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Commons Chamber

Volume 84: debated on Wednesday 23 October 1985

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House Of Commons

Wednesday 23 October 1985

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business After Prayers

Poole Borough Council Bill Lords:


That the Promoters of the Poole Borough Council Bill [Lords] shall have leave to suspend further proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than the day before the close of the present Session and that all fees due on the Bill up to that date be paid;


That, if the Bill is brought from the Lords in the next Session, the Agent for the Bill shall deposit in the Private Bill Office a declaration signed by him, stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the present Session;


That, as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed);


That, no petitions against the Bill having been presented within the time limited within the present Session, no Petitioners shall be heard before any committee on the Bill save those who complain of any amendment as proposed in the filled up Bill or of any matter which arises during the progress of the Bill before the committee;


That no further fees shall be charged in respect of any proceedings on the Bill in respect of which fees have already been incurred during the present Session;


That these Orders be Standing Orders of the House—[The Second Deputy Chairman of Ways and Means.]Message to the Lords to acquaint them therewith.

Oral Answer To Question

Trade And Industry

Steel Industry


asked the Secretary of State for Trade and Industry what representations he has received on the British Steel Corporation's corporate plan; and if he will make a statement.


Taylor asked the Secretary of State for Trade and Industry if he will make a statement on the position of the steel industry.

The Secretary of State for Trade and Industry and President of the Board of Trade
(Mr. Leon Brittan)

A statement on the British Steel Corporation's corporate plan was made by my right hon. Friend on 7 August, copies of which have been placed in the Library.

I am grateful to my right hon. and learned Friend for his reply. I welcome the fact that Ravenscraig will continue to operate during the current operating period of the British Steel Corporation. Is my right hon. and learned Friend aware of the widespread concern about BSC's proposal to close Gartcosh, which is in Strathkelvin, and the fears of the impact of that closure upon the steel mill at Ravenscraig? Will he assure me that if evidence is brought before the current Select Committee investigation which suggests that the closure of Gartcosh will prejudice the future of Ravenscraig, he and his ministerial colleagues will ask BSC to review its closure decision?

I am aware of the anxieties and have seen two delegations about the matter. I do not believe that the Gartcosh proposal will in any way prejudice the future of Ravenscraig. I shall consider any evidence to the contrary, but the material that has been put before me by the delegations does not support that view.

My hon. Friend the Under-Secretary of State has revealed to me in a written answer that whereas British jobs in steel have been cut by more than half since 1980, other members of the European Community have not reduced theirs by more than one quarter. Therefore, will my right hon. and learned Friend pay serious attention to the views of the Select Committee on Trade and Industry, which last year, said that there should be no further steel closures in Britain until other members of the Common Market carried a fair share of the cuts in jobs and capacity?

We shall fight for the British steel industry in the Community, as elsewhere. The United Kingdom's share of closures., which removed 30 million tonnes of hot-rolled capacity throughout the Community, was about 5 million tonnes. As for the future, I believe that the decision relating to Alpha steel makes a significant contribution towards what is required in the Community.

Will the Secretary of State take this opportunity to congratulate the workers of Gartcosh on their splendid record in co-operating with every one of British Steel's plans for productivity, pricing, delivery dates and exports? Will he also, using his new broom, withdraw the threat to this plant and to this community, which has given so much to the steel industry and to the British manufacturing base?

As the hon. Gentleman knows, I am happy to pay tribute to the work force at Gartcosh. Nevertheless, I cannot forestall or change BSC's decision. I am satisfied that Ravenscraig's future is not imperilled by that decision.

Does the Secretary of State realise that his reply, combined with the attitude and policies of the BSC, constitutes an insult to the intelligence of the Scottish people? They believe that if Gartcosh is closed there will be a proposal in three years' time, after the next election, to close Ravenscraig and that our national industry is being sabotaged.

The hon. Gentleman has no basis for making such an allegation. In many countries there are integrated hot-strip mills which have no cold mills associated with them. If the hon. Gentleman looks at Nippon Steel's Oita works, Nishin Steel's Kure works and, above all, US Steel's Geneva works in America, which is 400 miles away from the nearest cold reduction mill in Pittsburg, he will realise that his assumption is wholly unfounded.

Does my right hon. and learned Friend agree that in 1981 the British Steel Corporation was a joke among the steel producers in Europe, but today it is one of the most productive steel producers, if not the most productive, in Europe? Its costs of producing steel are lower than in Japan as well as West Germany. Will my right hon. and learned Friend remind the House that where the world is awash with steel and the European steel industry is operating at only 65 per cent. of manned capacity, decisions such as those in relation to Gartcosh must be taken if the BSC is to remain viable and to be set on course for a £300 million profit?

I agree that the decisions announced in August are designed further to strengthen the progress of BSC. which has been considerable, as my hon. Friend said. In doing so, the corporation will protect and enhance the prospects for all working in steel.

In his early days in his new and important office, will the Secretary of State recognise that the British steel industry has been cut to the bone in terms of capacity? Will he urge his colleagues to make the strongest possible representations in the European Coal and Steel Community to increase the British quota? Will he also bear in mind that this country will not always be in a state of slump?

I can agree with a large part of what the hon. Gentleman said. We shall be asking for more quota. We have done so, and shall continue to do so.

I accept that the decision to close Gartcosh was taken by the BSC, and that it is right that a nationalised corporation should take its own decisions, but what does my right hon. and learned Friend propose to do about the 88 submissons made to him by the trade unions in favour of retaining Gartcosh? As far as Scottish Members are concerned, it is not yet a cut-and-dried decision.

I have met the trade unions concerned, which have elaborated their position to me. I have explained that the strategic decisions relating to the steel industry are taken by the Government, but the decision on Gartcosh is for the corporation.

Will the Secretary of State bear in mind that he need not accept every word that is uttered to him by BSC on this matter? The right hon. and learned Gentleman should recall that Ravenscraig was set up by a political decision of Harold Macmillan. Secondly, Gartcosh is seen by every Scottish Member, with the possible exception of one rather eccentric Member, as an essential feature of Scottish industrial life. Will the right hon. and learned Gentleman pay attention to the views of Scottish Members of Parliament, who know something about the matter?

Of course I want to consider carefully the views of Scottish Members of Parliament. It is precisely because I want to do so that I have seen two delegations on the matter. However, the fact is that Gartcosh takes 30 per cent. of Ravenscraig's hot mill output. Shotton already takes 25 per cent. and only 6 per cent. of Gartcosh's output goes direct to customers in Scotland. I sympathise with those working at Gartcosh, but I am determined not to undermine the future of Ravenscraig by giving currency or support to the view that the decision on Gartcosh has the implications for Ravenscraig that so many people have suggested.

I welcome the right hon. and learned Gentleman to the somewhat diminished Department of Trade and Industry. I thought that his right hon. Friend the Leader of the House was somewhat cruel on Monday when trying to justify the transfer of the Department of Employment and a considerable part of the right hon. and learned Gentleman's Department to a Minister in another place, who does not seem to bother to turn up. In trying to justify the transfer of the right hon. and learned Gentleman's duties, the Leader of the House said that it was important to have the right man in the job. May I say that it seems grotesque to the Opposition that, while the Germans are increasing subsidies to the steel industry, this Government are imposing further cuts? As a Welshman, I join my Scots colleagues in denouncing the Gartcosh closure. No one is taken in by the cynical decision to defer the Ravenscraig announcement until after the general election. We are all infuriated by the fact that the Gartcosh decision, plus the refusal to make appropriate investment in Ravenscraig, is a malevolent attempt by the Government to predetermine that Ravenscraig must close when the decision time comes.

I hope that if I ever have occasion to compliment and welcome the right hon. Gentleman, I shall do so in a less laboured way. The objectives of the United Kingdom Government in the European Community are for a highly restrictive regime for state aids to be applied by all countries. That is something that we shall pursue. The point that was made about investment in Ravenscraig is wrong. Since the announcement of which the right hon. Gentleman complained, the British Steel Corporation has announced investment of £15 million in Ravenscraig. That is an earnest of its intentions and sincerity about what was said in August about the future of Ravenscraig.

Order. I have allowed a long run on this important matter. We must now get on rather more rapidly.



asked the Secretary of State for Trade and Industry what plans he has to bring new industry to Merseyside.

The Merseyside travel to-work areas continue to benefit from the highest level of regional aid available in Great Britain.

When will the Minister recognise that the policies pursued by this Government have resulted in abysmal failure with regard to industry coming to Merseyside? Is he aware that about 70,000 jobs have been lost in Liverpool alone in the past seven or eight years and that unemployment among young people is as high as 80 and 90 per cent. in many areas? Is that not the reality, rather than the fantasy of the Government, who suggest that there is a better tomorrow? When will the Government act on the terrible problem of mass unemployment on Merseyside and in other places?

I do not believe that the hon. Gentleman listened to my reply. The highest levels of aid in Great Britain are available to Merseyside. Has it not occurred to the hon. Gentleman that Councillor Hatton drives away investment in Liverpool faster than any other thing?

Does my hon. Friend agree that the best way for Merseyside to encourage industry into that area is for the Liverpool city fathers to admit that the great Socialist experiment has failed, and that a belief in free enterprise, flexible working practices and lower overheads, especially rates, is needed? Until then, will the Government stop throwing good money after bad?

I entirely agree with my hon. Friend that the decisions which have been made by the Socialist council in Liverpool drive away investment and jobs from Merseyside.

Is the hon. Gentleman aware that over the past seven years Liverpool has lost 65,000 jobs, and that Mr. Hatton has been deputy leader for the past two years only? Is he also aware that Liverpool, according to EEC charts, is fifth from the top in the league of areas with regional problems? Is he further aware that one in four of the workers on Merseyside is unemployed and that Liverpool is only part of Merseyside? Will he stop talking a lot of nonsense, like his colleagues, about Mr. Hatton and begin to deal with the real problem of Merseyside —unemployment—[Interruptioni.]

The hon. Gentleman will be aware that my constituency is just 15 miles away from Merseyside and Liverpool. I am well aware of the problem with which that part of the country has to deal. However, it would help if the likes of Councillor Hatton and his colleagues did not drive away potential investors.

Does my hon. Friend accept that one of the most sensible recent suggestions about the problems of industry was made by my right hon. Friend the Secretary of State for Defence, who is determined to ensure that the overfat south-east industry goes to help the lean and hungry midlands, north and Merseyside? Does he agree that it is a sensible use of Government patronage to ensure that those who are hungry in the north need not always feed those in the south?

As my hon. Friend will accept, I always agree with my right hon. Friend the Secretary of State for Defence, who will have regard to value for money and other aspects when he places contracts.

Notwithstanding the fact that the contrived confrontation in Liverpool is undoubtedly driving away industry and investment from Merseyside and that the sooner the confrontation and aggression end the better it will be for Merseyside, does the Minister accept that one in five of the population there is out of work, and that the city planning officer predicts that a further 31,000 will become unemployed by 1991? What will he seriously try to do to attract new and better enterprise to that deprived part of the country?

I am glad that the hon. Gentleman accepts that there is a problem of turning away inward investment. I accept that Merseyside and Liverpool have great problems. As I said in answer to the main question, Liverpool receives the highest regional aid in the country through the various schemes. I do not believe that the Government can do more than that.

European Regional Development Fund


asked the Secretary of State for Trade and Industry what is the value of the grants allocated to England from the European regional development fund since its inception.

Does my hon. Friend agree that those grants bring considerable advantage to Britain? Is he satisfied that the general public are aware of the extent of such assistance from the EC?

I certainly accept tht the grants bring investment into Britain. Between 1979 and 1983, about 109,000 jobs have been associated with the regional development fund. I am always keen to broadcast the schemes available, and my right hon. and learned Friend and I will do precisely that throughout the country.

I welcome the Minister of State to his new responsibility for regional aid, but I point out to him that he inherits a policy that was hacked to pieces by his predecessor. Will he take an early look at the prospects for regional aid in the light of the fact that, whatever we get from the ERDF, we shall still be a massive contributor to the EC budget, and that any help that the Government can give under section 7 of the Industry Act will be far less than was lost to the regions through the reduction in the previous regional policy? Will he review the position and the policy that he has inherited in the light of its results?

I thank the hon. Gentleman for his welcome. We certainly wish to maximise what we gel from the EDRF. However, I am sure he will agree that the most sensible and correct way to proceed is to direct the money available towards the creation of more jobs.

Steel Industry


asked the Secretary of State for Trade and Industry what is the present position in regard to the privatisation of the special steels capacity of the British Steel Corporation; and if he will make a statement.

It was announced on 7 August that the Government have agreed in principle to BSC's and GKN's proposals for a joint venture in engineering steels. The Government welcome the proposed venture as a further step towards the privatisation of BSC's activities.

Does the Minister agree that after all the furtive wheeling and dealing in pursuit of this privatisation, which has continued for several years, it is time that some consideration was given to the interests of the workers in the special steels industry, who hay e devoted great energy to assist the development of the industry, taken part in an enormous effort dramatically to improve productivity and broken world production records, but whose wages, valuation and conditions of employment are now regarded as a matter of the utmost secrecy? Does the Minister accept that the Government have a responsibility to the nation as a whole, not merely to the accommodation of the fixers in our declining economy?

I certainly agree with the hon. Gentleman that the work force is an important aspect of any company. However, he will be aware that the Government made their decision, which was announced on 7 August, with the thought in mind that it is in the best interests of the companies and, therefore, of their labour forces, that the proposals should be proceeded with. However, negotiations have yet to take place.

Is my hon. Friend aware that steel stockholders in my constituency tell me that they have considerable difficulty in getting supplies of appropriate steels from BSC and that, although they would like to buy British, they find that on the whole BSC does not seem to be interested and that, as a result, they have to import many kinds of special steel? Does my hon. Friend agree that privatisation can only improve that position?

I agree that privatisation is likely to improve the situation. That is why we are proceeding with quotas in the way that we are.

Is the hon. Gentleman aware that rumours are rife again in south Yorkshire about further closures in the special steels sector? In the past such rumours have all too often proved to be true. As the BSC chairman, Sir Robert Haslam, made it clear at his last meeting with the Select Committee that he expected a further closure in that sector after Tinsley Park, and as agreement has now been reached on the privatisation scheme, will the hon. Gentleman take steps to make public this agreement, which so far has been secret, so that the people concerned will know where they stand, how many more closures will take place and how many more jobs will be lost?

Those rumours are pure and complete conjecture. Further negotiations are taking place to get the deal together and, until they are concluded, no decisions could possibly be taken. I understand the hon. Gentleman's point about uncertainty. That is always very unsettling for those who may or may not be involved.

Competition And Retailing


asked the Secretary of State for Trade and Industry if he will make a statement on Government policy following the Director General of Fair Trading's report on competition and retailing.

The Parliamentary Under-Secretary of State for Trade and Industry
(Mr. Michael Howard)

A full statement was made by my predecessor on 28 June, stating the Government's policy in the light of the Director General's report.

Does the hon. Gentleman accept that there is widespread concern that the Binder Hamlyn report seriously underestimated the power of the monopoly purchaser in the market place through the operation of the discriminatory discount system? If the hon. Gentleman will not legislate to protect the small retailer, will he at least consider setting up a voluntary code of practice, or is he merely prepared to stand idly by and let our network of small retailers, especially those in rural areas, simply wither away?

The question of a code of practice is one for the trade itself to consider, although it would be essential for such a code not to conflict with the requirements of our competition legislation.

Will my hon. Friend confirm that his Department has not received any complaints from consumers or consumer organisations about the level of competition in retailing? Is it not a fact that consumers throughout the country are enjoying great benefits from the Government's competition policy?

I welcome the Minister to his new responsibilities. I put it to him that there is a simple question at the base of this apparently complicated matter. The market share of the four major supermarket groups has risen, the number of small independent grocers has fallen and the discriminatory discounts which are the cause of the problem have grown in size. Are the Government prepared to sit back and allow this to continue?

The extent to which the market share has increased is diminishing. The hon. Gentleman is asking the Government to take action that would increase the prices that consumers pay. I think that such action would be difficult to justify.

Cars (Imports)


asked the Secretary of State for Trade and Industry what representations he has received from BL about the report by Dan Jones on import penetration of cars.

None, but I recognise the concern about the sourcing policies of the multinational car companies, and there have been discussions with those companies. Ford has now said that it plans to manufacture 70 per cent. of its United Kingdom car requirements in its United Kingdom plants in the second half of 1985, and to maintain or increase the 80 per cent. United Kingdom content in these cars. Vauxhall aims to increase the number of cars and car-derived vans that it manufactures in the United Kingdom from 45 per cent. of its requirements in 1984 to 56 per cent. this year. Vauxhall will also raise the United Kingdom content of its vehicles from an average of about 46 per cent. in 1984 to about 49 per cent. by the end of this year. I regret that, after lengthy discussions, Vauxhall is not yet ready to go further in proving that it really is a British car producer.

Has not the report, with its revelation that exactly two-thirds of car sales in Britain come from imports, prompted the Government to push General Motors, Ford and Peugeot into making public their plans for investment and future manufacture in this country? Does the report not show that the catastrophic fall in employment in the car industry from 500,000 to 250,000 over the past 10 years is because multinational companies such as General Motors and Ford have no loyalty to Britain or to their workers, and that their loyalty is purely to the global strategy of profit and money?

I do not believe that the hon. Gentleman's analysis will assist the British motor industry. The causes that have led to the fall in British car manufacture are much more complicated than the hon. Gentleman suggests. He has to look at such things as labour practices, productivity and wage claims. The progress made by some British car manufacturers, in particular British Leyland in the past few years, resulting in their getting to grips with the difficulties, has been remarkable and should be commended.

Instead of listening to hard luck stories about British Leyland and import penetration, will my right hon. and learned Friend listen to the success stories of General Motors, and in particular Vauxhall Motors? Does he appreciate that output by Vauxhall Motors has doubled in recent years, that the United Kingdom content of Vauxhall cars is going up quite dramatically and that, unlike British Leyland, Vauxhall, certainly at Luton, has received no Government money, whereas BL has received £1·8 billion over the past two years? Will my right hon. and learned Friend talk about the success stories rather than listening to the carping of British Leyland?

I am happy to compliment my hon. Friend's constituents on the sterling work that they have done and I hope that that will lead to General Motors to ensure that more Vauxhall cars are made in Britain.

In the general endeavour to get some balance into our motor industry, can we expect that the new Secretary of State will initiate strenuous attempts to achieve balance in the trade between Spain, and this country, to enable Austin-Rover to trade on equal terms in that country and not have to climb over a tariff barrier four times as high as that faced by the Spanish manufacturers?

The hon. Gentleman is making a perfectly fair point about Spain, and this is one of the matters where Spanish entry into the EC will assist, because it will lead to a reduction in the tariff and an increase in the reduced duty quota.

Will my right hon. and learned Friend bear in mind that the manufacturers in my constituency, and in particular Land Rover, would benefit greatly in terms of competition if they could enjoy lower interest rates and more favourable exchange rates, and if there were a review of the special VAT on cars?

These were among the points made by the Society of Motor Manufacturers and Traders at its conference this morning and I am conscious of the interests and desires of the society in that respect.

Has the Secretary of State seen this absurd advertisement, which says "GM loves UK', ending with the words

"We seem to be a perfect match"?
Does the right hon. and learned Gentleman agree that for us this is a case of unrequited love, as GM told the House of Lords Select Committee that imports to the United Kingdom of foreign-made kits, for cars to be merely assembled here by Meccano technology, have increased more than threefold, from 51,000 in 1981 to 163.000 last year and in the meantime GM's net adverse trade balance has reached the appalling figure of £656 million? Far from being a perfect match, is not the reality that GM has leeched on to the British market under the disguise of British labels to sell foreign cars while exporting British jobs to the EC?

I have given the figures and my comments. I do not think that it helps to put the matter in the terms that the right hon. Gentleman does. Having said what I have said about our disappointment that it has not been possible for General Motors to go further, one has a duty to point out that if the British components' share in the product is not so high as one would like one must ask whether British component manufacturers cannot produce products which General Motors must recognise ought to be included in its cars, on price considerations alone.

The City (Regulatory Framework)


asked the Secretary of State for Trade and Industry what progress has so far been made in establishing the regulatory framework for the City.

Good progress is being made. The preparation of legislation based on the financial services White Paper is well advanced. In the City, arrangements for setting up the new regulatory structure are in hand under the direction of the Securities and Investments Board and the Marketing of Investments Board Organising Committee.

Does my right hon. and learned Friend agree that, on reflection, and following the debates in the House before the recess, it might be better to have one overall body to regulate the City, rather than two bodies as originally proposed, but subject to reconsideration?

I know that a strong body of opinion feels that way. We are awaiting the views of the SIB and MIBOC as to whether there should be one board or two. If a single board is recommended, I shall have absolutely no objection to that.

Will the Home Secretary—or rather the ex-Home Secretary, complete with his new job and new hairpiece—[Interruption.] I think that it is very fancy. Will the right hon. and learned Gentleman lake appropriate steps to ensure that there is a proper inquiry into the Lloyd's fiasco? Will he also acknowledge that a major body blow to the City and to the taxpayer has been the loss by the Export Credits Guarantee Department of £400 million in the last financial year, resulting in a £350 million bail-out from the Consolidated Fund? Will he also make inquiries in Nigeria to see where the fraudulent practices took place that resulted in a substantial loss to the taxpayer and take appropriate steps, with the Attorney-General, to see that those involved are brought to book?

The only part of the hon. Gentleman's supplementary that has anything to do with the main question is that related to Lloyd's. Disciplinary proceedings by Lloyd's have been taking place. In addition, the Director of Public Prosecutions is considering a number of matters relating to some of the affairs concerning Lloyd's that have achieved wide publicity. I believe that that process should be allowed to continue.

Is my right hon. and learned Friend aware that if the new proposals for large conglomerates in the City and the merger between jobbers and brokers go ahead there will have to be careful consideration of the whole law of agency to avoid the conflict of interest that may be expected? Will he examine that very carefully in the forthcoming Session?

I shall certainly look very carefully at the point made by my hon. Friend. We shall wish to consider the impact on the law of agency of any changes in the City. In saying that, however, I do not wish to give the impression that we have reached any conclusions whatever on the subject.

Does the right hon. and learned Gentleman accept that his plans for regulating the City would carry more credibility if he were prepared to take seriously the abuses and irregularities that have come to light in respect of the British Telecom flotation? While some of the cases have rightly been referred to the Director of Public Prosecutions, does he agree that with further privatisations pending it is essential that a full departmental inquiry should take place into what went wrong with the BT flotation so that we can all know the extent to which killings were made at the expense of the taxpayer and in defiance of the Government's own rules?

I do not believe that such investigation is called for. I believe that the inquiries now being made, to which the hon. Gentleman rightly referred, are the appropriate ones and that that is the right way to proceed in this matter.

To pursue the answer given by my right hon. and learned Friend to the supplementary question of my hon. Friend the Member for Surrey, North-West (Mr. Grylls), would it not be most remarkable if either the SIB or the MIBOC were to recommend its own abolition? I support my hon. Friend and urge my right hon. and learned Friend to give serious consideration to the representations that have been made from both sides of the House during the many debates that have taken place on this issue. We must have legislation that provides for one stratified authoritative body to have control of the regulation of the City.

I assure my hon. Friend that I shall give most serious consideration to the issue that he has raised. He is right to say that he is by no means the only person raising it.

In view of the revelations of pending prosecution of representatives of the Bank of England and the attention that is being directed to its own regulatory role, when matters have been cleared up will the Secretary of State make a statement to the House on the future of the Bank's regulatory role in respect of the commodity markets?

The hon. Gentleman must have said inadvertently what he did not intend to say. Certain matters are being investigated, and until the investigations are completed it would be quite wrong to jump to the conclusion to which the hon. Gentleman has jumped.

Company Donations


asked the Secretary of State for Trade and Industry if he will now encourage companies to ballot their shareholders and employees before making donations for political purposes.

This is something for company directors to decide in the light of circumstances and their priorities.

Now that union members have demonstrated clearly their wish to continue with the political fund, why is it that the Government refuse to legislate for, or even to encourage companies to have, such balloting before contributions are made for political causes? What does the Minister, especially the Secretary of State, say to all those fair-minded individuals who say, "If unions are forced to have political fund ballots every 10 years, why are companies not subject to the same provision?" Is the answer that companies donate to the Tory party?

Companies are not subject to the same provisions, for a simple reason which I would have thought would be apparent to the hon. Gentleman. Shareholders are free to buy or sell their shares, and very often trade union members do not have the freedom to choose the union to which they will belong.

Why has the Labour party such a fixation about these donations? Have representatives of the Labour party never been able to attend annual general meetings? Have they never had the privilege of reading an annual report in which political donations are declared? If they take such a view about political donations, should they not attend annual general meetings to try to vote down the proposition that such donations be made? Surely each company shareholder is entitled to support or dismiss a political donation as it comes before him.

My hon. Friend is absolutely right. He and the House may be interested to know that within the workings of the Labour party there are some proposals afoot which suggest that the Labour party might approach companies to see whether donations might be forthcoming.

Should not companies such as Silentnight be forced to hold ballots for their shareholders before they break agreements that have been reached with trade unions and before they dismiss workers who balloted under trade union legislation?

Aid And Trade Contingency Provision


asked the Secretary of State for Trade and Industry if he is satisfied with the operation of the aid and trade contingency provision; and if he will make a statement.

Since 1978, exports totalling £1·7 billion have been secured with £350 million from the aid and trade provision. With this support, 96 projects have been won in 37 countries. I am confident that ATP will continue to be a very effective instrument.

I am grateful to my right hon. and learned Friend for that answer, which demonstrates how well he has done. Does he realise how seriously concerned major British exporters are that their Japanese counterparts have an ATP fund that is 40 times as great? They will feel at a distinct competitive disadvantage for as long as this continues. despite the excellence of their products. Does he agree that, first, we must deal toughly with the Japanese on what amounts to a grotesquely unfair trading practice? We must speed up our procedures for the approval of the ATP budget so that industry can take quick decisions. If possible, we should increase the budget. We should certainly set aside a special budget for China, without reducing the existing budget.

I agree with my hon. Friend about the need to take action against unfair practices. My hon. Friend will be aware that we have announced that in principle the aid and trade provision could be used to enable long-term low interest loans, similar to those that are offered by our competitors, to be made available in appropriate cases. It is in that context that officials have been visiting Beijing to consider a possible facility there. The total size of the ATP provision is being considered in the context of current public expenditure discussions, and I cannot anticipate their outcome.

Is not the point that the Japanese offer massively better facilities than are offered by the British Government, in that to date the British Government have been halfhearted about that kind of assistance for industry here? Has the time not come when we ought to have a genuinely rolling ATP programme so that the timing of a project is not the factor that means that the project fails to receive the go-ahead?

Certainly, I agree that we need one that is flexible and can accommodate the commercial realities of the situation. It is true that the use of mixed credits has grown. Notifications to OECD rose by 50 per cent. in 1984. I do not think that a general competitive increase in provisions of this kind is necessarily in the best interests of this country, because if it goes on we may be outbid. It is, therefore, in our interests to use our international influence to discourage practices of this kind. For the moment there is no doubt at all that we must adopt a flexible approach. It is for just that reason that we shall be introducing the soft loan facility of the kind called for by industry, which will help us make the best possible provision.

I was very happy to hear my right hon. and learned Friend's last statement. Is he aware that, in the experience of most exporters, including the largest in Lincoln, the flexible use of soft loans is one of the best weapons in securing large overseas contracts, rather than our previous excessive reliance on direct grants?

Both will be needed. Different mechanisms will be appropriate for different projects. We are, however, persuaded of the need for soft loans and it is for exactly that reason that I hope, in the not too distant future, to announce the details of the scheme on which we have been working.

Regional Policy


asked the Secretary of State for Trade and Industry if he will make a statement on the results to date of his regional policy.

It is too early to measure the effectiveness of the revised regional policy. The transitional period is not over and we expect to continue making payments under the old schemes for some time. We shall make an assessment as soon as possible after the new incentive package has had time to work through into additional job opportunities.

Further to that very disappointing reply, is the Secretary of State aware of the vast and ever widening gulf between some regions of this country and others in terms of economic activity and recovery, in relation to which his present budget for regional policy is quite inadequate? Will he, therefore, announce that he is now aiming at greater financial support for his regional policy?

I do not need to be told by the hon. Gentleman about the gulf between different parts of the country. It is a subject on which I touched very extensively in my speech to the Conservative party conference only a couple of weeks ago. However, the hon. Gentleman is making a great error if he thinks that the efficacy of regional policy can be judged simply by the amount of money spent on it. To provide huge sums of money for capital investment which would have taken place in any event, or which would lead to no substantial number of new jobs, is simply a waste of money and has nothing to do with regional policy.

Does my right hon. and learned Friend recognise that regional policy is not simply a matter for his Department, but affects decisions of all Departments of State, as the Secretary of State for Defence has now acknowledged? Is it part of his responsibility within the Government to ensure that regional policy is considered in all aspects of other Department's decisions?

I am not sure whether it is my responsibility, but I certainly indicated in that same speech that I thought it ought to happen.

In the light of that Blackpool speech, when the Secretary of State indicated strong support for regional policies, and in the light of what he has already said, is he hinting that there will be a reduction in public expenditure in inducements for investment?

I was not hinting at anything. I said what I had to say. The evidence of the new policy and what it is doing is apparent in some respects, because since parts of the west midlands became intermediate areas last November, 538 firm applications for regional selective assistance have been received, 156 offers of grant have been made so far, which represent over £17 million of grant and over £150 million of total investment, and nearly 12,000 jobs are to be created or safeguarded. That is our new regional policy.

Is my right hon. and learned Friend aware that, irrespective of the answer that he has just given, the designation of the Ross and Cinderford travel-to-work area as an intermediate area is regarded as a sick joke? Since the designation a year ago, only 18 of the 285 applications made have gone to the first stage of appraisal, and, as far as I am aware, not a single one has come to fruition. Given the intervening increase in unemployment in the area, which has now reached about 17 per cent., will my right hon. and learned Friend reaffirm yet again his determination to make the intermediate area status successful? Will he also let us know how that travel-to-work area compares with others that were designated at the same time?

I assure my hon. Friend that the existence of intermediate areas and the regional selective assistance available to them are important parts of regional policy. If my hon. Friend has any reason to believe that a project put forward from his constituency has not received the consideration that it should be given under the criteria, I hope that he will let us know.

Is the Secretary of State aware that the House is not terribly interested in what he tells the Conservative party at Blackpool, but is much more interested in what he does as the Minister in charge of regional policy? Will he confirm that it is the stated aim of his policy massively to reduce regional aid for the regions, and confirm that that is already being acheived? When the impact of that policy becomes clear in the regions, will the Secretary of State make a statement to the House and, in the light of reductions in regional aid and the ever-increasing unemployment in the regions, will he revise his policy and reinstate the policy which his predecessor hacked to pieces?

I do not undertake to do any of the things for which the hon. Gentleman asks. He sounded like an old gramophone record that needs replacing. As I said in answer to a previous question, I do not believe that the success or value for money of regional policy can be judged simply by the amount of money being poured into it. The evidence given repeatedly over the years of money spent in the name of regional policy not leading to more jobs in the regions is legion. There is evidence to support the better targeting of regional policy, which we are pursuing. I have given an example from the west midlands, and I am happy to give an example from Bishop Auckland, a different part of the country, where, in a comparatively short time and in a small area, nearly £3 million of grants have been offered which have led to the creation or safeguarding of more that 1,200 jobs. The overall effect is, of course, impossible to assess only a matter of months after the policy came into existence, but I shall certainly be happy to report to the House from time to time on the effects.

I agree that one cannot judge the effectiveness of regional policy solely in terms of the money spent, but does my right hon. and learned Friend agree that arguments that regional policy is ineffective because it does not create additional net jobs in the economy as a whole also miss the point? Obviously, all new jobs are welcome, but is not the key feature of regional policy the fact that it is intended to transfer jobs into areas where assistance is available? Measured against that test, is not the policy quite successful?

My hon. Friend is right. The figure of about 500,000 jobs in the region has been mentioned and I do not think that we need be embarrassed or ashamed about the fact that we are spending money—effectively now, I hope—to redress the balance to which reference has been made from both sides of the House.

Cars (Overseas Components)


asked the Secretary of State for Trade and Industry what information he has as to which motor vehicles, by name, although seemingly British-made, have over 40 per cent. and over 50 per cent., respectively, of foreign-made components.

The Parliamentary Under-Secretary of State for Trade and Industry
(Mr. John Butcher)

Detailed information in the terms requested by the hon. Member on the imported component content of vehicles is, I regret, not available.

It is appalling that the information is not available; it should be available. Will all Ministers in the Department of Trade and Industry come to Sheffield to see the vast ex-industrial area of the east end so that they may realise what havoc they have wrought in the past six years? Do they realise that many factories are closing and there is a major strike in a so-called privatised firm in Sheffield because the steel that we make in south Yorkshire, which should be going to the motor trade, cannot go there because of the importation of foreign cars? What will the Government do? It is incredible. Unemployment seems to be out of control and the Government have no plans to do anything about the steel industry.

The reason why it is difficult to obtain those figures is that the car companies would have great difficulty, after a long period of time, assembling the information in the form that the hon. Gentleman has requested. The performance of the steel industry depends on the performance of its users, and until such time as our car industry starts to make major inroads in its share of domestic and international markets, the steel industry will continue to have difficulty in getting volume production back to historical levels. Of course we are concerned about this, and that is why we have supported the steel industry over the last five years.

Instead of criticising General Motors in the way the Opposition Front Bench has done, ought not people to remember the extent of General Motors' investment in truck factories and component part factories here? Will my hon. Friend confirm that it is Government policy to do things that encourage more General Motors investment in this country?

The Government can do a number of things to encourage General Motors to increase its investment in the United Kingdom, but I am bound to echo the remarks of my right hon. Friend that the onus is on General Motors to increase the British content of its United Kingdom products and to increase the share of the British market which it satisfies from its British assembly plants. We welcome the great strides the company has taken in the commercial vehicles sector and in particular I should mention the great innovations it has made in electrically driven vehicles.

Does the Minister agree that one of the problems concerns the policy of the multinationals in relation to putting up "screwdriver" plants? Is he aware that many people buy Ford Capris and Granadas believing they are buying British-made cars? What are the Government doing to remedy this situation? Is it not true that they are soft in dealing with multinationals, and is it not about time they were tougher, in the interests not only of British workers and British consumers, but in the interests of the economy?

In the context of the original question and the question posed by the hon. Gentleman, we have some weaponry available to tackle this problem. The Trade Descriptions Act 1972 requires imports bearing a United Kingdom name or mark also to bear a conspicuous indication of their country of origin. I am advised that enforcement of the Act is via the local authorities. There are no central statistics on prosecutions, but three recent cases in the west midlands were taken up precisely to attack the issue of badged cars.

Diesel Engines (Exports)


asked the Secretary of State for Trade and Industry if he will make a statement on the exports prospects for British-made diesel engines of all kinds.

Detailed assessments of market prospects are a matter for the companies themselves. I note, however, that the industry has an excellent record in this difficult market exporting engines and components worth some £700 million a year, either directly or as parts of other products. This amounts to about 70 per cent. of its production. British diesel engine companies are at the forefront of new technology and new products, including engines for the growing diesel car and van markets, and my hon. Friend can be proud of the contribution made by his constituency to the sector's success. I am therefore confident of the industry's ability to sustain its substantial export performance.

I thank my hon. Friend for his reply. Will he join me in congratulating Perkins Engines of Peterborough on the production of its 10 millionth diesel engine? That is more than any other company in the world has produced. Will he also bear in mind that about 80 per cent. of everything produced by Perkins is exported? If the company is to build on that enviable record, it w ill need less volatility in exchange rates.

I join my hon. Friend in congratulating Perkins on its performance. I visited the plant last year and was impressed in particular by the engineering capability. The company has a magnificent export record. Exchange rates are a matter for my right hon. Friend the Chancellor of the Exchequer. I hope my hon. Friend was encouraged, particularly in the context of Perkins, by the recent changes that we made in streamlining the approvals procedure in ATP and by the moves we are making on soft loan facilities.

The question refers to diesel engines of any kind. With regard to marine diesel engines, if the press speculation on the re-engining of the QE2 in West Germany is correct, will the Minister urge upon the Cunard company a policy of specifying British engines? Would that not be a marvellous export order for the British marine engine industry?

I am not in a position today to speculate. There has already been enough speculation on that question.

Nuclear Power (Inquiries)

3.30 pm

I beg to move

That leave be given to bring in a Bill to enable persons desiring to give evidence or make representations to public inquiries concerning or relating to the nuclear power industry to obtain such information and advice as they reasonably require in order to present their case; and for connected purposes.
There have been several inquiries involving the nuclear power industry in recent years, perhaps the most notable among them being the Windscale and Sizewell inquiries, although in Scotland considerable attention was given to the inquiry at Torness and to the proposals to test bore for high level radioactive waste disposal in the Galloway hills.

At all these inquiries the proposals of the nuclear or generating authorities were the subject of considerable scrutiny and challenge by objectors, including environmental groups and, on occasions, local authorities. I share the view expressed by Mr. Justice Parker in his report on the Windscale inquiry that the public interest was served by the fully developed case that the objectors deployed and that it was important that the validity of the applicant's case was thoroughly examined and investigated.

Mr. Justice Parker also drew attention to the clear disparity of resources available between nuclear establishments or generating authorities on the one hand and objectors on the other. The main purpose of the Bill is to try to some extent to redress the imbalance in two major ways. First, it would allow greater access to information which might reasonably be required for the presentation of a case; secondly, it would permit the use of public resources to allow objectors access to legal advice and technical expertise which would enable them to present an effective case.

Secrecy by public bodies is a subject that has often been discussed in the House since I was elected. Experience shows that the nuclear industry is one of the most difficult from which to prise information. If passed, the Bill would be of general application, but it is not unnatural from a constituency viewpoint that I have had in mind the forthcoming public inquiry into the proposed reprocessing plant at Dounreay. Some events since that was announced illustrate the need for the proposal that I am making.

Let us consider, for example, the response of the director of the Dounreay establishment when he was asked recently for details of all radioactive emissions since the plant opened and for details of all accidents, incidents or shutdowns in the existing small reprocessing plant. He replied by letter:
"As the information you request could possibly be related to the public inquiry, I cannot give you the information, apart from saying that much has already been published."
Surely here we have an anomalous and ridiculous position. The Atomic Energy Authority is unwilling to impart information which it must have readily to hand and which has been published. Rather than hand it over, it will force potential objectors with limited resources to spend valuable time and effort in an attempt to trace the information. It is equally clear from the reply that not all the information has been published, so some information which might be relevant in the presentation of the case at an inquiry may not be available.

I do not necessarily blame the director for taking that line, because undoubtedly he has received legal advice on what he should do when faced with such a request. No one is suggesting that the Atomic Energy Authority should embark upon argument and cross-examination by correspondence, but if there were a provision under which information could be made available that would prevent the unnecessary fears and suspicions which arise inevitably when it appears that someone is holding something back. The Bill would also remove any fear that there might subsequently be cross-examination by letter.

Since British Nuclear Fuels Ltd. and the UKAEA submitted the planning application, they have published a glossy brochure, entitled "Supplementary Information", which includes some environmental issues concerning the outline planning application for a European demonstration fast reactor fuel reprocessing plant at Dounreay, Caithness.

The information in the brochure is ostensibly helpful and expands on the bare bones of a planning application, but the consultants engaged by the three islands authorities in the north of Scotland found the information far from adequate. Indeed, one of the consultant teams, which was based at Aberdeen university, when discussing waste management and discharge from the proposed plant, concluded that the information was
"seriously defective, particularly in relation to the quality and quantity of substances which will be discharged from the site as waste. Much of the description relates to the present situation at Dounreay and does not attempt to predict in precise terms the wastes and effluents from the new process."
If such information exists, it would be highly relevant to an inquiry and it should be made available to the public. The public should not be forced to prise information out shortly before or even during an inquiry. One of the reasons for the considerable time taken at the Sizewell inquiry was that as objectors acquired more information, so the Central Electricity Generating Board had to produce yet more evidence in reply. Time could be saved if information was made available earlier.

The consultants that I have mentioned, having produced their report, were invited by the UKAEA to go to Risley to discuss an environmental impact assessment. We have ascertained that such an impact exists, but those who attended on behalf of the consultants and local authorities were shown only a contents page of the assessment, and the contents of the contents page must remain confidential. Even that limited information is therefore not being given greater public currency. It might be made public, but when?

Those who attended the meeting also noted the vast array of scientific, technical and legal expertise available to the UKAEA. One of the planning officials in an islands council which I represent said that he could not help contrasting that vast array of expertise with the fact that he and some of his officials must read up on nuclear physics in their spare time. There is a tremendous imbalance in terms of expertise and financial resources. We must have the resources necessary to engage legal and technical assistance when presenting a case on a matter as important as this. We seek an extension of legal aid provisions to facilitate that.

I accept some of the criticisms about the amount of time taken at inquiries. Regulations could bring objectors under one umbrella so that there is no duplication of evidence. A common database could also be established and the key issues could be established before the inquiry.

Nuclear power developments are the source of considerable public anxiety and it is essential that inquiries are fair, and seen to be fair. Fairness will be established only if it is felt that one side is not fighting blindfold or with one hand tied behind its back.

After the Windscale inquiry, Mr. Justice Parker said that he was unable, within the terms of reference, to make recommendations about assistance that might be given to objectors, but he stated unequivocally that if objectors' resources were drained, a fully developed case could not be presented and that that could prejudice the public interest. My Bill would seek to serve the public interest by ensuring that resources and information were made available so that a fully developed case could be presented at any such inquiry.

Question put and agreed to.

Bill ordered to be brought in by Mr. James Wallace, Mr. David Alton, Mr. A. J. Beith, Dr. Norman A. Godman, Mr. Michael Meadowcroft, Mr. Allan Roberts, Mr. Gordon Wilson and Mr. Chris Smith.

Nuclear Power (Inquiries)

Mr. James Wallace accordingly presented a Bill to enable persons desiring to give evidence or make representations to public inquiries concerning or relating to the nuclear power industry to obtain such information and advice as they reasonably require in order to present their case; and for connected purposes.

And the same was read the First time; and ordered to be read a Second time upon Friday next and to be printed. [Bill 211.]

On a point of order, Mr. Speaker. I know that it is late in the Session and that some ten-minute Bills are unopposed because they have very little chance of being passed, but an important question of principle and democracy is involved which affects the two parties represented here.

On a matter of such importance as we have just heard about from the hon. Member for Orkney and Shetland (Mr. Wallace), I should have thought that you would encourage a Member of the Social Democratic party, probably the hon. Member for Caithness and Sutherland (Mr. Maclennan), who is opposed to what has just been said by the hon. Member for Orkney and Shetland, to give his view of the matter. It is important that we should hear the views of both sides of the alliance. On every occasion that you have found it possible to do so you have called a Member of the Social Democratic party and a Member of the Liberal party. As they are so bitterly divided over this question, I think that you should give both of them an opportunity to present their points of view.

The hon. Member for Caithness and Sutherland (Mr. Maclennan) has been provoked.

I am very grateful to you, Mr. Speaker, for allowing me to intervene over what is an abuse of the orders of the House. The hon. Member for Bolsover (Mr. Skinner) has attempted to attribute to me views which, under a point of order, I could not possibly answer, nor indicate the extent of my agreement with my hon. Friend the Member for Orkney and Shetland (Mr. Wallace). [Interruption.]

Order. In fairness to what was said by the hon. Member for Bolsover (Mr. Skinner), the hon. Member for Caithness and Sutherland now has an opportunity to put his case—but briefly, please.

House Of Commons (Jurisdiction)

3.43 pm

On a point of order, Mr. Speaker. It concerns the interpretation of the proper jurisdiction of this House. I refer to the motion on the Order Paper for debate this afternoon, the crisis in southern Africa, which seeks to conceal the discussion of issues for which Her Majesty's Government bear no obvious or formal responsibility by reference to Britain's isolation in three organisations—the Commonwealth, the European Community and the United Nations.

The position relating to the Commonwealth is set out clearly in "Erskine May", which says that the authority of Parliament over all matters and persons within its jurisdiction, formerly unlimited, has now been severely limited in two respects: first, by the Statute of Westminster 1981 and, secondly, by the European Communities Act 1972.

"Erskine May" is quite specific about the Statute of Westminster. It says:
"it is in accord with the established constitutional position that no law hereafter made by the Parliament of the United Kingdom shall extend to any of the said Dominions as part of the law of that Dominion otherwise than at the request and with the consent of that Dominion."
There are two interesting statements on the European Community position. On 10 March 1983, in answer to a question by my hon. Friend the hon. Member for Northampton, North (Mr. Marlow), my right hon. Friend the former Secretary of State for Northern Ireland said:
"the European Parliament has no business to discuss the internal political affairs of a member state."
Later he said:
"we are not prepared to allow the European Parliament to interfere in the affairs of Northern Ireland, or the internal affairs of another country."—[Official Report, 10 March 1983; Vol. 38, c. 937–38.]
That remains our position.

On 13 December 1983 the Prime Minister——

Order. The hon. Gentleman is making a speech rather than making a point of order. Will he put his point of order to me?

Order. The hon. Gentleman has given me the reference. Will he make his point of order?

My point of order is that the House has no jurisdiction over a country the independence of which was firmly and clearly established in 1910 and reaffirmed by the Statute of Westminster, and which left the Commonwealth in 1961. It is perfectly clear from what the Government have said that they disapprove of legislatures interfering in the domestic affairs of other states. Finally, it is contrary to section 2 of the United Nations charter. It is also contrary to justice——

Order. I cannot answer the last part of the hon. Gentleman's point of order. However, I look at every motion on the Order Paper. I looked at this one, and it is perfectly in order for the House to discuss what is a matter of foreign policy.

Southern Africa

I have to inform the House that I have selected the amendment in the name of the Prime Minister.

I have a long list of speakers. It is only a half-day debate and I have no authority to control the length of speeches, but I hope that Back Benchers will take no more than 10 minutes. Perhaps Front-Bench speakers will help by shortening their speeches, because there are two Front-Bench speeches at the beginning and two to wind up the debate.

3.46 pm

I beg to move,

That this House regrets that the conduct of Her Majesty's Government over sanctions against apartheid in South Africa has isolated Britain in the Commonwealth, the EEC and the United Nations.
First, I should congratulate the Foreign Secretary on his safe return from Nassau after what must have been wearying negotiations with the Prime Minister.

Just three months have passed since the House last debated these issues. At the time I said that the wind of change in southern Africa had become a hurricane. Since then the hurricane has doubled and redoubled in fury. Over 6,000 people have been arrested since the troubles began some 14 months ago, 760 have been killed, of whom 500 were blacks killed by President Botha's stormtroopers. Despite appeals from all over the world, including an appeal from Her Majesty's Government, the apartheid regime has hung the black poet Benjamin Moloise.

It is highly significant that the violence in South Africa has now spread far beyond the black townships to which it has been confined for most of the time since the second world war. The middle class coloured population in Athlone are now in revolt against the shooting the other day of three students aged 12, 16 and 19. The delay in burying them, caused by the South African Government, has sparked off a wave of revolutionary religious fundamentalism among the devout Moslems of the area. Violence is now creeping into the white residential areas. We read of whites arming themselves to shoot blacks if they feel it necessary. I fear that we are on the verge of a new and horrifying turn in this tragic cycle of events. The blacks have now found a new and effective weapon in boycotts, which are already affecting more than 60 towns, mainly in the eastern Cape.

South Africa was once regarded in more senses than one as a gold mine for foreign investment; it is now a quagmire. It has become the first debtor nation in the world to default unilaterally on its debts. It is now reestablishing exchange control to prevent foreign companies from repatriating their profits. I hope that Her Majesty's Government will listen to the words of Chief Buthelezi whom they often quote as a black leader they respect. He said on television last night that Britain and the Western world must not permit the private banks to reschedule South African debts without first exacting a price from the South African Government in the form of a dialogue with the leaders of black opinion there.

Wiser firms involved in finance and commerce in South Africa are already pulling out. American and British banks and businesses are beginning to close or reduce their operations in South Africa. Only the other day, 10 of the biggest American multinational corporations, led by General Motors and IBM, banded together to work for the end of apartheid, and Sainsbury's has now followed the Co-op in beginning to cut out South African goods from its shops.

Those private sanctions, as the Foreign Secretary admitted in a recent article in The Sunday Times, have already had a powerful and direct impact on white opinion in South Africa. Afrikaans as well as English-speaking business men are not just calling for an end to apartheid, they are engaged in talks with the African National Congress. They have visited Zambia for such talks several times in recent weeks.

The reality of the new situation was well and forcefully set out by probably the most prominent of Afrikaner business men, Dr. Anton Rupert, who said recently:
"Apartheid is dead, but the corpse stinks and it must be buried, not embalmed."
Perhaps the most startling transformation of all in South Africa is that taking place in the Dutch Reform Church, which was once the seedbed of the theology of apartheid but which is now planning to send a mission to talk to the ANC leaders.

Only two people still refuse to talk to the ANC—the President of South Africa and the Prime Minister of Great Britain. The British Prime Minister has become the only apologist Dr. Botha can now count on in the outside world. When, in August, President Botha demonstrated that he had led our Prime Minister up the garden path, and the Minister of State, Foreign and Commonwealth Office criticised his speech, the Foreign Office news department was compelled to retract her views.

Time and time again, the Government have committed themselves to the hollow sham that they call constructive engagement, although President Botha has broken every promise he has made to the British Government over recent years. Just over a year ago, the Prime Minister met President Botha at Chequers. When she reported to the House on his visit, she said:
"On Namibia, we agreed that early independence for Namibia was desirable and should be achieved as soon as possible under peaceful conditions. We also agreed that all foreign forces should be withdrawn from the countries in southern Africa so that their peoples can settle their destinies without outside interference. The withdrawal of South African forces from Angola is an important first step in this process."—[Official Report, 5 June 1984; Vol. 61, c. 157.]
The Prime Minister described her talks with President Botha as leading to an agreement on the issues that I have just mentioned, but what has happened since? President Botha has broken every agreement to which she then referred in the House. He has set up a puppet Government in Namibia at Windhoek, contrary to the undertakings that he has given to the British Government and the contact group in Europe. He has invaded the independent sovereign state of Botswana with the raid on Gaborone. South Africa has repeatedly invaded Angola to help the rebel forces there and on one occasion recently attacked American oil installations at Cabinda. South Africa has broken the Nkomati accord with Mozambique by giving armed help to the rebels there, and it has boasted in public that it has broken all those agreements with the British Prime Minister. Incidentally, South Africa has also broken an agreement endorsed when one of its diplomats stood bail for two South African agents who were due for trial for offences against British law. On no occasion have the British Government even referred to those breaches of agreement, still less taken action to punish the South African Government for their behaviour.

The Foreign Secretary told the Conservative party conference the other day:
"No one has spoken more forcefully and more directly to South African leaders about the need for real change than Margaret Thatcher. I know because I was there when she gave them a piece of her mind."
That is a gift which I would be very cautious in accepting.

Despite all the events to which I have referred, the Prime Minister is sticking to constructive engagement, although, according to a report in The Times today—I was unable to obtain confirmation from the Foreign and Commonwealth Office — the final communiqué from Nassau yesterday stated:
"President Reagan's policy of 'constructive engagements' had failed to end South Africa's intransigence over Namibia as well as over apartheid."
What we need now, and what the whole world is asking for, is a policy of constructive disengagement from South Africa. Yet when the Community Foreign Ministers met a few weeks ago and proposed the withdrawal of defence attachés from Pretoria, the Minister of State refused to accept the proposal. The Community press agency reports him as justifying his refusal by saying that
"the presence of military attachés"
was useful
"in particular to convey information about possible South African intervention in neighbouring countries."
He does not seem to have taken the slightest notice when the interventions were blazoned on the front pages of every newspaper and boasted about by President Botha in the South African parliament. I gather that it took 10 days of knockdown, drag-out argument between the Foreign Secretary and the Prime Minister to get the Prime Minister finally to bring Britain into line.

I welcome the fact that the Prime Minister disavowed the arguments of the Minister of State, but I wish to ask the Foreign Secretary this: if he believes it light to withdraw our military attachés from South Africa, why does he allow South African military attaches to continue serving in London? Is it so that they can inform the South African Government about our possible intervention in neighbouring countries? If not, what is it? I hope that the Foreign Secretary will answer that question?

The Prime Minister has just gone to the Commonwealth conference in Nassau in her most "Rhoda-the-Rhino" mood; perhaps it would be more up to date to describe her as "Rambona". Once again. as on Rhodesia, on Hong Kong and during talks with the Government of Eire, she has painted herself into a corner and relied on the Foreign Secretary to carry her out—a heavy burden for him to carry. In Canada the other day, I noticed that her faithful St. Bernard — the Prime Minister's official press spokesman at Nassau—told the press there:
"We're used to being shot at. We're riddled with the bullets of isolation. We survive and enjoy it."
He is a true servant of his mistress.

According to the newspapers in Nassau, the Prime Minister again trotted out all the arguments that were drafted by Pretoria to justify opposition to sanctions against South Africa. They include the argument that sanctions would drive the South African Government into the laager. Has she not noticed that President Botha is in the laager, that the South African Government are firing from behind the wagons there, and that there are 800 people dead to prove this point?

The Prime Minister says that sanctions will hurt the blacks more than the whites, although everywhere in South Africa a majority of blacks, according to polls carried out not only by The Sunday Times but by a South African Government-sponsored institution, support the sanctions. Sanctions are supported by all the black trade unions in South Africa for which the Government attempt to claim some credit. They are supported by Bishop Tutu and even more so by the front-line states which may well suffer when sanctions are applied. I should like to quote in this respect a most eloquent letter from President Kaunda of Zambia to my right hon. Friend the Leader of the Opposition in which he said:
"Yes, we will be hurt by these sanctions but we will suffer more if economic sanctions as a peaceful weapon for change are not applied. The result of the explosion will be far more destructive than the injury that economic sanctions can cause to us."
The British Government's attempt to speak for the black majority in South Africa is really a reversion to old colonial habits when we thought that we had the right to speak for the inhabitants of all colonies. Thank God the people of South Africa now have some institutions through which they can speak for themselves. The overwhelming majority have called upon the outside world to apply sanctions.

I know that the right hon. Gentleman would not intentionally wish to mislead the House. He is correct in his reporting of the last opinion poll in The Sunday Times, in which only 400 urban blacks were asked their opinion. Certainly, about 70 per cent. said that they favoured sanctions, but the right hon. Gentleman omitted to tell the House that previous opinion polls, including that taken from the Schlemmer report, said just the opposite. He has not yet mentioned the opinion of Chief Buthelezi who is in London and who represents 5 million Zulus. As the right hon. Gentleman knows, Chief Buthelezi is very much against sanctions. Will not the right hon. Gentleman see both sides of the story?

Of course I accept that Chief Buthelezi opposes sanctions—he said so last night. He also said last night that the West should use the difficulty that the South Africans have over rescheduling their debts to bargain with the South African Government for an improvement in the political situation. I hope that the hon. Gentleman will accept that fact.

Of course I did not claim that every single black in South Africa supported sanctions. I said that the great majority do support sanctions and I referred to the organisations that have spoken for them. Incidentally, I include Bishop Tutu who was quoted in our debate in another direction in April by the Minister of State and I have just quoted the words of President Kaunda.

I shall give way regularly because I enjoy interventions and enjoy even more replying to them. However, Mr. Speaker, you have asked me not to waste time, so I shall continue.

We are told that President Botha himself last night used the argument that sanctions could lead to the West losing valuable minerals, but there are no minerals that South Africa currently supplies that could not be replaced by other sources, often by very much more worthy producers such as Zimbabwe and Brazil. We are told that sanctions would cause unemployment in Britain but the fact is that. if we cannot produce a change in the South African Government's position by peaceful means, the resulting violence would cost Britain everything that it now possesses in South Africa. Even now, we have more trade with black Africa than with South Africa.

You have asked me, Mr. Speaker, to confine my remarks to the subject, so I shall continue. I am grateful for the support from my lofty friend the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark).

Finally we are told that sanctions will not work, and yet they have worked. We have the Foreign Secretary's word for it in his article the other day in The Sunday Times. He said:
"Market forces are already exerting lasting testing pressure on South Africa."

Oh, so what the American banks have done and the disinvestment by companies in Britain and throughout the rest of the world are not sanctions. The Government's attitude reminds me very much of their attitude to the other great African prohlcm—they rely upon and applaud private action to help the starving in Africa but reject Government action to serve the same purpose, although that action is desperately needed.

In the end, the Prime Minister was compelled to give way to the rest of the Commonwealth. No doubt, the Foreign Secretary played a useful role in persuading her to change her mind because otherwise the rest of the Commonwealth would have gone ahead without her. As The Times today points out, she ruined the effect of her concessions by describing the sanctions as "signals"—she used to like the word "measures" better but she now calls them "signals". She said that they were minute and said, in her best Lady Bracknell voice, that she had moved only "a tiny little bit". She said that it was worth paying a small price to keep the Commonwealth together. The Prime Minister has an unfailing flair for choosing the most helpful word or phrase to describe any situation in which she is involved.

There is no question that the article in The Times was right, as I am sure that many Conservative Members would agree, when it stated:
"she has the … failing of sometimes not appearing to think at all about the requirements of tomorrow. These requirements are simple. Never gloat over a diplomatic victory. Never mock the mediators. Mrs. Thatcher broke both of these rules this week."
Thinking of the difficulty that the Prime Minister has caused for herself and Britain by her behaviour on this issue I am not surprised that not a single African thinks better of her, but, rather, thinks worse of her and, alas, of her Government as a result. The other day Bishop Tutu said when leaving his talks with her that she had persuaded him that she thought "You blacks are expendable" —I quote his words. Yesterday there was a moving account in the Financial Times about the reaction to her behaviour of the coloured population in Athlone.

The Prime Minister has infuriated blacks and whites alike by her behaviour. How typical of her that she should now be in New York to lecture President Reagan on how to make friends and influence people. Her graceless behaviour in Nassau has given her only six months' grace. The Commonwealth will meet in six months to take the next step of sanctions. The Commonwealth countries have listed the sanctions that they hope to take. The Australian Prime Minister has already announced that he plans unilaterally to take such steps next year. The Daily Telegraph today is right to say that there is not the slightest chance that South Africa will begin progress to reform itself within this period.

It stated:
"It will not be easy to step off the escalator in six months' time if Dr. Botha is deemed unresponsive to 'dialogue' and the trigger list of much more deadly sanctions … is invoked.
Mrs. Thatcher may have had an escape clause written into the contract but it could be hard to explain why she wants to use it, and harder still if a third stage is reached where more and tougher sanctions are called for."
The Minister of State put his finger on the nub of the problem when he spoke as a Back Bencher, not a Minister, on 8 December 1978. He said:
"I do not believe that one can have selective sanctions"—
which is what the Commonwealth has just imposed. He continued:
"If it is simply a cosmetic operation,"—
as everyone now says it is—
"it will not be effective. It would not lead to the ending of apartheid, or persuade the South African Government to see the error of their ways and demolish the existing political and social system. It will simply be a cosmetic exercise which will be increasingly ignored and which will inevitably lead to further demands for more comprehensive economic sanctions, which the Government and other Western Governments could not in logic resist once they had accepted the principle itself." [Official Report, 8 December 1978; Vol. 959, c. 1743.]
The Minister of State, not for the first time, was quite right. His words were prophetic, because without effective and real pressure, exerted above all by Britain, as one of the leading experts at Witwatersrand pointed out yesterday, the combination of unrest among the blacks, the troubles and concern among the white business men and the private pressure applied by the market will not be sufficient to bring about a dialogue in time. Only a dialogue between the Government and the African National Congress has any hope of bringing this tragedy to an end.

Mr. Shultz made this point in a recent speech in the United States. He said that the choice is between dialogue and revolution and I beg the Government to face this fact in the knowledge that their self-imposed isolation on this issue is a source of great shame to the great majority of the British people. Unless in six months' time the Government join the rest of the world in effective action against apartheid, they will not only compound that shame but will carry a great responsibility for the bloodshed and anarchy that will inevitably engulf the whole of South Africa.

4.11 pm

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:

"welcomes the Commonwealth accord on South Africa and especially the call to initiate, in the context of a suspension of violence on all sides, a process of dialogue across lines of colour, politics and religion, with a view to establishing a non-racial and representative government."
Having heard the closing section of the speech made by the right hon. Member for Leeds, East (Mr. Healey), it is difficult to believe that he recognises the terms of the accord arrived at in Nassau. calling for precisely the kind of dialogue that he recommended. It is also difficult for us to believe that those matters were the subject of unanimous agreement at Nassau between all the members of the Commonwealth.

However, I can agree with the right hon. Gentleman about the rightness of the House debating South Africa today. I agree that the issues before the House are of crucial importance for the future of Africa and for the Commonwealth, and of direct and real significance for the people of this country. Nobody who has seen the continuing tragic pattern of violence in South Africa which, night after night, has been visible on television screens around the world, can be in any doubt about that.

The Government share with the House, as with our partners in the Commonwealth and the Community, total abhorrence and loathing of apartheid. We all wish to see fundamental peaceful change in South Africa at the earliest possible date. My right hon. Friend the Prime Minister made that clear, as she has done on many earlier occasions, at this week's Commonwealth Heads of Government meeting. The right hon. Gentleman sought to present my right hon. Friend as the only apologist for the apartheid regime, but nothing could be further from the truth than that. All my right hon. Friend's colleagues at the Commonwealth Heads of Government meeting were deeply impressed by the strength and sincerity of her presentation of the case against apartheid.

The right hon. Member for Leeds, East quoted the words of Chief Buthelezi. He said that my right hon. Friend the Prime Minister was right, that he fully supported her, and that her approach was the more humane. I invite the House to consider this topic on that basis, because it is undoubtedly right. There is no division in the House about the ends that we seek—the division is over the means.

The right hon. and learned Gentleman has quotes Chief Buthelezi, but why has he not also quoted Mrs. Winnie Mandela who today made it plain that she and those for whom she speaks object to and resent the Prime Minister's claim to speak for blacks in South Africa?

It is not my function to quote each and every spokesman for South Africa. I invite the hon. Gentleman to accept, because it is foolish not to do so, that there is no division between the two sides of the House about the objective that we seek. Apartheid is a system that we cannot seek to uphold, and one that the Prime Minister, together with all her colleagues in government, wishes to see come to an end.

I was struck by another feature of the speech made by the right hon. Member for Leeds, East. Judging by the closing sections of his speech, on means as well there is now widespread agreement about what the next step should be. The first and most important task is to promote within South Africa a political dialogue—I agree that we need dialogue, not revolution, in South Africa — between the South African Government and representatives of the black community. That is the way to open the road to full and equal participation by South Africa's blacks in the government of their country.

If that dialogue is to succeed, there needs also to be an end to violence by all sides in South Africa. We have always regarded it, in the Community and in the Commonwealth, as a prime requirement to secure a clear endorsement of the need for that dialogue to take place in the context of a suspension of violence on all sides. That applies both to the law enforcement techniques of the South African Government and to the activities of the ANC. Let me say today to the ANC that a declaration on its part of willingness to suspend violence to help create an atmosphere in which the dialogue called for by the right hon. Member for Leeds, East can succeed would be well received by the international community. I urge it to make such a declaration and to suspend violence so that we can give peace a chance.

The right hon. and learned Gentleman has, interestingly, been urging the ANC, and offering it advice. Will he meet its representatives personally in London, or elsewhere, to put those points of view to them?

I have been urging them, as we urge other such groups, to suspend violence because in those circumstances the possibility of a meeting becomes realistic. [HON. MEMBERS: "Answer the question."] I have answered the question plainly. We do not engage in contacts with organisations that engaging in violence. It is for that reason that I am urging the ANC today to make a declaration suspending its policy of violence.

I shall not give way because, like the right hon. Member for Leeds, East, I have to conclude my speech in a reasonable time.

It has been our consistent aim to strengthen and support the process of peaceful change. We cannot force this change on South Africa from outside. Only the South African Government can take the necessary further steps towards establishing a democratic, non-racial, truly representative system of government in that country. We cannot dictate to them. They are more likely to be willing to take such steps if we on our side are willing to acknowledge what they have done so far.

Important steps have already been taken. The Mixed Marriages Act, the Political Interference Act and section 16 of the Immorality Act have been repealed. Almost all job reservations have been removed and forced removals have been suspended. Abolition of influx control and the pass laws have been recommended to the President by his advisory council. Leasehold and freehold rights are to be extended to urban blacks and common citizenship for all South Africans is to be restored. The South African Government have stated their willingness to share decision-making with all communities and to negotiate with black political leaders. Therefore, it makes no sense for Labour Members to shout and bay as though those changes had not taken place.

It may be said that these changes are not before time and that more needs to be done, and I agree with that. However, I should like to hear the Labour party agreeing with us in recognising the significance of the moves that are already taking place. The right hon. Member for Leeds, East spoke about the concept of constructive disengagement. Nothing could be less constructive than disengagement in the present situation in South Africa.

Has the right hon. Gentleman not noticed the changes that have taken place in South Africa, and why is he not willing to give credit where credit is due?

I repeat that it is the South African Government whose attitude and ideas we must influence. It is for precisely that reason that we reject external economic or trade boycotts. So far from supporting and encouraging the process of peaceful change, such boycotts would encourage the South African Government to retreat from reform and to entrench themselves behind the ramparts of apartheid. We cannot tell the South Africans as the right hon. Gentleman seems to imply, to co-operate with us, or else. Their capacity for responding to that "or else" is all too clear.

There is a distinction which the right hon. Gentleman fails to identify between the impact of external pressures dictated in a mandatory fashion from outside, and the impact of market forces. There is no doubt that changes are taking place in South Africa as a result of the impact on that country of economic judgments being made in the world outside. Those judgments are recognised as something to which the South African Government have to respond because they are a consequence of the policies of the South African Government. They are not judgments imposed by force and coercion. That is the distinction between mandatory economic sanctions and sanctions of the kind implicit in the judgment of the market place.

That is the case that we have been getting across with increasing success. Governments within the European Community and the Commonwealth have increasingly come to recognise that what is needed is not punitive sanctions, but plain political signals, properly spelt out. It is on the basis of that approach, an approach which has served to consolidate a united position within the European Community, that my right hon. Friend the Prime Minister and I attended the Commonwealth Heads of Government meeting at Nassau. The Prime Minister will, of course, make a full report of that meeting in due course, but I should like now to say something about the conclusions reached at that meeting on the matter of South Africa.

Two points were clear in our discussions from the outset. First, the Commonwealth was united in its wish to see a fundamental peaceful change in South Africa at the earliest possible date. Secondly, we all wanted to find practical ways in which the Commonwealth could help to achieve that goal. Of course, there was some tough talking at Nassau about the best way forward towards that goal. There were widely differing positions to be reconciled. Some thought that full economic and trade boycotts should be applied, but others shared our firm view that that was not the way to encourage the process of peaceful change that we all want to see.

An important point to emerge from that conference was that all sides wished and were ready to reach a common position. So far from being isolated, my right hon. Friend the Prime Minister was one of the architects of the agreement that was reached during an intensive series of weekend discussions. That is the reality which the right hon. Gentleman seems to have brushed aside.

That united position is set out in the Commonwealth accord on southern Africa, published on the evening of 20 October 1985, and I have arranged for copies to be placed in the Library. I emphasise that that accord has been endorsed and welcomed by every country in the Commonwealth. A united Commonwealth has sent a clear political signal to South Africa. That represents a substantial achievement by the Commonwealth, and a substantial achievement by this Government. None of that would have been possible without the vision, courage and steady perseverance of my right hon. Friend the Prime Minister. Like it or not, the Prime Minister's role at that conference was rightly applauded by other Heads of Government at the conclusion of the weekend discussions and the House should be ready to acknowledge that today.

If that is so, why was the Prime Minister so dismissively contemptuous about the movements that she had made to bring that about?

My right hon. Friend the Prime Minister was not dismissively contemptuous. She acknowledged the very hard work done by all Heads of Government to reach an agreement, and the other Heads of Government have acknowledged her role in the same manner.

I shall tell the hon. Member for Berwick-upon-Tweed (Mr. Beith) how the accord is constructed. The first key point of the accord is a plain condemnation of apartheid, of South Africa's illegal occupation of Namibia, and of its continuing raids into neighbouring states.

The accord has three positive features. The first is an agreement on the need to end the violence, the second an agreement on a plan to promote dialogue, and the third an agreement on measures that will send an effective signal to Pretoria.

The accord calls on the South African Government to take action to dismantle apartheid, to end the state of emergency and to release Nelson Mandela and others in detention. All those are steps which we have strongly urged on the South African Government. The accord calls also for political freedom and an end to the ban on the African National Congress and other political parties, but the accord places that firmly in the context of the renunciation of violence by all sides. I want to emphasise that point very strongly. As I said earlier, that has been one of our prime requirements.

The agreement reached at Nassau is based firmly in the context of the renunciation of violence by all sides and reflects the Government's whole approach to dialogue in South Africa. Without an end to the turbulence and repression which we have seen in South Africa, there is no chance of successful dialogue.

The Foreign Secretary is confusing us. As I read the communiqué, there is a sharp distinction between the point which calls specifically for a lifting of the existing ban on the ANC and the next point, which calls for the initiation of a process of dialogue within the context of a suspension of violence. The lifting of the ban on the ANC is quite separate from the other point. Is the Foreign Secretary deliberately confusing the House?

The right hon. Lady must acknowledge that the accord sets out quite clearly as one of its most important components the fact that all those recommendations should be set firmly in the context of the renunciation of violence by all sides. If there is no end to the turbulence and the repression that we have seen in South Africa, there is no chance for successful dialogue.

The second key point in the accord is the decision to set up a group of eminent Commonwealth persons with the task of encouraging and carrying forward that dialogue. A number of Commonwealth leaders will oversee that important initiative. The Prime Minister will for this purpose join President Kaunda and her colleagues Prime Ministers Hawke, Pindling, Mulroney, Gandhi and Mugabe and will consult our partners about the composition of the proposed group. The House will be informed as soon as decisions have been taken.

I stress that the Commonwealth is not prescribing the form of political settlement in South Africa. That is for the peoples of South Africa as a whole to determine.

The third key point in the accord is the programme of common action in agreed measures to underline a clear political message. I remind the House that before the Nassau meeting we had reached an agreement with our European partners on a list of measures which consolidated and added to the action that we were already taking. The list in the Commonwealth accord adds only two new measures—no further imports of krugerrands, and no Government funding for trade missions, fairs and exhibitions to South Africa. The cost of the action on krugerrands is very limited and we do not expect the withdrawal of financial support for trade missions and participation in fairs to result in a significant loss in new business in the context of our overall trade.

British exporters remain free to exercise their commercial judgment on trade with South Africa, and many do so with taxpayers' support. These measures are not economic and trade sanctions which would affect that freedom. They are a very long way from mandatory sanctions, to which we remain firmly opposed. As the hon. Member for Merthr Tydfyl and Rhymmney (Mr. Rowlands) rightly told the House on 28 June 1978 when he was a member of the previous Administration:

"any wide-ranging economic sanctions against South Africa could have important and serious consequences for the United Kingdom economy."— [Official Report, 28 June 1978; Vol. 952, c. 554.]
The important fact about the measures agreed at Nassau is that, taken together, this comprehensive Commonwealth package gives South Africa the clearest possible signal of the need for rapid change. Let me again remind the House that the South African Government have acknowledged the need for changes. Our common aim at Nassau was therefore to get more movement.

Will my right hon. and learned Friend acknowledge that the trade in krugerrands is small because when he was Chancellor of the Exchequer he imposed VAT on trade in gold coins? Therefore, no one in his right mind would buy krugerrands at this moment. My right hon. and learned Friend is making a compelling case for the partial, as opposed to the full, imposition of sanctions. but those of us who have serious misgivings about the effectiveness or wisdom of any form of sanctions deserve a guarantee that there will be no further sanctions imposed, nor any full imposition of sanctions, on any review of these matters in six months' time. Only in that way will some of us be able to go along with what I regard as a regrettable precedent in breaking the principle that we have adopted on the imposition of sanctions.

I think that my hon. Friend will have to make an extended contribution to the debate if he is fortunate enough to catch your eye, Mr. Speaker. I appreciate his tribute to the effect of the imposition of value added tax. That reinforces my argument that the implications of the change in respect of krugerrands will be limited.

As for the more general matters which my hon. Friend the Member for Chichester (Mr. Nelson) has raised, I was describing the set of measures on whih agreement was reached at Nassau. It consists in large part of measures positive and restrictive which have been in place for a long time, supplemented by those taken and agreed on in Luxembourg earlier this year. We are not committed to taking any further steps of that sort. Our approach is firmly in the context of the distinctions that I am making. There are distinctions betwen mandatory, economic and trade sanctions and boycotts—

—some of which have precisely the effects that are not intended— [Interruption.] Six months from now—

I say again that the South African Government have acknowledged the need for change. Our common aim at Nassau, which is reflected in the agreement that we reached, was to get more movement. I make it equally plain that we are not extending an ultimatum to the South African Government. Nor are we washing our hands of the problem and leaving it at that. We want to see launched the dialogue of which the right hon. Member for Leeds, East spoke. We want to see it sustained, and we want to see it succeed. Six months from now there will be another meeting. Britain, Australia, the Bahamas, Canada, India, Zambia and Zimbabwe will then review the situation. If adequate progress has not been made by that time, some Governments have stated that they will consider the adoption of further measures.

It is our earnest hope that at that meeting we shall be able to take note of significant progress in South Africa. But whatever the conclusions of the meeting, my right hon. Friend the Prime Minster has made it clear that Britain is not committed to any of the further steps which other Governments have agreed to consider.

The conclusions of the Nassau conference, which I have tried to summarise, should commend themselves to the entire House. They are entirely consistent with the approach that the Government have adopted over a long period.

The conclusions are designed to promote the fundamental changes which we all regard as necessary in South Africa to bring apartheid to an end. They are designed, not as a punishment, nor as a threat, but as an earnest signal of the need for change and of the Commonwealth's determination to help bring that about.

The Opposition began the debate by arguing that the Government were isolated in their approach to the problem of South Africa. The provisions of the Commonwealth accord make it plain that that allegation is palpably false. The approach that I have described is the one on which the 60 nations of the Commonwealth and the Community are at one with the Government. It is the one which we shall continue to pursue, and I commend it to the House.

Order. I repeat my request for short contributions. I hope that speeches will not be longer than 10 minutes.

4.34 pm

I returned 10 days ago from taking part in a panel composed of what I hesitate to say were eminent persons, which seems to be a popular term at present. It directed itself to transnational corporations, South Africa and Namibia. The setting up of the panel had been agreed by the General Assembly of the United Nations, and its report will shortly be going before that body. I am certain that the Foreign Secretary is already familiar with it. It is in that context that I want to examine what has been proposed in the Bahamas, and the right hon. and learned Gentleman's speech this afternoon.

I have never heard the Foreign Secretary make a speech of such low quality. It showed inadequate understanding and a deep lack of concern about the problem that we are discussing. I have often praised the right hon. and learned Gentleman when I thought that he had done rather better than the Prime Minister, but on this occasion I cannot do so. In an intervention I quoted from the Commonwealth communiqué and it seems — I am sure that this was inadvertent—that he has misled the House in dealing with some of the matters contained within it. He has argued that market forces are the factor that will count. In these days of interrelated world economies it is inevitable that market forces will involve Governments. The consequence of that understanding is something that the Government will have to appreciate sooner or later.

The panel of which I was a member was chaired by Malcolm Fraser, the former Prime Minister of Australia. It heard evidence for four days from bodies such as the International chamber of commerce and the South African chamber of commerce. The South African chamber presented a view which I would regard as distinctly more enlightened than that set out by the Foreign Secretary.

It knows on which side its bread is buttered.

Exactly. It knows the way that things are going. South Africa's long term interests can lie only in achieving a multiracial and equal society. As the commercial companies in South Africa realise, there is no future in trying to sustain the system of apartheid. Therefore, South African business wants an end to apartheid.

Does the right hon. Lady recognise the massive extent to which she is underlining the very argument that I was advancing? If South Africa is faced with the judgment of the world economy, and not with an armoury of sanctions that have been imposed politically, South Africa's business interests will be the foremost advocates of the change which both she and I want. The position will be reversed if mandatory sanctions are in place.

I take the Foreign Secretary's point. He leads me on to my next argument, which is that the most immediate factor that can have a real influence on the South African economy and, therefore, on the greater readiness of the South African Government to change their policy, is the financial sector. I refer to the roll-over and rescheduling of debts. The recent refusal to take that course sent the rand plummeting. This has had serious and dramatic consequences on opinion among the white community in South Africa, the South African chamber of commerce, South African companies and our own transnational corporations.

The Bahamas Commonwealth communiqué includes the following statement:
"a ban on all government loans to the Government of South Africa and its agencies"
The crucial factor is not what the Government do directly. We have little direct involvement in loans to South Africa, but we have a close involvement with the Bank of England, which we are supposed to own, although one doubts that from time to time. We are much involved in any discussions that take place between the central banks. Talks are taking place now under the aegis of the International Bank of Settlements. Discussions are, I believe, going on in London today with the private banks. It is that, together with the Government's influence on the private banking sector and their readiness or unwillingness to be involved in what the IMF decides to do—because Governments, as members -of the governing body of the IMF, influence and determine what it does—that will decide whether those South African debts are rolled over, rescheduled, or not.

The Foreign Secretary is quite right to emphasise the importance of market forces. Indeed, he may care to regard as a little cleverer than himself the opinion of Chase Manhattan and Citibank, which have got out, and which refused to roll over. They have detached themselves—disinvested — from South Africa. If the Foreign Secretary regards market forces as important, he may just care to lend an ear occasionally to what the most important elements in the market forces are themselves saying and doing.

The crucial factor is the financial sector, and the British Government are necessarily involved in what happens, within the context of market forces, to the rolling over and the rescheduling of those loans. They cannot avoid that. Either they will turn a blind eye, or they will say, as the United States Congress has recommended to the United States Government, that the IMF should not involve itself at all in any financial assistance to South Africa at present.

The right hon. Lady is advocating a principle which, as I understand it, the IMF has steadfastly refused to follow in its relationship with any country at any time since its foundation. It makes its decisions dependent on financial criteria alone and refuses to consider political criteria, because once it started doing so it would be not only South Africa but about 90 member countries of the United Nations whose political regimes would quickly bring them into disrepute with the IMF.

I knew that I should not have given way, because the subject that the hon. Gentleman has raised could keep the House for half an hour—the supposed political impartiality of the IMF.

Our panel in New York was quite clear that the special facility that South Africa is asking from the IMF would require an examination of the spending of the South African Government. This conditionality could very well include the fact that it is spending rather too much on military and police activity and not enough on the things that would assist its own economy. Were the IMF to apply its normal conditionality to the request from South Africa for special assistance, that conditionality would rule out such assistance on all the criteria which have been applied to Tanzania, Nicaragua and the other countries which the IMF has not helped.

And Argentina, indeed.

We recommended—again this is touched on in the report from the Bahamas—a ban on the sale and export of computer equipment capable of use by South Africa's military, police or security forces. The point that came to our attention was that it is not so much the sale and trade in these things that is sustaining apartheid, as the activities of the transnational corporations within South Africa, by manufacturing within South. Africa the vehicles and the computer equipment and the dual use equipment. These transnational corporations have their headquarters in various countries: 142 of them are in Germany, 406 are in the United States and 364 are in the United Kingdom.

At the same time, the transnational corporations — here we have the Foreign Secretary's market forces again — within South Africa have by law to abide by the apartheid laws of that country, including the key point legislation — legislation which commits them, if they obey it, to the worst kind of oppressive measures adopted under apartheid. What our panel has recommended—I do not know what the General Assembly will do with our report—is that if a company's activities in South Africa. particularly in terms of computers, motor vehicles, oil, coal and, in the case of Namibia, all the other things that relate so desperately to that country, mean that, in order to keep the law, a company has to conform to regulations and laws which inherently sustain apartheid, it should seek to dissociate itself from those laws. If it cannot, it should get out. Otherwise, transnational corporations are positively, actively, every day sustaining apartheid There is no way of avoiding that very simple fact. We recommend that in the end, after a year or so, if TNCs cannot do any of this, there should be sanctions, but that is a stage further on.

It must be noted—here again we have market forces for the Foreign Secretary — that 25 transnational corporations in the United Kingdom have already disinvested, together with 18 from the United States. I know that the Prime Minister is deeply concerned, and understandably from her own rather narrow point of view, about the effect, she says, on British industry and British employment if there were to be any imposition of direct sanctions against South Africa. I have already said that this is a very shortsighted and rather naive view, because the long-term interest of British industry lies in prosperity in a multiracial South Africa.

That, apart, there is another point of view on this issue—another way of looking at it. If the Prime Minister believes that our employment will be so deeply affected, clearly she must be concerned about what the transnational corporations see as being in their own interests, yet I doubt very much whether the Foreign Secretary and the Prime Minister—apart from talking to her husband perhaps—have really discussed this issue with the transnational corporations. I doubt whether either she or the Foreign Secretary has enlisted the assistance of the Treasury direct in holding a dialogue with the Bank of England and the banks in Britain. They rely on market forces, but do they ever bother to talk to market forces?

No, I am sorry, I am not giving way again.

If they were to talk to market forces, they would discover that the business community here, like the business community in South Africa itself, is a great deal more enlightened and looking much more to the long term than they are themselves. If dialogue is in the air, there should be a pretty open dialogue with the market forces in Britain to find out what they say about it.

At the same time, if the transnational corporations are to respect this sui generis situation in South Africa—quite different from all other human rights abuses in the rest of the world, partly because they are the subject now of international law — it is impossible for them to perceive their self-interest without realising their own responsibility for the situation in South Africa.

There is much more going on in the United States. It is not only that Chase Manhatten and Citibank have disinvested; it is also that disinvestment is going apace. Mayor Koch of New York gave evidence to our panel. We asked him what his advice would be to the shareholders of the transnational corporations in South Africa. He said, "I would tell them to get out now before there's nothing left to take out." The Foreign Secretary may care to talk to the Chancellor of the Exchequer about that.

There is a real responsibility also on individuals in this country, because divestment—that is to say taking one's investments in shares out of companies which engage in the support of apartheid in South Africa — is a very dynamic factor indeed. The Conservative council at Oxford decided recently to divest its pension funds and everything else from companies engaged in South Africa. Universities, city councils and ordinary people can take such action.

One argument often used by people with less historical awareness than some others is that there is no use imposing sanctions because they do not work. Such people say, "Look what happened when the United States tried to impose sanctions on China; look what happened when the United States tried to impose technological sanctions on the Soviet Union; look what happened when the world tried to impose sanctions on Rhodesia."

Clearly, sanctions will not work if they are bilateral — one country to another, seeking to whip up the support of its friends. I was the Minister in charge during the year when we were trying to impose sanctions on Rhodesia, and I know that many factors were involved. A number came out in the Bingham report, but the key factor was that oil and other goods could get into Rhodesia through South Africa and Portuguese Angola and Mozambique. All the routes into Rhodesia were protected by, in effect, Fascist Governments.

The situation is different now. Only the sea routes could save South Africa, though the transport routes of the frontline states would need some support and development. I am not suggesting that things will come to that. I merely wish to dispose of the spurious argument that because sanctions did not work in Rhodesia they will not work in South Africa.

The Foreign Secretary disappointed the House. We expected a little more from him. Perhaps his speech was not a surprise. Perhaps he can do no more than follow in the steps of his leader. I wish that he would escape from the eagle eye of the Prime Minister and ask his officials to examine the matter. We will take action. I do not say that we will be forced into it by other Commonwealth Governments, but our own long-term enlightened self-interest lies in ending apartheid in South Africa by measures that are considerably stronger than those that came out of the meetings in the Bahamas.

4.52 pm

I wish that I could be as sure and confident as the right hon. Member for Clydesdale (Dame J. Hart) is on every position that she takes, just as I wish that there was a Conservative council in Oxford, but there is not. I also wish that I could share the confidence of some of my hon. Friends on these matters.

I spent part of my childhood in South Africa, and I have recently revisited Namibia with the hon. Member for Swansea, East (Mr. Anderson). We are not debating an abstract matter of foreign affairs. We are talking about human beings, immensely complicated problems and the citizens of southern Africa, whether black, white or coloured. They are all South Africans. and this is not a colonial situation.

We have some responsibility. We were involved in the creation of the South African labyrinth and in the creation of the republic, which was regarded as the greatest liberal action in which the young Winston Churchill was involved. We were also much involved in the creation of Boer nationalism, the Afrikaans language movement and the recreation of the Dutch Reform Church. Our forefathers unwittingly helped to create apartheid, which is not a policy, but a religion, a faith, a belief.

It is ironic that Smuts, who was one of the leading creators of the League of Nations and the United Nations, and was a good friend of our country—we remember him with gratitude— unwittingly helped to create the tragedy that faces the world, this country, and, above all, the whole of southern Africa.

The right hon. Member for Leeds, East (Mr. Healey) and my right hon. and learned Friend the Foreign Secretary referred briefly to Namibia. At least there is no substantial difference between the two sides of the House over Namibia. We support United Nations resolution 435 and regard the South African occupation as illegal. I think that the best thing that could be done in the short term to improve relations between the Government of South Africa and the Western world would be to renew the Contact Group and to renew negotiations on the basis of resolution 435. I believe that that could be possible. There is one difference between us: the Labour party recognises SWAPO as the one party, and we take the view, under the resolution, that there should be a genuinely free election.

No one can go to the war zone in northern Namibia and go back to South Africa without being haunted by the vast, looming tragedy.

I strongly oppose the imposition of economic sanctions. I cannot accept that they would be helpful except to those who wish to have revolution in southern Africa. I do not see sanctions helping a society which is already going through a desperate economic and social revolution. Sanctions are part of the politics of negativism and I will have nothing to do with them.

However, I wish to impress on the Government the fact that we have an economic lever through our massive investment in South Africa. We have far greater influence and respect in all communities than we often realise. Perhaps we should use that positively to assist and encourage peaceful change—a development about which there is no division among those who are seriously concerned about the problems of South Africa.

We cannot ignore the mounting tragedy. We must do what we can to assist and encourage peaceful and progressive change. I hope that the debate will send a message to the moderate and peaceful people in South Africa who want moderate and peaceful change. Let us tell them, "We are prepared to assist you and to be on your side." That does not mean economic sanctions. It does not mean—[HON. MEMBERS: "How?"] It means using our economic position and our political position. [HON. MEMBERS: "How?"] That can be done and it has been done by some companies. That, rather than the politics of war and negativism which is preached by some, is the way forward.

5 pm

The hon. Member for Cambridge (Mr. Rhodes James) spoke with knowledge and experience of South Africa and with sympathy for the problems of South Africa, but he left us with a dilemma, because at the end of his speech he pointed to the extent of British economic involvement and interest in South Africa and the potential that lies there to operate a lever. But a lever is not a lever if it cannot be pulled. The hon. Member posed himself a question. He imparted to us his thinking at what I hope was an intermediate stage, because if he reflects further he will be forced in the end to the conclusion that some measures will have to be taken which will bring real pressure to bear and which actually force that lever.

There are many brutal regimes and many police states in the world. South Africa has many fellows in the club of police states, and some of them do not enjoy some of the things that South Africa still enjoys, such as an independent judiciary. There are many more brutal regimes even than the South African Government, who have inflicted so much death and destruction upon so many of their own citizens in recent weeks.

There are, however, aspects which single out South Africa for the attention of the House. Some of them were mentioned by the hon. Member for Cambridge, such as the long and traditional links, the personal and family links, which exist between this country and South Africa. There are the economic links between the two countries. Above all there is the nature of the regime which South Africa tries to operate and the extraordinary way in which that policy is defended on the pretence that it has something to do with Western values and interests. Fundamental to the regime in South Africa is the division of men and women on the basis of their race and the denial of political power on the basis of race. That is the one thing a man cannot change. He cannot pretend, as he can in a one-party state, to conform to the ideology of the party so that he can at least work his way into the political system and fight for change from within. He cannot claim to shift his allegiance to whichever side he needs to belong to in some repressive countries in order to gain political standing and power. There is no way in which a man can pretend away his racial origin, and it is that which categorises him in the South African system.

No, I wish to develop my arguments. The South African regime operates that system of racial discrimination and racial denial of power, while at the same time pretending that it is in some way defending Western values, and it consistently seeks to regard itself as part of the West, as a friend of the Western democracies. By doing so it invites a degree of attention to its appalling abuses of human rights which it then finds surprising. South Africa should not be surprised to find that if it seeks to act or speak in our name it earns our criticism.

I want to develop my argument, but I shall give way to hon. Members later.

Any black South African and any white progressive South African who wants to see a change in that system, a change which virtually everybody in this House professes he wishes to see, has, over the years, faced three options. One is the option of the exercise of violence, which is a frightening option to undertake; the second is the option of hoping that external pressure including economic sanctions, will force the pace of change; and the third is the option of waiting and hoping that things will get better. Many people in South Africa exercised the third option—they waited and hoped. That option has now run out and the number of people prepared simply to wait and hope is now tiny. That option is no longer available to us.

There have always been powerful reasons to be sceptical about the effectiveness of economic sanctions, particularly if they are not accepted and enforced by the whole community of nations, or virtually the whole community of nations. That is why I was sympathetic to the attempt at the Nassau conference to reach agreement, to arrive at a consensus, supported by all states. It was worth the hours of late night negotiations to try to obtain, as indeed was obtained at the end of the day, a package which, whatever its limitations, was an agreed package supported by all the states that took part.

Sanctions which might satisfy the conscience of an individual or of an individual country, which may be more far-reaching, are far less effective than sanctions which are agreed collectively by the community of nations. Our experience in this field should teach us that, but our wider scepticism—I shared in it, as many others have done—about the value of economic sanctions, has been changed by what has happened in recent months in South Africa. There has appeared in the South African economy and in the South African political system a degree of vulnerability far greater than we have seen for many years, and far more likely to be responsive to economic sanctions over a shorter period.

If that had not happened, our discussion of economic sanctions, which I should still none the less have supported, would have been about a long period of probably rather ineffective measures which for much of the time would have done more for our own conscience than to change what was going on in South Africa. That situation has changed drastically. It has changed because of sanctions dictated primarily by commercial considerations. It has changed because of sanctions exercised by banks and international commercial organisations making a judgment about what would happen in South Africa. That was a judgment about the politics of South Africa and about race relations and violence, but it was essentially a commercial judgment, and it has had a powerful effect, not least upon the South African business community. That effect must be sustained, and measures by Governments can help to sustain it.

It is just conceivable that the South African Government might be able to persuade some of those who have made a commercial judgment to impose sanctions on South Africa to do otherwise. It is just conceivable that the South African Government, by tightening the screw of repression, and by involving the military as well as the police increasingly in holding down violence, might manage to convince, I think wrongly, a few of those involved in international commerce that they can hold the lid on it to such an extent that the commercial pressure for sanctions might relax for a while. In those circumstances, it is important that Governments move in and make it clear that the pressure is both commercial and political. Both elements have to be sustained in order to keep up that pressure which has already begun to have a powerful effect within South Africa.

The South African Government believe that they still have a card to play. They believe that they have a friend in the British Prime Minister and the British Government and they are presented day after day with evidence for that. If that were not so, if they did not have some justification for that belief, the picture would have been different. The Government should have gone to Nassau with specific proposals reflecting perhaps the Government's scepticism about comprehensive sanctions, but with specific proposals for measures which would have an immediate effect. We should have been taking the lead at that conference in advocating those measures, and we should have been seeking more than that.

We should also have sought to gather together the Commonwealth leaders to work out measures to assist the front-line states, because that is a burden which the Commonwealth needs to share. With or without sanctions, the states that border upon South Africa will face increasing difficulty in the coming months and years. That is a responsibility which Britain cannot shoulder alone. Other Commonwealth nations ought to share in it, and are ready to do so. If we had gone to Nassau with a package of proposals combining measures which could be effective in the short term, together with measures to help the frontline states, we would have found ready backing and a ready audience of Commonwealth leaders. That was not so.

However, let us accept at face value what the Foreign Secretary said. Let us accept for the purposes of this discussion that at least the outcome of all these exchanges and late night discussions, and all the pressure put on our own Prime Minister, was in the Government's view, a worthwhile package of measures. The outcome was worth while. It was a step forward, in that all the states in the Commonwealth agreed upon this package. But what happened then? The Prime Minister came home and gave radio and television interviews in which she said that the movement she had made was "absolutely minute". What could have been more dismissive or more insulting to those with whom she was engaged in this task?

At least when President Reagan was forced by Congress to accept economic measures and economic sanctions against South Africa he had the wit to pretend it was his idea in the first place. Indeed, he went about claiming that the Administration had not changed its policy but had simply embraced this new development in policy. We all laughed a little at the time, but at least he saw that if the measure was to be worth while he had to embrace it and give it his support, whatever his initial reluctance.

The Prime Minister did the precise opposite. She is haunted by the fear of a U-turn. She is haunted by her experiences in past battles with the right hon. Member for Old Bexley and Sidcup (Mr. Heath). She is still trying to prove she is not like him. I wish that she would not do that. The right hon. Gentleman has many commendable features, one of which is the ability to see when he is wrong and change his mind. I do not see why the Prime Minister should be so determined to prove that she is unlike the right hon. Gentleman. Even if she is, frankly, it is a secondary consideration when compared to the need to build Commonwealth unity on an issue such as this.

If these measures are to be interpreted as the Prime Minister herself wishes to interpret them, as a signal to South Africa, the right hon. Lady has totally destroyed the signal. What sort of signal was it to say, "We have agreed on a package of measures, but for Britain the movement we have made is absolutely minute."? The significance is destroyed completely. That was no kind of statesmanship. It was seriously damaging to the Commonwealth. By the actions of the right hon. Lady, Britain is throwing away any pretence to leadership in the Commonwealth. Indeed, leadership has been handed to some notable figures who took part in those discussions. What happened was damaging to long-term British interests. As my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) said, it will cost British jobs in the long term as more and more Commonwealth countries which have been friendly to us and closely associated with us despair of the attitude that we have taken.

The hon. Gentleman has taken up the point made by the right hon. Member for Plymouth, Devonport (Dr. Owen), who made a threat to the Prime Minister that if she did not concede to the demands of the rest of the Commonwealth, jobs would be lost in this country through lost orders from Commonwealth countries because of our so-called isolated position. The hon. Gentleman obviously endorses that view. Can he spell out to the House which jobs would be lost, which countries would stop trading with us, and whether the trade that they do with us is to the benefit of this country? In many cases, they build up nothing more than debt in the trade that we do with them.

The hon. Gentleman would have difficulty in convincing my hon. Friend the Member for Yeovil (Mr. Ashdown) that the manufacture of helicopters is anything other than beneficial to our economy, and that is one of many industries in which we seek contracts with Commonwealth countries. To isolate Britain would be severely damaging to long-term interests in the Commonwealth and in much of the rest of the world. If the hon. Gentleman cannot see that, he is being very shortsighted. The Prime Minister was characteristically shortsighted when she isolated Britain to such an extent.

This is probably the last opportunity that this Prime Minister will have to bring about change in South Africa; it will be her last opportunity to play some part in it. More than that, I fear that it may be the last time that any of us will have an opportunity to help to bring about peaceful change in South Africa. The option of waiting and hoping is gone. Violence is mounting. It ought to be common ground to most of us that there comes a stage when limited concessions of the kind which might mark the progress which the Foreign Secretary hopes to see within six months will do nothing to alleviate the increase in violence. Once the cycle of violence begins, only the ultimate grant of full political rights can bring it to an end. Even that might not do so. If South Africa is launched into violence and internal conflict, of the prospect for a peaceful democratic South Africa in the future is threatened. The time is now, but this Government manifestly lack any sense of timing.

5.12 pm

I regret that Opposition Members are so often reluctant to acknowledge the common ground that exists between us on this subject. Historically the ideals and aspirations of Afrikanerdom are tainted with Fascism. In practice, the implementation of Afrikanerdom stinks with Fascism. It is unacceptable. That realisation should provide common ground in our debate. I hope that Opposition Members will one day acknowledge that this side of the House matches in rhetoric and sincerity its dislike and hatred of apartheid.

The last time the House debated South African affairs was on 24 July when the right hon. Member for Leeds, East (Mr. Healey)—I regret that he is not in his seat—posed a question:
"Is there anything which we can do which may slow down or divert this accelerating race to catastrophe in South Africa …"—[Official Report, 24 July 1985; Vol. 83, c. 1166.]
It would be wise to bear that question in mind. Is there indeed anything that from this distance, in the light of our global influence, we can do to influence the course of events in South Africa? I do not claim to have the knowledge or experience of South Africa of many of my hon. Friends or of the right hon. Member for Leeds, East but I believe that in July, just as earlier this afternoon, the right hon. Gentleman posed the right question but gave the wrong answer.

The question demands this reasoning. To know what we ought to do first demands knowing what we wish to achieve. Time and again the Government have reiterated that they seek a two fold policy towards South Africa: to seek the overthrow of apartheid and in its place to seek the creation of a form of government acceptable to all races in South Africa. It is not for us to specify what the form of government should be. To do so would be to demand of South Africa what does not exist elsewhere in the African continent where tribalism and persecution of ethnic minorities are the stuff of everyday.

Government policy also avoids the sham and the mockery of supporting the "one man, one vote" cry, to which Nelson Madela pays lip service, which is prostituted throughout the rest of the African continent. The end of apartheid and the creation of a form of government acceptable to all should be our objective, and I welcome the fact that it is the objective of the Government.

To return to the question posed by the right hon. Member for Leeds, East, is there indeed anything we can do to slow down or divert the accelerating race to catastrophe?

I am trying to follow my hon. Friend's logic. In using the phrase "acceptable to all" does he draw any parallel between the great difficulties we experience in developing a system of government acceptable to all in Northern Ireland or in Ireland as a whole and his assumption that somehow a system of government acceptable to all can be found in South Africa? Does that give him cause for thought or for concern?

One must beware of making absolutes. Forms of government are developed round the world according to the social needs and the historical trends and tendencies of different societies. There are no absolutes anywhere.

To return to the question posed by the right hon. Member for Leeds, East, there is both a positive and negative answer. Negatively we should do nothing which will promote and encourage unrest and disorder in South Africa. That is precisely what the imposition of sanctions and a strategy of disinvestment would achieve. The arguments have been heard in the House before and are well known to hon. Members.

If Opposition Members believe that unemployment causes unrest—I suspect they will be arguing that in a later debate—they must acknowledge that it is true of South Africa just as they will argue that it is true of this country. Disinvestment of 20 per cent. in South Africa would result, I am told, in the loss of approximately 90,000 jobs currently held by white people and 350,000 jobs held by black people. Those who would suffer first and most would be those whom we claim we wish to help. There is evidence that the very first to suffer would be the 1 million black foreign workers in South Africa. Nor should we forget the neighbouring black African countries whose economies depend so much on close economic ties with a prosperous South Africa.

For good or bad, we must not forget either that disinvestment and sanctions threaten some 200,000 jobs in this country. If Opposition Members wish to impose sanctions against South Africa, let them have the courage to go back to their constituencies and point out that the implementation of that policy would result in the loss of the best part of a quarter of a million jobs in this country.

Of paramount importance, economic sanctions imposed against South Africa would create further unrest, disorder and violence, and there is enough of that at the moment. Sanctions should not be imposed if we wish to slow down or divert the accelerating race to catastrophe.

Changes are taking place in South Africa. We see this in the labour laws, the marriage laws, the pass law s and the conducting and practising of sports. Above all, there have been constitutional changes. Changes have come. It is true that they have come slowly, but they are happening—they are not cosmetic, but nor do they go to the heart of the matter. However it is important to acknowledge that, apart from the absolute Afrikaner diehards within the laager of their ox carts, the overwhelming majority of all races, not least whites, in South Africa want change and they want it quickly. The forces of evolution, as opposed to revolution, in South Africa will respond to outside encouragement, but they will not respond to outside pressure. To encourage revolution is to encourage anarchy, barbarity and murder. I am not prepared to do that.

Is the hon. Member seriously suggesting that these changes have come about irrespective of any outside pressure?

The changes have come from an awareness among white South Africans that the position inherited from the early 1960s was morally and economically untenable. It is impossible to analyse what led people to change their minds. There has been a programme of change in South Africa for at least 10 years.

I welcome and applaud the agreement reached a few days ago by the Commonwealth leaders. The Prime Minister gave a little ground but the sanctions package lacks the teeth to do real harm to the South African economy. I applaud that. The seriousness of intent and concern behind the package cannot be doubted. It will encourage change rather than deter change and promote chaos.

My hon. Friends can speak for themselves. For my part, I hate apartheid. On 10 July, the hon. Member for Sheffield, Central (Mr. Caborn) declared:
"We want to rid South Africa of 20th century slavery". —[Official Report, 10 July 1985; Vol. 82, c. 1093.]
So do we—but slavery takes many forms. The slavery of any racial or tribal group is equally unacceptable. In Africa, slavery all too often takes the form of persecution of an ethnic minority by an ethnic majority. The stakes are too high in South Africa to back revolution. That is why our policy should seek to accelerate evolution rather than encourage revolution. The forces of evolution are represented by many people of many racial groups in South Africa. They need friends, not enemies. Rather than apologise for it, I am proud to declare myself one of their friends.

5.23 pm

When discussing apartheid, we are discussing not simply a person's rights, but a system that aims to devalue the dignity of man. It aims to defame humanity and to attack, as did the anti-Semitism of the 1930s, the spirit and dignity of man himself. Time is no longer on our side, and we are slipping towards a holocaust. What worries me is that, 40 years ago, another British Prime Minister came back waving a scrap of paper as a diplomatic victory and said that if we talked and talked everything would be all right. The situation is now beyond leaving it to talk alone.

It is quite true that members of the Commonwealth went along with the Prime Minister. The right hon. Lady certainly prefers to think that they went along with her. Britain is no longer the leader of the Commonwealth, and it is clear that this Commonwealth agreement was the last attempt to make Britain an equal partner in an association of equals. Britain needs the Commonwealth far more than the Commonwealth needs Britain. It asked our help because it recognised that, when a Labour Government imposed sanctions on Rhodesia, Ian Smith could avoid them because he had a sympathetic industrial and political base in Britain that would undermine the Government's intentions. Only when it was made clear that Britain as a whole recognised that the situation to which Ian Smith was dragging us would involve the interests of Britain and the rest of the world did we achieve what should have happened years before—representation of the people in Zimbabwe.

We are members of the Commonwealth. Of course sanctions will cost jobs — here and in South Africa. There is a great deal of difference, however, between enduring unemployment for a principle in South Africa and enduring it here because of an unacceptable political dogma.


We must distinguish between the two. When we went to war over the Falklands—a decision that ran contrary to all my beliefs—the Government argued that no cost was too much for a principle. Do they now recognise that the abolition of apartheid is a principle? It is not simply a system of government. It draws a distinction between one man and another simply because of the colour of his skin. It runs counter to my political convictions and counter to my Christian principles.

We are asking the Government to recognise that Britain is perhaps as much on trial as South Africa. We are in no position to lead the Commonwealth, but we must decide whether we stand by the principles which the House, the country and our society have valued or whether we stand back, excuse and dodge until the holocaust comes. What I suggest will cost us all, but what economic value do we put on one of the 800 lives that have already been destroyed in South Africa? Do we value humanity? Are we prepared to say that there are certain principles which the House and the British people reject? It is on that basis that we must decide our actions, and approach the present situation.

5.30 pm

By his caring and thoughtful speech my hon. Friend the Member for Cambridge (Mr. Rhodes James) has shown that to be in favour of peaceful change in South Africa and of a system which does not impose widespread sanctions — an approach that is the result of greater experience of the real situation in South Africa than many hon. Members have—does not make one an apologist for apartheid.

I bitterly resent the accusations that are levelled against anybody who dares to stand up and speak in favour of some of the good things that are happening in South Africa —and good things are happening there. Also, I bitterly resent, as a constituent said to me only last weekend, being lectured upon human rights by those who purport to support human rights. Their names have been mentioned this afternoon. They are said to be the people to whom this Government must turn if an agreement is to be reached in six months' time. Where were the protests from the Opposition and from other people who are ready to use South Africa as the whipping boy for all the world's problems when 10 dissidents were executed in Zimbabwe? We heard not a murmur.

Does my hon. Friend agree that if sanctions have to be discussed today, the House should be discussing sanctions against black African countries whose anti-democratic and antihuman rights records lead South Africa almost to look down on them? The whole of black Africa is full of such examples. To discuss the imposition of sanctions only against South Africa is hypocritical.

My hon. Friend is right to draw the attention of the House to the fact that our attitude towards the abandonment of human rights by other countries must not be selective. Nor must our condemnation of violence be selective. We must not condone violence in South Africa because it is directed against apartheid, which we abhor. We also abhor other forms of violence. We cannot give political respectability to violence. To do so would be to condone what is happening in many parts of this country. I do not believe that we should.

My hon. Friend the Member for Cambridge referred to the respect held in South Africa for the views of people in this country. He referred eloquently to the changes that have taken place. Human rights need progressively to be improved in South Africa so that stability can be achieved, and people must play a full part in achieving that stability. The stick followed by the stick and by yet more stick is not the way to bring about stability. The changes that are taking place must be the result of an acceptance and a growing belief among South Africans of all races that change must come about. Acceptance is being accelerated by the displeasure that is being shown by many countries. My hon. Friend said that it is impossible to quantify how much effect that displeasure will have, but its effect is undeniable. There have been major and significant changes. Many elements of both grand and petty apartheid are disappearing from South Africa.

We must ask ourselves whether we want this country to use its influence to accelerate the rate of change to an unacceptable level. Do we want the process of political change, which depends on the art of the possible, to result in a backlash, which will mean that the President of South Africa is unable to pursue reform?

Reference has been made this afternoon to the hard line Afrikaners. There is an organisation called the Broederbond. A member of that organisation could hardly be thought, by those who believe that Afrikanerdom is wholly committed to the maintenance of apartheid, to have participated in what I consider to be a major reform document that was published in 1980. In 1980 Professor de Lange produced a report on education. I had the privilege of talking to him at Witwatersrand university about its implications, which were staggering for white South Africans. It involved a massive shift of resources away from white education into black and coloured education. These are the people who represent moderate, sensible, reforming opinion in South Africa. We must encourage them and not slap them down at every step of the way.

My hon. Friend the Member for Cambridge referred to the historical perspective. It is important to keep it in our minds and not to ask for a pace of change in South Africa which cannot be achieved. If we try to cram everything into too tight a time frame, there will be an explosion. An explosion in South Africa is not in the interests of the blacks, the coloureds, the Asians or the whites, and it is not in the interests of those who believe that southern Africa needs stability. A reformed South Africa, which is prepared to move in the direction of change, could play a fundamental role in achieving stability.

5.39 pm

Several Conservative Members have referred to the difficulties facing South Africa and suggested that if certain action is taken the country will slip into disorder and chaos and there will be loss of life. They do not seem to realise what is happening in South Africa. If they do not realise that the Nassau crisis was the result of agitation about what is happening in South Africa, they understand nothing at all.

I have very mixed feelings about the Nassau agreement. I want to believe that the Nassau accord means that there will be progress. I want to believe that the Prime Minister has conceded ground, that the Government are serious about trying to get rid of apartheid and that the dialogue with South Africa will succeed. Yet experience teaches me that it will not.

It was in 1977 that we set up the Contact Group of five Western nations that were supposed to conduct negotiations with South Africa to bring Namibia to independence. We are now much further from achieving that independence that we were in 1977. It is clear that the South African Government have established this new multi-party or puppet Government in an attempt to bypass negotiations and freedom for Namibia.

I have mixed feelings because the Government have apparently given their wholehearted consent to some of the matters that I and many others have advocated for many years. I have been to the Foreign and Commonwealth Office several times to demand certain action—stopping the sale of krugerrands, withdrawing our military attaché in South Africa, sending back its military attaché here, and ending new investment. All those requests have been firmly refused by the Minister of State. Therefore, I can do nothing but welcome some of the proposals.

This is the second time in the past 12 months — possibly the past six months—that the Government have shifted their ground. The Prime Minister and the Minister of State said that they would not accept the EEC package of measures against South Africa, but they did accept it.

The hon. Gentleman must get his facts right. When the EEC package was being considered I, on behalf of Her Majesty's Government, said that at that moment we could not indicate our acceptance because we wished to give consideration to the implications of that package. We gave the package consideration and, in a very short period, we accepted it.

The Minister has confirmed exactly what I said. He said the Government could not at that time implement those measures but, after consideration, they decided to apply them. When the Prime Minister went to Nassau, she said much the same thing. She was not going to implement sanctions against South Africa; now she is applying not sanctions, but signals. One man's sanctions are another man's signals. The effect is intended to be the same. The truth is that the principle of sanctions, pressure. leverage or signals has been conceded.

We have heard the argument against sanctions from both the Foreign Secretary and others on the Government Benches. One of the points of the argument has been that if we impose sanctions they will hurt most the black Africans. The British Government's position is exposed on the front page of the Anti-Apartheid News. There is a picture of the British Prime Minister facing P. W. Botha. The Prime Minister is saying, "We are opposed to sanctions because they will hurt most the people we want to help." P. W. Botha replies, "Thanks." Many of us believe that the Government are much more concerned about protecting British investments than about the eradication of apartheid.

Another aspect of the Government's argument is that sanctions are ineffective. Central to that theme is that the use of sanctions on Rhodesia was a failure. I concede that the sanctions on Rhodesia were not as effective as I should have liked because of the situation in South Africa, because of Portugal, Angola and Mozambique and because some senior members of the then Labour Government were not keen enthusiasts of sanctions. I accept that, but if we had not had sanctions on Rhodesia, the Lancaster House settlement would have taken place at a much later date. If we had given diplomatic recognition to the Smith UDI, if it had free access to world banking, to arms and to communications, there is no doubt that the liberation war in Rhodesia would have gone on for much longer and many lives would have been lost.

The Minister of State and I have had discussions on several occasions, and he has partly conceded my case about sanctions having some effect while he still denies the role that they have played. He also says that I know perfectly well that the real reason for Lancaster House was the activity of the liberation movement—the liberation armies of ZIPRA and ZANLA. I agree with him. The liberation struggle brought about independence for Zimbabwe. When the hon. Gentleman accepts the role of the liberation movement, the cynicism and the hypocrisy of the Government's case is exposed. They are saying to black South Africans that we shall not help them to achieve liberation by applying sanctions, but at the same time we are denying them the only alternative method to sanctions — the right to fight for their freedom. That is condemned as violence.

It is in no one's interests to have a full-scale civil war in South Africa. The African National Congress makes that point. It does not want to inherit South Africa with its economy destroyed or with the machinery scrapped because of the civil war. Those people want to inherit a situation in which they can advocate the political system that they want and a truly multiracial society. If we stand back now, not for the first time, and say that we shall not come to the assistance of black South Africans, of Indian South Africans, of coloured South Africans and of white South Africans too—because they are all involved—the end that they fear, chaos, destruction and loss of life on an even more massive scale than now will come into being.

We must seriously ask the Government what they want. Did the Government mean what they said when they signed the Nassau agreement? It is difficult to take the Government's word for their assent to the major part of the Nassau agreement because the Prime Minister poured scorn on it. "Minute little changes," "very little concessions," she said. She poured so much scorn on it that she denigrated her own word. One should not be surprised at that. I do not believe that the Prime Minister or many hon. Members understand the qualitative change in psychology and opinion that has taken place in South Africa. The change has come about partly by economic circumstances. We know the South African economy is in very serious trouble. It has come about mainly because people have seen, perhaps for the first time in their lives, the sustained ferocity of the police and of the army in the past 12 months against the majority of the population.

I have spoken to people, who do not share my point of view on South Africa, who say that they had a feeling of revulsion when they saw on their television screens the South African railway truck with crates on it driving through a township and suddenly soldiers come out of it shooting indiscriminately. That has caused much revulsion, not only outside South Africa but inside the country, although people in South Africa have not seen on their television screens the full impact of what has happened.

That change has come about also because the South African Government have shown that they cannot tolerate any democratic freedom of expression. The trial has now started of the United Democratic Front leaders who are charged with treason because they dared to advocate that apartheid was wrong. They dared to advocate that the tri-cameral system was a disgrace.

The qualitative change is so great that even I found it difficult to believe. I listened to about six different radio broadcasts before I could believe what my ears were hearing — that white South African business men had asked to meet the African National Congress in Zambia. They not only asked to go, but they went, and they returned with a high opinion of the leaders of the ANC. I am glad that happened. The leader of the Progressive Federal Party, Mr. van Slabbert, and others have been to see the ANC. He also recognised that there can be no future discussion or negotiation of any sort about the future of South Africa unless the ANC is brought into the dialogue.

Afrikaner students wanted to see the youth wing of the ANC, but they were prevented from doing so because the South African Government withdrew their passports. There are many other organisations—I do not wish to give away any secrets because many of them do not want it known in case they are stopped from going—within South Africa and business interests in the City that want to discuss the future with the ANC. Only the British Government stand aside and say that they are not prepared to meet the ANC.

Why will the Government not meet the ANC? Why will the Prime Minister not do as she did with Bishop Tutu and invite Oliver Tambo to 10 Downing street?