so important that we should first obtain copies of the text of what has been said. We should then obtain copies of what orders have been made as they are relevant to an earlier question. We should consider those before criticising anybody—least of all the courts.

On a point of order Mr. Speaker. That last statement seems to imply that the inefficiency of the courts will delay proceedings in the House.

Order. It does not matter what that statement implied, because we cannot pursue it now.

On a point of order. Mr. Speaker. A few minutes ago you made clear to the hon. Member for Sheffield, Hillsborough (Mr. Flannery) the position about making personal criticisms of Her Majesty's judges. I am sure that the hon. and learned Member for Abertillery (Mr. Thomas) did not intend any discourtesy to you, or to Her Majesty's judges. May I invite you to ask him to withdraw his words?

Further to the previous point of order, Mr. Speaker. I understand that the judgment is not available because union rules prevent the shorthand writers from typing the proceedings on Sundays. I am not criticising, but it seems to emphasise the desirability of what I was just saying, namely, that we should find out what has happened before casting clouts in any direction.

Order. I warn the House that, although the time is extended for the debate on foreign affairs, there is a long list of right hon. and learned Members who seek to catch my eye. I hope that points of order will be brief.

Rhodesia (Bingham Report)

On a point of order, Mr. Speaker. May I ask whether you have received any representations from the Attorney-General, to the effect that he wishes to make another statement to the House in order to correct the misleading impressions that he gave in his statement on 19 December? That statement referred to the decision not to prosecute under the Bingham report. To the questions that arose from that statement, he gave two clear examples of answers that are contrary to the facts. In that statement, the Attorney-General—

Order. I can save the hon. Gentleman from pursuing that point of order. I have received no request from the Attorney-General to make a statement.

On a point of order, Mr. Speaker. I seek guidance as to how we can make the Attorney-General come before the House in order to correct the false impressions that he gave in that statement.

The only way in which the hon. Gentleman can pursue that issue is through the usual channels.

Bill Presented

IMPORT OF LIVE FISH (ENGLAND AND WALES)

Mr. Cranley Onslow, supported by Mr. John Golding, presented a Bill to restrict in England and Wales the import, keeping or release of live fish or shellfish or the live eggs or milt of fish or shellfish of certain species: And the same was read the First time; and ordered to be read a Second time upon Friday 15 February and to be printed [Bill 129].

Statutory Instruments, Etc

Ordered,

That the draft Development Board for Rural Wales (Financial Limit) Order 1980 be referred to a Standing Committee on Statutory Instruments, etc.—[Mr. St. John-Stevas.]

East-West Relations

Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Jopling.]

3.39 pm

Last autumn I expressed the view that the West would have to face in the next few years challenges and dangers more testing than any it had faced in the 1960s or 1970s. I called the 'eighties "the dangerous decade", but the first challenge has come sooner than many expected.

We face a grave development in East-West relations. Abroad, the Soviet Union has shown that it is prepared to use force to impose its will on a small neighbouring country. At home, by arresting and exiling Professor Sakharov, it has shown once again that it will not tolerate dissent within its own borders.

The Soviet Government's actions reveal a brutal disregard for accepted rules of international behaviour, for world public opinion, and for the principles laid down in the Helsinki Final Act of 1975—an agreement signed by President Brezhnev himself.

Does not the right hon. Lady recognise that the failure of the Attorney-General to prosecute the oil companies for their breaches of international sanctions and the reluctance to have an inquiry into how this House was misled have stripped the right hon. Lady of any right and authority to moralise on upholding the rule of international law?

As the hon. Member knows, anything to do with the Attorney-General must be raised with the Attorney-General.

I pick up the thread of my argument where I left off. I was referring to the Helsinki Final Act of 1975—an agreement that was signed by President Brezhnev himself.

The development in East-West relations, the invasion of Afghanistan and the arrest and exile of Professor Sakharov follow a decade of detente which some people thought would make such crises impossible.

"Detente" is an imprecise word. It reflects the common interest of all mankind to avoid a nuclear holocaust, which could come from military conflict between East and West.

For 10 years and more the West has built on that feeling to try to reach mutually beneficial East-West agreements on arms control, on Berlin and on Germany. East-West trade has grown, too. So have human contacts between the two sides.

Optimists in the West believed that this process would educate the Soviet Union about the outside world. They hoped that wider contacts and increasing prosperity would soften the harshness of the Soviet political system. They hoped that the Soviets would behave more moderately in the Third world, in Europe and in their relationship with the United States.

The Russians have a different interpretation of detente. For them, the word has meant the preservation of their security at the same time as they have enjoyed access to Western foodstuffs and technology on easy terms, and the chance to extend, by overt and covert means, their influence and political control wherever opportunity offered. They have proclaimed an unrelenting ideological hostility to all our ways, traditions, and institutions. They have meddled in our affairs at every turn, while angrily rejecting the thought that they should conduct their domestic affairs in a civilised and democratic manner. They have persecuted those of their citizens who have dared to think and speak for themselves. They have built up their armed forces far beyond their defensive needs.

In recent years they have gone further. They have instigated Cuba to intervene in Angola and Ethiopia on their behalf. They have provided arms, military advisers and financial support to the Marxist forces of subversion in the Third world—notably in the Caribbean, Africa and the Middle East. They have worked directly and indirectly against Western interests wherever they could. They have claimed repeatedly that all this is compatible with the rules of detente as they define them.

Regrettably, many people in the West have been prepared to overlook these breaches of the rules in the hope that, with time, the Russians would come to behave more responsibly.

The invasion of Afghanistan and the exile of Professor Sakharov leave no room for illusion. They seriously weaken the basis for the fruitful conduct of East-West relations. They are deliberate acts of policy by the Soviet Government.

Afghanistan is a symbol and a warning. It is not just a far distant country, which we can ignore because we face no local crisis in Europe.

This is not the first time that the Russians have used force to invade a neighbour, used it massively, swiftly and callously in a pattern that bears the Soviet hallmark. It is not the first time that they have claimed to have been invited in by a Government who, on closer inspection, turned out not to exist, or whose leaders they subsequently killed. But it is the first time since the world war that they have sent tens of thousands of soldiers, backed by tanks and helicopter gunships, into a country outside the Warsaw Pact; an Islamic country, a member of the non-aligned movement, and a country that posed no conceivable threat to their country or their interests.

Who are the Russians fighting against? The newspapers call them "the rebels".

This is a very important point. I should like to know what is the difference in principle between the situation that the right hon. Lady has described—of the Soviet Union's attack on Afghanistan—and that, for example, of the United States on Cambodia during the course of the Vietnam war.

The hon. Gentleman knows that the Vietnam war arose because the Geneva treaty was not honoured over a decade, and that the United States went in to try to protect South Vietnam against North Vietnam and Communism. But that was after the Geneva treaty. The two are totally and utterly different.

I was talking about the Russian invasion of Afghanistan and asking against whom the Russians were fighting. I was pointing out that the newspapers called them "rebels". It is a strange word to use of people who are fighting to defend their own country against a foreign invader. Surely they are genuine freedom fighters, fighting to free their country from an alien oppressor.

Commentators speculate about the motives of the Soviet Union in moving into Afghanistan. It is argued that the invasion is a confession of Soviet weakness; and it reflects a defensive mentality; or that it flows from a fear of encirclement. But we cannot know the motives of the Russians for certain. What we know is what they have done.

The Soviet Union has driven a wedge into the heart of the Muslim world. If its hold on Afghanistan is consolidated, the Soviet Union will, in effect, have vastly extended its borders with Iran, will have acquired a border more than 1,000 miles long with Pakistan, and will have advanced to within 300 miles of the Straits of Hormuz, which control the Persian Gulf. These are the facts. They are a cause for alarm both to the countries of the region and to ourselves.

West of Afghanistan, Iran is now, more than ever, in the front line. The Soviet Union says that its intentions towards that country are benevolent, but who can believe them. After all, the Russians claim that the treaty that they signed with Persia in 1921 is still valid. That treaty says, among other things, that
"if a Third Party should attempt…to use Persian territory as a base for operations against Russia…Russia shall have the right to advance her troops into the Persian interior"
I need hardly comment on the implications of such a text.

The revolution in Iran has stirred up feelings for ethnic autonomy among the Kurds, the Azerbaijanis, the Baluchis and many other ethnic groups. It has fostered ideological dispute, and it has led to differences even among the religious leaders themselves. The temptation to the Russians is apparent. There are signs that the Iranians themselves are increasingly aware of the danger.

At this point, I should like to say a word about the American hostages. We in this country respect the right of peoples to choose their own regimes and Governments. We wish the Iranians well in their search for the political system best suited to their needs. We hope that they will emerge from their present difficulties united.

The election of Mr. Bani-Sadr as the first President of the Islamic Republic of Iran, if confirmed, is an important new development. Our embassy in Tehran has previously had contacts with Mr. Bani-Sadr in his capacity as Minister both of Finance and Economic Affairs and of Foreign Affairs. We hope that the continued detention of the United States hostages will be one of the first problems to which he devotes his efforts.

The hostages must be released. We admire and applaud the restraint that President Carter has shown in pursuit of this goal. We support him and shall co-operate in every way with policies that will contribute to the release of the hostages. In doing so, we shall bear in mind the situation in the region as a whole.

The Russians would be only too willing to pose as protectors of the Iranian revolution, or as the restorers of order in the country. We shall want both to avoid giving them any opportunity to do so and to make clear the consequences if they tried.

We shall need to be similarly clear about the importance that we attach to Afghanistan's eastern neighbour, Pakistan. The Soviet invasion has driven many Afghan people over the border into Pakistan. There are already half a million refugees in the country, and the number is expected to grow rapidly. These people will be resentful and aggrieved. They come in large part from tribes that in any case span the border of the two countries. The threat to stability is only too obvious, and President Zia's concern only too well justified.

It is a concern that is shared by China and India. Premier Hua told us last year how seriously the Chinese regarded Soviet global ambitions, of which they saw Soviet activities in Afghanistan as a significant part. Mrs. Gandhi has said that the Russian presence in Afghanistan has increased tension and moved danger closer to the Indian border. This, I stress, has not happened because of rivalry between the super-Powers. The Russians are the only super-Power with massive ground forces in the area.

I hope that recognition of this fact will lead to the development of a better understanding between Pakistan and India.

Can the Prime Minister give an assurance that, whatever may be the short-term pressures, efforts to help the London group of nations to deny Pakistan the wherewithal to make nuclear weapons will go unabated?

I know that the hon. Gentleman is pursuing a cause that he has pursued for a long time. We naturally do not wish Pakistan to obtain nuclear weapons. I should like to make that clear.

We were talking about a better understanding between Pakistan and India, which is vital to the future of the whole region. The threat from Afghanistan to her neighbours to west and east is plain and direct. The threat to the south is every bit as dangerous. From southern Afghanistan to the Persian Gulf and the Straits of Hormuz is but a short distance. I do not need to stress the importance to the West of the States bordering the Gulf.

The oil that they produce is the life blood of Western industrial societies. The Straits of Hormuz are the artery through which it flows. If that flow were abruptly stopped in the years immediately ahead there would be real doubt whether our societies could survive in their present form. The threat is the more compelling when one recalls the control that the Russians can exercise over the entrance to the Red Sea through their client States in South Yemen and Ethiopia.

Of course, we cannot prove that the Soviet invasion is part of a deliberate drive to the Gulf, but we can point to the fact that in a few days the Russians have advanced 500 miles towards it, and, again, to the fact that throughout the Third world they have worked consistently and patiently against Western interests when ever opportunity offered. To some, at least, the implications of their presence in Afghanistan are clear.

In this new situation, the nations of the free world must be resolute and united. We must bring home to the Russians how badly they underestimated the cost to themselves of the invasion and how serious would be the consequences should they try the same thing again. If we are to continue the painful attempt to build a safer world—as we would wish to do—the Soviet Government must abide by the normal standards of international conduct.

The Soviet action is an affront not only to the West but to the members of the non-aligned movement, to which Afghanistan belongs. In the United Nations General Assembly earlier this month, 104 countries, most of them members of the non-aligned movement, condemned the Soviet Government.

Seldom has a great power been censured so publicly, so rapidly and so comprehensively. Russia's claim to be a champion of the developing world has been shattered. The Soviet proxy, Cuba, currently chairman of the non-aligned movement, was forced to withdraw as a candidate for the Security Council when support for her evaporated in the wake of the invasion. The truth is that the Soviet Union has had little to offer the Third world but weapons and dogma.

Such economic aid as they have given has always had ulterior motives. It is noteworthy that in 1954 Afghanistan was the first recipient of Soviet aid. Soviet tanks cross Afghanistan on roads built with Soviet money. Their aircraft land on airfields similarly financed. That is hardly aid without strings.

The countries of the Third world are awakening to the realities of Soviet foreign policy. They are recognising that Soviet ambitions are incompatible with their wish to determine their own destinies. But it is not for us to tell them how to carry forward the work begun in the General Assembly. We shall, of course, help if asked to do so, but, in the first instance, they themselves must develop effective answers to the threat of subversion in their own countries. Resistance to infection requires awareness and effort from the potential victim.

We in the West have our own response to consider. A number of immediate measures have already been taken. President Carter, in a move of great political courage, has banned further supplies of American grain to Russia. He has cut back on the supply of high technology, and reduced official contacts in a number of ways. He has said that the Olympic Games should be moved from Moscow, postponed, or cancelled if the Soviet troops have not left Afghanistan within a month. Both Congress and the United States Olympic committee have supported him.

The British Government have also responded. We have stopped aid to Afghanistan and have withheld recogni- tion from the new regime in Kabul. We initiated consultations in NATO and in the European Community. My right hon. Friend the Foreign and Commonwealth Secretary has visited the countries of the region and described in another place the talks that he had and the conclusions that he drew. We shall be reviewing our aid plans for Pakistan. We and our partners will do what is in our power to improve stability in the Gulf and to reassure our other friends in the Arabian peninsula.

Will the right hon. Lady explain a little more what she means by "reviewing" our aid plans for Pakistan? Does that mean that we shall be reviewing the whole policy of military aid to Pakistan? Does that mean that we shall possibly be creating a worse situation between Pakistan and India? The right hon. Lady has appealed for the two countries to get together. Aid to Pakistan of that kind cannot possibly help relations between India and Pakistan.

I meant exactly what I said; we shall be reviewing aid to Pakistan, and we shall of course be reviewing the military situation, for the reason which most people fully understand, that Pakistan is now right in the front line.

I have answered the question. I am sorry that the hon. Gentleman does not, or refuses to, understand it.

We shall also be developing our relations with China and we shall develop our co-operation with our Turkish allies.

We have announced the measures that we shall be taking with regard to the Soviet Union itself; measures to cut back political and official contacts, to cancel military exchanges, to refuse renewal of the Anglo-Soviet credit agreement which expires next month, and, in consultation with our allies, to tighten the rules governing the supply of high technology.

The House is already aware of the Government's concern at the prospect of the Olympic Games taking place in Moscow this summer. The Soviet Government hope, as another Government did in 1936, that the Games will give an immense boost to the State's prestige internationally and to its own prestige domestically. In any circumstances the Olympics in Moscow would have been a political event, but to attend the Games now would be to give aid and encouragement to the Soviet Government in the immediate aftermath of its invasion of an independent country and its arrest and exile of one of the country's most distinguished citizens.

Of course I sympathise with the athletes who have trained so hard for so long, but surely Sebastian Coe is right to say:
"Athletes cannot have their heads in the sand. They cannot say, 'I am a runner and, while I sympathise with the people of Afghanistan, that is not my problem'."
The solution is to move the Games to a place or places where politics do not predominate.

This is a move that commands great support from many parts of the House. In response to the Government's request the chairman of the British Olympic Association has agreed to propose this to the International Olympic Committee. In the light of their decision, the Government will consider further what advice—it could only be advice—we should give.

The actions already announced by the Government will have effects stretching well into the future. It is important that we and our allies should persist in our efforts. We must not give the impression that our indignation is synthetic or short-lived. The most persuasive evidence of our determination will be our willingness to sustain our unity and defence effort. The House will know from last week's defence debate that the Government are resolved to do so. Alliance Governments recently decided to increase their defence expenditure in the years ahead. They have decided to modernise NATO's long-range theatre nuclear weapons. They must now demonstrate that they can carry out those decisions.

The new measures that the West has taken, or will take, do not imply that there can or should be a complete break with the past. The business of East-West relations must go on. We have to live in the same world.

The Prime Minister continually refers to "the West". Is she claiming that there is a unanimity of view, for example, among the United Kingdom, France and West Germany?

I am coming on to deal with the West as Europe and as the larger definition of the Western alliance. I have just come to the point—having analysed the position of Russia in what she has done in her invasion of Afghanistan and defined what we have done—of saying that, nevertheless, we must continue to exist in the same world and that therefore the business of East-West relations must go on.

There are, for example, a number of arms control negotiations in which the West has a real and continuing interest. They are an integral part of our efforts to safeguard the nation's security. We do not propose to abandon them, but recent events once more call Soviet good faith into question and cast a shadow over the prospects for early progress. President Carter had no choice but to defer the ratification of the SALT II treaty, but we hope that the treaty will be ratified in due course.

We will persist with our effort to initiate negotiations with the Soviet Union about theatre nuclear forces in Europe. Although it rejected the recent American offer, that offer remains on the table. We will pursue the negotiations in Vienna on mutual and balanced force reductions. Here also the alliance took a new initiative last month. We will carry on the negotiations for a comprehensive test ban. We will continue preparations for the meeting in Madrid in November about the next stage in the process begun at Helsinki, although of course much will depend on Soviet actions meanwhile.

I am sorry to interrupt my right hon. Friend, because I know that the House is listening with great attention and is welcoming the firm line that she is laying down—particularly what she is saying about not letting up in our efforts to achieve agreed multilateral disarmament. However, will she take this opportunity, against the background of the forthcoming defence White Paper, to emphasise that this would be the worst possible moment for this country to set an example to our allies by making any unilateral cuts in defence spending?

As my hon. Friend knows, we had a debate on defence last week. I hope that it is clear from that debate and from other statements that the Government are resolved to play their full part in NATO and to increase their expenditure by 3 per cent. over the outturn this year.

The West's efforts, whether in defence or in negotiations, can be effective only if we are united. Here I come to the point raised by the hon. Member for Sheffield, Heeley (Mr. Hooley). We and our partners in Europe came together in the Community above all for political reasons. A greater ability to resist external pressure was not the least of those reasons. That shared interest lies behind the common action that the Community aims to develop in response to the crisis, in its relations with the Gulf, with Yugoslavia and with Pakistan. The Soviet Government doubtless think that they can detect differences among us. Indeed, some differences of emphasis are inevitable when a free association of nations deliberates on a problem of this magnitude, but the Soviet Government should pause before they conclude that debate is a sign of weakness. They would be making another miscalculation if they thought that their efforts to split us could succeed.

Nor should the Soviet Government expect to succeed in their attempt to persuade us that the interest of Europe in a sensible relationship between East and West is in some way different from that of the United States. The United States is the final guarantor of European security. It is demonstrating clear leadership, and we should back it.

I am reminded of the superb response that General de Gaulle gave to President Kennedy's representative at the time of the Cuba missile crisis. General de Gaulle then said:
"You may tell the President that France will support him".
Europe should send the same message today.

I began by speaking about the meaning of detente. If it means anything, it must mean a process whereby East and West move away from the hostility and confrontation of the years after the Second World War. It is about the management of East-West relations, so that war is avoided while the legitimate interests of both sides are protected.

The process cannot be confined to Europe. In an interdependent and oil-hungry world the interests of East and West are affected by events everywhere. Detente is indivisible, or it is nothing. So long as the Russians refuse to accept this—so long as they go on trying to defeat the West by all means short of war—we shall do whatever is necessary to counter their policies.

We shall strengthen our relations with the whole non-Communist world. We shall look to our defences, but we shall continue to negotiate—

The right hon. Lady has, not unnaturally, spent a lot of time dealing with the political and strategic aspects of response. Will she tell the House what is the Government's view of the aid aspect of response? We are battling for the hearts and minds of men and if the West responds in strategic and military terms only we shall alienate the people whom we hope to defend.

I have said that we shall be reviewing aid to Pakistan. I have pointed out that Soviet aid is in terms of military advisers and dogma only and not in terms of genuine economic aid. As the hon. Member for Dunfermline (Mr. Douglas) knows, our record in aid still compares favourably with most countries in the world.

I had reached the point of saying that it is absolutely necessary and vital that the unity of the West is retained. The Russians have a view of detente totally different from ours. Our view is that with security the legitimate interests of both East and West must be protected. We shall do whatever is necessary to counter Soviet policies by strengthening our relations with the whole non-Communist world, and, above all, by looking to our defences.

We shall continue to negotiate with the Soviet Union from a position of balanced strength on issues where our interests are mutual. If we are vigilant and steadfast our democratic values will outlast the sterile dictatorship and the spurious theories of Soviet Marxism.

We can gladly take on the Soviet Union in the struggle of ideas. This is an arena where the defeat, not the victory, of Marxism is inevitable. Meanwhile, we stand ready for co-operation in a search for mutual benefit in a true detente if, one day, the Soviet Union decides genuinely to take the path of peace. The burden of proof now lies with the Soviet Union.

4.12 pm

The visible presence of large contingents of Soviet troops and tanks in Afghanistan has demonstrated to the world that the Soviet Union will move swiftly, ruthlessly and powerfully when it makes up its mind that its interests require it. By doing so it has caused many countries to make a fresh assessment of their policies on military dispositions.

The Prime Minister referred to the response of the United Nations. I think that it has been most impressive. The Soviet Union has called down upon itself the condemnation of the overwhelming majority of the members of the United Nations in an almost unprecedented manner. Countries which would normally be reluctant to take sides when the West and the Soviet Union seem to be opposed to each other have not hesitated to express their total opposition to the action of the Soviet Union. They have united in an urgent call for the Russians to withdraw their troops from Afghanistan. That call goes out from the House once again today.

The first consequences of Russia's action are already becoming evident. Let me list them. Russia is clearly seen as a colonial Power. Its action has had the effect of strengthening Chinese relations with the United States. The Government of Pakistan are to receive economic aid and arms. The rival factions in Afghanistan have come together in opposition to the Soviets. The influence of Russia in the world of Islam has been weakened. The influence of Cuba among the nonaligned, as the Prime Minister said, has been undermined. The United States, among others, is taking restrained but firm action in the economic and trade context and the Olympic Games are in question.

This invasion has not been all gain for the Soviets. Russia has already begun to pay a price for a disastrous miscalculation. Answering a Pravda correspondent recently, Mr. Brezhnev said that the decision to enter Afghanistan had not been a simple one and that the Soviet Government and the party central committee took into account the entire sum total of the circumstances. I can only say that they added up the total sum wrongly. Their actions have made the world a more dangerous place.

In Europe we have been watching for some time the deterioration in relations between the West and the Soviet Union. Following the invasion of Afghanistan, the Soviet Union has added to that deterioration by the contemptuous flick of the wrist with which Dr. Sakharov has been banished to Gorki. The question that some countries are now bound to ask is whether they will be the next to be threatened.

The greatest danger at present lies probably in the prospect of the People's Democratic Republic of the Yemen, backed by Soviet advisers, attempting a coup in North Yemen. I hope that the Government are taking that possibility seriously into account, but it would not be in accordance with the measured caution that the Soviet Union usually displays if it were to take a bigger step than that within the foreseeable future.

I believe that we can discount the possibility of an outright attack on Pakistan, Iran or Yugoslavia. Nevertheless, the potential threat exists. The shadow of the Soviet Union hangs over many countries in that long are stretching from Turkey to Pakistan. This uncertainty and doubt will prompt those countries to strengthen their armed forces, and no one can blame them. Such a military response is inevitable and essential. Nevertheless, it is not enough in itself and it is to this that I wish to address myself later.

President Carter's message on the state of the union recognises that, and that recognition underlies much of the analysis of President Giscard and Chancellor Schmidt. We must welcome the intention of President Carter to set up a task force of 100,000 men which could move quickly into position, if only because of the utter dependence of the West on oil.

We must strongly support the Carter doctrine that, while the United States has no desire at all to intervene in that particular area, any attempt by the Soviet Union to gain control of the Gulf—as the President says—must be regarded as an assault on the vital interests of the West as a whole. That is the American position. It will be understood, and I hope accepted, by the countries of the Middle East and by the Soviet Union, because in an area where there is possible doubt and uncertainty it is essential that that doubt and uncertainty should be removed. There can be no room for misunderstanding about that. I believe that when misunderstanding is removed the prospects of external attack are lessened, not made greater.

Mr. Brezhnev is surely mistaken when he says that the strengthening of the positions of the United States and the Middle East is a hostile act. His experts must have told him of the vital importance of Middle East oil to the economic and industrial life of the West. Our lighting, heating, fuel, energy for our machinery, transport and levels of employment are all dependent upon the continuing and uninterrupted supply of oil. Unless that is accepted by the Soviet Union, there will be growing tension in the Middle East and no basis for future understanding between the Soviet Union and the West.

It is from that point, because I wish us to come to an understanding with the Soviet Union, that we must start. The world's concern about Afghanistan is genuine for some of the reasons given by the Prime Minister. We cannot accept the Soviet justification that Afghanistan was destined to become a bridge head for imperialist threats to the southern border of the Soviet Union.

This has always been a troubled area, but there was no real evidence that any major move was contemplated, and Russia must have mistaken—it has lived next door to them for a long time—the temperament of the Afghan people if it believed that they would consent to be used in this way by the so-called imperialists.

In the last century the tribesmen of Afghanistan fought with great deter- mination and some success against Britain. Now they will fight with equal determination against Russia. Every schoolboy knows that in Afghanistan in surgency has been a way of life. The Afghans do not need imperialists, whether the old-fashioned nineteenth century type or the new 1980 version, to tell them what to do. They will certainly not allow imperialists of any stripe to make use of them.

The Soviet Union claimed that the insurrection in the country was a threat to it and that it was fomented by outside influences. If that is so, I suggest that the proper course was for the Soviet Union to have brought the matter to the bar of world opinion. It made clear—as I know from personal conversations and otherwise—that the Afghanistan Government had made many requests to it for intervention over a long period, but it had not acted upon that. Surely, therefore, the Soviet Union, having refused to act on so many occasions when requests were made, does not claim that the situation was so desperate and that the borders of the mighty Soviet Union were under such threat from armed Afghan tribesmen that it had no alternative but to invade that country. The Soviet Union should now swiftly withdraw its troops. Only in that way can it begin to undo the damage it has done and reduce the alarm that is felt among some of its neighbours.

As I said earlier, a military response is not sufficient.

Before the right hon. Gentleman moves from the military response to the many other responses that he no doubt wishes to see, will he say fairly plainly that, in pledging his support for the necessary military response by the United States, he will pledge the support of his party to such military measures as may be necessary for this country to take in support of the United States?

I do not know why the hon. Gentleman wants to introduce party considerations into this matter. I shall make my speech in my own way and make the position absolutely clear.

In this area political instability is more likely to arise in the immediate future from the internal discontent of the peole there than from outside threat. If the causes of such discontent are not removed, instability will exist that the Soviet Union will be swift to turn to advantage in the way that it has done elsewhere and endeavour to regain the prestige it has lost in the Islamic countries.

We have before us the lessons of Iran. With those in mind, it is our responsibility to encourage all those countries with which we have contacts to root out internal corruption wherever it exists, to open up their social and political systems and to improve their social policies. There is a vacuum of understanding and agreement between the West and the Middle East countries that is made more difficult by the situation in Iran and by the conflict between Israel and certain Arab States.

The Prime Minister spoke of the need for the new President of Iran to devote himself to the question of the hostages; and I am glad to observe that the situation there seems to be easing a little. The Government and people of the United States have shown great patience in their response to the intolerable behaviour of militants in detaining American citizens as hostages. The United States feels the frustrated impotence of a great Power that knows that its strength cannot be effectively used, but the patience and caution that it has displayed may yet deliver the hostages unharmed where other methods would have led to their execution.

I agree with the Prime Minister that we support and encourage the United States at this time, and I welcome the fact that the President has said that, when the issue of the hostages is resolved and the men and women concerned are returned unharmed to the United States, as we profoundly hope they will be, there will be no irreconcilable differences between the two countries.

The signals from many Middle East countries are clear. They are alarmed at recent happenings. They wish to protect themselves from a possible takeover, but their peoples do not wish to enrol either under the Western banner or under the hammer and sickle. Their Governments are rightly chary of accepting a possible Western defence presence in their territories, and we should not press it upon them. They know that oil is essential to our economies and that it has dominated our relations with them. In some senses it has deformed our relationships with those countries. We in Britain had had a long relationship with them before oil was a major factor, and the people of Islam, as we knew before oil came to dominate all our considerations, have a long history, a wide culture and a deep religious belief. I believe that those people would value the relationship between them and the West much more highly were we to make stronger attempts to broaden and deepen our cultural links with them, to respect them as a people and not merely to regard them as purveyors of an essential source of fuel.

Our Government should encourage greater efforts in this direction, not only to escape from Mr. Brezhnev's taunt in the Pravda interview that our only interest is the smell of oil, as he described it, but to show the people of Islam that we value them as fellow human beings who have a contribution to make to the progress of the world as great as that of anyone else.

The United States is right to maintain the momentum to achieve a settlement of the problem of self-rule in the West Bank and the Gaza Strip. Principal negotiators from Egypt and Israel will be meetting Ambassador Linowitz this week to attempt to carry the process forward. I doubt whether this issue can be satisfactorily concluded until the framework is created to enable Jordan and the people of the West Bank to take part in such discussions. The future of the people of the West Bank is being discussed. If they are to accept the settlement—even if it is a transitional settlement with a long interim period, as might well prove to be the best next step—they will need to be involved in the discussions that lead up to it.

I shall not go into detail about this complicated Arab-Israeli dispute today, but we stand firmly by the need to ensure peace and independence for Israel within secure borders. We recognise that the conditions that would enable Israel to negotiate freely with representatives of the Arab people do not yet exist. However, these difficulties must be overcome and I trust that Ambassador Linowitz will be able to make some progress during his visit this week.

We must not overlook the problems of the Indian sub-continent either. By his visit to India, the Foreign Secretary was able to dispel any belief that our interest in the sub-continent is confined to Pakistan because of the events in Afghanistan. India has just emerged from a general election in which, with whatever defects there were, power has been transferred through the ballot box. That is rare enough in Asia, and we must give India our full encouragement. Our experience with India and Pakistan has been longer and richer than that of anyone else. Many people from the sub-continent who live in Britain today have a warmth and feeling for this country and the country of their origin. In our anxiety about Pakistan, we should not forget or overlook the need to cultivate, for its own sake and for the reward that it would bring us by the sharing of culture, the friendship of India. I greatly welcome the comments recently by General Zia and Mrs. Gandhi that seem to betoken a great willingness to co-operate with each other.

The Soviet Union has recently given voice to two specific areas of complaint against the West. The first is that the SALT II agreement has not been ratified. I must agree with Mr. Brezhnev on that. It is a great misfortune that the Senate failed to put its seal on this treaty in spite of the President's clear lead and his continuing desire, as he has said once again in his state of the union message that it should be ratified. I cannot do better than repeat his words:
"SALT II is in our mutual interest. It is neither an American favour to the Soviet Union, nor a Soviet favour to the United States."
We can support that view. It is a favour to the whole world, if only because it would provide confidence that would lead on, as was intended, to a fresh set of negotiations between the two super-Powers with the object not merely of putting a cap on the number of missile launchers and warheads but of reducing their unnecessarily vast number. I hope, therefore, that the Senate will ratify the treaty in due course and that, although the President has felt it necessary to with draw it, the Senate will take it upon itself before the election, if possible, to proceed to ratification.

On the other hand, I certainly do not agree with Mr. Brezhnev's second com- plaint against us, that the NATO decision to modernise its theatre nuclear forces gives him legitimate reason for refusing to negotiate on the control and withdrawal of such weapons from the European front. He is, of course, aware that there is a long gap in time, as the Prime Minister said, between the taking of the decision to modernise and the subsequent manufacture and deployment of the weapons.

Mr. Brezhnev knows also that the Soviet Union has altered the balance itself in recent years so that in nuclear weapons what was Western superiority has now been replaced by rough equivalence and in some fields, perhaps, by a Soviet advantage, although not an overwhelming one.

Mr. Brezhnev knows that Western policy in the strategic field is not to seek to retain superiority—that would he a mad competition—but, likewise, is not to permit the Soviet Union to do so. We cannot afford to allow nuclear weaponry to expand without the most strenuous efforts to control it, for we in Europe live in the most heavily armed region of the globe, with large standing armies carrying the most dangerous weapons yet known to man.

Moreover, quite apart from Europe's preoccupations, there is the need for urgent discussion to control the proliferation of nuclear weapons to nations which do not yet have them. I was glad to hear that the right hon. Lady is continuing the policy of seeking to make the non-proliferation treaty effective and also to continue the negotiations for a test ban agreement as well.

I must say to the House that the situation in regard to non-proliferation today is most unsatisfactory. The President of the United States has recently said that it is possible for suppliers and recipients of nuclear fuels to work together in order to balance energy needs, which they rightly have, with the non-proliferation of nuclear weapons. I hope that he is right. So far, I have not seen the evidence to that effect, but I understand that when we receive the INFECYEP report it will be available to us.

I hope that that is so, especially in the sensitive and unstable area of the Middle East. I do not know whether hon. Members are studying what is happening there, but there are at least five countries in that region alone, from Turkey to Pakistan, where work is at varying stages of development on nuclear weapons technology. This most dangerous development must be taken in hand, and I urge that the strongest efforts be made to do so in co-operation with the Soviet Union, because it is necessary to secure its co-operation if we are to have new and effective agreements.

I mention that because part of my theme, as I think is becoming clear, is that, while we resist very strongly the policy of the Soviet Union as it has been demonstrated in Afghanistan, it is nevertheless our responsibility and our interest to seek out areas of co-operation with the Soviet Union, and it was this element which I found missing from the right hon. Lady's speech this afternoon. The nuclear area is the most obvious one in which the consequences of failure to agree—

I very much agree with what my right hon. Friend the Leader of the Opposition has just said. Does he agree that many of the measures proposed by the Prime Minister, and, indeed, the whole tenor of her speech, will create an unbridgeable gap between East and West, which should be the very last thing for us to intend?

Everybody will draw his own conclusions from the Prime Minister's speech, but I hope in my speech to make positive proposals about where our real interest lies. We are not out to punish people. We are out to secure peace in the world, but a peace in which we can all live in freedom and justice. That is the approach which I am making this afternoon.

Does the right hon. Gentleman agree that the Prime Minister gave a very statesmanlike lead this afternoon, and does he accept also that there is no country which the Soviet Union has annexed in which it has not stayed in command?

No, I would not agree with the hon. Gentleman about the right hon. Lady's speech. I am not accustomed to give encomiums to her, and I do not do so this afternoon. [HON. MEMBERS: "Why?"] I am sure that everybody will come to his own judgment. With some of the things that she said I found myself in total agreement, and others, I thought, were phrased in a way which would not create the area of understanding that I am coming to. [Interruption.] I do not wish to make too much of this, unless hon. Members want to fight a party battle, for I think it important that we should get as much agreement as we can in this area. That is why, unless I am dragged into it, I shall not venture into trying to find points of difference between us.

I do not agree with the hon. Member for Staffordshire, South-West (Mr. Cormack) that the Soviet Union does not withdraw from areas into which she goes. There have been a number of areas from which she has had to withdraw—Ghana in 1966, Egypt, Somalia—