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Commons Chamber

Volume 986: debated on Monday 16 June 1980

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House Of Commons

Monday 16 June 1980

The House met at half-past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Oral Answers To Questions

Trade

Floating Exchange Rates

1.

asked the Secretary of State for Trade how many individuals and how many organisations have made representations to him opposing floating exchange rates.

I can think of no recent representations that have concentrated on opposing floating exchange rates as such, although the problems caused by fluctuating exchange rates have been pointed out to Trade Ministers and officials on a number of occasions.

Does not my right hon. Friend agree that the British economy worked better with a fixed exchange rate than it has worked with floating exchange rates? In view of the uncertainty that floating exchange rates cause among those engaged in international trade, would he not agree that it would be a good idea for Britain to join the EMS at an early stage? That would at least remove the uncertainty in respect of European trade.

I agree with my hon. Friend that the fixed exchange rate system worked well in the immediate post-war period, but in current conditions, where there is a great divergence in performance and in rates of inflation, and in view of the exchange rate problems connected with the North Sea, I cannot agree that a return to a fixed exchange rate would create any greater certainty for British industry.

Has the Secretary of State received any representations from British industry about the crippling effect of the high rate of the pound? What does he propose to do about making British industry more competitive?

I receive representations on the subject most days, and I understand the problem that a high parity causes for British manufacturing industry.

If representations are made to the Secretary of State against the floating exchange rate, will he pay no attention to them? Does he not agree that the efficient British exporter is still incredibly successful in the export markets of the world?

It is a misconception to believe that fixed exchange rates would not fluctuate. They would fluctuate more violently than floating rates, because they would have to be changed.

Paper Products (Overseas Suppliers)

2.

asked the Secretary of State for Trade what recent representations he has received about unfair trading practices employed by overseas suppliers of paper products to the United Kingdom market.

Recent representations that have been made to my Department by the paper industry about unfair trading practices have included allegations of dumping of paper products and of price discrimination in the supply of pulp for paper making. My Department is following up those allegations.

Is my hon. Friend aware of the rapidly worsening situation facing the United Kingdom paper industry? Is he aware of the dubious practices and irresponsible increases of capacity that are now being generated by our Scandinavian and Common Market competitors? Does he believe that we can continue with our free and easy attitude towards imports? Is it not a fact that we are now becoming a soft touch? We should toughen up our attitude towards unfair trading practices.

I wish that my hon. friend would go to Brussels and retail that description of Britain there. It is not the way in which our Common Market partners see us. We fight our corner for British industry. We are aware of unfair practices and we are pursuing the matter. If my hon. Friend provides specific information, we shall take action.

Is it not clear that the Brussels institutions are bound to say that we are not a soft touch? They could not say anything else. They would be daft if they did so. Is it not clear that we must examine the matter more seriously than this Government or any other Government have done for a long time?

I would not wish to defend the hon. Gentleman's Government to him. I know that the hon. Gentleman himself finds that difficult. For our part, we are prepared to stand by our record and show that we take action when we have information on which we can act.

Car Imports

3.

asked the Secretary of State for Trade what percentages of United Kingdom markets for cars, sold at £3,000 or under and for four-wheel drive vehicles, were taken by imports in 1977, 1978 and 1979 to date, from Eastern Europe and Japan, respectively.

As my hon. Friend has the information about imports of four-wheel drive vehicles, in particular from Japan and Eastern Europe, will he not therefore understand the real threat that that poses? In the case of Eastern Europe, will he not consider some limitation? In the case of Japan, will he not make it plain that we require a longer-term agreement than the present annual agreement negotiated on an industry basis?

As my hon. Friend knows, the agreement on motor cars is negotiated between the SMMT and JAMA; the Government are not a party

NEW REGISTRATIONS OF LIGHT FOUR-WHEEL DRIVE VEHICLES, UNITED KINGDOM

Imported vehicles

Total

Japan

United States

Other Countries

*

Number

Percentage of total

Number

Percentage of total

Number

Percentage of total

New registrations Number

197765(1)1(—)56(1)6,890
1978679(10)175(3)40(1)6,616
19793,387(32)255(2)596(6)10,656
January-May :
1979979(23)113(3)153(4)4,295
19801,524(32)63(1)326(7)4,721

* Including vehicles imported from Comecon countries which cannot be separately distinguished.

Source: Society of Motor Manufacturers and Traders.

Information is not available on new registrations of cars sold at £3,000 or under.

to it. However, the arrangement appears to be working to the satisfaction of those who negotiated it and the Japanese honour the commitments that they have made under that agreement. I have noticed the increase in the market for four-wheel drive vehicles, but they are included in the overall restraint figures agreed.

Is not the solution for British manufacturers to produce more four-wheel drive vehicles and to reduce the current waiting list, which in London is about 15 months?

The hon. Gentleman has a strong point. One disturbing thing that I have come across in my travels overseas is that the British four-wheel drive vehicle is more and more in danger of being priced out of the market. We must produce them more efficiently and have them available for delivery and not price ourselves out of the market.

Are cars from Eastern Europe dumped in the same way as footwear is dumped here? If so, will my hon. Friend take action about it? Further, since the Japanese take unfair measures to prevent the export of United Kingdom footwear to Japan, will my hon. Friend ensure that we can take equally unfair measures to prevent the import of their wretched cars, which are, after all, not particularly attractive items anyhow?

I do not own a Japanese car, but a growing number of people seem to find them attractive and good value. We are not complacent about cars from the Eastern European bloc, but altogether they amounted in the first four months of this year to 1·6 per cent. of our market. That is less than it was in both 1979 and 1978.

Following is the information :

Manufactured Goods

4.

asked the Secretary of State for Trade if he is satisfied with the balance of trade in manufactured goods between the United Kingdom and the European Economic Community.

If present trends continue, will we not end up doing an increasing percentage of our total trade in manufactured goods with our partners in the EEC, while incurring an increasing deficit with them?

It depends on which figure one likes to take. Some of the trends in our trade in manufactures with the EEC are encouraging. In the first quarter of this year, our export-import ratios rather improved. The total value of exports to the EEC grew in 1979 at nearly four times the rate of our exports to the rest of the world. The total value of exports increased faster than our imports from the EEC. It depends on which sectors one takes.

Does not my right hon. Friend agree that the problem of the balance of trade with the EEC, as with the rest of the world, lies in improved productivity, fewer strikes, harder work and better deliveries?

Will not the right hon. Gentleman admit that the Common Market has had an absolutely disastrous effect on our trade and that the Government's recent sell-out on the budget contribution will do nothing at all to improve our trading position, and that it will probably continue to get worse, and even more crippling until we get out of the EEC altogether?

Our balance of trade with Europe has certainly deteriorated since our entry, but our balance of trade throughout the world has deteriorated since our entry. I therefore do not think that the hon. Member can draw any deductions of the kind he does. However, nine out of our 10 leading export markets are now in Europe. Europe is now fundamental to our trading activities.

Yes, but the trading imbalance continues to grow, does it not? At what level of imbalance—if there is such a level—would my right hon. Friend think it worth our detaching ourselves from the EEC?

My own view of the EEC goes much broader than the balance of trade. I believe that our position in the Community is fundamental to the preservation of peace and to our influence in the world. That is the reason why I would certainly not wish to withdraw.

Balance Of Payments

5.

asked the Secretary of State for Trade what is his latest estimate of the balance of payments surplus on Great Britain's trade with non OPEC countries for the financial year 1979–80; how this compares with the trade balance with European Economic Community member States; and if he will make a statement

In the year ended March 1980, the United Kingdom had a visible trade deficit of £2·2 billion with the European Community and a deficit of £900 million with the remaining non-oil exporting countries.

I am grateful to my right hon. Friend for that reply. Is he aware that the balance of payments surplus of manufactures with the developing world is very substantial, standing at about £2·1 billion? Does he recognise the importance of the developing world as a market for British manufactured goods? Will he take steps to ensure that his colleagues in the Cabinet know of the importance of that, in view of the recent report of the Brandt Commission?

The House will be debating the Brandt report this afternoon. I entirely agree that the interdependence of the developed and developing worlds is crucial for everybody's future security and welfare. My hon. Friend is also right to say that at the moment we have a favourable balance of over £2 billion in manufacturing trade with those countries.

Multi-Fibre Arrangement

6.

asked the Secretary of State for Trade if he will negotiate a strengthened multi-fibre arrangement in 1981.

Mr.

The Government accept that a new multi-fibre arrangement will be necessary when the current arrangement comes to an end in 1981. The exact form and terms of the successor arrangement will be a matter for negotiation, but the Government will, of course, have the interests, and views, of the United Kingdom clothing and textile industries very much in mind in those negotiations.

Does not my hon. Friend accept that if he gave a commitment to the House today that the multifibre arrangement would be strengthened, those firms which are teetering on the brink and considering closure would hang on for a better trading climate?

My hon. Friend knows as well as anyone in the House that the present arrangement has two-and-a-half years to run. The industry must know that over this next critical period, its basic protection under the bilaterals which end in 1981 will be the existing arrangement. Of course we note what my hon. Friend says about the need to strengthen the new arrangement. I hope that he has noted that I said that this is a matter for negotiation and that in that negotiation we shall have the best interests of the industry at heart.

But since it has been clearly demonstrated that the present MFA, despite its enormous complexity, has done nothing at all to assist the textile industry, should not we look for something a little more radical from the present Secretary of State, for whom we have a high regard, than increased protectionism?

The hon. Member will know that the present arrangement was negotiated by his Government and that it has succeeded in its original objective of maintaining the level of imports from developing countries at around 12 per cent. It is unfair to his right hon. and hon. Friends to say that that agreement is not working, because to a considerable extent it is achieving the desired result.

Does my hon. Friend agree that it is not what is in the MFA that is important, but what is not in it? Does he not agree that the gentlemen's agreement quotas which have been given to the Mediterranean associates have been breached dramatically, thus undermining the confidence of our textile industry? Will my hon. Friend do something about that to make the next MFA much more robust?

My hon. Friend seems to specialise in making strong, but—I am afraid—not wholly accurate statements. The truth is that we have a range of agreements which are monitored extremely carefully. They are not breached as if they did not exist. The sooner my hon. Friend joins me in telling the industry that the arrangements that we negotiated on its behalf are being enforced, the sooner we shall restore confidence to the industry.

Will the Minister of State appreciate that the British textile industry is probably in the most parlous state in its history? I understand that mills are closing at the rate of one per week. In those circumstances, will he undertake to consider a recession clause or some other device to tighten up the operation of the MFA?

I agree that the fundamental mistake which was made by the right hon. Gentleman's Government was in conceding a continuing increase of the share of the market regardless of whether the market expanded. That was a mistake made by his Government, with which we are having to live. We hope that we can learn from their mistake.

Origin Marking

7.

asked the Secretary of State for Trade if he intends to legislate to extend origin marking.

23.

asked the Secretary of State for Trade if he intends to legislate to extend origin marking.

I announced on 21 May that I had issued a consultative document on the extension of compulsory country of origin marking of certain groups of consumer goods. The groups selected cover clothing, textiles, footwear, electrical appliances and cutlery. Those are the groups where two consumer surveys have shown that the country of origin marking is needed for genuine consumer reasons. In the light of the responses received from those likely to be affected by this action, who have been asked to comment by 31 July, I intend to prepare draft orders under the Trade Descriptions Act with a view to bringing them before the House this autumn.

May I say that unlike the answer to the last supplementary question which I asked, which was a very inadequate and inaccurate answer, I am very grateful indeed to my right hon. Friend for that excellent answer?

Does my right hon. Friend agree that it is right that the British people should be able to buy British and when they go into a clothing shop should know that the item that they buy is British? Does she agree that at present the origin of a particular garment is very much in doubt? Does she further agree that many British retailers, such as C & A and British Home Stores, do no service to this country by, as it were, apparently offering British-made goods when the vast majority of those goods are manufactured abroad?

I am always grateful for my hon. Friend's gratitude. The main purpose of the steps that I have announced is to protect consumers so that consumers in the market place can exercise their choice on the basis of adequate information being given. As my hon. Friend will know, branded goods already have to show the country of origin.

Concerning cutlery and Sheffield in particular, will the Minister consider making sure that the words "Made in Sheffield" are stamped only on that cutlery which is wholly made in Sheffield and not on that which is partly brought in from abroad?

This is one of the aspects of the problem of origin marking which we are discussing during the present consultations.

I recognise that origin marking provides useful information to the consumer. However, does my right hon. Friend also agree that all the origin marking in the world is no substitute for good quality, at the right price, delivered at the right time?

Will the right hon. Lady give to my hon. Friend the Member for Penistone (Mr. McKay) an assurance that where, for instance, blanks are simply plated in Sheffield, they will be subject to origin marking? Secondly, will the legislation extend to advertisements in colour supplements, which are a very big source of gaining consumer orders? If the origin marking provision does not apply to supplements and advertisements, it may well defeat the object of the exercise.

First, I can give the hon. Gentleman the undertaking that he seeks, which is that the main manufacturing process will determine the country of origin. As I have said, this is the subject of consultation.

Concerning advertisements and mail order catalogues, we recognise that there are some difficulties because these are outside the Trade Descriptions Act. However, if we become convinced that origin marking in advertisements and mail order catalogues is necessary in the consumer interest, we have no doubt that these difficulties will be overcome.

Product Liability

8.

asked the Secretary of State for Trade whether he will ensure that the additional cost to the consumer arising from new legislation to cover the provisions of the European Economic Community directive on liability for defective products will be fully explored before any conclusions are reached concerning the United Kingdom position on this directive.

The Government are carefully examining all aspects of the draft directive and will take account of all the implications in the negotiations with the Community.

Is my right hon. Friend aware of the varying estimates put upon the cost of this legislation, ranging from £200 million to £900 million? Does she agree that this will be quite unsupport-able both by consumers and by industry?

My hon. Friend is right to point out that the costs of this measure would be likely to be borne by consumers rather than by the companies concerned. I am certain that some estimates of the likely insurance costs have been greatly exaggerated. Insurance costs will vary between industry and industry and between company and company within the same industry, according to the risks involved. I understand, however, that the British insurance industry is confident that it can provide cover and that the cost of insurance, even for the more hazardous products, is not likely to have any significant effect on production costs.

Is the right hon. Lady aware that for the consumer who gets passed from retailer to wholesaler to manufacturer, with no one being prepared to accept the buck when a product has been bought, the implementation of the product liability directive would be the most major single advance that we could make at present? Will she—as I think she indicated just now—reject the wholly bogus arguments that are being put forward, that in some way this is so damaging that we cannot do it? Is it something that we must do.

As the hon. Gentleman will know, consumers' rights are now purely with the retailer. This should be made clear to them at every opportunity. The EEC proposed draft directive would put some of the responsibility, but not all of it, on to manufacturers.

In reply to the final part of the hon. Gentleman's question, I always reject bogus arguments.

In view of the potentially serious implications for all of British industry and commerce in this matter, will my right hon. Friend consider publishing the consultations of the Council of Ministers when it has considered this matter, so that there can be further detailed consultation? Will she assure us that there will not be any blind implementation of the EEC directive?

As my hon. Friend will be aware, the version currently being considered by the Council of Ministers is a revised draft. In view of the number of representations received, both from institutions in this country and from hon. hon. Members on both sides of the House, the Government must reserve their position until all the implications of the full effects of this revised draft are completely clear.

Bearing in mind that product liability has the backing of the Law Commission and of the Pearson Commission, following the thalidomide tragedy, will the right hon. Lady make a declaration of principle in favour of product liability, recognising, of course, that there are detailed problems to be sorted out?

I think that the hon. Gentleman already knows my views on this matter. Anything of benefit to consumers and which does not place a disproportionate burden on industry has my backing. What is important is to see that that balance is maintained.

Manufactured Goods (Imports And Exports)

9.

asked the Secretary of State for Trade what further representations he has received concerning the level of United Kingdom imports and exports of manufactured goods.

Has the right hon. Gentleman read the Bank of International Settlements' annual report, which is openly contemptuous of the Government's monetary policy and which underlines their attitude to the exchange rate of the pound, to the detriment of our exporters and to the advantage of our importers? Will he now change his priorities to make sure that British manufacturing industry is accorded the importance that it deserves?

I would not think of the BIS report as being my choice for bedside reading, and I have not read it. It is not alone in disagreeing with the Government's policies. But, in due course, I am confident that the BIS will realise the wisdom of the Government's policies and will then change its tune.

Is my right hon. Friend aware of the damage now being done by barter arrangements, both by individual firms and those imposed by Comecon countries, on orderly marketing and industry-to-industry arrangements?

I would much prefer that trade was conducted by settlement with money rather than by barter. However, if we were to opt out of the barter arrangement, I think that we would lose a great deal of trade. We are particularly well equipped in this country to handle it—probably better equipped to handle barter transactions than almost any other country.

Will the right hon. Gentleman re-examine the plight of the textile industry with regard to its need to export? Will he consider the bitter conclusions of my constituents employed by Courtaulds in Flint—that under the present Government it is becoming easier to import than to export?

I think that everyone in the House is deeply concerned about the present problems of the textile industry. I certainly am concerned. I understand that many of these firms have the most admirable, loyal, hard-working employees. They are very unhappy circumstances that we now face. But I remind the hon. Gentleman that the textile industry exports over £2 billion worth of textiles every year. It is a successful industry, although parts of it are at present in great difficulty.

Synthetic Fibre Carpets

10.

asked the Secretary of State for Trade what has been the increase in imports of United States synthetic fibre carpets since the decision by the European Economic Community Commission not to authorise a quota on such imports.

The Commission's decision was based on statistics for 1979. Imports of man-made fibre tufted carpets amounted to 2·3 million square metres in the first quarter of 1980, compared with 1·7 million square metres in the last quarter of 1979.

Does not my hon. Friend accept that the percentage of our market taken by North American imports broadly doubled in the first four months of this year compared with the whole of last year, that United States production is based on artificially low oil and feed stock prices and that the EEC Commission has agreed only to keep the matter under surveillance? Does not my hon. Friend agree that the Government would be fully justified if they were to go back to the Commission and claim that our industry was suffering a serious injury?

As my hon. Friend knows, we applied to the Commission for quotas on carpets. The Commission turned down our application. It was argued that import penetration on carpets had reached about 10 per cent., whereas it had reached about 25 per cent. on the two products to which it gave approval for quotas. I am sorry to tell my hon. Friend that there has been very little change in that percentage since the date of our original application. At present, I do not think that the Commission will accept our argument for import quotas.

Why did the Minister accept the Commission's decision, when it will clearly harm industry in the United Kingdom? Does not he realise that unemployment in the carpet industry is increasing and that it is having a knock-on effect on industries such as the jute industry, causing the closure of factories in my constituency?

When we applied to the Commission, we put those arguments strongly. We need the Commission's cooperation if we are to have quotas that will stick. Under free circulation, goods could come in from other parts of the Community. That is why it is essential to have the Commission's co-operation in fixing such quotas.

Do not my hon. Friend and the Commission realise that the protection given to yarn manufacturers will be worthless if carpet manufacturers are not protected? Does he not accept that yarn makers sell their protected yarn only to carpet manufacturers and that every carpet manufacturer is going out of business?

My hon. and learned Friend has made a good point. We strongly made that same point at length to the Commission. However, as the Commission realises the importance of acting only within the rules of world trade, and as a level of penetration of 10 per cent. is not thought to amount to serious damage, it refused to accept our arguments.

Does the Minister realise that the problem will get worse? Is it not clear that the United States Congress will do nothing about the dual energy pricing gap and that there is no chance of anything happening until after the presidential election? Instead of lamely accepting the Commission's opinion, is it not time that the Government challenged it, and argued the case for a very important British interest?

The right hon. Gentleman is a very impressive armchair negotiator. However, he did not have much to shout about when he did the job. We pressed the case very strongly. According to the rules of world trade, the case for carpets does not stand up at present.

Department Stores (Consumer Protection)

12.

asked the Secretary of State for Trade if he will consider introducing legislation to provide for a system of classification of large department stores according to the extent to which their trading practices afford protection to the consumer.

No, Sir. I agree that retailers should be strongly encouraged to adopt trading practices which protect the consumer. If, however, any system of classification is to be introduced—which would be difficult—it should be operated by voluntary bodies in the same way as the classification of hotels and garages.

I am grateful to my right hon. Friend for that reply. Is she aware that certain large stores automatically prosecute alleged shop-lifters, without making any effort to satisfy themselves that there was any intention to steal, and that that places respectable people—who may experience a moment of absent-mindedness or stress—in real danger? Should not such stores—notably the Army and Navy—be obliged to display a notice over every entrance, saying "Shopping at this store can be very dangerous to your health?"

The concern expressed by my hon. Friend is fairly widespread. However, this is a matter for my right hon. Friend the Home Secretary.

Will the Minister look at another aspect of the activities of large stores? Will not she consider the impact on imports into the United Kingdom that result from the range of their buying and marketing powers? Is it not a fact that, compared with France or Germany, there are so few sales outlets within the United Kingdom that it makes for easy import penetration of our markets?

Retailers are in the business of providing consumers with the widest possible choice at the lowest possible price, and at the best possible quality. That is their only role.

Reverting to the specific question asked by my hon. Friend the Member for Flint, West (Sir A. Meyer), does not my right hon. Friend agree that the trading practices of stores—particularly self-service stores—have directly resulted in a massive increase in shop-lifting? Does she not accept that there is no shop-lifting in banks and that if a store insists on inviting people to help themselves, it should not be surprised if they do so? Is she further aware that this practice not only causes expense to taxpayers and to the courts but a great deal of human misery, as numerous mistakes and wrongful prosecutions are made? Will she hold discussions with the Home Office and the Attorney-General to ensure that something is done?

Not for the first time, my hon. Friend has expressed a concern of which I am well aware. He will know of the considerable cost that faces the retail trade as a result of shoplifting. I do not think that this is a matter that I can properly discuss with the Lord Chancellor or the Attorney-General.

Christmas Cards (Russian Imports)

13.

asked the Secretary of State for Trade if he will use his powers under the Trade Descriptions Act to require that Russian Christmas cards be marked with their country of origin when being offered for sale.

Inquiries by my Department suggest that this trade is coming to an end. But I now put the USSR on notice that if the problem should persist I shall not hesitate to use the powers of the 1968 Act.

Will my hon. Friend accept that I welcome that statement and hope that it will prevent a country that suppresses religion from benefiting commercially from it? On reflection, does not my hon. Friend agree—particularly with reference to previous questions—that we should enact legislation to mark all goods with the country of origin and thus stop the evil practice of a disreputable and agnostic country?

I note what my hon. Friend has said. My right hon. Friend is about to make a statement on that question.

Should not the legislation apply with equal force to Easter cards as Christmas and Easter are both religious festivals in Britain? Is not the consumer entitled to know the origin of such cards—not only those from the Soviet Union—so that he may exercise any conscientious objections he may have about the persecution of religion?

I agree with my hon. Friend. I hope that he noticed the speech made last week by my hon. Friend the Member for Eye (Mr. Gummer). He and the hon. Member for Stalybridge and Hyde (Mr. Pendry), have made that point, together with my hon. Friend.

Air Passenger Safety

14.

asked the Secretary of State for Trade if he remains satisfied with current provisions for air passenger safety.

The safety of operation of British passenger-carrying aircraft is the responsibility of the Civil Aviation Authority and I am satisfied with the provisions by which the CAA is able to meet this responsibility and with the way the authority carries out its obligations in this regard. In respect of the air safety of foreign aircraft, this is a matter for the State of registry concerned, in accordance with the ICAO convention.

While I welcome that reply, may I ask whether my hon. Friend saw the statement that the CAA made last week to the effect that much of Britain's air traffic radar is as much as 25 years old, and that in safety terms it is incompatible with the future needs of London airport? What discussions has my hon. Friend had with the CAA about replacing that equipment as soon as possible? I accept that in May an order was placed with a Dutch company for £9·7 million of radar equipment.

I must emphasise the confidence that we have in the way in which the Civil Aviation Authority discharges its responsibilities. I have no doubt that the matters that my hon. Friend has raised will be carefully considered by the authority and that we shall take part in that consideration.

Carpets And Wool Textiles

15.

asked the Secretary of State for Trade what were the changes in the volume of exports and imports of carpets and of wool textiles for the latest 12-month period.

Based on weight, it is estimated that, in the year ended April 1980, exports of carpets decreased by 17 per cent. and imports increased by 38 per cent., compared with the previous 12 months. On the same basis, exports of wool textiles rose by 2 per cent. and imports fell by 2 per cent.

Does the Minister recognise the serious consequences that these disastrous trade figures have for the job prospects of textile workers in West Yorkshire? In view of the fall in output of the woollen industry by 6½ per cent. last year, and the 9½ per cent. fall in the output of the carpet industry, what specific measures will the Government take to help these vital industries to compete in the battle for jobs and markets? Will the Government ensure that the textile industry faces a future instead of a rapidly impending crisis?

There is a range of agreements under the multi-fibre arrangement designed to give a measure of protection to these industries. May I put some other figures to the hon. Member? Although, last year, import penetration was 21 per cent., we exported 23 per cent. of everything that was produced on the carpet side. Although we imported 23 per cent. of wool textiles, we exported 34 per cent. Therefore, we have a very strong interest in making arrangements which will work within the rules of world trade, rather than breaking those rules. Both these industries are valuable exporters as well.

While recognising that the Government have taken some action, albeit inadequate, against the United States to assist the British carpet industry, may I emphasise that the quotas that have been imposed against the United States are being breached by free circulation to other members of the EEC? I see the Secretary of State shaking his head, but it is true. What action are the Government taking to ensure that free circulation does not take place in accordance with the assurance given to the Government by the Commission?

Since we took office, we have under article 115 taken action about once every fortnight to prevent quotas from being undermined by free circulation. We watch the quotas very carefully and we monitor them. I have been in touch with the Commission already about the new rules under article 115 to make sure that they do not prevent us from taking action. I promise my hon. Friend that on a daily basis, we are taking action to prevent the quotas from being undermined.

Is the Minister aware that since the Tories came to office they have presided over disaster areas in wool textiles, carpets, cars, shoes, steel and everything else on the manufacturing side? In that same period they have encouraged the big banks to make £1,500 million in profits. Also, Ladbroke's has announced a 71 per cent. increase in its profits and Pleasurama Ltd. has just announced a dividend increase of 141 per cent.

I know that the hon. Member lives in a world in which everything that is bad began after 3 May last year. Very few people in this House believe that, and no one outside cares a fig for his views.

Footwear Imports

16.

asked the Secretary of State for Trade what is the current state of negotiations over quota imports of footwear from Eastern Europe.

Poland, Czechoslovakia and Romania have been voluntarily restraining their exports of leather footwear to the United Kingdom. We are pressing for the continuation of these restraints. Imports of rubber footwear are subject to quantitative restriction.

Is my hon. Friend aware that the home market has decreased by 10 per cent. this year, and that in Northamptonshire alone more than 70 out of 110 firms are now on short time? In these circumstances will he give an assurance that there will be no increase in the quantities coming from Eastern Europe in the current year? Will he make strong representations for a decrease in the light of the reduced home market?

As my hon. Friend knows, because we have regular consultations on these matters, the imports from Eastern Europe, although they cause trouble, amount to only 2½ per cent. of the United Kingdom market. We agree that there is no scope for an increase in those quotas and that is the point that we are arguing with the Commission.

Does my hon. Friend agree that that 2½ per cent. is 2½ per cent. of the market before the fall and that it has now declined? Is it not true that the shoes that come in from Eastern Europe are bought in at less than the cost of production, and are therefore dumped? Will my hon. Friend say whether he has the power to stop any further imports of shoes from Eastern Europe? If so, will he do so; and, if he will not do so, will he say what other industries he intends to sustain while he continues to sacrifice the footwear industry in this country?

The country makes about £1,200 million in exports to Eastern Europe. The House and the Government must decide whether they wish to continue that trade or to give it up. In my view, many jobs in British industry depend on those exports. The problem for the Government is to strike a balance, and we do that by ensuring that there are restraints on a whole range of products from Eastern Europe.

Manufacturing Industry (Exports)

17.

asked the Secretary of State for Trade if he is satisfied with the export performance of Great Britain's manufacturing industry.

Although export volume has held up very well, in spite of the lack of buoyancy in world trade, it is not part of my job to be satisfied or complacent.

Has not British price competitiveness dropped alarmingly against that of the Japanese, Americans and West Germans? Is not current Government policy of a strong pound and high interest rates working against British exporters? Will the Secretary of State agree that it is likely that this winter a major British company will go bankrupt unless policy changes are made?

Our competitiveness has been seriously eroded in the past two years, and the movements in world currencies, which have meant a strengthening of sterling, caused mainly by the security of North Sea oil, have produced that result. However, our export volume has stayed remarkably stable. It has held up very well indeed at a time when there is a lack of buoyancy in world trade.

In reiterating what the Minister said, should we not remind the British public and the Opposition that our export achievements as a nation have been magnificent, and that we have been unduly modest about them?

I agree entirely. There is no other major nation that is exporting as much as 30 per cent. of its gross domestic product.

Will the Secretary of State now admit that if interest rates continue to remain high, the pound stays overvalued, the rate of inflation remains high internationally, and industrial investment continues to decline, there will be no way in which British firms can restore their competitiveness in the next two years?

The best way to restore the competitiveness of British industry is for industry to increase its productivity and ensure that wages do not continue to outstrip production. Generally, industry must make products that the world wants to buy. There is no collection of policies that the Government could follow that would make these factors any less important.

Is my right hon. Friend aware that there has been much criticism of the Export Credits Guarantee Department over its operations in Zimbabwe? It appears that the ECGD does not give as advantageous terms to British exporters as those received by competing countries such as France and Germany.

If there are any complaints about the ECGD's facilities for Zimbabwe I hope that my hon. Friend will bring them to my attention. Generally, the ECGD has the highest reputation among British industry and throughout the world. If there are any particular problems, I hope he will let me know them.

Central Electricity Generating Board (Monopolies And Mergers Commission)

18.

asked the Secretary of State for Trade what are the terms of reference in the case of the reference of the Central Electricity Generating Board to the Monopolies and Mergers Commission under section 11 of the Competition Act 1980.

I announced the formal terms of reference for this inquiry on 3 June and have placed a copy in the Library of the House. The investigation will cover the efficiency and costs of the board in general, but the commission has been invited to pay particular attention to five areas which I believe deserve special scrutiny. They include internal cost control, purchasing policy, methods of stock control, plant maintenance programmes and planning and appraisal of new investments.

Will cost control cover possible cost differences in the price of imported coal? If so, will employment consequences for this country be taken into account?

I feel sure that the Monopolies and Mergers Commission will want to pay attention to every aspect of costs, including the availability of cheaper coal elsewhere, if that exists. The cost of electricity supplied in bulk to area boards by the CEGB is a large element in the final bill to the consumer, which has risen substantially in recent years. It is, therefore, important to establish that everything possible is being done by the CEGB to absorb costs and increase efficiency in order to keep prices as low as possible.

Order. I shall call the hon. Member for Derby, North (Mr. Whitehead) to ask a supplementary question. His question is next on the Order Paper and is almost identical.

Without having the benefit of seeing the main answer, may I ask the Minister to say why the public sector appears to be being treated more harshly in these referrals than the private sector? When will orders be drafted under the 1980 Act to allow restrictive practices in the private sector to be referred to the Monopolies and Mergers Commission?

Overseas Development

British Council

46.

asked the Lord Privy Seal if he is satisfied that he is getting value for money for the contribution made by the Overseas Development Administration to the British Council.

Yes, Sir. I believe that we are.

Will the Minister accept the thanks of the Cowley Hill school, the Hard Lane section of the famous Cowley school, St. Helens, which has turned out some of the finest pupils and academics in the world? Is he aware that, despite that gratitude, the school regrets that the officials and staff of the British Council responsible for dealing with correspondence and telephone calls have failed to even acknowledge communications?

Is my hon. Friend aware of the widespread acceptance of the outstanding work done by the British Council over many years? Will he do everything possible to ensure that it is able to continue.

Zimbabwe

47.

asked the Lord Privy Seal if he will make a statement on his discussions with Prime Minister Mugabe during his visit to London on 9 May which concerned the aid needs of Zim babwe.

In the discussions which Mr. Mugabe had with the Prime Minister on 9 May he expressed his gratitude for the advisory teams that we had already supplied and urged us to provide generous help in following up their recommendations, particularly as regards the public service. In addition, he sought our assistance in persuading other aid donors to make generous allocations for Zimbabwe. We undertook to do all that we could.

Did the Minister discuss with President Mugabe the report that, unless aid is forthcoming by the end of the year, people in some rural areas of Zimbabwe will suffer severe starvation? What additional aid is being considered in that eventuality?

I did not have direct discussions with Mr. Mugabe, but rural development has been discussed. The ODA mission that returned this weekend has been discussing just that subject with the Zimbabwe Government.

What is the latest status of the Zimbabwe debt to the United Kingdom Government? Can my hon. Friend confirm that the £75 million aid that he announced in the House some weeks ago is to be grant aid and not related to the repayment of that debt?

The first part of my hon. Friend's question is for my right hon. and learned Friend the Chancellor of the Exchequer. The negotiations that have taken place with the Zimbabwe Government are ad referendum to the Zimbabwe Government. Therefore it would be discourteous of me to answer that question.

Will the Minister accept that rescheduling of debts, terms of grants, loans and consideration of debts are for him and not the Chancellor of the Exchequer?

With regard to the £7 million emergency aid, which is part of the £75 million, how much has been spent, how much is planned to be spent and how far will it meet Zimbabwe's emergency food needs?

The answer to the first part of the right hon. Lady's question is "No." In the discussions that have just taken place I believe that agreement was reached on how to spend that £7 million. We are ready to disburse that sum when Zimbabwe is ready to spend it.

That will be up to the Zimbabwe Government and will be contained in their agreement with us on how to spend the emergency aid.

United Nations (Contributions)

48.

asked the Lord Privy Seal what were the annual contributions made by Her Majesty's Government to the United Nations international children's emergency fund and the United National refugee programme, respectively, in the years 1974 to 1979; and what contribution is to be made in the current year.

Subject to parliamentary approval, in 1980 Her Majesty's Government will contribute £4·3 million and £5 million to the regular programmes of the United Nations international children's emergency fund and the Office of the United Nations High Commissioner for Refugees respectively.

Tables of contributions in the years 1974 to 1979, together with those to special appears and special projects of the two agencies, will, with permission, be published in the Official Report.

Bearing in mind the extreme poverty and social distress under which millions of people are living is the Minister satisfied that he is bringing to bear on that problem the vision and idealism that it deserves if we are to honour our obligations and commitments? Will the hon. Gentleman accept that it is a great shame to talk of cuts in the allocation to UNICEF, for instance? Will he take steps to increase the allocations so that we, may be proud to be British and continue our commitment to deprived people throughout the world?

It is not for me to say whether I have the idealism. That is for others. With regard to our UNICEF contribution, 1979 was an exceptional year, and our contribution was in support of the international year of the child, organised by UNICEF. In 1978, we gave £4·5 million, and the figure for 1980 is £4·3 million. That is a slight reduction, but it is not a figure of which we need be ashamed. As a nation we should be proud of what we do for developing countries.

Will my hon. Friend press the United Nations to give more support to Thailand, which at present has a particular problem with Cambodian refugees?

Certainly I shall. However, we are already giving considerable aid to Thailand and Cambodia to help with the refugee problem.

Following is the information :

CONTRIBUTIONS BY HER MAJESTY'S GOVERNMENT TO UNICEF

Regular programme

Special appeals and specific projects

£ million£ million
19741·3000·520
19752·0001·025
19762·300Nil
19773·3000·790
19784·5001·192
19795·8001·600

CONTRIBUTIONS BY HER MAJESTY'S GOVERNMENT TO UNHCR

Reqular programme

Special appeals

£ million£ million
19740·360·53
19750·331·14
19760·400·35
19770·860·25
19782·344·83*
19796·001·63*

* Unaudited.

The European Community also makes significant contribution to UNHCR's regular programme and special appeals, parts of which are provided from United Kingdom subscriptions to Community resources.

European Community (Aid To Non-Associates)

50.

asked the Lord Privy Seal what British proposals have been put forward to the development council of the European Economic Community concerning aid to non-associates.

We have supported proposals for a total programme of 130 million units of account of aid to non-associates in 1980, and we have put forward for consideration projects in Bolivia, Costa Rica, Yemen Arab Republic, Sri Lanka and Bangladesh.

Will the Minister accept that I consider it right steadily to increase the sum of approximately £90 million over the coming years? Is the Minister aware that the Commission is looking for projects to keep in hand and use when appropriate? Can the hon. Gentleman assure us that we shall be submitting projects to the Commission, and that such projects will be made known to the House or placed in the Library?

Does Zimbabwe feature in any project that we have submitted? If not, why not, bearing in mind that, for the first time in its recent history, Zimbabwe is having to import maize and considerable starvation is likely to occur in rural areas?

Zimbabwe has applied for membership under the Lome convention and it will come in under that, and not under the non-associates, which is the subject of the question.

On a point of order, Mr. Speaker. I was hoping that the Secretary of State for Trade might be able to answer question No. 22, which was not reached. I made a request to the right hon. Gentleman to deal with that question. Would it be in order for him to answer it now?

Further to that point of order, Mr. Speaker. I, too, was hoping that we would reach question No. 22, but we just failed to do so. The right hon. Gentleman wrote a public letter to me and I have recently released a public letter to him replying to his remarks. I am sure that he will find an opportunity of raising the matter again in the House and I shall be pleased to have an opportunity to respond at the appropriate moment.

Further to that point of order, Mr. Speaker. Would it not be in order for the Secretary of State to answer the question now?

If a Minister wishes to answer a question at the end of Question Time, it is customary for me to have notice before Question Time. There are two other statements to be made shortly.

Questions To Ministers

On a point of order, Mr. Speaker. I have given you and the Minister concerned notice of the point that I wish to raise. You will recall, Mr. Speaker, that on Wednesday last week I referred to the fact that a question that I had tabled on the way in which the rebate on our EEC contributions was to be repaid was transferred from the Lord Privy Seal to the Chancellor of the Exchequer six days after it had been tabled.

When I raised the matter with you, Mr. Speaker, you ruled that that transfer was in breach of advice from the Select Committee on procedure that only two days should elapse before a question was transferred, and you said that it was discourteous and unfair to hon. Members for the Lord Privy Seal to have acted in the way that he did.

In the light of your ruling, Mr. Speaker, I wrote on Thursday to the Lord Privy Seal asking him to take back the question, in order to restore me to the position that I would have been in had he not transferred the question. The right hon. Gentleman replied today, but has not dealt specifically with that point.

I am aware that you, Mr. Speaker, cannot determine which Minister should answer a question, but I submit that when a Minister transfers a question after the two days that the Procedure Committee recommended, and in clear breach of that Committee report, he should be under an obligation to restore the hon. Member concerned to the position in which he would have been had the Minister not acted in breach of the transfer rules.

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons
(Mr. Norman St. John-Stevas)

Further to that point of order, Mr. Speaker. With your agreement, I can inform the House and the hon. Member for Blackburn (Mr. Straw) that his question will be answered at 3.30 p.m. on Wednesday.

I am most grateful to you, Mr. Speaker, for having, exceptionally, agreed to this procedure. I am also grateful to my right hon. and learned Friend the Chancellor of the Exchequer, who has responded so helpfully and rightly in this matter. I hope that in view of the action that has been taken, the hon. Member for Blackburn will feel that his rights have been respected.

The point of order gives me the opportunity to tell the House that reports of the exchange last week indicated that I had hit the Lord Privy Seal on the head with a cleaver. I want to make clear that I hit him with a feather duster, and no more.

European Council (Venice Meeting)

With permission, Mr. Speaker, I should like to make a statement on the meeting of the European Council which my noble Friend the Foreign and Commonwealth Secretary, and I attended in Venice on 12 and 13 June. The summary of the proceedings issued by the Italian Presidency has been placed in the Library of the House.

The Venice meeting was a series of general discussions between the nine Heads of Government about the fundamental problems that we all face within the Community and outside. We had in mind the need to prepare a common European view for the economic summit that is to be held next Sunday and Monday.

All the nations of the European Community have similiar problems of inflation and unemployment and a number now have an adverse balance of payments. We were agreed that the major short-term objective must be to contain inflation by means of appropriate monetary and fiscal policies. We were concerned that the 100 per cent. increase in the price of oil over the past year would lead to a recession in world trade. We were therefore disturbed at the pressure for further oil price increases at the recent Algiers meeting of OPEC. Such an increase can only make worse the economic problems of the industrialised countries and give rise to intolerable burdens for the developing countries. The European Community remains willing to enter into a dialogue with the oil producers.

Having noted the budgetary settlement reached by the Council of Ministers at the end of May, the Heads of Government had a useful, but necessarily preliminary, discussion of the need to put in hand and carry through urgently a review of the Community's financial position. We also took the opportunity to have a first, informal, discussion about the choice of the next President of the Commission.

The European Council issued three declarations, on the Lebanon, on Afghanistan, and on the Middle East. With permission, all three texts will be circulated in the Official Report. Those on the Lebanon and on Afghanistan reaffirmed the concern felt by the Heads of Government about the position in the two countries.

The declaration on the Middle East restates the two principles that have for many years been the basis of the European position : the right of all the States in the region, including Israel, to existence and security; and justice for all the peoples, which implies the recognition of the legitimate rights of the Palestinian people. A comprehensive settlement requires that all the parties concerned should be bound by these principles.

Beyond that, the European Council decided to make contact with all the parties in order to ascertain their position
"with respect to the principles set out in this declaration, and in the light of the result of this consultation process to determine the form which an initiative on their part"—
that is on the part of the Nine—
"might take."
The diplomatic activity that the Nine will undertake over the next few months is intended to be complementary to the Camp David process on which the United States, Egypt and Israel are still engaged. We hope and believe that in this way the Nine can contribute to the work that will have to be done to prepare for a peace settlement in the Middle East.

On the general economic situation and the summit that is to be held on Sunday and Monday, the right hon. Lady's statement is extremely thin and inadequate. Are we to take it that the European Community is going to the economic summit with the view that, because of the increase in oil prices, deflation must be accepted because growth is to be put to one side; the debt problems of the Third world—mounting problems, which are seriously affecting its development—are not to be considered and that action is not to be taken on them; and that unemployment in the Western world as a whole cannot be overcome? If so, that is a grave departure from the attitude that has been taken on these questions at previous summits, when positive policies have been put forward, in some instances very successfully.

It seems from what the right hon. Lady said that all that the Community is going to the summit for is to complain that oil prices have been increased and that therefore there is nothing that it can do about those problems. That is totally inadequate.

Secondly, the President's statement is apposite to our position at home. It refers to the disturbing level of unemployment among young people and calls—this is where it is apposite to the Prime Minister's policies—for short-term measures in the context of an active employment policy. How does the right hon. Lady propose to reconcile her signature to that statement with her attitude and policy on the cuts in the Manpower Services Commission finance, which the MSC says will render it incapable of carrying out its responsibilities? As the right hon. Lady put her name to the text, when does she propose to bring before the House measures that will help to overcome the problem of unemployment in this country?

Thirdly, there is a series of laudable statements to which we can all say "Amen" but which do not really carry us very much further on the financial position of the Community and other things. The only real issue on which there is any precision and any sharp edge is the Middle East. It would have been very much better if the Council had been much less sharp. All that it has done by its statement on the Middle East is to encourage Mr. Begin in his unwise and illegal policy on the settlements, to give a boost to the PLO, which said that it would destroy Israel, and to embarrass the United States in its efforts. If that is the sort of initiative to which the statesmen of Europe are committing themselves, I say that it would be far better if they kept quiet.

The right hon. Lady referred to the two principles that have been the basis of the European position. It seems that a third principle has been introduced, namely, that the Palestinian people must be placed in a position to exercise fully their right to self-determination. That is a change of British policy. Does it mean that there is to be in the right hon. Lady's policy a new independent State in the Middle East, which under the right of self-determination can be fully armed on the borders of Israel, Syria and Jordan? [HON. MEMBERS : "Why not?"] Is that the policy of the British Government? If that is so, I can only say to the right hon. Lady and to anybody who says "Why not?", that they are creating another powder keg in the Middle East. The sooner that that is recognised the better.

What is the right hon. Lady's policy on self-determination and the creation of another independent self-armed State? Of course there are rights for the Palestinian people, but what has been happening, and what has Europe fallen for? Europe's motives are suspect as long as it is so concerned about oil. Both protagonists are always trying to line up allies. The PLO has won a propaganda victory by lining up the Europeans to give it a boost the week after it said that it was going to destroy Israel. That cannot contribute to peace in the Middle East. It would have been far better if Europe had said that it would support the discussions that are now to take place between King Hussein of Jordan and President Carter and had tried to involve the other Arab States in those talks rather than going out with new principles about self-determination that will only add to the difficulties in the Middle East.

First, with regard to the right hon. Gentleman's question on the economy, instead of having detailed discussions on particular aspects we spent several hours having a general discussion on all of the things that I have included. We discussed inflation. Of course people were concerned about unemployment and adverse balance of payments. Those topics and the energy debate were wrapped up into one.

Some of the right hon. Gentleman's former colleagues, my present colleagues, made the point vigorously that these summit meetings were never meant to end in detailed statements on a number of issues. They were meant, first, to be general discussions in a quite private atmosphere between Heads of Government as they met. It was some time before the habit arose of issuing very detailed communiqués.

The right hon. Gentleman will have observed, if he has read the presidential statement, that each and every one of us did not put our signature to the presidential statement. It states that
"It was not discussed in detail by the European Council itself except section 7 on energy."
It was a general presidential statement. The only parts that were discussed in detail were the statement on energy and the three declarations on the Lebanon, Afghanistan and the Middle East.

Most of my colleagues thought that this had been an unusually successful meeting and that we had spent a lot of time on genuine and general discussion on the problems without trying to come to artificial communiqué results on many things that would repeat previous communiqué statements. Of course we are concerned about the problems of unemployment, inflation and adverse balance of payments, We cannot trot out immediate and quick replies.

The right hon. Gentleman went on to express a little disappointment about the financial position in the Community. We confirmed the budget settlement that had previously been reached. It will, as the right hon. Gentleman knows, take quite a long time to get a new structural change on the budget. The earliest that it can be expected is July next year, and most of us think that that will be a little bit soon, bearing in mind that the Commission changes and that there will be a number of other things happening between now and then.

The right hon. Gentleman reserved his main criticism for the statement on the Middle East. I remind him that in the declaration of the European Council in June 1977, to which he, I believe, put his signature, the Council stated that
"The Nine have affirmed their belief that a solution to the conflict in the Middle East will be possible only if the legitimate right of the Palestinian people to give effective expression to their national identity is translated into fact, which would take into account the need for a homeland for the Palestinian people."
No one said to the right hon. Gentleman "Precisely what do you mean by a homeland?" because we knew that there would be no quick answer to that point. However, he and all other Heads of Government have accepted for a very long time at the European Council that if one people expects to exist behind secure boundaries it cannot deny that right to another people. What one asks for oneself one must be prepared to accord to others. That is exactly what we are saying.

We have put into the communiqué for the first time the phrase "self-determination". I accept that. What was previously in a declaration given to the United Nations by the Irish Foreign Minister on behalf of the Nine was a slightly different wording. With respect, it did not mean anything very different. It said :
"The Palestinian people are entitled within the framework set by a peace settlement to exercise their right to determine their own future as a people."
With respect, that is not really very different from self-determination. We have also said very firmly that it is in the interest of putting an end to violence that the Nine consider that
"only the renunciation of force or the threatened use of force by all parties can create a climate of confidence in the area."
We have also said that the two principles—that each accepts the right of the other to live in peace behind secure boundaries—are binding on all parties to the negotiations. I thought that in the communiqué we had covered just about everything that one expects to cover if one is expecting to accord to others the very things that one demands for oneself in living in peace behind secure boundaries.

Finally, in response to what the right hon. Gentleman said, we made it clear that we believe in the future of the Camp David process and regard this as supplementary to it. I believe that that is a true assessment of the situation.

First, the right hon. Lady correctly says that she did not put her signature to the document. Does she agree with the summary by the Presidency of the proceedings of the European Council—that is what its heading is—which states that there is an

"increasingly disturbing employment situation, particularly as regards young people, there was reaffirmation of the priority need…for short-term structural measures in the context of an active employment policy"?
Does she agree with that? If she agrees with it, is she going to bring forward measures that will ensure that there is an active employment policy?

Secondly, on the question of the Middle East, the right hon. Lady knows as well as I do how words are studied in that area. The European Council has gone further than has been gone before. The 1977 statement, to which I adhere, took place before Camp David. I do not make much of that. However, it was an important step on the way.

It is clear that there is an evolving situation in which the position of the Palestinians has to be taken carefully into account. What the Europeans are doing by this initiative is cutting across much of what has been going on so far. It would be far better to involve King Hussein privately in these matters and to have negotiations with him rather than to come out with a declaration of this sort.

I can only say to the right hon. Lady that if she is giving her support, as she apparently is, to the creation of an independent State in this part of the world, with all the full rights of an independent State, she is going along with a process that President Giscard d'Estaing initiated and she should not have done so. President Giscard does not support the Camp David process, and never did.

With regard to the latter point, the right hon. Gentleman is trying to put words into my mouth.

The words in the communiqué I support entirely. They concern the right of the Palestinian people to determine their own future. If one wishes to call that" self-determination". I shall not quarrel with it. I am interested that the right hon. Gentleman appears to be attempting to deny that right. I do not understand how anyone can demand a right for people on one side of a boundary and deny it to people on the other side of that boundary. That seems to deny certain rights, or to allocate them with discrimination from one person to another.

I know, of course, that communiqués are looked at in detail. I looked in detail at the right hon. Gentleman's communiqué, because it was the first time that the phrases "national identity" and "a homeland" had been used, but I hope that at no time did I try to embarrass anyone genuinely seeking a settlement by trying to define it more closely than that.

We are all determined not to undermine the Camp David process and to try to do something positive to assist a genuine settlement in the Middle East. If we do not get one, it will be disastrous for the whole Western world.

With regard to the right hon. Gentleman's points about unemployment, of course we were all concerned about unemployment. As he knows, some countries have a higher rate of unemployment than we have. Of course, we were all concerned about the prospects for young people. In fact, the presidential statement was more detailed than the actual discussion. Each and every one of us accepts that we should try to do everything possible to alleviate the unemployment position, especially for young people. But we are not prepared to print money to do it.

The right hon. Lady—[Interruption]. We have had a totally unsatisfactory statement from the Prime Minister, and, if Mr. Speaker allows, I propose to pursue it.

I shall leave the question of the Middle East, because it is bound to be followed up in other ways, but on unemployment in this country the right hon. Lady gives general assent to short-term measures to relieve it. Does she intend bringing measures before this House?

We already have short-term measures to relieve unemployment. That is exactly what some of the short-time working subsidies are. They give very wide opportunities to young people under the present youth opportunities programme being operated by my right hon. Friend the Secretary of State for Employment.

Does my right hon. Friend agree that the Israelis conquered the West Bank from Jordan and that, under resolution 242, it is therefore with Jordan that the Israelis should negotiate their withdrawal? Is it not therefore for the Jordan Government to decide to what extent the PLO should be associated with the negotiations? Why is it for the European Governments to nominate this terrorist organisation as a valid negotiator in the transaction that is to come?

I think that my right hon. Friend is asking me what is the specific legal position about the land on the West Bank. Only two countries recognise the land of the West Bank as belonging to Jordan. One is ourselves, and the other is Pakistan. The other States have not precisely determined the legal position of that land; nor has the United Nations. We accept that the land of the West Bank legally belongs to Jordan, and so does Pakistan.

My right hon. Friend asked whether it was not therefore for the negotiations to be with King Hussein. As my right hon. Friend knows, King Hussein has indicated that he will negotiate with the Arab States as a whole, and that is his right. The Arab States as a whole have gone very much further than the Leader of the Opposition or I or most people in this country could go, by recognising the PLO as the sole representatives of the Palestinian people. We have not done that, and we could not do that, but we believe that the reality of the situation is that there will not be a comprehensive settlement in this area unless the PLO is associated with it.

Is the Prime Minister aware that it has been widely reported that, for once, she and President Giscard d'Estaing were agreed in rejecting the candidacy for the Presidency of the Commission of Gaston Thorn not on the ground of his ability or of the size of his country but because he was too Community-minded? Will the Prime Minister, who is known for her blunt speaking, give the House an unequivocal assurance that she is anxious to see as president of the new Commission someone who will press enthusiastically for greater European integration?

The hon. Gentleman is not right in assuming that that candidacy has been rejected; it has certainly not. There is more than one candidate, and more than one very good candidate. Because we did not come to a unanimous decision, which would have been unlikely on the first discussion, we shall discuss the matter further.

Will my right hon. Friend say to what extent she and her colleagues found agreement on how to handle the very large sums of money flowing into the oil-producing countries? Was there general agreement that this could not be resolved in a purely European context but required wide financial and economic meetings between countries, including Japan, which are dependent on the oil suppliers, and meetings of the developing countries to which the funds generated by oil are so very important?

Most of our discussions on that subject were preliminary to the wider economic summit that takes place next Sunday and Monday. If I may put it this way, we felt that whatever recycling arrangements might be proposed, whether through private banks or international institutions, recycling was not enough, because some of the developing countries can no longer afford to go on borrowing money. They really need more grants from some of the OPEC countries, whose very considerable increases have imposed intolerable burdens on some Third world countries.

Is the Prime Minister aware that many besides the Leader of the Opposition will be alarmed at the spectacle of the Western European nations preparing to interfere, if only verbally, in the Levant, upon the basis of principles that are at best ambiguous and at worst deliberately contradictory?

I accept that they lack the right hon. Gentleman's specific clarity. Because we have gone on for a long time talking about the right of peoples to decide their own future, and because the options have never been worked out and put to the several parties and the many different representatives of the Palestine people, so we have gone on using vague terms such as "homeland", "national identity" and "self-determination". We thought that it was time someone went round and discussed with the parties precisely what these principles were likely to mean in practice and precisely what the options were. There will be nothing vague about the process, but I think that the right hon. Gentleman will agree that a great deal has been vague about the terms that have been used in the past. We are trying to seek clarification of those on the basis that all the parties concerned accept as binding, right from the outset, the principles enunciated in the communiqué.

As this was the first summit following the very tough budget negotiations, can my right hon. Friend say that the EEC now has momentum again and can carry on with many of the necessary jobs ahead of it in the coming year?

From the financial viewpoint, it was an unusually friendly meeting, which will, I believe, free us to take a greater part on the world stage. I believe that, in view of the increasing tensions on the West Bank, we were right to take the view that we could not just leave this part of the world alone. We must try to do what we can to supplement the Camp David process.

Will the right hon. Lady find some way of informing hon. Members on both sides of the House—the media in this country are so irresponsible and partisan—that, as Mr. Yasser Arafat said to me and to the hon. Member for Canterbury (Mr. Crouch) the right hon. Lady's colleague—

I would have thought that this was a matter of some concern upon which the peace of the world depends. That is the sort of silly, snide comment to be expected from the pro-Zionists in the House. As Mr. Yasser Arafat said to me and to the right hon. Lady's colleague the hon. Member for Canterbury, at a meeting in the small hours of the morning, about 10 or 12 days ago in Beirut, the significance of the outcome of the congress was not the reiteration of the ritualistic phraseology about Zionism, which is perfectly understandable, because that is a racialist dogma, but that the A1 Fatah congress, meeting for the first time in nine years, had entirely endorsed every resolution of the Palestinian National Council—its Parliament in exile—including that which accepted, or was willing to accept, a part of Palestine as its State. That, by implication, can only mean an acceptance of Israel. It is a pity that more of our parliamentary colleagues do not understand that simple point.

The hon. Gentleman made many comments. I could not possibly accept the description of Zionism that he gave. I cannot possibly accept what he says about Zionism. Mr. Yasser Arafat and the PLO must accept the right of Israel to exist behind secure boundaries. The Al Fatah statement to which the hon. Gentleman referred contained many things that none of us could possibly accept. If these negotiations are to get anywhere with any of the parties, just as the Israeli people will have to accept the legitimate rights of the Palestinian people so the Palestinian people, including the PLO, will have to accept Israel's right to exist behind secure boundaries and be prepared to guarantee those boundaries.

Will my right hon. Friend accept warm congratulations for the part that she played in this evidently constructive meeting? Can she give an assurance that oil-rich Britain will now play a forward part in ensuring that the EEC develops policies for meeting the grave North-South crisis caused largely by the actions of the oil-producing countries?

I accept that there is a grave North-South crisis and that part of that crisis is attributable to the sharp increase in the price of oil, which has gone up more than tenfold over the last eight years. Although the increases cause immense difficulties for the industrialised countries, they cause intolerable burdens for the poverty-stricken countries, which are approaching financial crisis. We are extremely worried about how the revenues from OPEC oil will be recycled this time. This will be more difficult than on previous occasions. We shall certainly expect to play a constructive part ourselves. It was with a view to deciding what we should say next week that we spent such a long time on this aspect of the problem in Venice.

In view of the fact that the PLO, only last week, once again reiterated its intention and desire to obliterate the State of Israel, and in view of the fact that the establishment now, of an entirely independent State would put the PLO in a position to do exactly that, is the right hon. Lady not concerned to help the Camp David agreement? That agreement envisages autonomy for the Palestinians that not only could, but would, develop into a Palestinian State after a period of time.

The hon. Gentleman began by referring to the PLO statement last week. I made clear that part of the statement of the Nine said that the two principles, namely, the right of Israel to exist behind secure boundaries and the recognition of the legitimate rights of the Palestinian people—I quote from the communiqué that we all signed—are

"binding on all the parties concerned, and thus the Palestinian people, and on the PLO, which will have to be associated with the negotiations."
It is clear that unless those two principles are accepted as binding there would, and could, be no settlement at all.

Did my right hon. Friend and her colleagues discuss the urgent necessity of expressing the clearest and most concentrated abhorrence of the appalling atrocities in Afghanistan? Does she agree that there is a case for the West acting in concert and applying the same sort of sanctions as those applied against Iran?

We issued a separate statement on Afghanistan, which made the point that we abhor totally the atrocities and the continued invasion of Afghanistan by the Russians. I think that sanctions against Russia would not secure the objective that my hon. Friend seeks. That is one of the facts that one has to face. We must go about the matter through diplomatic action and decide what we shall do later in the year if the invasion persists and the number of Russian troops in Afghanistan remains of the same order.

Is the right hon. Lady aware that many of us who want to see the State of Israel live within secure borders and who have long been her friends are very disturbed with the policies of the present Government in Israel. They are not helping the situation. At the same time, we want to see the Palestinian people with a State of their own. We do not feel that the so-called initiative coming from the Heads of the European Common Market countries is the best way to deal with the situation.

Is the right hon. Lady aware that some of us feel that it would be far better, acting together with the United States, which is very much involved, to try to reach an agreement and then to get the Soviet Union to help to make certain that such an agreement was carried out?

I cannot agree with the hon. Gentleman that that would be the best way forward. I would, however, accept—as I hope most people would accept—that what we really wish to achieve is a settlement in this area, believing that this would be in the interests of the Israeli people there, of the Arab people there, and of the whole of the Western world. We believe that we have taken a small constructive step along that path, in conjunction with our American friends, who are continuing to follow up the Camp David agreement.

Order. I propose to call four more hon. Members from either side. That will be a very fair run.

Is my right hon. Friend aware that there will be a widespread welcome for the accord that she announced today and pleasure that the EEC is at least prepared to look to the future in the Middle East, where many of us believe there will never be peace unless and until the Palestinians have their own State? Is not trying to discuss the future of the Middle East without the Palestinians as useful as trying to discuss the future of the laws of cricket without consulting the MCC? Will my right hon. Friend devote to this problem the same energy and, we hope, the same success as she devoted to solving the problem in Zimbabwe, with people inevitably and rightly determining their own future.

I am afraid that this problem will take a considerable time to solve. I do not think it helps if we try to go too quickly and to conclude that there would be an independent Palestinian State. I would not necessarily conclude that myself. There are a number of other possibilities. It is for the people there—along with the European initiative—to indicate how they see the options and how they would react to them and then, as the last phrase of the communiqué states

"in the light of the results of this consultation process to determine the form which an initiative on their part could take."
It seems to me to be an example of the fact that time spent on reconnaissance and on trying to clarify principles is seldom wasted.

Will the right hon. Lady confirm that the conversations that she is reported to have had with the French President about the New Hebrides took place? There seems to be a discrepancy between what the press reports say about the conversations that she has had and the information being given by her right hon. Friends in the Foreign Office. Can she tell us anything about those reports concerning the New Hebrides?

I spoke to the French President about the position in the New Hebrides, and my hon. Friend the Minister of State will shortly be making a statement about them. I pointed out that we had agreed that we would act jointly in pursuance of our duties there, and that when the French sent the armed gendarmes we believed that we were acting fully within our obligations in sending the Marines. As the French sent armed gendarmes and we have no armed police, we sent the Marines. We believe that that was joint action, and it is our wish to continue to act jointly.

Will my right hon. Friend accept that this House uniquely understands Germany's unhappiness at the prospect of having to make a net contribution of £1 billion to the Community? Will she make available to Chancellor Schmidt her expertise in this region, so that together they can bring about a restructuring of the finances of the Community?

I entirely agree with my hon. Friend. We were to have been the largest net contributor this year, and we know exactly what it felt like to have that obligation placed upon us. Germany, although a very much richer country, per head, than we are, now has that obligation. We are still the second largest contributor, although a long way behind Germany, and France is behind us in contributions. The other countries are net beneficiaries, and some of them are very much wealthier, per head, than those that are making the contributions. Herein lies the need to restructure the budget.

It has always seemed to me to be quite absurd that we should be making extensive contributions to quite wealthy countries in Europe when the real need in the world is to help those who are suffering from considerable poverty.

Reverting to Palestine, may I ask whether the Prime Minister realises that by seeking to equate the rights of Israeli citizens with the rights of Palestinians she is seeking to equate what cannot be so equated and begging the question whether the Palestinians have, in international law, a proper case to be recognised as a State?

Does she not recognise that however important the diplomatic role of the European Council may be it does not have a legislative role that can prescribe in international law whether it is appropriate for the Palestinians' aspirations to statehood to be recognised?

Does the right hon. Lady not recognise, also, that by admitting that she is not sure whether statehood is the appropriate end-point for the Palestinians she is contradicting the communiqué, which recognises what it calls the right of self-determination, in the light of the fact that it has been categorically asserted so often that statehood is what the Palestinians seek?

I think that the hon. Gentleman—and possibly a number of other hon. Members—are making great distinctions without a difference. The word "homeland" has been used for quite a long time in connection with the legitimate rights of the Palestinian people. The two principles have been expressed for a very long time. If the hon. Gentleman had listened carefully he would have heard the difference. May I read out the text again? It says that

"the time has come to promote the recognition and implementation of the two principles universally accepted by the international community : the right to existence and to security of all the states in the region, including Israel, and justice for all the peoples, which implies the recognition of the legitimate rights of the Palestinian people."
Other communiqués have gone on to define those legitimate rights in terms of national identity, and words such as "homeland". We have gone on to say that
"The Palestinian people, which is conscious of existing as such, must be placed in a position, by an appropriate process defined within the framework of the comprehensive peace settlement, to exercise fully its right to self-determination."
I should have thought that it was very difficult to quarrel with that if the result is that we get a comprehensive settlement within the region as a whole. I stress again that there can never be a settlement unless both the Palestinian people and the Israeli people recognise each other's rights and the right to continue to exist securely.

Will my right hon. Friend comment on the question of the enlargement of the Community by the admission of Spain and Portugal—a matter on which earlier statements by the French President have cast some doubt? Will she confirm that this question was discussed at the summit? Is she now satisfied that there is an absolute commitment in principle to their membership, and that, in practice, no delays or obstacles will be put in the way of the early accession of those two nations?

We did no more than mention it in passing. We did not discuss it. I make clear that we take the view that we wish to go ahead with negotiations for the admission of Spain and Portugal. I do not wish there to be any doubt about that.

Were the proposals of the Brandt Commission considered? If so, what consideration has been given to the commission's proposals for a summit?

Does the right hon. Lady not think that if we are to have statements about foreign affairs coming from the EEC Commission it would be better to debate them first in the House of Commons, so that the views of the House were known?

We did not agree that there should be what is called a Brandt summit. As the hon. Gentleman will gather from what I have said, we discussed a number Of things that concerned the Brandt report.

Is my right hon. Friend aware that many will welcome the Community statement on the Middle East, which is cautious and well-balanced, believing that the United States has no monopoly over diplomatic activity in this area?

Bearing in mind the increasing tension on the West Bank in recent days, will my right hon. Friend make sure that there is no delay in following up this activity?

I believe that the contacts will get under way after the change in Presidency, which occurs at the beginning of July, and will probably be done through the Presidency. We shall first have to find out whether all the parties concerned are prepared to accept the fundamental principles that we have enunciated as being binding on all parties.

Is the Prime Minister aware that the statement that will have given most satisfaction to the British people over the weekend was her statement condemning the loutish behaviour of British football fans in Italy? Did she take an opportunity to discuss with her colleagues ways of containing such violence in future, and whether any form of joint action could be taken, so that the good name of British people going abroad could be properly protected?

I am very grateful to the hon. and learned Gentleman, because I believe that the vast majority of people in the House will share the views that he expressed. I am sure that he will understand that I did not at that moment raise the question with my colleagues, because in Venice we were trying to do everything that we could to enhance the reputation of Britain, while, unfortunately, in other parts of Italy, there were incidents that most of us regarded as disgraceful. I hope that they will not occur again. They did not do justice to the football team that was representing England.

Following are the declarations:

EUROPEAN COUNCIL, VENICE 12/13 JUNE 1980

EUROPEAN COUNCIL DECLARATION ON THE MIDDLE EAST

1. The Heads of State and Government and the Ministers of Foreign Affairs held a comprehensive exchange of views on all aspects of the present situation in the Middle East, including the state of negotiations resulting from the agreements signed between Egypt and Israel in March 1979. They agreed that growing tensions affecting this region constitute a serious danger and render a comprehensive solution to the Israeli-Arab conflict more necessary and pressing than ever.

2. The Nine Member States of the European Community consider that the traditional ties and common interests which link Europe to the Middle East oblige them to play a special role and now require them to work in a more concrete way towards peace.

3. In the regard, the Nine countries of the Community base themselves on Security Council Resolutions 242 and 338 and the positions which they have expressed on several occasions, notably in their Declarations of 29 June 1977, 19 September 1978, 26 March and 18 June 1979, as well as in the speech made on their behalf on 25 September 1979 by the Irish Minister of Foreign Affairs at the 34th United Nations General Assembly.

4. On the bases thus set out, the time has come to promote the recognition and implementation of the two principles universally accepted by the international community : the right to existence and to security of all the states in the region, including Israel, and justice for all the peoples, which implies the recognition of the legitimate rights of the Palestinian people.

5. All of the countries in the area are entitled to live in peace within secure, recognised and guaranteed borders. The necessary guarantees for a peace settlement should be provided by the UN by a decision of the Security Council and, if necessary, on the basis of other mutually agreed procedures. The Nine declare that they are prepared to participate within the framework of a comprehensive settlement in a system of concrete and binding international guarantees, including on the ground.

6. A just solution must finally be found to the Palestinian problem, which is not simply one of refugees. The Palestinian people, which is conscious of existing as such, must be placed in a position, by an appropriate process defined within the framework of the comprehensive peace settlement, to exercise fully its right to self-determination.

7. The achievement of these objectives requires the involvement and support of all the parties concerned in the peace settlement which the Nine are endeavouring to promote in keeping with the principles formulated in the Declaration referred to above. These principles are binding on all the parties concerned, and thus the Palestinian people, and on the PLO, which will have to be associated with the negotiations.

8. The Nine recognises the special importance of the role played by the question of Jerusalem for all the parties concerned. The Nine stress that they will not accept any unilateral initiative designed to change the status of Jerusalem and that any agreement on the city's status should guarantee freedom of access for everyone to the Holy places.

9. The Nine stress the need for Israel to put an end to the territorial occupation which it has maintained since the conflict of 1967, as it has done for part of Sinai. They are deeply convinced that the Israeli settlements constitute a serious obstacle to the peace process in the Middle East. The Nine consider that these settlements, as well as modifications in population and property in the occupied Arab territories, are illegal under international law.

10. Concerned as they are to put an end to violence, the Nine consider that only the renunciation of force or the threatened use of force by all the parties can create a climate of confidence in the area, and constitute a basic element for a comprehensive settlement of the conflict in the Middle East.

11. The Nine have decided to make the necessary contacts with all the parties concerned. The objective of these contacts would be to ascertain the position of the various parties with respect to the principles set out in this Declaration and in the light of the results of this consultation process to determine the form which an initiative on their part could take.

EUROPEAN COUNCIL DECLARATION ON AFGHANISTAN

The European Council has noted with deep concern the intensification of the military operations conducted by the Soviet troops in Afghanistan.

>These dramatic developments increase still further the sufferings of the Afghan people. They emphasise the genuinely national nature of the resistance offered by an entire people. They threaten to jeopardise the climate of international relations for a long time to come.

In these circumstances, the European Council wishes to reaffirm its conviction that it is necessary to find without delay the means of reaching a solution which, in keeping with the Resolution of the United Nations General Assembly, would ensure the withdrawal of Soviet troops and the free exercise of the Afghan people of the right to determine their own future. It reiterated its view that a solution could be found in an arrangement which allowed Afghanistan to remain outside the competition among the powers and to return to its traditional position as a neutral and nnn-aligned state

It recalls that it proposed in Luxembourg, on 28 April, that the great powers and the neighbouring states should undertake the necessary commitments to this end : in particular, they should agree to respect the sovereignty and integrity of Afghanistan, to refrain from any interference in its internal affairs and renounce any stationing of troops on its soil or any forms of military association with it.

The European Council shares the concern expressed and the conclusion drawn by the 11 th Conference of Foreign Ministers of Islamic States on the continued Soviet military presence in Afghanistan and has noted with great interest the creation by this Conference of a Committee to seek ways and means for a comprehensive solution of the grave crisis in respect to Afghanistan.

The Council repeated its readiness to support any meaningful initiative designed to promote a solution of the Afghan crisis.

EUROPEAN COUNCIL DECLARATION ON THE LEBANON

The Nine affirm once again their full and complete solidarity with the friendly country of the Lebanon whose stability remains dangerously threatened by confrontations in the region, and renew their urgent appeal to all the countries or parties concerned to put an end to all acts liable to damage the independence, sovereignty and territorial integrity of Lebanon or the authority of its Government. The Nine will support any action or initiative which could ensure the return of peace and stability of the Lebanon, which constitutes an essential stabilising factor in the region.

The Nine stress the important role which UNIFIL must play in the southern part of Lebanon. The Nine recall their Declaration of 22 April 1980 at Luxembourg and stress that it is essential that all the parties concerned permit UNIFIL to carry out the tasks with which it has been charged, including the control of the territory up to the international frontier.

New Hebrides

4.20 pm

With your permission, Mr. Speaker, and that of the House I shall make a statement on the New Hebrides.

On 11 June, following the shooting of a prominent Opposition deputy during a demonstration on the island of Tanna, the New Hebrides Government asked the two resident commissioners to recommend to their Governments the dispatch of British and French forces to the New Hebrides. This request was made during the course of a Cabinet meeting, and both resident commissioners agreed to make such a recommendation to their respective Governments. The Chief Minister's understanding of their agreement was later confirmed in writing.

It was in response to this joint recommendation that the French decided to send some gendarmes from New Caledonia. They informed us of this decision. It was also in response to the joint recommendation and to match the French action, that we decided to send a contingent of the Royal Marines, in order that we might be in a position to act jointly, should the need arise, with the French gendarmes. We informed the French of that decision.

On 12 June the French Government decided to withdraw the gendarmes from the New Hebrides, and did so that day. On 15 June the French resident commissioner made a formal protest to the British resident commissioner about the dispatch of the Royal Marines.

In deploying our troops in Vila, we are not only demonstrating our willingness to live up to our obligations but we are satisfied that we are acting in accordance with the 1914 protocol that governs the joint administration in the condominium.

I am seeking an early meeting with M. Dijoud, the responsible French Minister, in order that we may clarify our joint approach to the problems in the New Hebrides. Meanwhile, it remains the intention of the Government to do all in their power to promote a peaceful solution to the problem, to support the democratically elected Government, and to safeguard the integrity of the New Hebrides.

Is it not painfully obvious that the Government have been led by the nose by the French Government? What price now the close accord that seems to have been reached between the Prime Minister and the French President? Is it true that the order to withdraw the gendarmes came from the Elysée Palace? If so, was that in direct contradiction of the written understanding of the joint declaration of the resident commissioners? Will the blockade of Espiritu Santo be maintained? That is vitally important for the maintenance of the territorial integrity of the Government.

If need be, are the British forces prepared to act independently, giving the same information to the French Government that they appear to have given to us, and in accord with the wishes of the elected Chief Minister of the New Hebrides Government? What undertakings have the British Government given to the Rev. Walter Lini about the maintenance of law if the present talks, which he has instituted yet again with Jimmy Stevens, break down?

I entirely repudiate the hon. Lady's first remarks. I do not think that it helps to inflame the position between Britain and France. Quite clearly, we have a difference of opinion. I hope that the hon. Lady will recognise that it is very much in the interests of the people of the New Hebrides—to whom I hope she will pay some attention—that Britain and France should be able to resume their joint approach to the problems of the New Hebrides. Many in the New Hebrides speak French and have links with France. Many speak English and have links with Britain. It is important to continue to work in co-operation to restore stability, to preserve the integrity of the islands, and to give aid.

On the question of the talks between my right hon. Friend the Prime Minister and President Giscard d'Estaing, I have nothing to add to my right hon. Friend's earlier remarks except that they agreed that the two Governments should remain in the closest touch in their handling of the problem and that they should continue their joint effort to resolve the problem by peaceful means.

I do not know from whom the order came to withdraw the French gendarmes. The blockade of Espiritu Santo continues. The undertakings given by the British and French Governments, on a number of occasions, to support the legally-elected Government of the New Hebrides, the constitution worked out last September, and the integrity of the islands, still exist.

With respect to the Minister, we have been told what the Prime Minister said to the President but we have not been told what the President said to the Prime Minister. It would be helpful to know whether he got a word in edgeways. If the Minister wants information about who made the statement that the order to withdraw the troops came from the Elysée Palace, I can tell him that it came from the French resident commissioner on the news bulletins. It would be helpful if the Minister could tell us whether the Government have the faintest idea what they are doing about the attitude of the French Government.

It would not be proper for me to say what the French President said to my right hon. Friend the Prime Minister. The hilarity on the Opposition Benches will not be well regarded by the New Hebrideans. It is high time that the Opposition took the matter seriously. It has become perfectly clear to me—after three statements in the House—that there is a degree of ignorance and irresponsibility on the part of the Opposition about matters in the New Hebrides.

Does my hon. Friend agree that this is not the first time that assurances given in private have been falsified by later declarations made in public? Will he not lose any sleep over that? Will he answer two questions? How does he now see the role of the British troops in the New Hebrides, and will he continue to encourage negotiations between the New Hebridean parties?

The role of the British troops is to provide an element of stability and to create an atmosphere in which negotiations can once again take place. I am optimistic about the possibility of negotiations starting again. I am confident drat the Chief Minister, Father Lini, is prepared to make proposals for new nego- tiations. I hope that Mr. Stevens will respond.

The Minister made two statements—first, that the French decided to send gendarmes, and informed us and, secondly, that we decided to send Marines and informed the French. Was it stupid and idealistic of me to imagine that a condominium meant that the two parties actually discussed matters with each other, in advance of any action?

We informed the French before we sent the Marines. The French informed us simultaneously with their dispatch of the gendarmes.

Bearing in mind that the New Hebrides is a condominium regulated by treaty, and that our partner, France, is now refusing to sanction emergency arrangements, under what lawful authority can British troops be used to put down a secessionist movement? Should we not be careful to avoid using force in a position where, very shortly, we shall be asked to leave the area altogether? Why should the life of a single British Service man be risked in such a ludicrous position?

I agree with my hon. Friend about the desirability of avoiding force, if at all possible. However, opinion in the Pacific is grateful that the British have sent the Royal Marines to the New Hebrides in the interests of preserving stability in the islands.

Mr. Whitehead