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Commons Chamber

Volume 7: debated on Thursday 25 June 1981

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House Of Commons

Thursday 25 June 1981

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business

London Transport Bill

[Queen's Consent, on behalf of the Crown, signified.] Read the Third time and passed.

Oral Answers To Questions

Agriculture, Fisheries And Food

Council Of Agriculture Ministers


asked the Minister of Agriculture, Fisheries and Food what initiatives he intends to take when he assumes the Presidency of European Economic Community Agriculture Ministers.

I expect the Council to play its part in examining the ideas for reducing surpluses and containing the costs of the common agricultural policy put forward in the Commission's document on the 30 May mandate. I hope that the Council will examine the problems over State aids to agriculture as well as discussing commodity prospects over a longer time scale than is possible at the annual price fixing.

Will my right hon. Friend confirm that in the next six months he will do everything possible to promote that stability of the agriculture industry and that stability of employment in the industry that have been the outstanding features of the CAP in recent years?

Yes, Sir. Stability in agriculture is of immense importance. In addition, British agriculture has made a considerable contribution towards improving productivity and good labour relations. Obviously, I should want that to continue.

If the Minister looks on State aids with a jaundiced eye, does he believe that the Community should have greater responsibility for expenditure in the less-favoured areas, such as hills and uplands?

The Commission exercises certain responsibilities in that direction. Obviously, I hope that the positive policies in that sphere will continue to develop. There is a place for State aids, but if they increase to the extent found in certain countries they become the subject of unfair competition.

Will my right hon. Friend tell his colleagues in Europe that many British farmers are sick and tired of the way in which his European colleagues interpret the rules to their advantage? We play according to the rules. Will my right hon. Friend ensure that they play the game as fairly as we do?

I shall convey my hon. Friend's views to my European colleagues. I have conveyed such views to a number of my colleagues on several occasions.

Will the right hon. Gentleman consider using countervailing charges against the Dutch under article 46 of the Treaty of Rome? Will he bear in mind the plight of tomato growers in general, and, in particular, that of my tomato growers in Whittlesey who use gas-fired appliances to heat their glass-houses? Will the right hon. Gentleman accept that we wish him well in his Presidency?

I am grateful to the hon. Gentleman for his concluding remark. I think that he knows that I have considerable sympathy with those tomato growers in his constituency. We are examining several aspects of energy supplies to the British industry. With regard to using countervailing duties specifically against the Dutch, I should point out that they have not yet announced any detailed proposals about their new subsidies. When they do, the Government will examine them in great detail.

From what the right hon. Gentleman has said, do I take it that he is not in favour of funding part of the CAP on a national financing basis, as suggested in the latest budget proposals from the EEC?

No, Sir. There is a difference in the latest proposals, which were received only this morning. For example, we were in favour of the principle of national funding when we supported the super levy on milk, which in practice would have meant the national financing of future milk surpluses. However, we are against national loans that pervert fair competition between one country and another. Both sides of the House are united about that.

Common Fisheries Policy


asked the Minister of Agriculture, Fisheries and Food when next he will have a meeting with his counterparts in the European Economic Community to discuss a common fisheries policy.

The Minister of State, Ministry of Agriculture Fisheries and Food
(Mr. Alick Buchanan-Smith)

At the next meeting of the Council of Fisheries Ministers, the date for which has not yet been fixed.

Given the unavoidable delay arising from the election of the new French Government, can my right hon. Friend give a guarantee that the conservation measures already agreed with our partners will be neither compromised nor abandoned? Does my right hon. Friend agree that even before the common agriculture policy is settled, vital as it is, there is a desperate need for a new marketing regime? What progress does he envisage on that?

I agree with my hon. Friend that it is essential that those conservation measures already agreed, which largely comprise our national measures, should continue and be enforced while the broader negotiations are proceeding. My hon. Friend will be aware that we have taken a number of measures on marketing in certain areas. Pending the outcome of comprehensive marketing regulations, we shall continue to press the Commission to take action on such items as imports from third countries.

Is the Minister able, or willing, to confirm that if we do not achieve a settlement by the end of this year our sister States will be able to fish up to the high water mark? Have any contingency plans been drawn up with the industry to deal with that?

The hon. Gentleman may inadvertently have made a mistake. The current arrangements continue until the end of next year. There is an obligation on the Commission to introduce proposals to replace the present arrangements before the end of next year. The correct thing for the Government to do is to press the Commission, in agreement with the other States, to propose arrangements that are satisfactory to the United Kingdom.

I agree with my right hon. Friend that the current arrangements come to an end at the end of next year. Is there any validity in the suggestion that when we get out of our present difficulty we might be able to obtain agreement to an extension of the present period of derogation until some other agreement is reached? Does my right hon. Friend agree that we do not want to find ourselves forced into an untenable position at the end of next year?

If we find ourselves in circumstances where there is no agreement, we shall have to consider what to do. I hope that we shall be able to improve considerably on the present arrangements.

Is the right hon. Gentleman aware that the real problem for the deep-sea fleet and the 1,000 fishermen unemployed in Hull is the question of fishing in third country waters? Does he agree that it is important that we reach an agreement within the Community to allow us to make arrangements with other countries outside it? If we cannot make an arrangement within the Community, should we not make third country agreements and tell our Community partners to "stuff it"?

I acknowledge what the hon. Gentleman says about the importance of third country agreements. The problem about concluding third country agreements that have been available so far is that they have largely been to the benefit of fishing fleets of other European countries, and not to ours. Clearly, we must stand up for the interests of our fleets. I assure the hon. Gentleman that we shall continue to do so.

Common Agricultural Policy


asked the Minister of Agriculture, Fisheries and Food what are his main priorities in the reform of the common agricultural policy.


asked the Minister of Agriculture, Fisheries and Food whether any further progress has been made towards the reform of the common agricultural policy.

My main priority is to continue the progress already made towards containing the growth of guarantee expenditure.

Is there any logical or commercial reason why the record quantities of cheap subsidised food sent to Russia last year, and the near record quantities of food and vegetables destroyed, should not be offered at comparable prices to, say, retirement pensioners here? In his search for reform, will my right hon. Friend ensure that food is not offered at subsidised cheap prices abroad which are not available at home?

My hon. Friend knows that the Government have constantly opposed the selling of cheap food to the Soviet Union. On his general question, my hon. Friend knows that the doubling of the consumer subsidy on butter, and the sheepmeat regime, with its considerable advantages to consumers, are two ways in which the Government have made considerable progress in achieving the objective that my hon. Friend seeks.

Does the Minister agree that the common agricultural policy must be reformed so that British agriculture can compete on equal terms with its counterparts in Europe? What plan has he in mind to achieve that?

Yes, that is why in answer to an earlier question I stated that I hoped that the Council would give careful consideration to the nature of national aids. The areas in which British agriculture is being impeded in its success are those in which, in our judgment, national aids are being offered to other farmers, outside the general principles of the Treaty of Rome.

In his consideration of the development of the common agriculture policy, will my right hon. Friend take heed primarily of the long-term needs of Britain's agriculture industry? Will he emphasise to those who peddle instant panaceas for the problems of the CAP that proper attention must be paid to the means of effecting changes that are being discussed, if the industry is not to be impossibly stressed in the interim?

I think that both sides of the House agree that the nature of agriculture is essentially a long-term business and one in which swift and rapid movements cannot be made without doing considerable economic and social harm. That is why I am anxious that during our Presidency we should consider the long-term trends of the common agriculture policy and make decisions based on the long-term, rather than on the immediate problems.

Has the Minister made any estimates of the cost or the tonnage of cereals from the 1981 harvest that will end up in intervention stores in the United Kingdom? Can he think of better ways of handling a commodity such as this, as the United Kingdom is a net importer of cereals?

I should never make the mistake of making firm predictions for the 1981 harvest world-wide or of the 1981 demand. Last year's experience showed that the United Kingdom coped well.

Tenant Farmers


asked the Minister of Agriculture, Fisheries and Food whether he intends to introduce legislation in response to the Country Landowners Association and National Farmers Union proposals on security of tenure for tenant farmers.


asked the Minister of Agriculture, Fisheries and Food if he will make a statement on his response to the agreement between the National Farmers Union and the Country Landowners Association on agricultural holdings.


asked the Minister of Agriculture, Fisheries and Food what discussions he has had in recent weeks with the National Farmers Union and the Country Landowners Association about farm tenancy legislation; and if he will make a statement.


asked the Minister of Agriculture. Fisheries and Food whether he proposes to introduce legislation to implement the Country Landowners Association and the National Farmers Union agreement on agricultural holdings legislation.


asked the Minister of Agriculture, Fisheries and Food if he will make a further statement on Government policy concerning the future of agricultural holdings.

My right hon. Friend the Secretary of State for Wales and I met the presidents of the National Farmers Union and Country Landowners Association earlier this month to discuss the joint proposals of the union and the association for changes in the agricultural holdings legislation.

There was a constructive discussion, in particular on the importance of improving the opportunities for young farmers to enter agriculture. The proposals have been referred to officials of the two Departments and the agriculture industry for further examination.

Does the Minister agree that if these proposals were carried into legislative form they would result in two classes of tenant farmers—one with succession rights, and the other with those succession rights expressly excluded?

I hope that before hon. Members on either side of the House come to firm conclusions they will realise that a majority of both tenants and landowners agreed on a balance of proposals which they considered were good for the industry. Obviously I do not ask for immediate conclusions to be reached, but anyone interested in agriculture—especially in giving young farmers the opportunity of openings in agriculture—should carefully examine the proposals and come to a solution that is good for the whole industry.

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

Is my right hon. Friend aware of the burning need for action to help young people to have opportunities in farming? Is he aware also of the need for a bipartisan approach, to give stability to the future of young people in farming?

That is an important aspect of the question. Almost the first people who came to see me to urge that action is taken were from that considerable movement, the Young Farmers Clubs, many of whom would like the opportunities that are not currently available. On the other side, it is correct that existing and future tenants should have a basis on which they are satisfied and agreed. I am anxious that all hon. Members interested in the future of British agriculture should examine the joint proposals carefully and that we should introduce sensible legislation as a result.

Although I accept the need for all parties to approach the agreement constructively, does the Minister agree that the agreement as presently constructed envisages, as my hon. Friend the Member for Bradford, South (Mr. Torney) said, two classes of tenancy, one protected by Labour legislation, where a son would have a right to succeed a tenant farmer on his death, and the other protected by Conservative legislation, where the family would have no right to succeed the deceased tenant farmer?

That is not an accurate description of the position. There is not yet any Conservative legislation. I have not accepted the proposals or said that I will legislate on them immediately. I have asked for a detailed examination of every proposal and we shall look objectively at the results. I have not come to conclusions on the form of any legislation. The hon. Gentleman had responsibility for this matter in the past, and I think that he will agree that we both want to see opportunities provided for young people to enter the industry, and also that we want a sensible basis for existing and future tenants. That is what I am seeking, and I hope that all hon. Members will approach the matter in that spirit. I am not seeking a partisan approach.

I understand that my right hon. Friend does not wish us to come to firm conclusions now. Will he appreciate that in many quarters there is much good will behind the discussions and a hope that we shall be able to get away from the rigidity of the present law, which is not only inhibiting to the potential young tenant farmer, but often inhibiting to landowners, some of whom are large corporate owners who would like to do more to help the young farmer?

When we took office we found that firm proposals for legislation had been advocated by representatives of the landowners. The Government took the view that that they would not proceed with legislation if there was no agreement between the NFU and the CLA. Representatives of the majority of tenant farmers came to some form of agreement and I am glad that, as a result of that attitude, an agreement has been reached. Obviously there is good will, because an agreement has been reached, but we must examine the matter in detail and try to come forward with proposals that are acceptable to both sides of the House.

Is the right hon. Gentleman aware that many of us would support moves to improve the opportunities for, and security of, tenant farmers? Will he accept that it is up to him to bring forward practical proposals, and will he and his hon. Friend the Member for Devon, West (Mr. Mills) refrain from accusing Labour Members of blocking something that we have not seen?

I have never accused any Labour Members of doing that. I hope that all those on both sides of the House who are interested in agriculture will carefully examine proposals that have substantial backing within the industry. Of course, it is the Government's responsibility to come forward with legislation.

Is grass letting a way round the allocation of secure agriculture tenancies?

Ware Potatoes


asked the Minister of Agriculture, Fisheries and Food what is the estimated yield of ware potatoes in the 1981 season.

The average yield of the past three years is 33·5 tonnes per hectare. Actual yield this year depends on growing conditions between now and harvest.

I thank my right hon. Friend for that reply. Is he aware of the deep concern felt in Scotland about the penetration of the United Kingdom market by, in particular, Dutch seed potatoes? What proposals has he for dealing with that problem?

I hope that my hon. Friend will acknowledge that Scottish seed potato producers command about 90 per cent. of the English market, and that, with their reputation for quality, they will meet the challenge of retaining that share of the market.

Notwithstanding my right hon. Friend's characteristic opaque reply about forecasts, is it not a fact that it is expected that yields will be more or less comparable with those of the past two years and that, therefore, comparable problems will arise? Is my right hon. Friend satisfied, through the Potato Marketing Board and otherwise, with the arrangements for grading potatoes to ensure that there is a proper market and that market conditions are satisfied?

If my hon. Friend thinks that it is possible to be precise about future yields, his crystal ball must be even more opaque than my own. I am genuinely worried that more than the target acreage has been planted and that growers may not have paid attention to last year's over-production. As my hon. Friend knows, we have taken steps with the Potato Marketing Board to authorise an advance buying programme which, we hope, should deal with any surplus that arises in the current year.

Bearing in mind the prominent position of Ulster in the production of seed potatoes, will the right hon. Gentleman modify his previous answer to the extent of acknowledging that there is room for competition between Scottish and Ulster seed potatoes in provision for this country and that 90 per cent. represents an excessive share of that market for Scotland?

I am sure that the right hon. Gentleman will acknowledge that Northern Ireland producers have a considerable share of the remaining 10 per cent. of the English market. Those producers have a fine record of marketing, not only in England, but in exports. I am sure that their example will be followed by Scottish producers and others in the United Kingdom.

Grain, Dairy, Beef And Sheep Farming


asked the Minister of Agriculture, Fisheries and Food what is the current state of profitability of grain, dairy, beef and sheep farming respectively.

Information was given in the White Paper on the 1981 annual review of agriculture. This year's price settlement, which will add £325 million to farmers' incomes, and other measures taken by the Government will help in improving farm incomes.

Does my right hon. Friend accept that the profitability of the dairy and livestock industry is low, and that that is not in the interests of the producer or the consumer and is leading to a switch to cereal production? Will he take account of that in forthcoming negotations with his EEC colleagues?

I acknowledge what my hon. Friend has said, and I hope that he will acknowledge that we made it clear in the April price review negotiations that we were in danger of getting livestock and arable products out of balance. As a result, price increases in livestock are slightly better than those in other areas.

Is not the dairy industry potentially threatened by the preliminary European Court decision on the imports of French milk into this country? Is not the doorstep distribution of milk also threatened by that decision? Does the right hon. Gentleman accept that the distribution of milk in this country is hightly effective and much appreciated by housewives? What does the right hon. Gentleman intend to do about that matter?

One would almost think, from what the hon. Gentleman has said, that the European Court had taken a decision. I remind him that we are contesting the Court proceedings, because we believe that we have a strong case. I agree that our doorstep delivery is important, not only for the dairy producer, but, in social terms, for British housewives and older people who rely on that excellent daily service. We shall certainly do all that we can to defend it.

Is my right hon. Friend aware that the profitability of farmers concerned with these commodities and those who trade with them is seriously at risk because of the strike by civil servants? What plans has he to alleviate that hardship? Will he consider some of the schemes that have been put to him to ease the difficulties?

I am aware of the problems, and I hope that the dispute will be ended as soon as possible. My hon. Friend has been in touch with the Ministry, and we are doing our best to help in cases of particular hardship.

Council Of Fisheries Ministers


asked the Minister of Agriculture, Fisheries and Food what initiatives he proposes to take during his term as President of the Council of Fisheries Ministers.

My prime objective will be to secure overall agreement on a satisfactory common fisheries policy.

In view of the considerable success that my right hon. Friend has had in the past two years in setting up bilateral talks on fishing matters with other members of the Community, does he think that there will be an opportunity during his Presidency to embark on important bilateral talks on fishing with the new French Government; and, if so, what prospects of success can he hold out?

Immediately after the formation of the new French Government, following the presidential elections, I wrote to the new French Minister responsible for fishing expressing my eagerness to have talks with him on these matters. I hope that now that the National Assembly elections are over and the new Government have been confirmed bilateral talks will quickly take place.

Will the right hon. Gentleman look again at the answer given to my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara)? Is he aware that there are half a dozen vessels fishing for mackerel at certain times of the year, compared with 146 from my constituency that formerly fished in all waters of the Arctic? The same tale can be told of Fleetwood and other ports. Will the Secretary of State make this an important item in his armoury when he assumes office? We have to get third party agreements. We have to get access to distant waters.

We are not alone in Europe in wanting to get third country agreements ratified and agreed as quickly as possible. The more rapidly we reach a conclusion on a common fisheries policy, the better it will be for the whole of Europe, and certainly for Hull.

Before my right hon. Friend takes up the Presidency of the Fisheries Council, will he examine the problem of very small fishing vessels, which did not feature in the last financial aid granted by the Government? Will he consider also the question of possible EEC aid for fish processing factories that need to replace machinery that is now obsolete because of conservation measures adopted by the Government?

My hon. Friend, who has a keen interest in these matters, knows that the aid package introduced by the Government was directed to small ships. It was also a package that had been employed previously and had proved of tremendous benefit to the fishing industry. We are constantly examining the position of processors.

In an earlier answer the Minister of State spoke of the pressure that the Government were putting on the Commission with regard to the disruptive impact on our domestic market of third country imports. What are the right hon. Gentleman's proposals for avoiding this situation in future?

This is one area where the Commission is not being successful in seeing that the reference price is observed. If that were done, it would make a terrific difference. We have given the Commission details of cases where it has not been observed. The Commissioner has promised that he will take action to see that it is observed. If that promise is fulfilled the situation will be greatly improved.

Glasshouse Industry (Holland)


asked the Minister for Agriculture, Fisheries and Food whether he will make a statement on the latest proposals by the Dutch Government to provide a large subsidy to their glasshouse sector.

I understand that the Dutch Government have agreed recently to make 270 million guilders available to finance energy saving programmes carried out by individual glasshouse enterprises and a further 30 million guilders to fund research into energy-saving techniques. Because they have not yet announced the details of their proposals or introduced any legislation to implement them, I am unable to see whether the proposals comply with fair competition rules within the Community. If they do not comply, I shall take the matter immediately to the Commission.

Is it not clear that the Dutch Government are determined to dominate this market in Northern Europe by any means, fair or foul? Will my right hon. Friend consider the imposition of countervailing charges under article 46? Will he not agree, in the longer term, that if our glasshouse sector is to survive, it is time for a fundamental reappraisal of energy sources, conversion and perhaps also of location of the industry? Will he pay particular attention to waste heat from nuclear power stations?

I should like to deal with the latter part of my hon. Friend's question, which is of considerable importance. We are having talks with the National Coal Board to see what can be done in respect of the substantial glasshouse industry in the Yorkshire area. We wish to see whether contracts and perhaps improvements in capital grants can be made to enable coal to be used for the glasshouse industry in the area on an economic and sensible basis.

My hon. Friend will know that some power stations have supplied heating for the glasshouse industry. We are examining a range of other methods. I should say, in fairness to the Dutch Government, that they have recently increased gas prices substantially. These proposals may well compensate for that increase. If that is the case, I believe the action to be wrong. We would have to consider what action can be taken by the Commission or ourselves. Until seeing the detailed proposals, I think my hon. Friend will understand that I cannot take any action.

Will not the right hon. Gentleman agree that one of the great tragedies of Britain's entry into the Common Market is that it has meant that the glasshouse sector is almost eliminated, especially in the Lea valley which, at one time, produced the best tomatoes in the world? Is he aware that Lea valley tomatoes have practically gone out of existence due to our entry into the Common Market? Should we not put the interests of our people first rather than being tied by Common Market competitive rules that operate against the interests of Britain?

Prices for tomatoes in this market throughout most of last season were substantially above prices the year before. Although there was an early drop in prices this year, prices in the last two weeks have again been well above those of last year. A section of the British tomato growing industry has been doing pretty well during the last two years.

Can my right hon. Friend give an assurance that our own experiments in heat saving at the Exel nurseries opened two days ago, which should have been opened by a Minister from the Department of Energy—

Because he went to a film. Will my right hon. Friend assure the House that this experiment is not in contravention of the EEC regulation? We cannot dig at the Dutch if we are cheating.

I am sure that there is no contravention. No subsidy is involved. I recently visited my hon. Friend's constituency and met some of the growers. I should like to congratulate the Kent growers on their remarkable success in the marketing of soft fruit so far this year and on the terrific improvement that has taken place in their marketing techniques.

Order. I intervene to defend the hon. Gentleman. He has a right to be heard.

Order. The hon. Gentleman is accustomed to giving silence, and to receiving it. Question Time is passing by.

Will the Minister explain to what extent the Chicago-Friedman theory operates in respect of the common agricultural policy with specific reference to the glasshouse industry? Who gets most satisfaction from the operation of these market forces? Is it the Minister himself, or is it the Prime Minister?

Having heard the question, I understand the hon. Gentleman's reluctance to put it.

I shall certainly draw the attention of the professor who has been mentioned to the glasshouse industry's problems.

Is not the damage that our industry, especially the glasshouse industry, so often suffers, due to the fact that the Commission takes so long to act after my right hon. Friend makes a complaint? Is not the correct response, therefore, for my right hon. Friend immediately to put on countervailing duties so that it takes the Commission the same time to deal with complaints against them as it does to take action against the measures which they countervail?

Yes, Sir. I think, however, that it is important for British agriculture and horticulture not to enter a war of countervailing duties, which would cause considerable damage to our trade with Europe as well as in the other direction. If a legal foundation exists for them and it is proper to use them as an aspect of our legal rights, I would not hesitate to do so. I shall certainly not use such rights irresponsibly.

If the survival of not only the tomato section of our glasshouse industry but the carnation and lettuce sections and all the others are to be put at risk by the action of our competitors and confreres in Europe, surely the Government must give themselves the power to take the necessary countervailing action.

It is because the Government took the attitude that they would not allow the industry to disappear because of unfair competition that they recently announced the maximum possible aid for horticulture. The industry knows that it has the Government's support and that it will continue to have it.

Less Favoured Areas


asked the Minister of Agriculture, Fisheries and Food what is the estimated cost of aids to less favoured areas in England in 1981–82.

The Supply Estimates 1981–82 provide £10,000 for forage groups and £14,922,000 for livestock allowances in less favoured areas in England, but the rates of livestock allowances for January 1982 will be reviewed this autumn.

I am grateful to my right hon. Friend for that reply. Does he agree that marginal land could make a major contribution to increased farm productivity? Is he aware that there is considerable disquiet at the possible closure of the Great House experimental husbandry farm at Helmshore in Rossendale, Lancashire? That farm is a valuable aid to farm development in the North-West, especially to grassland management, which is useful for stock production. Will he consider this issue seriously?

No decision has been taken on the Great House farm. The Government and my Department review the manner in which we use our available resources for research and development. I can assure my hon. Friend that whatever decisions are taken will be in the best interests of farming and of ensuring that the quality of advice that is given to hill farmers and marginal land farmers continues at the high level that they have enjoyed in the past.

When the right hon. Gentleman takes over the Presidency will he investigate why the fishing vessel owners of Fleetwood can no longer send their vessels to sea because when they land their fish they make a severe loss? How do the losses affect the wages of the deck hands who work on the fishing vessels?

We have had many talks with the Fleetwood owners, who benefited very much from the aid that we announced recently. Over the past year that aid has been more substantial than the aid given in recent years. I am aware of the importance of Fleetwood. We shall keep in close contact with all those whose occupations are concerned with the fishing industry at Fleetwood.

Does my right hon. Friend realise that there is now a growing body of opinion in the countryside that these payments should be linked to acreage rather than headage?

There is always a dispute over the manner in which an allowance should be paid. However, to proceed on an acreage basis would create considerable perversions. Aid would be poured into areas where the yields and results would be extremely limited. I think that the majority agree with the current principle.

Does the right hon. Gentleman accept that there is a strong case for creating an additional zone of assistance for marginal farmers over and above that of the less favoured areas? As it is two years since the Government inherited the previous Labour Government's study of the problems in marginal farming areas, will he say when the Government will make a policy statement?

I am shocked by the hon. Gentleman's supplementary question. No survey was undertaken of marginal land by the previous Labour Government. Had I proceeded along the lines that were being followed by that Government, it would have taken four years to complete such a survey. I am glad to say that we have speeded up the process and that the survey will be completed by the autumn.

Dairy Farmers (Non-Marketing And Conversion Payments)


asked the Minister of Agriculture, Fisheries and Food when the non-marketing and conversion payments to those farmers who give up dairying are to be stopped.

The non-marketing section of the scheme closed to new applicants on 16 September 1980 and the conversion section on 5 April 1981. As premiums may be paid over a period of up to five years, actual payments to producers under the scheme will come to an end in 1985–86.

I am grateful to my right hon. Friend for that reply. Does he agree that the payments have not been especially effective in containing the surplus? Will my right hon. Friend the Minister of Agriculture, Fisheries and Food be making alternative suggestions to contain the milk surplus when he is President of the Council of Ministers?

I agree with my hon. Friend that the scheme was not especially effective. It was taken up mainly by those who appeared to be considering leaving dairying for other reasons. For that reason we supported the closure of both the schemes. We shall consider any means that will be effective to contain the surplus created by the dairy industry generally in Europe.

Prime Minister



asked the Prime Minister if she will list her official engagements for 25 June.

This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I am giving a dinner for the Vice-President of the United States.

Will my right hon. Friend please tell the Vice-President that there is both concern and anger in the House and in the country that money from the United States is still reaching the IRA? Will she invite the Vice-President to find some way of ensuring, in the light of ill-informed and biased reports that the American people receive from their media, that the true position is put across to the people, perhaps including an explanation that the people of Northern Ireland are just as entitled to choose their own constitutional arrangements without intimidation as, for example, are the people of Puerto Rico?

I think that the first thing that I will say to Vice-President Bush is how grateful we are for the firm stand that the United States Government have taken over Northern Ireland matters. They have made it quite clear that Northern Ireland matters are matters for the United Kingdom. I think that we should show our appreciation of that fact.

Of course, I share my hon. Friend's concern that money from the United States should be finding its way to the PIRA. All those who contribute to NORAID fully recognise its connection with the PIRA, which was established by a recent court case. Indeed, by virtue of a recent court case NORAID has had to be registered as an agent of the IRA. I hope that that will be understood.

We are constantly trying to find effective ways of getting our message and our case across to the people of the United States. We think that we have got it across to both Government and responsible commentators, but I agree with my hon. Friend that we must find every possible way of getting the message across and showing everything that is being done.

—to meet the representatives of the footwear industry who are in London today? They represent an important industry which is in a near-desperate situation. It is an important industry that is threatened partly by the Government's failure to act and partly by the Government's actions. Will the right hon. Lady undertake to meet its representatives?

I am afraid that the answer must be "No". I agree with the right hon. Gentleman that the industry has grave problems. Certain voluntary arrangements are conducted on a bilateral basis with the countries concerned which put so many imports into this country. I know that my right hon. Friend the Secretary of State for Trade is much concerned about this. I am sure that he will see the representatives if they are here.

Will the right hon. Lady give full consideration to their proposals for controlling imports and take urgent action on the matter?

I cannot go further than I have. I know that my right hon. Friend is very concerned. We have a series of bilateral arrangements. I am sure that he will listen to any proposals that they have to make and give them urgent consideration.

Will my right hon. Friend give an assurance that no consideration will be given today or in the immediate future to any reductions in the BBC's overseas services, which I am sure she will agree are an essential part of British foreign policy?

I think that a question is being answered today about BBC external services. We are anxious to switch expenditure from current to capital account. In the last two years some expenditure has been switched the other way. In our view, it is better to have some 33 language services properly heard than to have 40 language services inadequately heard.

In the Prime Minister's continuing review of the Government's economic policy, will she heed the speech that her right hon. Friend the Minister of Agriculture, Fisheries and Food made in America earlier this week, when he said that the Government's political and economic approach should not be based on the doctrines of any one group of economists?

I am sure that my right hon. Friend was referring to the fact that none of us should ever listen exclusively to the Keynesian school of economists. The report that I read, as I am sure my right hon. Friend will confirm, said:

"Mr. Peter Walker, the Minister of Agriculture, yesterday gave an optimistic account of the economic achievements of the Thatcher Government".
I am delighted.

Will my right hon. Friend continue to press the need for industry to improve its productivity, and will she welcome the fact that in the 12 months to the first quarter of 1981, output per man hour increased by 2½ per cent., and since January unit labour costs, in comparison with those of our main competitors, have fallen by 6 per cent?

It is absolutely vital that British industry should compete, and to that end we must watch wage increases during the next round. I confirm that there have been great advances in output per man hour. In January this year, output per man reached an all-time record, and we should warmly congratulate everyone involved—management and work force alike.


asked the Prime Minister if she will list her official engagements for Thursday 25 June.

I refer the hon. Gentleman to the reply that I gave some moments ago.

Will the Prime Minister find time today to consider again the question that I put to her in the debate yesterday, to the effect that of those under 25, no fewer than 917,000 are unemployed, and that of males over 30 who should be employed, have been unemployed for nearly one year? No other country in Europe or in the world would accept that level of unemployment. Will the Prime Minister tell us now, not later, what she intends to do about it?

It is as well that I did not go any further than I did in answering the hon. Gentleman last night, because the figures that he asks for are not compiled. The figures for the average length of unemployment are not and never have been available.

I am sorry, but I would not necessarily accept the hon. Gentleman's figures. I shall give him the figures that we have, which I think are the real figures about which he is concerned. The figure for those who have been unemployed for longer than a year is now just over half a million—515,913. Of course, we are concerned to do something about unemployment, but the question that we should really ask ourselves is why more people in this country do not buy British goods—[Interruption.] Hon. Members are very touchy and tetchy again today—and why so many constituents of Labour Members—and, indeed, of some Conservative Members—prefer to use their pay packets to buy foreign goods.

I must have made a good point there, as Labour Members are so touchy.

Is not my right hon. Friend somewhat nauseated at the way in which certain elements in the Civil Service trade unions are positively gloating at the prospect of giving added misery to those sections of the community that the House and the nation have approved as requiring special help? Does she accept that, if the Civil Service unions cause the nation great expense, that fact should be taken into account in future wage settlements?

I am well aware that a large number of people are suffering from the Civil Service strike. Nevertheless, the great majority of civil servants are loyally continuing to carry out their jobs. That is something that we must bear in mind at the same time. I hope that those who are on strike realise the damage that they are doing to the very people from whom they are seeking higher payments. I hope that they will soon end the strike and return to duty.

Will the Prime Minister ponder the fact that her Government's lack of initiative over youth unemployment causes much anxiety? She may talk about people buying British, but in West Yorkshire and many other constituencies, the British Movement is campaigning and recruiting among school leavers and school unemployed. Does she accept that her Government will be responsible for this problem?

This Government are very, very concerned about the numbers of young people who are unemployed. We are doing everything that we can to make it easier for them to stay in education or training or to have some work experience with a company, either in industry or commerce, or with a public authority. At present, we provide some 440,000 places under the youth opportunities programme. That may not be quite enough. We have received a letter from the chairman of the Manpower Services Commission asking for a number of things, including the power to increase the number of places. We shall consider the matter urgently and sympathetically.


asked the Prime Minister if she will list her official engagements for Thursday 25 June.

Will my right hon. Friend comment on the reluctance of local authorities, whether Labour or Conservative, to consider putting their functions and services out to private enterprise?

I heard my hon. Friend make that point in his excellent speech yesterday. I agree with him that it would be far better if more local authorities put some of their services out to private companies. I agree that it would often be cheaper, as has happened in Southend, where the services are cheaper and where the rates have been reduced by 1p in the pound. I hope that more authorities will follow the example of Southend.

Will the Prime Minister find time in the near future to intervene in the dispute in Laurence Scott Electromotors (Manchester) Ltd, where workers and constituents of mine are staging a sit-in to preserve their jobs? Will she try, where local Members of Parliament have failed, to open a dialogue with the management which, judging by its letters and actions, is the epitome of the unacceptable face of capitalism?

I must say "No" to the hon. Gentleman, as he would expect. It is not for me to settle disputes, but for those who are party to them to come to a negotiated settlement.


asked the Prime Minister if she will list her official engagements for Thursday 25 June.

Would my right hon. Friend reflect and agree that the constant calls for protectionism and import controls are simply the expression of stark fear on the part of those who have little faith in the traditional ability of the United Kingdom to export, as it has done throughout the generations? Does she not agree that protectionism cannot safeguard our standard of living and will increase unemployment?

Apart from one or two industries, including textiles, footwear and cars, where we have voluntary or negotiated arrangements for import controls, I agree with my hon. Friend that general import controls would be highly damaging to a number of jobs in this country, because there are a tremendous number of jobs in exports, and we should do nothing to harm their chances of success. Moreover, general import controls considerably put up the cost of living and do nothing to enhance the competitiveness of our industries, which would shelter behind a wall of protectionism.

As the Prime Minister said that people in Britain should buy British, will she undertake to ensure that a survey is carried out among Conservative Members, including Ministers, to find out how many of them have British and not foreign cars, and how many of their relatives have foreign, not British, cars?

I shall carry out no such survey. It is a matter for hon. Members themselves. If we inquire why more people do not buy British, we shall find that in some cases it is because overseas goods are better value. We then get straight back to the competitiveness, value and service of British industry. [Interruption.] However much Opposition Members yowl and scowl, in the end we must have competitive British industry producing the sort of goods that we want to buy.

Business Of The House

May I ask the Leader of the House to state the business for next week?

The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons
(Mr. Francis Pym)

The business for next week will be as follows:

MONDAY 29 JUNE—Supply [23rd Allotted Day]: Debate on the problems of the Yorkshire and Humberside region, on a motion for the adjournment of the House.

Consideration of Lords amendments to the Insurance Companies Bill.

Motion on European Community Document 7583/80 on proprietary medicinal products.

TUESDAY 30 JUNE—Supply [24th Allotted Day] (First Part): Debate on the conduct of the Secretary of State for the Environment.

Remaining stages of the Matrimonial Homes (Family Protection) (Scotland) Bill [Lords].

Proceedings of the Belize Bill.

Motion on the Supplementary Benefit (Requirement and Resources) Amendment Regulations.

WEDNESDAY I JULY—Supply [25th Allotted Day]: Debate on the car industry, on an Opposition motion.

Motions on the following orders: London Docklands Development Corporation (Area and Constitution) and (Amendment), Vesting of Land (Port of London Authority) and (Greater London Council).

THURSDAY 2 JULY—Motions on the Northern Ireland (Emergency Provisions) Act 1978 (Continuance) Order and on the Northern Ireland Act 1974 (Interim Period Extension) Order.

FRIDAY 3 JULY—Supply [24th Allotted Day] (Second Part): Debate on the disabled, with special reference to the International Year of Disabled People.

MONDAY 6 JULY—Private Members' motions until 7 o'clock.

Afterwards, remaining stages of the Deep Sea Mining (Temporary Provisions) Bill [Lords].

[Debate on European document relating to proprietary medicinal products: The relevant report of the European Legislation Committee is the 16th Report 1980–81 H/C 32-xvi, para. 1].

I wish to put three questions to the right hon. Gentleman. First, will he make arrangements for the motions on Northern Ireland on Thursday to be amendable because we wish to put our view in either an amendment or a motion? I hope that that will be the way in which the business comes forward. Secondly, on Tuesday's business on the conduct of the Secretary of State for the Environment, will he say whether he has had discussions with the Patronage Secretary about allowing a free vote? That would be generally accepted by the House. Thirdly, has he had an opportunity to reflect on the question I put to him last week about the debates on the Brandt report?

There are three major summit meetings scheduled for this year—the economic summit in Ottawa in July, the Commonwealth conference in Melbourne in September, and the Mexico summit in October. Neither the House nor the country has any idea of the Government's attitude towards those important matters. Will the Government provide a day, before the Summer Recess, to debate those matters, and will the Government make a statement to the House?

On the right hon. Gentleman's first question, we can arrange the motions in the way that he requested. On his second question, I have not yet consulted my right hon. Friend the Patronage Secretary. My right hon. Friend the Secretary of State for the Environment is entirely capable of defending himself. On the third question, I am afraid that I have nothing to add to what I said last week. In saying that, I am not in any way suggesting that it is not an important subject. There were three debates on the topic last year, including one on a Government day, and it also formed part of a debate in March this year. I appreciate the importance of the subject, but at the moment I cannot find Government time in the near future. I appreciate the significance of the request.

In view of the statement that we are all eagerly awaiting, will my right hon. Friend assure us that the House will have an early opportunity to debate defence?

Is the Leader of the House aware that Dr. Dracan Clift, a Home Office forensic scientist, gave crucial evidence at the trial of Mr. John Preece of Stoke-on-Trent which led to his conviction for murder? The Court of Appeal decided that that evidence had been discredited and the sentence was quashed. Will the right hon. Gentleman find time next week for the Home Secretary to make a statement about that case and agree to reopen all the cases in which Dr. Clift has given evidence? Is the right hon. Gentleman aware that the case to which I referred is not the first case in which Dr. Clift's evidence has been discredited and the convictions following that evidence quashed?

I doubt whether a statement would be appropriate. My right hon. Friend the Home Secretary will have heard the right hon. Gentleman's request. I shall consult him. I could not be sure that a statement would be an appropriate step.

Is my right hon. Friend as disappointed as I am that my Bill on smaller businesses was not reached on Friday? Will it be possible for him to find time shortly to give half a day to that important subject?

I regret that I cannot accede to my hon. Friend's request. I am sad that his Bill was not reached.

Does the Leader of the House recall that in November 1979 a motion was passed in the House to the effect that there should be no further cuts in expenditure on the BBC overseas services? Is he aware that evidence on the subject has been given in public, by both the BBC and the Foreign and Commonwealth Office, to the Select Committee on Foreign Affairs, which is in the process of drawing up a report? In view of those facts, does he agree that any Government statement on that matter should be made in the House and not by other means?

As my right hon. Friend the Prime Minister said, a question on that matter is being asked today. I shall have to check the facts to be sure that I am right, but I believe that, far from expenditure being cut, more money will be spent.

When arranging the business of the House, will my right hon. Friend continue to give high priority to the consideration of the important questions of unemployment and the management of the economy so that, as was demonstrated with such clarity yesterday, the country can be continually reminded that from no part of the House has there been offered any sensible alternative to the Government's economic policies?

We have given adequate time, and an appropriate amount of time, to discussing the important matter of unemployment. No doubt other opportunities will arise.

Is it not time that the Leader of the House arranged a debate on the scandalous treatment being meted out by the Government to the nurses and ambulancemen? Have not the Government forced them to accept a real wage cut? Were not the Tory Government elected on a prospectus of not interfering with free collective bargaining? Should they not take into account the fact that other workers, such as the police, have been given 21 per cent. by the Government? How does that fit in with the view of the new Hexham school of economics that the Government have spent more, borrowed more and been less able to count that money than any other Government in history?

Even if I thought that that was an appropriate subject for debate, I could not find time for it next week. There are other ways and other opportunities available to the hon. Gentleman of which, no doubt, he will take advantage.

As the cuts in the BBC external services have been announced by way of a written answer, and in view of the widespread concern about this matter, would it not be right for my right hon. Friend to arrange an early debate on the whole subject, because substantial cuts are planned in individual countries' services?

I do not think that I have Government time available for that purpose. I emphasise to my hon. Friend that the purpose, of the change is to spend more, to invest more, and to have a higher degree of audibility. That is an appropriate matter for the House to debate, but my hon. Friend may have to find some other way of raising the matter.

Can the Leader of House give an assurance, particularly to Scottish Members with children of school age, that the House will be in recess by the beginning of August, even if that means that it must meet on Wednesday 29 July, irrespective of any other event that may happen to be taking place on that day?

Would it be a good idea for my right hon. Friend to arrange an early debate on the important question of trade union immunities, bearing in mind that the closing date for representations on the Government's Green Paper is 30 June?

I believe that we must wait for that time. The Government will then give consideration to that extremely important subject. I doubt whether there will be time for that subject before the House rises for the Summer Recess. In due course there will be plenty of opportunities for it to be debated.

May I take the Leader of the House back to yesterday's debate on unemployment, picking up a question that was asked by one of his hon. Friends? Does he appreciate that, whilst I agree with what my right hon. Friend the Leader of the Opposition said yesterday, in congratulating the Government on providing one day for a debate on unemployment, one day is totally inadequate? That is shown by the fact that only six speeches were allowed from the major Opposition party and 18 contributions were made from the Back Benches. We are asking for a further debate next month and every other month on unemployment figures, but will the Government seriously consider giving more time—at least two days—to debate this vitally important subject of unemployment?

The Government have been forthcoming on this matter. I have been forthcoming since I have been Leader of the House, because we have had two days on that subject in Government time. The Opposition have provided time, on a regional basis, on several other occasions. Therefore, I believe that it can be said that this important matter has had a full degree of debate. There will be further opportunities. The right hon. Gentleman knows that there is a limit to the amount of time that any Government or Opposition can make available. We shall do the best we can.

Will my right hon. Friend confirm that between now and the Summer Recess it will not be convenient to receive any fresh legislation, whether emanating from overseas or not?

Will my right hon. Friend consider introducing a debate at an early date on the urgent need for constitutional reform?

In view of the Prime Minister's sad answer to the right hon. and learned Member for Hexham (Mr. Rippon), to the effect that about seven language broadcasts are to be cancelled to the effect by the BBC, does the right hon. Gentleman not believe that this is far too important a matter to be left to a written answer? In view of the fact that hon. Members on both sides of the House will regard that as a massive false economy, does not the right hon. Gentleman believe that we should at least have an opportunity to debate it?

In view of statements that we have had, the one that we shall have today, and others that will come, I believe that a written answer is correct. If the matter is to be debated—it is an appropriate subject for debate—some other way must be found. It is a question of working out what is the best use of the money allocated for that purpose. We shall spend more, there is an audibility problem, and the money will be spent to make sure that, in a given number of languages, the service is heard much better in the countries towards which it is directed. That matter is appropriate for debate. I do not believe that an oral statement would provide the answer or the conditions to raise other points that the hon and learned Gentleman wants discussed.

As Thursday's business is presumably not appropriate for this purpose, can my right hon. Friend give the House an assurance that we shall have an early opportunity to debate the decision, just announced, to give Harland and Wolff another £46 million from the taxpayers whom we represent, on top of the £300 million that has gone before, apparently coupled with the pledge to continue to do so for at least another five years? Can we have an urgent debate on that matter before any further money is committed?

That is an appropriate matter for Supply. While acknowledging the appropriateness of that subject and the importance of that allocation of money, I do not believe that there will be an opportunity in Government time. Unfortunately, I cannot give my hon. Friend the undertaking that he would wish.

In view of the fact that there is no time for a debate on the Brandt report, will the Leader of the House give consideration to having a statement some time before the recess on the progress made by Government Departments on implementing it? As the Prime Minister may discuss with the Vice-President of the United States the use of resources in that regard tonight, and as the Specialised Agencies of the United Nations will have made some rules, will it not be possible for a statement on progress to be made, not on platitudes but on resources?

Will my right hon. Friend go a little further than he did in answering my hon. Friend the Member for Melton (Mr. Latham) and say that there is no question of the House dealing with any Canadian legislation before the Summer Recess?

It would be rash of me to say "No" to any legislation, from whatever source. I do not have it in mind at the moment.

Has the Leader of the House seen early-day motion 463, which deals with the recent Select Committee's report on the Vagrancy Act, and in particular with the offences of begging, sleeping rough and being found on enclosed premises.

[That this House notes the Third Report of the Home Affairs Select Committee concerning Vagrancy Offences (H.C. 271); further notes that the Committee was divided on the timing of the repeal of the offences of sleeping rough, begging, and being found on enclosed premises under the Vagrancy Act 1824; and urges the Government to initiate an immediate debate on that Report.]
Will he arrange for an early debate on that report?

The Government must make their response and then we must consider, when days are available, which Select Committee's reports and which responses should be debated. The hon. Gentleman has raised one candidate. I cannot go further than that.

Has my right hon. Friend received any communication from our right hon. Friend the Home Secretary saying that he will shortly introduce a short three or four-clause Bill dealing with replica firearms—a Bill that, with the acclamation of the House, could be on the statute book before the Summer Recess?

Further to the point raised by my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley), is the Leader of the House aware that there is a precedent, in that a previous Labour Secretary of State for Scotland made a statement at the Dispatch Box following the release of Paddy Meehan after it was found that he had been wrongfully convicted for murder? Would it not be more appropriate if the Solicitor-General for Scotland made a statement on the Preece case? I understand that before he came to the House the Solicitor-General was supposedly responsible for defending those two men, who might have been dead today had the hanging brigade, including the Solicitor-General, had its way?

I take note of that and I shall consider it. I have nothing to add to what I said to the right hon. Gentleman earlier.

Is my right hon. Friend aware that the cutting of seven or eight foreign broadcasts of the BBC is important, not least in terms of defence, because propaganda is part of the battle? Will he therefore arrange that the House takes that fact fully into consideration, has an opportunity to debate it, and does not have to depend upon a written answer?

Nothing that I have said in any way lessens the importance that we attach to the BBC external services. I believe that a written answer on what we have decided is correct and I hope that an opportunity for debate can be found. I cannot see an opportunity in Government time in the near future. If I did not say that, I might mislead the House.

When will the House next have an opportunity to debate the reports of the Public Accounts Committee? Does not the Leader of the House believe that it is important that his successor at the Ministry of Defence should defend, at the Dispatch Box, the allegations that International Military Services—a company of which the Secretary of State for Defence owns all but one of the shares—has allowed the payment of nearly £½ million into a Swiss bank account with no guarantee that that money is not being used for bribery? When can we have a debate so that the matter can be thrashed out on the Floor of the House?

Is my right hon, Friend aware of the tragic circumstamces prevailing in dockland, certainly in the port of Southampton at the moment? Is he further aware of the need for a debate on the review of the national dock labour scheme and the fact that it has been a considerable time since the Jones-Aldington agreement was made? Surely, for the benefit of the export and import circumstances of this country, a debate on the entire ports industry would be invaluable.

I am sure that it would, but I am afraid that I cannot see an opportunity in the near future.

Does the Leader of the House recall that he promised to consider a debate on the Royal Commission on criminal procedure report? Is he now in a position to give us a date?

Defence Programme

With permission, Mr. Speaker, I should like to make a statement.

The Government have reviewed the defence programme, and a full account of our conclusions is contained in a White Paper, which will be available shortly in the Vote Office.

The Government intend to honour the NATO aim of 3 per cent. real growth in defence expenditure, and have, exceptionally, taken a firm decision now to plan to implement the increase until 1985–86, a full four years forward and two years beyond the published plans for public spending generally. This may mean that defence absorbs an even greater share of our gross domestic product, and, while it will be necessary to curb several of our forward plans and aspirations, the additional funding should enable us to enhance our front-line capability above its present level in very many areas.

The House knows of our basic problems, which are not unique to Britain. We have a defence programme which is unbalanced and over-extended. Last year, we suffered from severe cash problems, and similar difficulties are already emerging in the current year.

We cannot go on like this. We have no choice in the longer term but to move towards a better balance between the various components of our effort—front-line numbers, quantity and quality in equipment, and military and civilian support. We must determine this balance in terms of real defence capability rather than as the outcome of a debilitating argument over each Service's budgetary share.

We have looked first at the defence of the United Kingdom itself, especially in its role as a crucial reinforcement base for NATO. For some time we have felt the need to give greater emphasis to our reserve forces. For the Territorial Army, whose readiness and efficiency were vividly shown in Exercise Crusader, my intention is that there will be a progressive increase in numbers of some 16,000 men and women, and there will also be an increase in training days from 38 to 42 a year. We will order new minesweepers for the Royal Naval Reserve as soon as resources permit, and we will expand the use of Royal Air Force Regiment reserves in airfield protection.

In United Kingdom air defence—a priority requirement—we will sustain all the programmes already in hand, including the Nimrod early warning system and the doubling of modern air-to-air missile stocks. As a new enhancement, we will provide Sidewinder air-to-air missiles for a further 36 of our Hawk aircraft, making 72 Hawks in all available to supplement our fighter force; we will run on two Phantom squadrons, instead of phasing them out as had been earlier planned, when the air defence version of Tornado comes in; we will examine the possibility of switching 20 Tornados to the air defence rather than the strike version; and we will substantially increase the VC10 tanker fleet, which multiplies our fighter force by prolonging patrol time and range. Around our coasts, we will increase our capability to counter enemy mining, and we have set aside funds for enhancing our defensive mining capacity to help secure our ports and maritime routes.

I turn next to the major land/air contribution on the Continent of Europe. BAOR's manpower, which is above our Brussels Treaty commitment of 55,000 men, will return to that level, but we will retain in Germany our full present combat fighting strength of eight brigades and our responsibility for the forward defence of a vital 65 km of the central front.

We intend, however, to withdraw from Germany one divisional headquarters and other supporting staff, with a consequent reduction in the number of locally employed civilians, and this, together with other necessary economies, will enable us to move over the next five years towards a slightly smaller Regular Army of 135,000 trained men—7,000 fewer than at present, but partly balanced by the increase in the Territorial Army.

Suggestions have been made, I know, that we should go for a much greater reduction in our troops in Germany, but, quite apart from the fact that there is no one else to perform our task of defending 65 km of the central front, it would be much more expensive to bring the troops home, because we simply could not house or train them here without a massive new infrastructure programme. Only disbandment would relieve our budgetary pressures, and we cannot prudently cut our Army below a certain minimum level.

However, the small reduction in Regular Army manpower that I propose will help us to afford, as is our intention, the very wide range of re-equipment projects now envisaged for BAOR. The scale or timing of some of the projects will be modified, partly to restrain costs but mainly to provide for a further increase in war stocks and ammunition, to improve the combat endurance—the staying power—of 1st British Corps, which will be substantially enhanced. We plan, for instance, to increase further the buy of Milan anti-tank missiles.

The Challenger tank will equip four armoured regiments, new night sights for missile systems and tanks will be introduced, and improvements will be made both to the present Chieftains and, in due course, to Challenger. We will bring into service the 2nd Chinook helicopter squadron to enhance Army logistic support and mobility. We shall introduce the tracked version of the Rapier missile system and the TOW anti-tank missile launched from Lynx helicopters.

I am glad to announce that, subject to final negotiations, we should shortly be signing in Washington an agreement with the United States Government for the joint manufacture with the United States of the AV8II, the advanced Harrier. This has turned out to be an agile and effective aircraft, with a substantial weapon-carrying ability, and we plan to order 60 aircraft for close all. support. Within the total Anglo-American programme of some 400 aircraft, we are looking for a 40 per cent. share for British Aerospace and a 75 per cent. share for Rolls-Royce on the engine. There should be something like £1 billion work for British industry, the bulk of it for export to the United States.

I have decided that we cannot afford early replacement of the Jaguar, although possibilities remain open for new combat aircraft in the longer term, perhaps through international collaboration. On the other hand, we must exploit our investment in Tornado—some £10,000 million at current prices. We will continue with the JP233 system for neutralising enemy airfields, and we shall seek also to acquire new weapons to equip Tornado in an anti-armour role and for suppressing enemy air defences.

At sea, the Royal Navy will continue with the key task of providing a strategic nuclear force by the modernisation of the Polaris force with the Trident system. We have maintained one Polaris boat on station continuously for the past 12 years. One Trident submarine, invulnerable to any pre-emptive strike, will carry up to 128 independently-targeted warheads, which can hold at risk targets over a vast area of the Soviet Union. No enhancement of our conventional forces could possibly prove of equal deterrent value. In a world where nuclear weapons cannot be disinvented, it is the United Kingdom's surest way of preserving peace.

However, we must also keep strong the three conventional elements of power at sea. In maritime air, in addition to present plans, we will fit a further three Nimrods, making 34 in all, to the full mark II equipment standard, which is as great a leap in technology over the mark I Nimrod as the mark I was over the Shackleton. Armed with the Sting Ray torpedo, the mark II will have great striking power against submarines. We will proceed with a new stand-off anti-ship missile to be delivered by Buccaneers—which we will keep on for this task—or by Tornado. Subject to the satisfactory completion of contract negotiations, we intend to acquire British Aerospace's Sea Eagle anti-ship missile.

We shall increase our fleet of nuclear-powered attack submarines, newly equipped with Sub-Harpoon, from the present 12 to 17. I have today confirmed the order with Vickers at Barrow of another submarine at a cost of £177 million. We shall also proceed as fast as possible with a new and more effective class to replace our present ageing diesel-powered submarines. These should also have a market overseas. We shall acquire a new heavyweight torpedo for all our boats, and are considering alternative British and American designs for this. Overall our maritime air and submarine capability will be much enhanced.

As regards surface ships, we shall go ahead with all the very large orders—20 new warships to a value, with their weapons, of about £2,000 million—already in hand in British shipyards, and shall be placing an order for a further type 22 anti-submarine frigate, at a cost of £125 million, which will sustain work at Yarrows on the Clyde. We are placing the order for five patrol craft with Hall Russell of Aberdeen for service in Hong Kong.

But I believe we must make changes here in a number of ways. First, if we want to build a reasonable number of new ships in the future, we must devise much cheaper and simpler designs than the type 22 frigate. We must accelerate urgently—and I have provided funds in the programme for this—a new type of anti-submarine frigate, the type 23, built with an eye to export as well as Royal Navy needs, for we have not sold a major British warship of Royal Navy design for over a decade. I intend to pursue as well the possibility of still more cost-effective, smaller ships than the type 23.

Secondly, we can maintain our surface fleet at its present full strength only through a continuous programme of refits and major mid-life modernisations of older ships, requiring a huge and costly dockyard infrastructure. Typically, it can now cost up to £70 million to modernise an old Leander frigate, which is actually more than our target cost for the new type 23 frigate.

If we are to be able to build new ships in our shipyards and fulfil other priority defence tasks, we simply cannot afford to sustain such a policy of refit and modernisation—or, for that matter, maritime air defence at the present level, where the planned forward investment in major equipment for the air defence of warships at sea has been about double that for the air defence of the United Kingdom itself.

It is for this reason that, while we shall complete the new carrier "Ark Royal", we intend to keep in service in the longer term only two of the ships of this class, with their heavy demands on supporting anti-submarine and air defence escorts. The older carrier "Hermes" will be phased out as soon as the second of the new carriers is in operation.

Overall, we shall try to hold the destroyer and frigate force declared to NATO at around 50 ships compared with 59 ships at present. This will be achieved by disposing early of older and more manpower-intensive ships—for example, from the County, Rothesay and Leander classes—and timing their withdrawal so far as possible to avoid major refit or modernisation. We shall place some of these ships, without further modernisation, in the standby squadron, where they will still be available, though at longer notice, as part of our force declaration to NATO. There will be a consequential reduction of Royal Fleet auxiliaries.

On present estimates, the reduction in target numbers of the Royal Navy will be between 8,000 and 10,000 men by the end of 1986, rather more than the reductions of 7,000 in the Army. We shall maintain the three Royal Marine commandos, since we place great value on their unique capability, but we shall dispose of the two specialist amphibious ships rather earlier than planned.

In consultation with the United States Secretary for Defence about these changes, I have indicated our wish to play an enhanced role, alongside our allies, outside the boundaries of the NATO area. We envisage resuming the deployment of naval task groups—centred sometimes around a carrier, sometimes around destroyers or frigates—for substantial periods on visits and exercises out of area. We have made specific provision in our programme for the extra costs of such deployment. We are continuing with our plans designating an Army field command to plan out-of-area contingency tasks; for providing an extra stockpile of equipment and giving our Hercules aircraft the equipment needed for a co-ordinated assault by parachute troops.

As regards support, the change in policy on refits which I have described earlier will mean that we cannot justify keeping a dockyard organisation of its present size. I regret to inform the House that the base and dockyard in Chatham will have to close in 1984. Work at Portsmouth dockyard will contract very severely, though the naval base will be retained, and consideration will be given to alternative ways of fulfilling the Government's obligation to support the economy of Gibraltar if it is decided that the dockyard work there cannot be kept up indefinitely. We shall consult closely the Gibraltar Government about how best to deal with the situation.

Much more naval training will take place at sea, and there will be a reduction in shore-based naval establishments, stores and fuel depots. Overall civilian numbers in the Ministry of Defence will fall by between 15,000 and 20,000 as a result of our measures. Our total work force will in due course be significantly below 200,000. Redundancies will, I am afraid, be inescapable.

I have described to the House the main thrust of what we propose and the substantial enhancement of our front-line capability in very many areas, but with a major reduction in the supporting infrastructure of defence.

I am asking my right hon. Friend the Leader of the House to find time, as soon as possible, for a debate on all these issues. At that time I shall be able to explain more fully the background to my proposals.

In conclusion, the Government have, in accordance with their undertakings to the country, decided to provide the increased resources our defence demands by increasing spending by 3 per cent. in real terms for the next four years, and we have decided also to apply the extra funding in a revised programme which will enhance the combat endurance and the hitting power of our front-line Forces in the decade to come.

The Secretary of State made a statement which obviously has grave implications for the future defence of this country, and it is one that we shall want to study closely and to debate. His role has been that of a conjurer concealing by illusion what is really happening to the defence effort. His statement today has been altered from the worst case that was trailed in the Conservative newspapers over the last few weeks and he has tried to induce sighs of relief on the Conservative Benches. But I remind them that this is an illusion.

The right hon. Gentleman has told the truth to the House, but not the whole truth. For example, let me put to him the question of money, which enters crucially into the argument. The question of the funds available and what can we afford has been the subject of debate, yet the Secretary of State did not mention even one figure in his statement. How much will this exercise save compared with the Government's published programme? How much will be saved next year and up to 1985? How much will be saved up to the end of the decade, when the Trident costs will start to bulge?

What percentage of GDP does the Secretary of State envisage for defence in all the programme years? He said that it might take a larger percentage of GDP, but, given that under the dead hand of the Tory Government GDP is not likely to rise in the immediate future, how much of it that is available will be taken up by defence?

My second point concerns the size of the Navy. The Secretary of State has announced what appears to be a reduction of nine ships, from 59 to 50, but he will know, as we all do, that the gross number of ships in the Navy is irrelevant. What is relevant is how many there will be in the front line and how many will be in reserve. Will he confirm or deny that all the 50 ships that he mentioned will be in the front line, or will some be put in mothballs, to be called up when necessary, and left to rot away quietly in some river, thus reducing our total front-line fleet to 30 surface ships, as has been mentioned in the press? Will the third through-deck cruiser be sold or scrapped?

How is it proposed to deal with the 8,000 to 10,000 naval redundancies and the 7,000 redundancies in the Army? Where are they coming from? Are they being made across the board? Does the right hon. Gentleman have any plans to get rid of the extraordinary number of senior naval officers who are still in the Admiralty, although the size of the fleet has shrunk by so much?

I turn to the job implications of the closure of Chatham dockyard. The area already has an unemployment rate of 14·3 per cent. If Chatham is closed, the rate will rise to 25 per cent., and with the indirect consequences it may go up to 33 per cent. At the same time we shall lose the greatest source of expertise in SSN—nuclear-powered submarine—refitting in the Navy. What does the right hon. Gentleman propose to do about that and about Portsmouth? Does he propose to launch any special schemes for redeployment? Will any alternative industry come in, or will Chatham and Portsmouth be cast aside as monuments to the Government's monetarist folly?

What are the implications for British Shipbuilders? How many of the 20 ships that the right hon. Gentleman mentions on page 7 of his statement are already ordered and how many are new orders? If, as I suspect, there are no new orders for British Shipbuilders, what effect will that have on British Shipbuilders? Will it mean that its corporate plan has to be scrapped?

Is it not clear to even the most loyal, unthinking and compliant Government supporter that what we are hearing today is the first instalment that conventional defence has to pay because of the Trident missile system fitting into the defence review? This defence review has been shamelessly rigged, in that Trident's efficacy has never been called into question. By lowering our conventional warfare capability, we are lowering the nuclear threshold. We are abandoning the NATO priority, which is for a strengthening of non-nuclear forces as opposed to nuclear. If the right hon. Gentleman will not cancel this nuclear folly, the next Labour Government will.

Perhaps the hon. Gentleman did not hear what I said. We are not trying to save anything; we are spending more on defence. That was the central part of my statement. The percentage of gross domestic product that we shall be spending depends on how fast GDP grows.

Secondly, all of the 50 ships will be available to NATO. They will all be in the NATO operational category, although it is true that eight will be in the stand-by squadron.

We do not need to take any decisions on the carrier at present. HMS "Ark Royal" will not be completed until 1985–86. We shall have to take a decision at about that time about the third ASW carrier.

The reduction in numbers will take place as far as possible by natural wastage. I cannot exclude some redundancies, because it is essential that we keep the balance of the Forces correct and that we have a good balance of recruitment and professional skills within them.

I very much regret the closure of Chatham. It is a matter of great regret. The refits of the nuclear submarines and the other nuclear refits will in future be done in Devonport and Rosyth.

Although the hon. Gentleman clearly did not hear me, I announced today some new ship orders, which I think will be welcome to British Shipbuilders.

I come to the question of Trident. There is a big difference between our achievement already, in this Government's whole period in office, and our forward plans for defence spending, on the one hand, and the implications of the Labour Party's policy of reducing the share of our GDP spent on defence to the European NATO average, on the other hand. We debated the matter recently, and that was the official Labour Party amendment. The difference between the amount of money in our proposals and Labour's proposals is £20 billion. That is enough to pay for Trident four times over.

Therefore, how the hon. Gentleman has the temerity to talk to me about jobs in the defence industry, and our inability to sustain the cost of Trident, I do not understand.

It is clear that the Secretary of State is hard of hearing. I asked what alternative plans his Government had—apart from his Uriah Heep-like expressions of regret—for bringing alternative work to the people who are being displaced in the dockyards. They have served him and his Government, and all Governments, loyally. They demand more than the cheap, intellectual priggishness that they have been treated to recently.

Will the right hon. Gentleman now answer the question about Trident? Are we not hearing today about paying the first instalment in conventional defence for fitting in the Trident programme?

I have already seen the trade unions—about an hour ago. I shall be seeing them again within the next few weeks to discuss the further details of the Chatham and Portsmouth redundancies. We shall see how we can achieve this very difficult reduction in numbers in the easiest possible way. But I repeat that the hon. Gentleman cannot lecture me about the cost-effectiveness of any of our weapons systems.

Order. It is clear that many hon. Members are seeking to catch my eye, but it has been announced that there will be a debate on this question in the near future. Therefore, I propose to allow—exceptionally—a full half-hour for questions and then we shall move on.

Does my right hon. Friend believe that the people of Rochester and Chatham elected me to support a Government that would do what has just been done to their dockyard? My right hon. Friend need not reply. I shall tell him the answer: they did not, and I will not.

What are my right hon. Friend's plans on timing? How long have we to fight this diabolical decision? What are my right hon. Friend's plans for the 7,000 work force and their great expertise? Forty-five per cent. of them are dedicated to submarine refitting. How does it happen that in a realignment of the surface fleet this refitting is removed from Chatham, when they have worked up such an expertise?

Our plans are for the dockyard and naval base at Chatham to close in 1984. I quite understand that my hon. Friend feels strongly on the matter, and I naturally regret that I have had to make this announcement.

As for the manner of the rundown, over the next few months we shall of course have discussions with the employees and their representatives to see how we can do it in the fairest and most effective way.

In view of the highly controversial nature of the right hon. Gentleman's statement, may I ask whether there is any special significance about the fact that there does not appear to be on the Government Front Bench any representative of the upper echelons of the Foreign and Commonwealth Office to listen to what the right hon.

Gentleman says? Is he aware that only last week, in the forum of Western European Union, the Minister of State, Foreign and Commonwealth Office, gave a categorical assurance to the parliamentarians assembled there that there would be no reduction in the conventional forces established in Europe in accordance with the Brussels Treaty? In view of what the right hon. Gentleman has said about the abrogation of an establishment in Germany, is he in a position to give the same categorical assurance, that there will be no diminution in the number of our Forces remaining in Germany in accordance with our obligations?

I said in my statement that we shall maintain our Brussels Treaty commitment of 55,000 men. That is what my hon. Friend said at the Western European Union. There will be a reduction in numbers in BAOR of up to 2,000 soldiers, but we shall certainly maintain our Brussels Treaty commitment, which is what my hon. Friend said at the WEU.

I strongly support my right hon. Friend's determination continuously to obtain value for money in defence expenditure, which is very much needed and has often been reported upon by Select Committees, notably the Public Accounts Committee in the last Parliament. Will he give the House two clear assurances?

First, is it his belief that our maritime capacity, actual and potential, including the capacity for refitting, is adequte to safeguard Britain's maritime trade routes upon which the economic health of this country will always depend, in peace and in war?

Secondly, with regard to the hydrographic department of the Royal Navy, which he did not mention today but which is important for both strategic and commercial reasons and which pays its way, will he give an assurance that if he has not already made the decision he will make a decision in future not only to maintain it but to expand it in that strategic and commercial interest?

I certainly assure my right hon. Friend that we shall retain an adequate capacity for refitting the fleet that I have described for the next decade.

With regard to the hydrographic fleet, perhaps I may deal with that in greater detail when I speak in the debate that my right hon. Friend the Leader of the House has suggested. I cannot undertake that the fleet will be expanded, but I should like to deal with the subject in more detail in the debate.

With regard to anti-submarine warfare, is the Minister sure that he is not relying too much on nuclear-powered submarines and maritime patrol aircraft, and the barrier operations and search-and-destroy techniques in which they undoubtedly excel? How will he provide, for example, for the pre-positioned hostile submarine or a breakdown in barrier operations if he cannot muster a balanced mix of forces, including certainly more escort vessels than the absurdly low figure of 50 that he now proposes?

I am not making any judgments about operational questions of that kind, but the surface fleet will still be substantial. There will be a very substantial increase in maritime air capability, particularly with the new weapons. There will also be an increase in the submarine fleet. However, I think that the techniques of anti-submarine warfare are better dealt with in a debate rather than in supplementary questions and answers.

Does the Minister accept that the reduction in the Navy of both escorts and men will be a very severe blow to it which, in my opinion, will mean that it will not have the capacity adequately to safeguard the convoys which must come to and go from this country in wartime? Does he also accept that the reduction at Portsmouth and the closing of Chatham will have severe repercussions in the neighbourhoods of both ports and indeed the whole of South Hampshire in the case of Portsmouth?

Will the Minister also answer two specific questions? Will he ensure that Ministry of Defence contracts are placed in the Portsmouth area, in particular with Vosper Thornycroft and Marconi? Will he further undertake to continue the close collaboration with local representatives to ensure that the least possible hardship is suffered in these most regrettable reductions?

I believe that the only way that we can afford to go on building new ships for the Royal Navy is by cutting down on the support costs of the existing arrangements. We cannot simply go on modernising Leander frigates at a cost of £70 million each when we can build the new type 23 for about £60 million. It is looking to the future of the Navy that leads one to that conclusion. The main reductions have therefore been in the infrastructure and not in the front-line capability.

With regard to the defence industries in my hon. Friend's area, Portsmouth will remain a major naval base. There is a tremendous concentration of defence industries in that area. I have attempted to avoid substantial cutbacks in procurement so that the defence industries are not affected, but I can do that only if I look to savings in the support infrastructure, which is what I have done.

Will the Secretary of State explain why he thinks it wise to reduce the Army by 7,000, having regard to the enormous burden of Northern Ireland and the very frequent rotation of units there which often requires the taking of troops from West Germany, considerations which caused me to increase the number when I was in office?

Secondly, how many of the M23 frigates have been ordered? Does the Minister appreciate that we shall not sell any unless they are already down the line with a much shorter delivery time than we can normally quote? Has he made up his mind whether he intends to try to sell them for export or for the Royal Navy? Are they to be financed by the defence Vote, or by the Department of Industry Vote, as they should be if they are to be part of the export programme?

Finally, as it seems that we intend to spend so much more than our European allies, what is the Minister doing to encourage NATO to increase its expenditure? Can he give us some idea of NATO's preferences as between our conventional forces and the very expensive Trident programme which, in my view, is not justified against our general economic background or the programme that he has now announced?

On the last point, that may be the right hon. Gentleman's view, but it is not the view of our NATO allies who welcomed the Government's decision to modernise the strategic nuclear deterrent. Moreover, when the right hon. Gentleman was Secretary of State for Defence he, too, was modernising the strategic deterrent with Chevaline. I am surprised that he has changed his mind in the past 18 months.

I should, of course, prefer to increase the size of the Army rather than to diminish it, but I regret to say that, with cost escalation of equipment at its present level, it is not possible both to maintain the enhancement of our weapons systems in Germany and also to retain the full present size of the regular Army.

The type 23 is still in the design stage. We are trying to get the plans ready as soon as possible, but it will be between a year and 18 months before we can place tae first order for a type 23. It is all being financed on the defence procurement Vote.

Finally, of course, I believe that our NATO allies should increase defence spending. That is the purpose of the 3 per cent. But it does not help very much to lecture one's allies. One must just encourage them along.

Will my right hon. Friend accept that the use of the term "contraction" with regard to Portsmouth dockyard is no comfort whatever to the thousands of people who will lose their jobs with no prospect of finding alternative employment in that area?

Does the Minister also accept that the deterioration in morale in the dockyard which will follow today's statement will make an orderly contraction difficult to obtain? Will he also explain how, if his strategic decision with regard to the surface fleet proves to be wrong, the necessary back-up capacity could be provided for the hastily assembled surface fleet which might well be needed in an emergency?

Finally, I wish to put two specific questions. First, will the Minister give a clear assurance that the Portsmouth naval base will still be regularly visited by warships of all classes and from all nations and that it will have the proper facilities to receive and to service them? Secondly, with regard to the base and the dockyard, will he give an assurance that the giving up of Ministry of Defence land to the civic authorities and to private development will take place as soon as possible, but that before that happens sensitive industries will be offered places within the secure perimeter, for example, for the production—

Order. I know that the House wants to be fair to the hon. Gentleman, whose constituency is affected, but I have given a time limit. Perhaps he will now come to his concluding question.

I agree with my hon. Friend that the contraction of Portsmouth will be very severe. I can only say that we shall try to make it as orderly as we possibly can. As my hon. Friend knows, whenever the economy is buoyant there is anyway a considerable problem with Portsmouth. I believe that when the economy picks up there will be additional jobs available in the Portsmouth area. Portsmouth naval base will continue as at present. I shall certainly look into my hon. Friend's questions about land, and I shall be happy to discuss with him any problems concerning the Portsmouth dockyard contraction if he would like to come and see me.

Dr. David Owen
(Plymouth, Devonport)