House Of Commons
Wednesday 18 March 1987
The House met at half-past Two o'clock
Prayers
[MR. SPEAKER in the Chair]
Oral Answers To Questions
Foreign And Commonwealth Affairs
Falklands Fisheries
1.
asked the Secretary of State for Foreign and Commonwealth Affairs how many fishing vessels have been boarded by fisheries protection personnel in the Falkland Islands conservation zone since 1 February; and if he will make a statement.
Seventy-four fishing vessels have been boarded by fisheries protection personnel in the Falkland Islands interim conservation and management zone between 1 February and 12 March 1987.
Does the Secretary of State agree that although fishery protection is important to the Falkland Islands economy, the broader issue of conservation is even more important for ecology? Does he agree that one should avoid the over-fishing that has taken place in the north Atlantic and resulted in the migration of seals to the Norwegian inshore fishing grounds? Are the current licensing system and the protection that is afforded sufficient to take regard of that, and will the right hon. and learned Gentleman sponsor a form of international symposium to ensure that the Falkland Islands get the best possible advice on the subject?
I am grateful to the hon. Gentleman for his support for what we are doing. The fishery protection arrangements were established precisely to meet the conservation case that he has put. It is a matter of satisfaction to him and the House that the system is working as well as it is. Obviously, we would like to see that extended into a multilateral basis, and that is why we started our initial search for arangements through the Food and Agriculture Organisation and would still be ready, if we could, to move to multilateral arrangements.
Does my right hon. and learned Friend recall the whingeing, cringing predictions of international conflict and disaster by the Opposition Front Bench when the zone was first introduced? Has the zone not been fully justified and has not the Government's policy earned the thanks of the Falkland Islanders and the British people?
I am grateful to my hon. Friend for reminding the House of that. There were, indeed, doom-laden predictions from the Opposition Benches, supported by the now benignly smiling hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on the Opposition Front Bench. Again, it must be a matter of satisfaction to the House that the arrangements have been put in place and have worked as smoothly and well as they have done.
May I say that I have the greatest admiration for the skippers and crews of the elderly stern trawlers which are carrying out the police work? However, what consideration has been given to the replacement of those elderly vessels by, for example, two newly constructed fisheries replacement vessels of the sort built by Fergusons, which just happens to be in my constituency?
I understand the hon. Gentleman's interest in that aspect of the matter. The main thing is that the vessels and aircraft selected for the task have been able to carry it out effectively, entirely in line with the normal pattern of fisheries promotion, with the granting of 100 licences to 50 vessels so far and a substantial revenue accruing to the system. No doubt the question of prolongation of the life or substitution of the vessels will be borne in mind by those responsible.
I am sorry to see the Secretary of State following his Back Benchers in jumping so prematurely to conclusions after only a few months' operation of the zone. As the Government have always said that the unilateral zone is a temporary measure, when does the right hon. and learned Gentleman expect the United States-inspired contacts between Britain and Argentina—I know that I must not call them talks—to result in a bilateral or, better, a multilateral agreement, which is the way in which any two civilised Western democratic countries ought to be concluding an agreement, instead of what is still a nerve-racking and tense arrangement that could flare up at any time?
I have no doubt that the hon. Gentleman lives in lively expectation of that event, if only to fulfil his doom-laden forecast. I am not suggesting that he would like it for the sake of warlikeness. On experience so far, he has been shown to have made some extremely foolish and ill-founded predictions. Of course it is right to say that we want a multilateral rather than a unilateral arrangement. It is precisely that that we are seeking. It is on that basis that ideas are being exchanged. There is no secret about that. We are now awaiting a response to the ideas that we have put forward. I am sure that the hon. Gentleman, with his care for arriving at a sensible conclusion, will recognise that here particularly it is most important to follow a step-by-step approach if we are to ensure the establishment of a proper basis of understanding.
Arms Control Talks
2.
asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress at the arms control negotiations in Geneva.
The seventh round of the Geneva nuclear and space talks has been extended to allow further discussion of the United States draft INF treaty tabled on 4 March. The chemical weapons negotiations resumed on 3 February. We hope that it will be possible to build on the encouraging progress made last year.
Has my right hon. and learned Friend noted the desperate Houdini tactics being adopted by the Leader of the Opposition in a vain attempt to satisfy the negotiators at Geneva and the voters of this country that his party is no longer unilateralist? Does my right hon. and learned Friend agree that it proves that the firm defence policy that is being followed by the Government will produce effective, verifiable progress towards genuine disarmament?
Like my hon. Friend, I am driven to speculate about the implications of reports in today's press about shifts in the position of the leader of the Labour party, suggesting that the Opposition are moving towards support for a zero-zero position. If indeed that is happening, one must, however belatedly, welcome the Opposition's attempt to evade the consequences of their previous disastrous policy. The logic of the Opposition's position of one-sided disarmament would be to speed up the removal of cruise missiles to encourage Mr. Gorbachev to remove the SS20s. The recognition, if it be the case, of the wisdom of keeping cruise missiles in this country to achieve success in the negotiations reveals the foolishness of the whole unilateralist approach.
Have Her Majesty's Government been consulted about the suggestion that American Pershing 2 missiles, which will be covered by the INF agreement, might not be removed but converted into shorter range systems? Since anything that can be converted can be reconverted, what are the implications for the difficult verification issues arising out of the agreement?
It is because of the importance of the verification issues that the verification provisions in the draft treaty are themselves so important. It is because of the scope for variation in the capacity of the SS21s and the SS22s on the Soviet side that it is so important to achieve proper constraints on shorter range intermediate nuclear weapons. Among the constraints, the right to match, as well as everything else, has always been open to consideration.
Does my right hon. and learned Friend agree that, put in succinct terms, there would be no progress in the various talks if the Opposition's policies on these matters were to be pursued? None the less, does my right hon. and learned Friend agree that progress in the various negotiations is disappointingly slow? Is there no chance, perhaps with the help of our American allies, of being even more firm about these matters and getting the processes somewhat speeded up?
I can understand my hon. and learned Friend's impatience for quick headway in the matter. He must acknowledge that, in matters of such complexity where verification and constraints on shorter range intermediate nuclear weapons are of crucial importance, it is far more important to be right than to be speedy.
Will the Home Secretary explain why the Government have changed their mind on the zero-zero option by now wanting an agreement on short-range nuclear weapons while reaching an agreement on the INF instead of in subsequent negotiations, as was the Government's position between 1981 and 1986?
There has been no change in the Government's position. If one looks back at the statements in the series of communiqués, one sees that it has always been regarded as important to secure proper constraints on the shorter-range intermediate nuclear weapons as part of the initial agreement, and, beyond that, to secure a commitment to a further round of negotiations for the rest.
Although there is now, fortunately, real hope of progress with regard to the INF and chemical weapons, does my right hon. and learned Friend agree that it is equally, if not far more, important that we should reach some sort of accommodation over strategic weapons? Does he further agree that such an accommodation will be very difficult to achieve until there is some understanding with the Soviet Union on the testing and deployment of the SDI?
As the prospect of agreement on strategic weapons was one of the components that was endorsed by NATO at its two ministerial meetings at the end of last year, as well as at Camp David, it is clear that we should like there to be headway on strategic weapons. That may be easier to achieve if there is proper understanding of the way in which the ABM treaty is to be observed by both sides.
Will the Foreign Secretary confirm that the draft treaty on intermediate missiles that has been tabled by the United States at Geneva does not endorse the Prime Minister's line that catching up with Soviet short range superiority is a pre-condition for an agreement? Why is it that when this condition was not part of NATO's zero option offer in 1983 it is now so important and might easily obstruct a historic agreement that would get rid of both the SS20s and the cruise and Pershing missiles in Europe? Why does our Prime Minister, every time that there is a significant concession from the Soviet Union and the chance of a break through in arms control, insist on inventing some spurious objection to it and on moving the goal posts?
The hon. Gentleman is doing his best with a profoundly bad brief. There is absolutely no validity in the points that he makes. From the moment that the zero-zero option was put forward in 1981 it was always accompanied by the suggestion that constraints on shorter-range intermediate weapons were necessary and part of it. As I have already said this afternoon, that position was clearly set out in the Defence Ministers' and the Foreign Ministers' communiqués of December 1986. We need to have constraints on the SRINF systems, which are capable of targeting western Europe, and those constraints need to be incorporated in any INF agreement on zero-zero. Thereafter, further negotiations must address urgently the substantial imbalance that currently exists in the SRINF.
Postal Communications
3.
asked the Secretary of State for Foreign and Commonwealth Affairs whether the United Kingdom delegation to the Conference on Security and Co-operation in Europe review conference in Vienna will raise the subject of the free movement of postal communications between the United Kingdom and countries in eastern Europe; and if he will make a statement.
Our delegation has already raised this issue in debate on a number of occasions. With other Western countries, we have tabled a proposal aimed at ensuring freedom of transit of postal communications.
I am grateful for my hon. Friend's reply, but does he not agree that the Soviet record in these matters is a yardstick by which its general commitment to human rights should be judged? Will my hon. Friend advise our partners in Europe and at the Vienna conference that no agreement should be reached with the Soviets until the subject of the free movement of postal communications can be sorted out?
My hon. Friend is right when he says that freedom of postal communications is one area where we should be watching carefully porgress on the Soviet side. That is inherent in the implementation of the Helsinki Final Act, and we shall be pressing the Soviets continually on that point.
Is my hon. Friend aware that many of the recently released Soviet dissidents have returned home in very bad health, but that Soviet law currently prevents the mailing of medical supplies to them from the West? Will he take up this matter in Vienna and also when my right hon. Friend the Prime Minister goes to Moscow?
I thank my hon. Friend for drawing our attention to that matter. I shall certainly ask our delegation in Vienna to raise it with the Soviets. When my right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign Secretary go to Moscow at the end of next week, I have no doubt that human rights abuses will be high on their list of priorities. It is one matter that I shall see is in their brief as well.
Ec Budget
4.
asked the Secretary of State for Foreign and Commonwealth Affairs when the EEC Council of Foreign Ministers last discussed the 1987 budget.
The Foreign Affairs Council last discussed the 1987 budget on 26 January.
Will my right hon. and learned Friend confirm that the European Community will spend about £3 billion more than its permitted revenue this year, and that the Commission's reaction to that is to try to switch to a more generous revenue system so that the budget can continue its upward path? Will my right hon. and learned Friend undertake to veto any such scheme? Will he bring to the European budget the prudence and financial rectitude for which he was famous when he was Chancellor of the Exchequer?
I acknowledge with gratitude the tribute from my hon. Friend. He is right to remind the House of the continuing problems of securing effective control over the Community budget. He will know that our position with regard to any possible increase in resources rests absolutely on the Fontainebleau agreement, which provides that the maximum rate may be increased to 1·6 per cent. on 1 January next year, by unanimous decision of the Council and after agreement by national Parliaments. I emphasise the word may, not shall. We stand by the letter of that agreement. We see no case for going beyond it. We intend to achieve control over the budget that is as effective as my hon. Friend would like.
When will the Delors proposals that budgetary contributions be based on national GNPs be discussed by the Council, and what is the Government's initial response to them?
The Delors proposals are now under consideration by permanent representatives, having received preliminary discussion by Ministers. The Foreign Affairs Council will have its first discussion of the Commission's proposals on 27 and 28 April, on the basis of which there will be a report to the European Council. However, our position is as I have stated it. We stand by the letter of the Fontainebleau agreement, as I have just described it.
Is it not a distortion to say that the main responsibility for Community budgetary discipline rests with the Commission? Does not the main responsibility for the problem rest with the Council of Ministers in its various guises being unwilling to impose upon itself a proper set of budgetary priorities? Is it not the case that we are unlikely to produce a permanent solution until we tackle that institutional aspect of the problem?
I wish that it was as easy as something that could be solved by reshuffling the institutional responsibilities. The basic reason for the extreme difficulty in securing control over Community expenditure on agriculture is the same as the reason for achieving similar discipline in the United States, Japan and most other industrial countries— the problem of protecting the health of rural communities in a fashion that is compatible with the cash resources that are available. I am afraid that it will be a matter for the whole House, just as for the whole European Parliament and all those engaged in institutions, to seek further and better ways of protecting the rural environment that do not depend upon the production of food surpluses that cannot be sold and can be stored only at great expense.
Is the Foreign Secretary satisfied, and is the Council satisfied, that the revenue side of the budget agreed by the Council recently will be adequate to produce the revenue needed in 1987? If not, do he and the Council favour a supplementary budget or a new intergovernmental agreement?
We have made it clear in the discussions that have taken place so far that we shall not provide additional finance outside the own resources system.
Does my right hon. and learned Friend mean by what he has just said that he sticks by the triumph of the Fontainebleau agreement, with its commitment to strict budgetary discipline, and that he is not prepared to support any form of intergovernmental agreement or any other form of financing that goes outside the budget as defined and as limited by the Fontainebleau agreement?
I said in my earlier reply that we shall not provide additional finance outside the own resources system. There is scope for savings in the agricultural price fixing. There is also some headroom in the 1·4 per cent. ceiling. Of course, there is scope for consideration, under the Fontainebleau agreement and subject to the requirement of unanimity, of the possible increase provided for there.
The Foreign Secretary has come to the House before and told us all this. It is all very well his saying that he will stick to the Fontainebleau agreement, but the Community is already working at 1·6 per cent. of VAT and its accumulated liabilities now total £12 billion. If the Government were to reject the Delors package, which would put the price tag up to 2·1 per cent. of VAT, what would happen then? Even these proposals provide for an increase in CAP of 2·5 per cent. a year. Why is there such a silence from the Government about this very important crisis affecting the Community? We have had no debate, no statements from the Finance Ministers Councils, nothing except a lot of dithering. How is the circle to be squared? Where will the extra mony come from to fill the huge hole that exists in the Community's finances?
The hon. Gentleman should really know better than to make that kind of observation. He should know perfectly well that we have put in place the budgetary discipline arrangements of the Fontainebleau agreement. They are fortified and sustained by the specific limitations of the own resources system. The limits of the room for manoeuvre are as described, with the possibility—and I emphasise the word possibility—of a 1·6 per cent. ceiling with the unanimous agreement of all member states. It is a matter of may, not must. We are entitled to look to the hon. Member for Hamilton (Mr. Robertson) for his support for the range of extremely difficult measures that are likely to be necessary if we are to secure effective control of the financing of agricultural policies.
Dr. Blackburn. I am sorry, I meant to call Mr. Willie Hamilton. That was my mistake. I was listening to something else.
Brazil
5.
asked the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the implications for diplomatic relations between the United Kingdom and Brazil of that country's decision to suspend interest payments on its overseas debts; and if he will make a statement.
I am delighted to have the opportunity to answer the question. Although we have made clear to the Brazilian Government our regret at their decision, this has not affected our generally good relations. My right hon. and noble Friend the Minister of State, Foreign and Commonwealth Office is visiting Brazil this week and will no doubt discuss this subject.
Does the Foreign Office still accept the opinion that the Under-Secretary expressed in the House a week or two ago that the solution to the problem can be found only by accepting IMF conditions? That would quite clearly be impossible for the very poor people in that country. Does the hon. Gentleman not accept that the poverty of these countries is as big a threat to world peace as any nuclear weapon? Unless the problems are solved, principally, I believe, by the commercial banks accepting lower rates of interest rather than having unacceptable conditions imposed by the IMF, the problem will never be solved. What proposals will the Minister take from banks in this country when she visits Brazil later this week?
We very much regret the decision to suspend payment of interest on commercial debt. However, debt negotiations are a matter for the Brazilian Government to discuss directly with commercial bank creditors. It is not for Her Majesty's Government to interfere, although we obviously hope that negotiations can begin very soon.
Does my hon. Friend agree that the best way to decrease the debt burden and increase the ability of countries such as Brazil to pay is for the West to reduce interest levels? That will occur only when they have prudently run economies.
I very much agree with the thrust of my hon. Friend's question.
Will the Minister confirm that these are strictly commercial loans between British banks and foreign agencies and Governments? Will he give an undertaking to the House that in the event of there being a major default by one of these countries it will be up to the British banks to bear the consequences?
I gladly confirm to the hon. Gentleman that the debts that we are talking about are almost overwhelmingly commercial debts between commercial banks of Western countries and Brazil.
Does the Minister agree that unless there is a major initiative by the West on these matters, perhaps based on reducing interest rates and rescheduling debts, we shall face the unpalatable alternative of even more people defaulting, following the example of Brazil and now Ecuador?
The situation in Ecuador is slightly different, as there has been a significant natural disaster there. It is impossible to have a general prescription on this as it is a matter for discussion between the countries involved and those who hold their debts. There are a number of possible solutions and each must be considered on an ad hoc basis.
Soviet Union (Human Rights)
6.
asked the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied with the Soviet response to representations made by the United Kingdom delegation at the Conference on Security and Co-operation in Europe review conference in Vienna on the subject of human rights and freedom of religious rights.
No, Sir. Our delegation has vigorously raised human rights issues, including freedom of religious rights, at Vienna. We still await satisfactory answers to many of our questions, particularly from the Soviet delegation.
Will my hon. Friend note that there is considerable support in all parts of the House and throughout the country for the British delegation to stress the abhorrence in this country at the restriction of human and religious rights, both Jewish and Christian, in the Soviet Union? Will he give an assurance that action will be taken on these very important issues?
I very much agree with my hon. Friend. It is important to ensure that the spotlight is focused not just on the hundreds who may be obtaining release but on the thousands still suffering either for their Christian beliefs or because, as Soviet Jews, they cannot obtain exit visas. The Vienna conference provides an opportunity, and our delegation will continue to stress this.
I thank the Government for their approach to this issue. Does the Minister agree that the release, however welcome, of people such as Josef Begun, Slepak and Ida Nudel from prison or exile is not enough and that they must also be released from the Soviet Union, even if Members of this House and their spouses are not allowed into the Soviet Union? May we expect the Prime Minister to protest about both matters when she is in Moscow?
I thank the hon. and learned Gentleman for his support. I note that he has a later question—
It will not be reached.
I hope that it will be reached. That question relates to the lack of entry visas for some parliamentary colleagues to go to Moscow, which I very much regret. I have no doubt at all that my right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign Secretary will have the whole question of human rights and the points raised by the hon. and learned Gentleman very much in mind when they visit Moscow at the end of next week.
Does my hon. Friend accept that his last remarks will be very reassuring to most people? Will he ask our right hon. and learned Friend the Foreign Secretary and our right hon. Friend the Prime Minister to stress to Mr. Gorbachev that if he is to create an atmosphere of international trust which could be the basis for real progress in disarmament talks it is essential that proper freedoms are granted in his own territories and that Jews and Christians are allowed to worship in peace and freedom?
I am sure that the whole House agrees with my hon. Friend. It is a matter not just of securing the release of the famous few but of ensuring true and proper freedoms for the obscure many. I have no doubt that my right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign Secretary will have that in mind next week.
Does the Minister agree that although we should continue to ensure that the Soviets pay a very heavy political price for their failure to release the 1,500 and more Christians who are in prison simply because of their religious activities, it would be wise at the same time to give some credit for the progress and positive signals since December and the release of Sakharov from internal exile? Does the Minister agree that in this, as in other matters, we should have a twin-track policy?
Yes, I think that the hon. Gentleman has a fair point. We are cautious about the developments that have taken place in the Soviet Union, but we are certainly ready to put Mr. Gorbachev's comments and promises to the test. The real issue is that glasnost should apply not just to some but to all. Only then will we be convinced that there is fundamental change In the Soviet Union.
Turks And Caicos Islands
7.
asked the Secretary of State for Foreign and Commonwealth Affairs when he expects to be able to set a date for elections for a new administration in the Turks and Caicos Islands.
We are studying the report of the Turks and Caicos Islands constitutional commission and its recommendations. On present plans, we hope to publish the report and our response towards the end of April.
Does the Minister accept that there is considerable concern over the delay that has followed the announcement of 25 July, that everyone hopes that the timetable that the Minister has now given is adhered to, and that democracy is restored to the islands as soon as possible?
I very much appreciate the hon. Gentleman's point, and I also appreciate the constructive attitude taken by the Labour Front Bench. We are well aware of the pressures referred to by the hon. Gentleman, and we are doing our best to reach a decision and make the necessary publication by the date in question.
Does the Minister agree that our experience in the Turks and Caicos Islands brings into question the perceived wisdom of automatically allowing independence to small islands and other small dependencies?
As my hon. Friend is aware, a review of our policy on dependent territories is taking place, and we have his point very much in mind.
Intermediate Range Nuclear Forces
8.
asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the intermediate range nuclear forces negotiations.
As I told my hon. Friend the Member for Stafford (Mr. Cash) earlier this afternoon, the seventh round of the Geneva nuclear and space talks has been extended to allow further discussion of the United States draft INF treaty tabled on 4 March. Our aim remains the conclusion of a global longer range intermediate nuclear forces agreement based on zero-zero missiles in Europe and incorporating constraints on Soviet missiles in Asia and on certain shorter range intermediate nuclear forces in Europe. Effective verification will be a vital part of the agreement.
I thank my right hon. and learned Friend for his reply. As he knows, during the recent visit of the Soviet delegation to the Foreign Affairs Select Committee Professor Zagladin suggested that we might jointly pursue the concept of adequate defence rather than that of mutually assured destruction. Has my right hon. and learned Friend done any work on that subject?
That question raises massively wide issues beyond which it is difficult to go. We cannot escape from the conclusion that for the foreseeable future the nuclear component will be an effective and essential part of our deterrent defensive policy, and any changes must be calculated to enhance rather than undercut the effectiveness of that defence.
In his welcome speech in Brussels the Foreign Secretary asked us to look beyond the INF agreement to the strengthening of the WEU. Why did the right hon. and learned Gentleman find it necessary to imply that the WEU headquarters should move close to NATO in Brussels, apart from the fact that he was speaking in Brussels?
Will the right hon. and learned Gentleman also tell us whether he wants Spain to become a member of, and a signatory to, the treaty and join the union? Is he worried that an expansion of the membership might detract from the capacity to discuss nuclear strategic questions, and in particular from the importance of using the framework for increased Anglo-French strategic nuclear co-operation?The suggestion of possible co-location in Brussels was prompted, not by the fact that I happened to be speaking in that city, but by a fact that has not escaped the perceptive intelligence of the right hon. Gentleman, namely, that the NATO headquarters are in Brussels. To have part of an organisation's institution in Paris and another part in London is not necessarily the best way of ensuring that it contributes effectively to the dynamic of the Alliance. No doubt many people will disagree with the suggestion, but it is worth considering.
The right hon. Gentleman asked about the membership of Spain and other possible applicant countries. As I said in my speech on Monday, it is most important that any expansion of membership should contribute to the cohesion and effectiveness of the WEU, which is why it is important for the WEU's existing members to be clear about their purpose and intention. I do not think that if any prudent alteration in the membership took place, it should affect the prospect of the necessary increasing consultation between Europe's two nuclear powers, the two permanent members of the Security Council, France and the United Kingdom.In response to an earlier question my right hon. and learned Friend referred to the need for a proper understanding between the two signatories to the ABM treaty. Can he confirm that article 13 of that treaty established a consultative committee precisely to consider questions of interpretation and that, as a result of those arrangements, that committee meets twice every year? Can he tell the House whether he has any information about disputes relating to the interpretation of that treaty, the so-called broad or narrow definition, having been raised in the consultative committee?
My hon. Friend, with his long experience and knowledge of such matters, is quite right to draw attention to the existence of the consultative committee and to the fact that it meets to consider matters within its terms of reference. However, it is equally clear that it has not been able to resolve all the matters currently under discussion. The question of any possible change as between broad and narrow in the application of the treaty would go beyond the scope of that consultative committee.
Returning to the original supplementary question asked by the hon. Member for Broxtowe (Mr. Lester), will the Foreign Secretary express a view as to whether the existence of about 50,000 nuclear warheads throughout the world is adequate for security, or do we need more?
I repeat the view that I expressed in Brussels on Monday, and which I have expressed on many other occasions. There is a super-abundance, far beyond any necessity, of nuclear warheads on both sides of the European divide. That is one of several good reasons for seeking to achieve progress in arms control, including the reductions that could be made possible if we secure the present INF agreement.
Does my right hon. and learned Friend agree that, in negotiations with the Soviet Union on arms reductions, consistency of purpose and firmness of resolve are essential? Does he further agree that if we were unilaterally to abandon our independent nuclear deterrent or require the United States to remove cruise from Europe, we would have a position of instability in Europe and fundamentally undermine those arms negotiations? Is not the lesson that if one gives anything to the USSR, one gets nothing in return?
It is quite clear that the prospect of progress in the INF agreement and in the negotiations that may now be before us is a consequence of the coherence and firmness of the Western Alliance and not of our willingness to embark on unilateral disarmament.
Soviet Union (Human Rights)
11.
asked the Secretary of State for Foreign and Commonwealth Affairs whether he will seek opportunities to raise the question of the reunification of divided families both with the Soviet Foreign Minister and at the Conference on Security and Co-operation in Europe review conference in Vienna.
13.
asked the Secretary of State for Foreign and Commonwealth Affairs whether he has received any official response from the Soviet authorities to representations which he and his ministerial colleagues have made during the past six months on individual cases of abuse of human rights in the Union of Soviet Socialist Republics.
There has been no official response. But a number of cases that we have raised over the past six months have now been resolved, for example, those of Irina Ratushinskaya, Josef Begun and Alexander Ogorodnikov, who are now at liberty. We shall continue to press for further improvements in human rights and family reunification cases in bilateral contacts with the Soviet Government and at the Vienna CSCE review meeting.
Bearing in mind that there are more than 9,000 Soviet Jews who have been waiting for more than five years for permission to emigrate from the Soviet Union, will the Foreign Secretary advise the Prime Minister that, when she meets Mr. Gorbachev, she should make it clear to him that Her Majesty's Government will not be satisfied until all those Soviet Jews who wish to emigrate to other countries are allowed to do so?
I very much take the hon. Gentleman's point. When I was in Moscow in January I was promised by Mr. Kashlev, the head of the Russian delegation in Vienna, that the number of exit visas this year would increase by an order of several magnitudes from that of last year. However, so far I notice that for February there have only been 146 exit visas for Soviet Jews, compared with more than 4,000 per month in 1979. Therefore, I am sure that my right hon. Friends will have the hon. Gentleman's point in mind when they go to Moscow next week.
May I, too, thank my hon. Friend for the work that he is doing in this area? May I ask him, when he next meets the Russians, to tell them that, happy as we are that they are ending their abuse of human rights in respect of a few individual cases, they cannot persuade the West that they are serious about their undertakings on peace and security which have been entered into internationally if they are breaking wholesale their international undertakings on human rights? Will he also say that, instead of doing a bit here and there to keep the West sweet, they should honour those international undertakings to the full?
I very much agree with my hon. and learned Friend. As I have said, we must now think not only about the famous few who are in the spotlight, but about the thousands who are either still in prison as prisoners of conscience for their beliefs or who have been waiting 10 or 15 years for an exit visa. My right hon. Friends will certainly have those points in mind next week.
While I join warmly in the appreciation expressed to the Government for their work and the work of others in this area, may I ask the Minister whether it is not the case that, in making representations in Moscow about the crime of keeping families divided, our hand would be strengthened if we stopped keeping some families divided?
The hon. Gentleman's analogy is somewhat obscure to me, but I thank him for the tribute that he paid. It is important that we should continue to put pressure on the Soviet Union over the whole area of human rights and to make certain that the promises that are now being made from the top are genuinely fulfilled to help the human rights position of the many thousands who are still suffering in Soviet Russia.
May I, too, express appreciation for the many hours of work that my hon. Friend has put in on human rights and divided families with the Soviets? Is he aware that the fourth Member of Parliament who was recently refused a visa, namely, me, was refused on the day when a Soviet fireman was here receiving honours for his work at Chernobyl? Will he confirm that Soviet visitors, including political visitors, are free to come here on individual or official visits and that they do so frequently? Will he kindly explain to Mr. Zamyatin that the crucial difference on the divided family syndrome is that our problems arise because people want to come into the country, whereas in the Soviet Union people want to leave?
I am sorry that my hon. Friend was not able to obtain his entry visa to the Soviet Union, but I hope that he will continue to apply and, that on another occasion he will be successful. It is, indeed, ironic that it is only from the Soviet Union that literally thousands of people are wishing to obtain exit visas and to leave. There is no such record from this country or the United States. That is a point that we must continually press on the Soviet authorities, including the Soviet ambassador in London.
Is the Minister aware that in 1985,; when Mr. Gorbachev came to office, there were 383,000 outstanding invitations to Soviet Jews from their friends and relatives to go to other countries? In his first year of office he released fewer than 1,000, last year he released 1,100, and this year the figure is about the same. Therefore, will the Minister call upon the Prime Minister to draw Mr. Gorbachev's attention to those figures? Is the Minister further aware that in January this year Soviet emigration rules were tightened to make it even more difficult for Soviet Jews to emigrate?
I thank the right hon. Gentleman for his remarks. I have already commented on the rapid fall-off in exit visas for Soviet Jews and others, particularly since the high point reached in 1979, when more than 50,000 exit visas were granted. That compares with last year's total of 5,000, of which 1,000 were for Jews. We shall continue to stress that point. I note the right hon. Gentleman's point about the change in the emigration rules and I raised it in Moscow. I was told that, nevertheless, the authorities expected a great increase in exit visas this year. We are waiting to see that happen, but so far it has not. The proof of the pudding will lie in the eating. We shall continue to press vigorously for it.
May I add my voice to those urging my hon. Friend to explain once again to the Russian authorities that, despite some window dressing, their refusal to honour their obligations with regard to human rights will cast some doubt upon their sincerity in disarmament negotiations?
I believe that what we have to do now is accept what Mr. Gorbachev and some of his Ministers are saying with caution, but put it to the test. We have to test them—and I have no doubt that my right hon. Friends will have this in mind in Moscow next week—to see whether the major changes which they have promised they are envisaging really will happen. I certainly take my hon. Friend's point that until there is a radical change in the human rights position in the Soviet Union it is difficult to accept wholeheartedly all that they promise us about arms control.
Iran-Iraq War
12.
asked the Secretary of State for Foreign and Commonwealth Affairs what recent initiatives Her Majesty's Government have taken towards ending the Iran-Iraq war.
16.
asked the Secretary of State for Foreign and Commonwealth Affairs what information he has received about the possibility of an end to the Iran-Iraq war.
We take every opportunity to encourage progress towards a peaceful settlement of the Iran-Iraq conflict in bilateral contacts, in concert with our European partners and at the United Nations. The Foreign Ministers of the Twelve issued a further statement on 26 January, and we are taking an active part in discussions at the United Nations. We support the constructive role played by the United Nations Secretary-General. There are, however, regrettably, no firm indications that an end to the conflict is in prospect.
Surely the appalling loss of life, particularly among young people, calls for an immediate ban on sales to both countries? Will Her Majesty's Government continue to raise this particular question with the Council of Ministers and the Security Council?
Let me first reassure the hon. Member that, as I have said many times in the House and in answer to letters from parliamentary colleagues, the guidelines that we have had in place since the end of 1984 are strictly impartial as between Iran and Iraq. They have lost British manufacturers many millions of pounds' worth of orders, but we are scrupulously seeing that nothing is exported from this country that would significantly enhance the capacity of either side to prolong or exacerbate the war. Yes, we will certainly continue to pursue these points in both the Council of Ministers and the Security Council in New York.
Is it not a fact that chemical weapons have been used in the war and that innocent people have been killed by them? Will my hon. Friend condemn the use of chemical weapons, both in this war and anywhere else?
What my hon. Friend says is right. A United Nations team investigated the use of chemical weapons by Iraq and reported on this to the Security Council, when the use of chemical weapons was condemned. We continue to press both sides not to use chemical weapons and we remain active in Geneva in pursuing negotiations on a total ban on the production and stockpiling of chemical weapons.
Does the Minister accept that his words about bringing peace in the Iran-Iraq conflict would make much more sense and be much more plausible if there were an absolute ban on the sale of arms to either side and on the sale of any precursor chemicals that could be used for the manufacture of chemical weapons? Does he not accept, further, that he would be well advised to ensure that this ban was effectively co-ordinated throughout the EC and the United States?
I find it rather hard to be lectured on this point by the hon. Gentleman. We have put an export embargo on a number of precursor chemical weapons. We have introduced a warning list, which is circulated to manufacturers, about other chemicals that could be used as precursors. Many chemicals which have a perfectly bona fide civilian use can also be used as precursors, which is one of the difficulties with a tight export regime. But we have been taking a lead on this and if all other countries were being as prudent and careful as we are about the export of military equipment there would be very much less danger of the Iran-Iraq war escalating.
May I ask my hon. Friend whether he will say something about aerial attacks on British merchant shipping using the Gulf, whether he can say anything about any new counter-measures which may be available and whether he has anything encouraging to say to the House in this respect?
Yes. As my hon. Friend will know, there was an attack by the Iranians on the MV Isomeria, a Shell gas tanker, towards the end of January. We protested strongly to the Iranians subsequent to that attack. We have since then taken care to see that the Armilla patrol is more regularly in the Gulf near the area where these attacks have been taking place, not only on the vessel that I have just named, but on other neutral merchantmen. The job of the patrol will be to help and to stay in the vicinity of British merchantmen.
Iran (Arms Supplies)
14.
asked the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has received on the implications for Her Majesty's Government's foreign policy of the supply of arms to Iran.
We have received a number of letters from hon. and right hon. Members and members of the public on this subject. We have no plans to change the guidelines on defence sales to Iran and Iraq. They have proved effective in implementing our policy of strict impartiality in the Iran-Iraq conflict and of not supporting the war-making capabilities of either side.
Is the Minister aware of the concern throughout the country at the existence just across the road from this palace, at 4 Victoria street, of an office which reputedly organises over 80 per cent. of all Iran's arms imports? Is not the continued operation of this office, in the face of representations from the American Government to shut it down, an outrage in view of the Government's declared policy to end this dreadful war? Will the Minister now take resolute action to stop the activities of these "neighbours" of ours who are indulging in this evil trade?
On the hon. Member's main point, may I say that we are, of course, aware of the allegations concerning the activities of the Iranian military procurement office in London. He must understand that the arrangement from the United Kingdom of arms sales to Iran is not illegal unless the goods concerned are exported from the United Kingdom in breach of British law. There is no firm evidence of this.
As to the hon. Gentleman's general point, he seems to revel in guilt by accusation and innuendo. He appears to think that if he throws enough mud some of it will stick. There is no firm evidence for the allegations that he has made now and on previous occasions. He should learn to put the national interest before cheap scaremongering in order to make political points.In welcoming my hon. Friend's restatement of the Government's policy of not selling lethal arms, may I invite him to agree that we have international obligations as well as a national interest in the security of the Gulf, and that, following the increasing extent to which American policies in the middle east have become discredited, there is a real vacuum which could be filled by this country? Will my hon. Friend consider taking an initiative in that regard, but, before doing so, will he consult most closely with our allies in the region who are directly affected in the Gulf Co-operation Council, that is, the United Arab Emirates and the Sultanate of Oman?
I take my hon. Friend's point. He knows the region well. I was in the Arabian peninsula three weeks ago and my noble Friend the Minister of State for Defence Procurement is in the area at the moment. From those visits we are well aware of the points my hon. Friend makes and of the need to work closely with the Gulf Co-operation Council to try to defuse the risk in the Gulf of the present worrying Iran-Iraq conflict spreading. We shall do all we can in that respect, with the advice of our friends in the area.
Does the hostility to the sale or provision of arms to Iran expressed by the hon. Gentleman a few minutes ago include hostility to the sale or provision of arms from the United States of America? Can the Minister tell us when last either the Foreign Secretary or the Prime Minister put that point to the President of the United States?
We are clearly talking today about our policy in relation to arms sales to Iran and Iraq. We remain in consultation with the United States and other friendly countries about what we can do to stop the spread of the conflict. This was a matter that I discussed with two Government officials from Iraq only yesterday. We shall do all that we can to see that the conflict does not spread.
United States (Trade)
17.
asked the Secretary of State for Foreign and Commonwealth Affairs if he intends to meet the United States Trade Secretary to discuss any effects of United States trade measures on the Atlantic Alliance.
My right hon. and learned Friend has no plans at present to meet the United States Trade Representative or Commerce Secretary, although my right hon. Friend the Secretary of State for Trade and Industry met them in Washington on 3 March. My right hon. and learned Friend last discussed EC-US trade issues with Secretary of State Shultz in January, and will be meeting him again on 9 April next.
Will my hon. Friend or any of her colleagues take the first available opportunity to draw to the attention of any United States Ministers in the list that she mentioned the admirable document that has been placed in the Library by her right hon. Friend the Secretary of State for Trade and Industry showing the extent to which the United States aircraft industry is subsidised through military budgets? Will she ask them to stop attacking the extremely successful European aircraft industry on the basis of false figures?
I thank my hon. Friend for that question. He is absolutely right. The way in which the United States aircraft industry has been supported in the past should be considered carefully by those Ministers. The Airbus partners reject the allegations of unfair subsidies. We have acted, and will continue to act, in accordance with GATT. It is clear from the funding of Boeing and McDonnell-Douglas just how much United States money has been put into defence-related projects in the United States, and that must be clearly borne in mind in any discussions of such trade matters.
On a point of order, Mr. Speaker—
Order. I shall take the hon. Gentleman's point of order after the private notice question.
British Rail Engineering Ltd
3.32 pm
(by private notice)
asked the Secretary of State for Transport to make a statement about the 1,600 redundancies announced today at British Rail Engineering Ltd. at Crewe, Derby, Doncaster and York.
At a meeting yesterday afternoon, British Rail Engineering Ltd. informed the national officers of the trade unions concerned that it would unfortunately be necessary to make a further reduction in the staff of the new build and repair group. These changes are largely prompted by further reductions in British Rail's repair requirements for coaches and locomotives and do not reflect any new policy initiatives.
The new build and repair group has around 13,000 staff, and the BREL announcement covers a reduction of 1,400 staff by March 1988. About 1,000 of the job losses are new—600 at Crewe, 350 at York and about 100 at Derby. A further reduction of some 350 jobs at Derby had already been announced last year but is being brought forward from 1988–89 to 1987–88. The Government fully recognise the importance of the railways. British Rail is investing heavily in modernisation—a total of £3 billion since we took office, with a further £2 billion planned for the next five years. But, as the House will recognise, modern rolling stock needs much less maintenance and repair. Three factors flow from BR's major investment in new rolling stock. First, from the moment that BR decides to order new rolling stock, heavy maintenance on the old stock ceases. Secondly, fewer modern vehicles are needed to provide the same level of service. Thirdly, new rolling stock itself requires less maintenance, and the design is such that much of it can be done by component exchange in the depots rather than in main BREL works. Decisions on work load and employment are matters for BR and BREL. Naturally, both I and the Government greatly regret that further redundancies are now unavoidable. I say that because we recognise the human problems and personal difficulties caused by such a solution. I understand that BREL will be seeking voluntary redundancies and early retirements wherever possible.Is the Minister aware that his latest batch of excuses just will not wash, that 87 per cent, of British Rail's locomotives and power cars entered service prior to the Government being elected in 1979; that the Central Transport Consultative Committee, in its latest report, draws attention to what it terms "massive overcrowding on trains" and demanded large-scale new expenditure on rolling stock; that if the Government were to implement a proper programme of mainline electrification and ensured that British companies were top of the list for new orders there would be a lot more business for British Rail Engineering Ltd. and better prospects for that company in the international market?
British Rail is about to put out to tender a major order for heavy freight locomotives. Will British Rail Engineering Ltd. take part in that tendering? If so, why is it once again running down capacity? The hon. Member for York (Mr. Gregory) said on local radio this morning that he would be in the House and would raise this matter to defend the interests of his constituents. Why is he not raising it, and why am I doing it for him? [HON. Members: "Disgraceful."] It is a fact. He said it on the radio this morning.Order. I remind the hon. Gentleman that that decision rests with me.
I am sure that the hon. Gentleman will wish to check whether my hon. Friend the Member for York (Mr. Gregory) also sought to table a private notice question. That must have placed you, Mr. Speaker, in a difficulty in having to choose between two applicants.
The hon. Gentleman said that the explanation that I gave to the House about the reasons for this reduction in jobs would not wash. He cannot deny that when new rolling stock is brought into operation there is immediately no need for old rolling stock to go for heavy maintenance. He cannot deny that new rolling stock requires less maintenance than old rolling stock requires. [Interruption.] There is no point in the hon. Gentleman shouting and blustering. He cannot escape the fact that, when he and others call for more investment in British Rail and when I accede to those requests, it inevitably means that less heavy maintenance is required.rose—
Order. I must tell the hon. Member that he should not refer to any application that he may have made for a private notice question.
I share with the whole House the sadness expressed in response to the private notice question. Redundancies are a matter of great concern to us all, including families, and I hope that we all sympathise with the families that are affected. If there have to be redundancies, will my hon. Friend give a commitment that he will ensure with British Rail Engineering Ltd. that they are on the most favourable terms possible and in line with redundancies in other nationalised industries? Concern about that has been expressed in the past.
Secondly, in his discussions with the management of British Rail Engineering Ltd., will my hon. Friend ask the company to put more resources into gaining a greater proportion of the export market in which there has certainly been a lacklustre performance? Thirdly, given the success of bus deregulation, will my hon. Friend draw to the company's attention the possibility, as occurred some 15 to 20 years ago, of a greater amount of bus and coach heavy maintenance being undertaken to absorb the ups and downs in that sector? This is a time of great concern and I hope that my hon. Friend will respond positively, thus reflecting the fact that the Government have invested substantially in British Rail resulting in the efficiencies that are now bearing fruit.My hon. Friend asks about favourable terms for those who will lose their jobs. Certainly I shall respond to his request that I should discuss that matter with the chairman of British Rail. I know that British Rail will make every effort to find alternative employment for employees displaced from British Rail Engineering Ltd. British Rail hopes that the changes will be covered by voluntary redundancies and early retirement.
My hon. Friend asked about exports. British Rail Engineering Ltd. has put a big effort into exports, but the market is fiercely competitive. It submitted bids in 1986 for about £185 million worth of export work and members of staff have made no fewer than 300 overseas trips in the last six months in an endeavour to obtain export business. I hope that my hon. Friend will take some reassurance from that. I shall draw to the attention of the British Railways Board my hon. Friend's point about bus maintenance possibilities.Does the Minister recall that the Secretary of State came to my constituency as recently as 11 February and at a private meeting gave an undertaking to the Conservative party that there would be no change in the job position in BREL? Can the hon. Gentleman reconcile that with the fact that 400 recent job losses which were supposed to occur over three years occurred in less than six months? Yesterday, the chairman of BREL and of British Rail told me that another 600 jobs were to go in my constituency. How can the hon. Gentleman pretend that this is not the grossest betrayal of men who have worked hard in the industry all their lives and who have great expertise but will now be forced to tender even for work that they could do standing on their heads? How dare the Minister come here today and talk such arrant rubbish.
I am afraid that the hon. Lady has misunderstood what my right hon. Friend said in Crewe. He said that there was no change in the Government's policy. That is still the position. The redundancies do not arise as a matter of Government policy. They arise according to the level of demand for services provided by BREL for the British Railways Board. If the hon. Lady is as anxious as I am for work to come to Crewe, perhaps she will be a little more enthusiastic about the Channel tunnel, with all the work that it can bring.
Although the loss of any job is to be regretted, will my hon. Friend confirm that the main problem facing British Rail Engineering relates not to new build but to the reduction in maintenance work caused by advances in new technology and a fall-off in British Rail's freight business? Will my hon. Friend speak to British Rail and urge it to give employment priority to British Rail Engineering workers who are to be made redundant?
I can certainly give my hon. Friend the assurance for which he asks. I shall ask British Rail to ensure that, so far as is possible, those who are made redundant at BREL are offered other job opportunities on the railways. Nearly £600 million of investment in new rolling stock has been authorised in the past three years. That has a direct bearing on maintenance requirements.
Clearly the job losses which the Minister has announced are appalling. I should like to extend the sympathy of my right hon. and hon. Friends to the communities, particularly the families, over which the cloud of redundancy now hangs.
Will the Minister confirm that one reason why Freightliner Ltd. has to close a number of depots in Scotland and in north-east of England is that it does not have resources available for investment in new rolling stock? Why are the Government presiding over a spiral of decline? Would it not be better if there was the political will to provide the resources for that new investment as this might not only stave off some of the redundancies which were announced today but put off the closure of depots which are threatened?
The closure of the Freightliner depots to which the hon. Gentleman refers is entirely a management matter. It was the judgment of those responsible that they would have a more efficient business which was able to win more business if they cut out some of their loss-making depots.
As for investment, the hon. Gentleman should know that I have not turned down any submission from British Rail Freight. It is for the railways to propose investment and for Ministers to respond to the proposal.My hon. Friend does not need to hear about my credentials as a railway enthusiast. Is he aware that I have just come from Swindon? It gives me no great pleasure to say so, but when the works there closed it was considered to be a major disaster; in fact, the work force have almost all found other jobs in that growth area in a very short time.
There is, however, one thing that my hon. Friend could do. I should be very grateful if he would look at the question of railway investment and examine the criteria laid on British Rail by the Government which British Rail has to use in deciding what investment proposals to put to the Government. Does he agree that these criteria are extremely stiff? There are many investment projects which British Rail would like to undertake but which will not meet the Government's criteria. If he would ease the criteria, we could maintain more worthwhile investment in the nation's infrastructure through the railway system.My hon. Friend and I share enthusiasm for railways. I recently visited Swindon myself to see the progress being made in job creation by British Rail as it seeks to ensure that alternative employment is provided for those who lost their jobs in BREL. My hon. Friend is quite right: it has had considerable success already, and a large number of people who lost their jobs have now taken up other employment.
As to the criteria for investment, the chairman has not approached us to ask for any change in them.Is the Minister aware that two years ago Mr. Bob Reid made some very boastful statements, telling the nation that he would buy 1,500 new locomotives and that everything would be rosy in the locomotive engineering industry? May I remind the Minister that, although he keeps on referring to lack of maintenance, engineers are quite adaptable and capable of changing from maintenance to new build? All these skilled men— electricians., coppersmiths, fitters, turners, and grinders—could be used on new build. Why does not the Minister do something about giving them some new locomotives to build instead of doing maintenance?
There are two parts to the answer. First, I do not give orders to British Rail. The British Rail chairman says to us that he wishes to invest in this, that or the other new rolling stock or to make some other major investment. If British Rail puts forward a further programme for new locomotives— we have already approved a substantial number— we would consider it very carefully. But every major investment in new locomotives will mean less heavy maintenance work.
Does my hon. Friend agree that, if Opposition Members had supported the Government's efforts to speed up the Channel tunnel link instead of opposing it and filibustering, more jobs could now be saved at Derby and there would certainly be more orders?
My hon. Friend is quite right to draw attention to the potential value of the substantial amount of orders for BREL and other engineering works arising from the Channel tunnel. As to the proportion of those orders that BREL wins, it will, of course, depend on how competitive it is.
Is the Minister aware that since 1979, when the Conservatives took over, British Rail Engineering Ltd. has closed roughly seven main workshops and shed about 20,000 jobs? The figures that British Rail has just announced will add to that total. Is he further aware that British Rail is now looking very closely at the west coast main line and has given notice that there will be a large number of redundancies on it, together with further closures such as at Kingmoor in my constituency? Is he proud of that?
Of course I am aware of the job losses and closures in British Rail Engineering Ltd. Indeed, I have taken a special interest in and followed a number of them, including Shildon, where work has been done to try to find alternative employment. I know of the closures, but I also know that that matter is directly related to the £3,000 million spent by British Rail on modernisation since 1979. I wish that the hon. Gentleman would stop spreading false rumours about the future of the west coast mainline.
Is my hon. Friend aware that I have a number of constituents who work at the BREL factory in Derby and are therefore under threat, as does my hon. Friend the Member for Derbyshire, South (Mrs. Currie), who shares my concern in this matter? Would my hon. Friend consider what more assistance we might give to BREL in securing overseas contracts, particularly in the far east, by improving our aid and trade provisions, as recommended by the Select Committee on Foreign Affairs?
My hon. and learned Friend's final point is a different issue and I shall write to him about it. On the matter of exports, Ministers have been helping wherever British Rail Engineering Ltd. has indicated that such help would assist in clinching orders. Certainly that offer of assistance remains.
Is not the Minister saying exactly what he said a year ago when he announced the closure and 3,000 redundancies at the Springburn works where, at the end of the month, we will be down to 300 employees? How can he tell the House that he will try to find alternative work within the railway industry when 3,000 people in my constituency left their place of work and will never see another job in British Rail?
The hon. Gentleman will know that there is a substantial number of job vacancies in British Rail, but not in Scotland, and that British Rail is having difficulty in filling them. As for his comment that I am saying the same thing today as I said 12 months ago, I do not think that consistency is necessarily wrong.
rose—
rose—
Order. I shall call the two hon. Gentlemen, provided they ask questions about railway redundancies.
Is it not a fact that it is the Conservative party's long-term policy to privatise and profitise any part of any nationalised industry that it can, including maintenance or contracts, just as it has done with the Health Service? Can the Minister give us an assurance that this is not the first step to reducing manpower in order to let the maintenance go to private enterprise?
The position on privatisation has nothing to do with the job losses that British Rail Engineering Ltd. has now announced. We have asked the chairman to tell us his proposals for the future of BREL. I have no doubt that he will consider, among other options, the possibility of privatisation, but I have no report or recommendation from him at this stage.
Is the Minister aware that the people I have been able to speak to in my constituency who work at the Derby workshops and could well be affected by the announcement today said that there was a great opportunity for the Government yesterday to formulate a Budget that would have supported the infrastructure of Britain and provided jobs and would not have thrown those people on the scrap heap? It is nothing short of hypocrisy for the Chancellor of the Exchequer to go on television last night showing charts proving that Britain was providing more jobs than the rest of Europe put together, when we have this pathetic Minister coming to the House saying that another 1,600 workers are to be put on the Tory scrap heap. The truth is that the Government have written off millions of people in this country in the past eight years, and the railwaymen are now among them.
The hon. Gentleman wants increased expenditure on the railway infrastructure. I remind him that the increased expenditure for which he calls is likely to lead to a smaller requirement for maintenance and to fewer jobs for the people involved. In any case, I remind the hon. Gentleman that British Rail is in the middle of a massive modernisation programme involving expenditure of about £5,000 million, £3,000 million of which has already been committed.
On a point of order, Mr. Speaker. I understand that it is not customery for an hon. Member to refer to applications that may or may not have been made by other hon. Members. For that reason, I apologise to you for raising the matter and withdraw what I said.
Points Of Order
3.55 pm
On a point of order, Mr. Speaker. May I ask you to make clear what responsibility you have for decisions taken by the Table Office in relation to written questions? What is the position when there is a dispute between an hon. Member and an Officer of the Table Office?
The hon. Member concerned should, if he wishes, ask for the matter to be brought to my attention. If the hon. Gentleman has a specific case in mind, perhaps he will let me know about it.
On a point of order, Mr. Speaker. I seek your advice. As you may know, some hon. Members have been trying for nearly three weeks to get an oral statement from the Foreign Secretary on reports of the British connection in the supply of arms and mercenaries to the Contra terrorists in central America. I have now had a letter from the Prime Minister refusing such a statement. She also arranged for a question to be put down and answered it, thereby blocking any parliamentary questions about her private meetings with Major David Walker of KMF, one of the people who have been named—
I cannot see how this can possibly be a matter for me. It seems to be a matter between the hon. Gentleman and the Prime Minister. It is not a matter of order.
I am seeking your advice, Mr. Speaker, on the method by which we can get the Foreign Secretary to go to the Dispatch Box to answer questions on a matter that has become an absolute scandal.
Further to that point of order, Mr. Speaker.
It is not really a point of order. I shall in fairness take it, but it has not been a point of order so far.
Is not the real reason why we have not had a debate on central America the fact that the hon. Member for Manchester, Central (Mr. Litherland) did not turn up to ask question No. 9 in Foreign Office questions?
Order. That may be so, but it is not for me to advise the hon. Member on parliamentary tactics. Question Time is a method of getting at such matters.
On a point of order, Mr. Speaker. I apologise for raising the matter before an important debate, but it would have been less appreciated if I had tried to raise it before yesterday's Budget Statement. It clearly is a matter of responsibility for you, as you implied in your reply to my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees). It is essential that, before Prime Minister's Question Time tomorrow, we clarify a matter that arose from Prime Minister's Question Time yesterday. I believe that, as the Prime Minister twice misled the House on the issue of sub judice, yesterday—
Order. The right hon. Gentleman must not allege that any hon. Member misled the House. Will he please withdraw that remark?
Withdraw.
Yes, I shall do it in my own way. No doubt, as the Prime Minister inadvertently—
No. I shall he grateful if the right hon. Gentleman would please withdraw that allegation.
I said "inadvertently" because it was inadvertent. Nevertheless, at the time, Mr. Speaker, you had to overrule the position that she took in relation to the House and for which she did not apologise. Yesterday, no doubt equally inadvertently, she again misled the House in a reply to my right hon. Friend—
Twice?
Yes, twice, in reply to my right hon. Friend the Member for Morley and Leeds, South. You will recollect, Mr. Speaker, that he said that the then Prime Minister's statement on 8 December 1977 applied to allegations against the security services that were different from those that were under discussion at Question Time yesterday. At column 812 of Hansard, which I believe you have with you, Sir, my right hon. Friend said
He was referring to the new information that had been pinpointed by the judge in the Australian courts, to the effect that now we have a confession that there was a seditious attempt to undermine the—"Fresh allegations should be looked at."
What is the point of order for me? The right hon. Gentleman must come to it straight away. What he is alleging is patently not a matter for me. I cannot be held responsible for anything that the Prime Minister may say or for what anybody else may say.
The last thing that I would try to do on an occasion as important as this would be to stand up on a non-existent point of order. I trust that you will see that it is a point of order, if you will allow me to develop it. My right hon. Friend said yesterday that we are in a new situation because there has now been a confession—
Order. I am very sorry, but this is surely a continuation of yesterday's Question Time. What the right hon. Gentleman is saying cannot possibly be related to my responsibility for dealing with points of order. The right hon. Gentleman must relate what he is saying to a point of order, and then I shall consider whether I have any responsibility; but I cannot believe that I have.
I am not trying to repeat points unnecessarily, but my right hon. Friend made the point that now we have a confession to an act of sedition—a confession that did not exist before. In reply to that, the Prime Minister—also at column 812—
Order. It is unfair of the right hon. Gentleman, who is on the Opposition Front Bench, to seek to involve me in an argument that took place yesterday on an issue that is not a matter for me. I cannot be held responsible for answers, or for the motives behind answers.
I should not be raising it, Mr. Speaker, if it were not a matter for you. In column 812 of yesterday's Hansard, in reply to my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) the Prime Minister said:
She later said— you will appreciate the significance of this, in terms of blocking questions—that"The right hon. Gentleman is certainly referring to matters for which I am not, and cannot be, responsible."
If that position is allowed to stand in relation to the point that was raised by my right hon. Friend, it means that the Table Office will be unable to accept further questions relating to this matter. That is one of your direct responsibilities, Sir, as you have just ruled. It also means that the Prime Minister is precluding herself from taking the very important action that she alone can take, which is to refer this matter to the Security Commission."I can take no responsibility whatsoever for matters that happened before my time."—[Official Report, 17 March 1987; Vol. 112, c. 812.]
I should certainly like to clear up that matter. I am not responsible for any questions that may be asked in the House or for anything that is said here, provided that it is in order. What the Prime Minister said was perfectly in order, otherwise she would have been stopped, like any other hon. Member. The hon. Member for Birmingham, Erdington (Mr. Corbett) alleged something without being specific about it, and I said that I would look into it if he drew it to my attention. However, if the Prime Minister gave a blocking answer that is not a matter for me.
On a point of order, Mr. Speaker.
Is it a genuine point of order?
I am sure, Mr. Speaker, that if I try you will rule. My point of order relates to the tabling of questions and specifically to the reply that you gave to my right hon. Friend the Member for Swansea, West (Mr. Williams). You know that I have been endeavouring to table questions about the alleged Cunard incident in 1975 and the implication of those allegations for the democratic government of this country. The Table Office has resisted those questions—
Order. I understand that the hon. Gentleman is discussing this matter with the Table Office. He should not seek to bring it before me. I think that it would be wrong of the hon. Gentleman to raise openly in the Chamber any discussions that he is having with the Table Office. That is against all our conventions.
I am not having discussions with the Table Office. Those discussions were completed last evening when my questions were refused. The Table Office resisted the questions on the basis that the Government are not responsible for matters that took place—
Order. The hon. Gentleman must stick to the conventions. If he is dissatisfied with the advice that has been given to him by the Table Office, he should ask that the matter be referred to me. If he does that, I will gladly look into it.
But, Mr. Speaker—
Order.
rose—
Order. I am sorry, but the hon. Gentleman must do as I have asked him to do.
But, Mr. Speaker—
Order. I must ask the hon. Gentleman to resume his seat.
rose—
The hon. Gentleman must please do what I have asked him to do. I am not prepared to have private discussions with the Table Office raised in the Chamber in this way. It is against all our conventions, as the hon. Gentleman knows. He must do as I suggest. I shall not listen further to his point of order.
On a point of order, Mr. Speaker. If you look at the records and consider the development of blocking questions, I think it is fair to say that initially they began on the basis of Ministers not wanting to answer questions for which they had no departmental responsibilities or were trivial. For example, the Prime Minister would give blocking answers to questions about ministerial broadcasts because she did not want to answer. That is how the practice developed.
I come now to a more substantial matter that applies particularly to the office that you hold, Mr. Speaker. It makes sense to have blocking answers from Ministers to prevent the tabling of questions that some would think are of a trivial nature. If the same question is put down three months hence and the Table Office accepts it, under your guidance, that is okay. But in a number of instances, of which this is one, the practice has grown up, especially under this Prime Minister, of using the blocking mechanism to stop very unsavoury matters from being raised on the Floor of the House. I want to ask you, Mr. Speaker, a very important question in the run-up to the next election— [HON. MEMBERS: "No."] Oh, yes. Will you hold an investigation into the blocking mechanism system, with particular reference to what has been happening in recent months and years so that we can have a full report about the way in which that system is being used for purely party political reasons? The job of the Opposition in any Parliament is to test the Government. That can be read in any textbook. However, we are now being prevented from pursuing a very important political matter that relates to security, and it is important that the nation should know about it. The blocking mechanism system is being used by the Prime Minister, and in my view that is contempt.Order. The hon. Gentleman has made his point. He should raise it with the Select Committee on Procedure and ask it to look into the matter.
On another point of order, Mr. Speaker.
No.
It is a completely different point of order.
Order. I am not prepared to hear it.
It is unrelated to my previous point of order.
I repeat that I am not prepared to hear it.
It is unrelated.
I am not prepared to hear it. Mr. Campbell-Savours: It is unrelated.
I am sorry, but I am not prepared to hear it.
Opposition Budgets Bill
4.8 pm
I beg to move,
I move this motion in a spirit of comradeship to the Opposition parties—the alliance and the Labour parties. The whole House is fortunate that in my right hon. Friend the Chief Secretary, who is sitting in his place today, we have a man of great integrity. Faithfully and voluntarily he has done for the benefit of the whole nation what my Bill now proposes, but new pledges come day by day from the Opposition and we need a Bill to cost those pledges. We do not want the Tory media, about whom the right hon. Member for Chesterfield (Mr. Benn) frets so much during the long night hours, to distort the spending plans of the Opposition parties. That is why we most definitely need my Bill. The full light of critical analysis needs to be thrown on the Opposition's spending plans. We want that analysis so that after the election, which I am sure the Conservatives will win, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) will not be able to say what he said after the previous election:That leave be given to bring in a Bill to require the Treasury to cost proposed budgets put forward by political parties in Parliament.
My Bill would ensure that we could dig beneath the razzmatazz, the glossy packaging and the red rose, and find out exactly what pledge the Labour party intends to carry out and what pledges it intends to abandon. For instance, does the Labour party intend to abandon the £360 million that it is pledged to spend on abolishing the right of all parents to spend what they want on their children's education? Will Labour abandon the pledge to spend £1,460 million on increasing overseas aid, although it must be said that that pledge strangely slipped out of the jobs and poverty package last week? Where has it gone? Perhaps the begging bowls of the Third world are to go unfilled. Will Labour honour the pledge to spend £760 million on new hospitals, although, again, that pledge seems to have slipped from last week's package? Does the Labour party recall the fact that spending on hospitals was cut by 30 per cent. under the previous Government? I know not. Perhaps, through my Bill, we can hear about whether the Labour party intends to carry out its bribes for pensioners, although again perhaps wiser counsels will have reminded it about the sad fate of the £10 Christmas bonus under the previous Labour Government. After all, the hon. Member for Olham, West (Mr. Meacher) has a habit of shooting from the hip, so perhaps a clause in my modest little Bill can provide him with a box of matches so that he can do his sums, although in the case of the hon. Member for Kingston upon Hull, East (Mr. Prescott), that might be a bit inflammatory, so I shall not suggest that. We might hear a little more about the pledges that the Labour party has already made on local government. We had to wait until page 11 of last week's jobs package before we saw a mention of local government. Perhaps after all the publicity of the past few weeks about the loony Left, even the forces for moderation such as the right hon. And learned Member for Monklands, East (Mr. Smith) have forgotten his description of the barmy scheme by Sheffield district council to spend real ratepayers' money on phoney jobs as"Nobody believed that our theories could be put into practice. Our vague hopes of achieving growth through government spending were barely understood and rarely believed."
Perhaps that was an exaggeration. Perhaps the Labour party has realised all too late the truth of the wise words of the Audit Commission:"an imaginative and workmanlike initiative."
My little Bill will also be able to delve deep into how the Labour party intends to borrow money for its spending plans. Perhaps the preamble to my modest Bill can contain the wise words that it is"Throwing money at a problem all too often simply means more waste."
Those are not my words or the words of my right hon. Friend the Chancellor of the Exchequer. They are in fact the words of the right hon. Member for Leeds, East (Mr. Healey) in his pathetic letter to the International Monetary Fund in 1976. Most of all, we shall have to look at the Labour party's taxation plans. Will its plans result in a basic rate income tax of over 50p in the pound? Let me quote the candid words of Mr. Blunkett:"the Government's intention in the years ahead to reduce the share of resources taken by public expenditure. It is also part of this strategy to reduce the public sector borrowing requirement so as to establish monetary conditions which will help the growth of output and the control of inflation."
Will those candid words come true? Like Walter Mondale winning Minnesota, perhaps the right hon. Member for Sparkbrook will win Sheffield. Whether he wins much else is a matter for conjecture. Finally, I must refer to the alliance. Its members are here in the Chamber in some force. I well recall the wise words of Mrs. Shirley Williams, when she said:"There will have to be a return to the higher standard rate of income tax".
I know that the alliance does not want to fall into that trap. I am sorry to say this, but there are many weasel words in its latest policy document, "The Time Has Come". There are weasel words such as"The danger for any new Party … is that it becomes all things to all men".
I am sure that with my Bill we could excise those words. It would ensure that the alliance spoke with the same candour as Dick Taverne in introducing its tax and benefits package. He said:"The Alliance parties' ambition is … Ultimately we would wish to … We would try to … New and improved services could … As a long-term goal … we would aim".
We could make sure that the wise—perhaps not so wise—words of the right hon. Member for Plymouth. Devonport (Dr. Owen) when he told the British people last year:"You can't make an omelette without breaking eggs."
—are brought home to the British people. This is a modest little Bill, which I hope will result in the British people knowing that when they go to the polls, if they are determined not to vote Conservative, they will be signing a blank cheque made payable to Her Majesty's Government to repay the tax cuts that they received yesterday. While it is undoubtedly the privilege of Opposition parties to make promises, it is their bounden duty to make only such promises as they have an even chance of carrying out. What we have from the Opposition parties is jam today and pie in the sky tomorrow. I commend my Bill to the House."Your responsibility is to forgo … tax cuts."—[Official Report, 13 November 1985; Vol. 86, c. 596.]
4.16 pm
rose—
Does the hon. Gentleman seek leave to oppose the Bill?
Yes, Mr. Speaker.
I suppose that virtually every Member of the House wishes not only political parties in the House but all hon. Members to have the best possible information from the most independent, reputable and reliable sources on any matter that is introduced for debate. I go further and hope that hon. Members will agree that it is most important to set out on the right foot and not to confuse the issue, as the hon. Member for Gainsborough and Horncastle (Mr. Leigh) has done. I can vouch for at least one group of Members who have gone to considerable expense to obtain an independent costing of their proposals so that the House may be fully informed. Our procedures would need to be revised so that the Houe may have some control over Government proposals to borrow. One of the great gaps in the House's power over the Executive is that the Executive is left virtually free to borrow what it wants, often with lamentable consequences. Secondly, it would be necessary to find some way round the difficult situation created by the fact that the Crown has the sole initiative in this place for proposing to raise taxation, which means that all Opposition parties—most of us have taken advantage of it from time to time—are let off the hook because we are not allowed to propose to increase taxation as the Finance Bill goes through Parliament. Those two matters need to be put right first. The hon. Gentleman proposed that, of all the bodies in the country with economic knowledge, the Treasury should be chosen to have that duty. That is absurd and cannot have been put forward seriously. I apologise for reminding the House, first, that the Treasury is necessarily the servant of Government. Secondly, it is the protector of the Revenue. In those capacities, the Treasury is bound to put the worst possible face on any proposals from anybody in opposition, whether a party or an hon. Member. I cite this as evidence. It happens every year when the Finance Bill is debated. It is an annual ritual, whichever party is in power, that its obedient servants, following the course of duty meticulously, keep a score sheet of the cost of every Opposition proposal for reducing taxation. Those proposals are in fact a set of alternatives. No Opposition suppose that they will ask for all those reductions to be granted simultaneously— of course not. We know that we will be defeated on one matter, so the following week—[Interruption.] Conservative Members know that, so it is no good their trying to cover it up with hilarity. We come back to the charge the next week with another proposal for the Treasury— Laughter.] Some Conservative Members do that every time. The Treasury, in the most simplistic way, keeps a milometer of the cost of such proposals, adds up the whole lot and every week gives Ministers a horrific figure that they duly retail in Committee. Nobody believes them. It is just part of the ritual. I have an alternative which I am sure has occurred to most hon. Members. There are many independent economic institutes in the country, academic departments and others that are perfectly capable of costing Opposition proposals. The House should make funds available— within reasonable limits—so that independent institutes can provide information for the House. That seems to me to be very much more constructive than the obviously tendentious proposals made by the hon. Member for Gainsborough and Horncastle. I hope that the House will divide against the motion.Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and Nominations of Select Committees at Commencement of Public Business):
The House divided: Ayes 91, Noes 13.
Division No. 121]
| [4.20 pm
|
AYES
| |
Adley, Robert | Leigh, Edward (Gainsbor'gh) |
Ashby, David | Lewis, Sir Kenneth (Stamf'd) |
Atkinson, David (B'm'th E) | Lilley, Peter |
Baker, Nicholas (Dorset N) | Lord, Michael |
Baldry, Tony | McCurley, Mrs Anna |
Beaumont-Dark, Anthony | MacKay, Andrew (Berkshire) |
Biggs-Davison, Sir John | McQuarrie, Albert |
Blackburn, John | Mather, Sir Carol |
Bright, Graham | Mills, Sir Peter (West Devon) |
Bruinvels, Peter | Montgomery, Sir Fergus |
Budgen, Nick | Morris, M. (N'hampton S) |
Butterfill, John | Morrison, Hon C. (Devizes) |
Carlisle, Kenneth (Lincoln) | Moynihan, Hon C. |
Carttiss, Michael | Mudd, David |
Chapman, Sydney | Murphy, Christopher |
Clark, Dr Michael (Rochford) | Onslow, Cranley |
Colvin, Michael | Oppenheim, Phillip |
Coombs, Simon | Ottaway, Richard |
Dickens, Geoffrey | Pawsey, James |
Douglas-Hamilton, Lord J. | Proctor, K. Harvey |
Eyre, Sir Reginald | Raffan, Keith |
Farr, Sir John | Rhodes James, Robert |
Fenner, Dame Peggy | Rhys Williams, Sir Brandon |
Fookes, Miss Janet | Rossi, Sir Hugh |
Forsyth, Michael (Stirling) | Rowe, Andrew |
Forth, Eric | Sackville, Hon Thomas |
Fox, Sir Marcus | Sayeed, Jonathan |
Gardiner, George (Reigate) | Shaw, Sir Michael (Scarb') |
Goodhart, Sir Philip | Silvester, Fred |
Gow, Ian | Sims, Roger |
Greenway, Harry | Skeet, Sir Trevor |
Grylls, Michael | Smith, Sir Dudley (Warwick) |
Hamilton, Neil (Tatton) | Smith, Tim (Beaconsfield) |
Harris, David | Speller, Tony |
Hawkins, Sir Paul (N'folk SW) | Stern, Michael |
Heathcoat-Amory, David | Stevens, Lewis (Nuneaton) |
Henderson, Barry | Stewart, Andrew (Sherwood) |
Hill, James | Stradling Thomas, Sir John |
Hind, Kenneth | Sumberg, David |
Hirst, Michael | Temple-Morris, Peter |
Howell, Ralph (Norfolk, N) | Thompson, Patrick (N'ich N) |
Hunter, Andrew | Whitney, Raymond |
Irving, Charles | Yeo, Tim |
Johnson Smith, Sir Geoffrey | |
Kershaw, Sir Anthony | Tellers for the Ayes: |
Knight, Greg (Derby N) | Mr. Ivan Lawrence and |
Knight, Dame Jill (Edgbaston) | Mrs. Elaine Kellet-Bowman. |
Latham, Michael | |
NOES
| |
Bruce, Malcolm | Steel, Rt Hon David |
Cartwright, John | Taylor, Matthew |
Jenkins, Rt Hon Roy (Hillh'd) | Wainwright, R. |
Johnston, Sir Russell | Wrigglesworth, Ian |
Kennedy, Charles | |
Kirkwood, Archy | Tellers for the Noes: |
Maclennan, Robert | Mr. David Alton and |
Meadowcroft, Michael | Mr. James Wallace. |
Shields, Mrs Elizabeth |
Question accordingly agreed to.
Bill ordered to be brought in by Mr. Edward Leigh, Dr. Michael Clark, Mr. Michael Forsyth, Mr. Andrew Stewart, Mr. Neil Hamilton, Mr. Ian Gow, Mr. Robert B. Jones, Mr. Tom Sackville, Mr. James Pawsey, Mrs. Elaine Kellett-Bowman, Mr. Ivan Lawrence and Mr. Eric Forth.
Opposition Budgets Bill
Mr. Edward Leigh accordingly presented a Bill to require the Treasury to cost proposed budgets put forward by political parties in Parliament; And the same was read the First time; and ordered to be read a Second time upon Friday 20 March and to be printed. [Bill 117.]
Statutory Instruments &C
Ordered,
That the draft Broadcasting (Extension of Duration of IBA's Function) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c — [Mr. Lightbown.]
Orders Of The Day
Ways And Means
Order read for resuming adjourned debate on Question [17 March].
Amendment Of The Law
Motion made, and Question proposed,
That it is expedient to amend the law with respect to the national debt and public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—(a) for zero-rating or exempting any supply; (b) for refunding any amount of tax; (c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or (d) for any relief other than relief applying to goods of whatever description or services of whatever description.—[Mr. Lawson.]
Question again proposed.
Budget Resolutions And Economic Situation
[Relevant documents: European Community Document No. 10155/86, Annual Economic Report 1986–87 and the unnumbered document, Annual Economic Report 1986–87 (final version as adopted by the Council).]
4.31 pm
There is one aspect of the Budget on which I am sure that the Chancellor and I are in complete agreement— the opportunity that it provides for the two major parties to show how wide is the gulf that now divides them. The alliance will no doubt take refuge in the abandoned trenches of no man's land. We believe that at the next election the voters must be offered a clear alternative, so we shall not counterfeit agreement where none exists, opposing tax cuts before they are made but supporting them once they are in the pay packets. We believe that the Budget is wrong—socially wrong, economically wrong and, in its neglect of the unemployed, morally wrong—and we propose to say so.
While I am on the subject of the alliance, I should take this opportunity to offer my congratulations to the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) on his victory last Saturday. Labour Members were never in any doubt about his success. As the creator of the SDP, he must have been irresistible to what Matthew Arnold described as the "home of lost causes". In any case, I understand that there was considerable apprehension in Oxford that if the right hon. Gentleman failed to get the top job there he would go off and found a university of his own. I also congratulate the Chancellor on his remarkable performance yesterday. With £6 billion to spend, he managed to make its distribution an anti-climax. Dead sheep have done better in their time. As the right hon. Gentleman knows, there was some hope among Conservative Back Benchers that the lost page of his speech— the dramatic highlight of his entire performance—contained the tax cuts for which they longed but which they were denied. Notwithstanding that, I can offer some cheer to those Tories who wanted a party political Budget and felt that they were not getting it. It was, of course, exactly what they got. The Budget was intended to buy votes, but the Chancellor has carefully targeted the voters whom he hopes to buy. The men and women who have been written off as potential Tory converts were ignored. There was nothing for pensioners without a second income, nothing for families living on poverty wages, and nothing for the unemployed. By neglecting the people who need help the most, the Chancellor has widened the desperate and destructive divisions within our society.Will the right hon. Gentleman explain how the fall in interest rates, which has already begun and will inevitably continue as a result of my right hon. Friend's long-term Budget—for that is what it is— can fail to benefit the business community and therefore employment in the long run?
Everyone agrees— the Tory's own model agrees and every economist and institution of every point of view agrees— that if the first priority is to reduce unemployment, spreading money about in tax cuts is the slowest, least effective and least economic way of achieving that.
What about interest rates?
If the hon. Gentleman will bear with me for more than a couple of minutes of my speech, I shall be developing exactly that point.
Before the hon. Gentleman's wholly irrelevant interruption, I was referring to the fact that the desperate and destructive divisions in our society have been intensified and deepened by the Budget. They have been intensified in the name of prudence. The price for the reputation of prudence that the Chancellor thinks it expedient to promote is to be paid by the families on the dole, those living in houses unfit for human habitation, the sick waiting for hospital beds and the pensioners unable to pay their fuel bills. No Budget every relied so heavily on the dictum that no one with a conscience votes Conservative. Prudence is the word that Conservative spokesmen have been advised to put into their speeches, but this is not a prudent Budget. It is not prudent to spend £20 billion per year holding unemployment at more than 3½ million. It is not prudent to sacrifice the £30 billion per year that this country would earn if those 3½ million men and women were back at work. It is not prudent to allow our housing stock, our hospitals our schools and our roads to decay to the point of disintegration. It is not prudent to squander our oil revenues. It is not prudent to encourage the reduction of manufacturing output and the collapse of manufacturing investment and to escalate the deficit in our balance of manufactured trade. It is not prudent to refuse to secure the homes of the old and the weak against the disastrous rise in burglary and robbery over which the Government have presided. I repeat, this is not prudent Budget.If the right hon. Gentleman is so converted to the mertis of genuine prudence, which I take to be the burden of his argument, what is so prudent about the Labour party's spending plans which would increase public expenditure by £28 billion at the minimum estimate?
"All this and more", as they say. If the hon. Gentleman and his colleagues will bear with me, they will find that I deal with exactly that point on page 78 or 79 of my speech.
I repeat, this is not a prudent Budget. More important, it is generally irrelevant to our economic needs. It is built around income tax cuts which cannot be sustained and will worsen the growing deficit in our balance of payments— a danger that the Chancellor at present finds it convenient to ignore. Even if the prospects were as rosy as the Government pretend, the Chancellor's choice of spending priorities would be wrong. It is not simply the economic outlook which demands that available funds should be invested in our future rather than used to fuel the credit and consumption boom. Short term or long term, the extra resources at the Chancellor's disposal should be concentrated on the reduction of unemployment, the alleviation of poverty and the improvement of essential services. They should have been used to build a united country; instead, they have been used to finance a failed publicity stunt. The public expenditure White Paper, which was the curtain raiser to the Budget, was described by the Spectator as having fallen off the back of a lorry. The simile is now continued. We are in the middle of one of those closing-down sales that advertise their bargains with whitewash messages painted on grubby shop windows: "Everything must go. Buy while stocks last. Amazing reductions." Customers who fall for such blandishments find, when they return to complain about the shoddy character of the goods, that the hucksters have cut and run. So will it be with this Government. That is their clear intention, and that is the message of the Budget. The tax cuts that the Chancellor announced yesterday, intensifying as they do both the credit boom and the pressure on imports, cannot be sustained. Were the Government to be returned in the general election, for which the Budget is no more than a trailer, value added tax would be increased to fill the gap left in the revenue and to reduce the consumption of imported goods. We would be left with tax cuts that help the rich the most, and those cuts would be replaced by tax increases that hit the poor the hardest. An increase in VAT is the Prime Minister's clear intention. On television in January 1984 she was absolutely explicit. She said:It is the pattern of Tory behaviour to cut direct taxation before elections and, given the chance, to increase indirect taxation afterwards. Yesterday, my right hon. Friend the Member for Islwyn (Mr. Kinnock) referred to the history of Conservative tax duplicity, notably the behaviour of Mr. R. A. Butler. Hon. Members shouted then, as some are shouting now, for more recent examples. An hon. Gentleman, whom I am afraid I cannot identify as I do not know his constituency, has asked for such an example. Let me give him one. I suspect that the occasion of his election in 1979 was such an example. Before that election, the Prime Minister promised that there would be no increase in VAT. Immediately the election was over, VAT was increased from 8 per cent. to 15 per cent. At least the Prime Minister has learnt that lesson. When pressed on television, on the radio and at press conferences, she now refuses to say categorically that she will not increase VAT if the Government are re-elected, and I understand that the Chancellor of the Exchequer was similarly evasive with journalists yesterday evening. If, now or later today, the right hon. Gentleman wishes to give a categorical assurance on the subject, I am sure that we shall listen to it with a good deal of interest and with absolute belief. Until then, it will be clear—and I believe it to be true—that the Government firmly intend to increase VAT should they be re-elected. That must be true, because the use of the Chancellor's extra revenue for tax cuts cannot be sustained. Anyone who looks at the causes of the extra revenue that the Chancellor distributed yesterday will understand that. Let me make it clear that I do not intend to accuse the Chancellor of being lucky; luck is an essential part of our trade. But no one believes—and I do not think that the Chancellor even pretends—that the £6 billion that he has to distribute is the result of four years of careful planning. In December, the Chancellor told the House:"It is the balance between indirect and direct taxation which we want to switch."
In the present Treasury team, invention is one of the jobs allocated to the Chief Secretary, so I assume that the Chancellor was telling the truth in December. If he was telling the truth then, he did not expect the £6 billion fiscal adjustment in March; therefore, he cannot legitimately claim credit for it. He should be surprised by the sudden bonus, and, as well as being surprised, he should be worried. That £6 billion is underpinned—indeed, it has largely been created— by four underlying factors that have made it possible for the Chancellor to reduce income tax and the public sector borrowing requirement simultaneously. Those factors should oblige a rational and honest Chancellor to take responsible decisions about how the available money should he spent. If it is used to expand the real economy, it can be turned to advantage. Only by using it for investment can we turn the temporary bonus into permanent gain. If it is frittered away on a brief spending spree, it can only intensify our underlying economic problems. The Budget is underpinned by a bogus calculation of Government borrowing. The temporary expedient of selling Government assets is recorded as a reduction in the PSBR. We have argued in the past, and no doubt will argue again, about the wisdom and propriety of privatization— especilly privatisation at knockdown prices, which has allowed speculators to make £2 billion in profit on the instant resale of wilfully undervalued assets. However, there can be no argument about one fact: the sale of capital assets is now being used to finance increases in consumption. The buoyant revenues of which the Chancellor made so much yesterday are an even more short-lived and even more dangerous phenomenon. They are the product of circumstances that either cannot continue, or cannot be allowed to continue, without massive damage to the real economy. It is folly to use them for immediate spending rather than for investment in our future."I very much doubt whether there will be much scope for reductions in taxation in next year's Budget"—[Official Report, 17 December 1986; Vol. 107, c. 1242.]
How does the right hon. Gentleman square what he has said with the rapid increase in corporation tax during the past year, which is far above my right hon. Friend's estimate and cannot be described as either temporary or bad for the economy?
I assure the hon. Gentleman that it is wholly temporary—at least, I hope it is. It results from two phenomena— the first is the changes in the tax regime brought about by the Government, which have now made it more likely that capital will be distributed rather than being ploughed back into industry. The other is the fact that the capital investment has been reduced. and that that reduction has produced a phenomenon about which the House should be concerned—namely, the decline in investment, especially in manufacturing. In a moment I shall give the figures and develop the case—I hope with the general agreement of the House, if not with that of the hon. Gentleman.
The Revenue collected an extra £500 million in stamp duty as a result of house price inflation and the extra share transactions that result from merger mania. The corporation tax payments to which the hon. Gentleman referred amounted to an extra £1·7 billion, but I repeat that they are not the marks of success. They are largely the result of the withdrawal of investment incentives and stock relief, and the failure to invest increased profits. The extra revenue in that sector is the direct product of a disastrous fall in the most important area of new investment. Investment in manufacturing industry has fallen to 20 per cent. below its 1979 level. I shall give another example of that. Government income has gained almost £1 billion from increased VAT receipts on consumer durables and imports. The increase in VAT revenue creates a perfect vicious circle. That revenue is increased when imports rise. The extra revenue is distributed in income tax and the extra spending power thus engendered is used to suck in more imports. Those are the sources of revenue that the Daily Express yesterday described as the result of economic success. Lord Beaverbrook must be turning in his grave to learn that his old paper is congratulating the Government on promoting the exports of Germany and Japan. Central to the increases in VAT and corporation tax receipts is the explosion in indebtedness which the Government first allowed and then encouraged. Personal debt now accounts for almost 70 per cent. of net income after tax. Indebtedness now increases by 20 per cent. a year and stands far higher than it did during the much derided Barber credit boom. The Government are obsessively opposed to increasing public borrowing to finance investment in British industry. However, they actively encourage private borrowing to finance the purchase of German cars, Japanese videos, Italian footwear and south-east Asian textiles. The result is unfortunately recorded for all to see. It is the continual decline in Britain's balance of payments, despite oil income that has contributed at least £100 billion during the lifetime of the Government. Let us consider the actual figures. In the 1985 autumn statement, the Chancellor predicted a £4 billion balance of payments surplus for 1986. Naturally, he brushed aside, with all his usual charm, the idea that he might possibly be wrong. Each subsequent forecast, the Budget and the 1986 autumn statement, was worse than its predecessor. There was a £1 billion deficit last year and this year the deficit was originally forecast to rise to £1·5 billion. Yesterday, the Chancellor increased his estimate of the deficit to £2·5 billion. We have seen a £5 billion deterioration in the 1986 deficit between the 1985 autumn statement and the actual outturn. If, in 1979, the BBC had prophesied that, despite oil, the Government would still preside over a balance of payments deficit which would grow year by year, the chairman of the Tory party would have got on his bike and pedalled round to Broadcasting house to sort out the Bolsheviks who were spreading such nonsense. About manufacturing trade, the Chancellor cannot even simulate confidence. The manufactured trade balance has slumped from a surplus of £5 billion in 1978 to a forecast deficit of £8 billion this year. The Government know that the balance of payments is deteriorating fast. It is impossible to imagine a more irresponsible way of reacting to that deterioration than escalating the consumer and credit boom by cutting 2p off the basic rate of tax.Will the right hon. Gentleman give way?
No, I shall not.
The folly of that choice is underlined by the inability of British industry to meet the increased demands upon it that more purchasing power will bring. Manufacturing exports are a subject on which the Government make great claims and repeat great boasts.They are right.
Yes, they are right. Manufacturing exports have risen by 15 per cent. since 1979. The only problem is that imports have risen by 48 per cent. Manufacturing trade is in deficit for the first time since the industrial revolution. Net manufacturing is negative for the fifth year running. Manufacturing output has fallen and is still lower than it was in 1979.
The first necessity of a responsible Government is to increase Britain's capacity to meet domestic demand and expand foreign sales, especially to fill the gap that will be left when oil revenues begin to run out. Once we were told that rescue would come from invisible earnings. However, now even the forecasts for invisible earnings are beginning to be scaled down. I ask the Chancellor a question today which I have often asked him before but which, so far, he has refused to answer. What are his plans for getting the balance of payments back into surplus? What will replace the oil income? He must know that yesterday's Budget makes that gap harder to fill. It will boost the import of consumer goods and do little or nothing to improve the prospect of manufacturing industry. A brief balance of payments deterioration, in preparation for increases in manufacturing output, is sustainable. However, a continuing balance of payments deterioration, brought about by a flood of consumer durables, cannot possibly be sustained. There are some parts of the Budget which we approve of and applaud and which I should like to put on record as receiving our support. I refer, for example, to the tax differential for unleaded petrol, the concessions to charities, the increased allowances for the blind and for those aged over 80 and the new tax allowances to assist with training. I have taken examples from the four parts of the Chancellor's speech with which we especially agreed.
What about exchange controls?
I hear the hon. Gentleman ask, ".What about exchange controls?" I shall answer, perhaps improperly, the question that was shouted out from the Front Benches rather than the one to which the hon. Gentleman would like me to reply.
We are told that we are to have the formal repeal of exchange control. However, since the present powers are incapable of effective operation, I am not quite sure why the Chancellor chooses to bother. In the one passage of his speech that was meant to be a joke, the Chancellor asked whether Opposition Members would support repeal. I am pleased to tell him that we shall, gladly. However, we shall want a debate on the Floor of the House to draw attention to the money that has flooded out of Britain since the end of statutory exchange control and to describe the new way in which we propose to bring that money back to invest in the British economy, British industry and British jobs. However, after we have debated it we have no intention of attempting to breathe life into an already dead Act when we have a superior instrument to put in its place. I should also like to tell the Chancellor how much we applaud his conversion on the measurement of broad money. Once it was the criterion against which all policy was tested and the centrepiece of the medium-term financial strategy, of which the Chancellor was the author. The only problem with the broad money target was that the Chancellor could never hit it. Yesterday, in a moment of rash frankness, the Chancellor described what he proposed to do about M3 and said that he would follow the "wiser" course. It is certainly wiser for his reputation. We equally welcome the changes in VAT that the Chancellor proposed for small businesses. However, we must confess to bias because we proposed them all in last year's Finance Bill, but the Government voted them down. We welcome the sinners come late to repentance. Would that we could say the same about the Chancellor's manipulation of statistics. He told us yesterday—as he has told us so often— about the seven years of continuous growth. However, I invite him to tell the House what the average rate of growth was during those seven years. Knowing his reticence, I offer him the answers. For 1979–1986, the average rate of growth was 1·5 per cent. Including the forecast for 1987, it increased, on average, to 1·7 per cent. However, under the previous Labour Government, from 1974–1979, it was 1·9 per cent. I am not surprised that the Chancellor chooses his statistics with such scrupulous care. I give another example. He did it again yesterday evening when he entertained the British public with what I can only describe as some interestingly creative diagrams, mostly based on the notion that if they did not record the performance of our most successful competitors, it would look as if Britain was top of the league. There are some attractions in that technique. By assiduously