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Commons Chamber

Volume 128: debated on Wednesday 2 March 1988

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House Of Commons

Wednesday 2 March 1988

The House met at hall-past Two o'clock


[MR. SPEAKER in the Chair]

Oral Answers To Questions

Foreign And Commonwealth Affairs



To ask the Secretary of State for Foreign and Commonwealth Affairs if, in the light of recent events, he will make a statement on the relationship between the United Kingdom and Somalia, with particular reference to those parts of that country having historic links with Britain.

The relations between the United Kingdom and Somalia are very friendly. When I visited Mogadishu last April, I met President Barre, the former Foreign Minister and other senior Ministers and discussed British aid in Somalia, including northern Somalia, and other matters of interest to both our countries. I hope that a senior Somali Minister will be able to visit the United Kingdom later this year.

The Minister may be aware that there is a significant Somali community in my constituency — and in others—and that the Somali community has made a significant contribution, particularly to our maritime tradition, to our economy and to the community in general. Is the Minister aware that there is a great deal of concern among members of the Somali community in this country about several aspects of the position in Somalia at the moment? Will she accept that there is also a feeling in the Somali community in this country that Britain should continue to bear some responsibility and take an interest especially in those parts of Somalia that were previously Britain's responsibility? Will she assure us that that interest will continue and tell us how it will be pursued?

I assure the hon. Gentleman that we continue to take an interest. For example, we brought pressure to bear with regard to the trials of certain prisoners, including prisoners from the north, who had been held for several years without trial. The hon. Gentleman may be aware that our ambassador was instructed to protest when the death sentences were passed. I am pleased to say that on 11 February those death sentences were commuted to terms of imprisonment or house arrest.

This year we gave about £5·1 million of aid to Somalia. That aid is directed to a number of projects in the north, including projects for overhauling power stations.

It is good news that the already excellent relationships with Somalia have improved yet further following my right hon. Friend's visit to that country. Is Somalia still having to feed, clothe and house refugees entering the country from Ethiopia, or has the problem eased?

I am glad to say that the refugee problem in Somalia has eased. Some refugees still cross the border from the Ogaden region. Where possible we help with that. We have helped children from the Ogaden region who have been orphaned. I thank my hon. Friend for the kind remarks that he made at the beginning of his comments.

Television News Service


To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received seeking the funding by his Department of a television news service, to be operated by the BBC external services.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs
(Mr. Tim Eggar)

We have very carefully considered a request from the BBC for public funds to start up a world television news service. We note that a British commercial world television news service has been started without public funds, and have concluded that the provision of public funds to the BBC for this purpose would not be justified.

Bearing in mind the role and unique international reputation of the BBC external service radio broadcasts and the fact that it constitutes an important national asset, is my hon. Friend aware that his refusal to back a three-year experiment for a world television news programme at a cost to the taxpayer of £1 million a year will be greeted with great disappointment?

I want to make it clear to my hon. Friend that we are not stopping the BBC from taking an initiative in this area. However, we do not believe that the provision of public funds for start-up or production is justified.

Did Foreign Office Ministers see the Granada "World in Action" programme entitled "The Taming of the Beeb", and especially did they hear Alan Protheroe's comments on the threat to the historical traditions of the BBC? Can we be sure that Foreign Office Ministers will do everything to protect those historical traditions and ensure that Mr. Protheroe's gloomy predictions are not fulfilled?

I did not see the programme to which the hon. Gentleman referred. This is a matter for my right hon. Friend the Secretary of State for the Home Department.

Does my hon. Friend recollect the considerable support from both sides of the House for additional Government funding of the BBC external services for satellite television news? That was exemplified by an early-day motion before the election which attracted nearly 250 signatures, many from Conservative Members, and by the debate in July. Is my hon. Friend aware that many people will see his announcement as a shortsighted and somewhat doctrinaire decision and, above all, a waste of an outstanding international asset that we are privileged to have?

I recognise the strong feelings that my hon. Friend has on the matter. I agree that the BBC external services and its radio section have a fine record, which we applaud, and which we have recognised by increasing the funding available for the external radio service by a considerable amount over the past seven years. However, that is not justification in itself for making additional public funds available for a world television service.

Is the Minister aware that much of the intransigence among the people of the Falkland Islands stems from the fact that the media of the Falkland Islands is, in effect, in the hands of one person, and there is no television? Do the Government not realise that if they want some flexibility from Falkland Islanders they could do no better than ensure that a full television service is provided for them so that they can see what is going on in the outer world? I put that proposition to the Minister in all seriousness. By that experience they might learn to trust some of their neighbours in a way that, hitherto, they have found impossible.

The hon. Gentleman has raised that point before. The BBC external service "Calling the Falklands" and the world service are available in the Falkland Islands and are listened to widely.

Middle East


To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress towards a middle east peace settlement.

We welcome recent efforts to give new impetus to the search for a negotiated settlement of the Arab-Israel conflict. We and our European partners support strongly an international conference as the suitable framework for negotiations between the parties directly concerned.

I thank my hon. and learned Friend and congratulate him on his active participation in the process during the past few weeks. Has he had a chance to look at the Hansard extract that I sent to him dated 23 July 1946 entitled "Terrorist Outrage, Jerusalem" and the statement made by the then Prime Minister, Mr. Attlee? Does he agree that as Messrs. Shamir and Sharon were involved in those terrorist activities it is utter hypocrisy for them to condemn the PLO as a terrorist organisation? On that basis, does he agree that if Mr. Shultz is to play any useful role it is essential that the United States and our Government include the PLO in any discussions if they are to be meaningful?

I appreciate my hon. Friend's sincere interest in this matter. The tragic events of the King David hotel are matters for historians, and our concern has to be with the present. Plainly, the PLO is accepted widely within the occupied territories as the representative of the Palestinian people. We have never accepted it as the sole representative of those people, and there has been an inhibition on the part of the Americans and the British Government at Cabinet level to receive the PLO because of the need for it to make a clean break with terrorist activities of the past. I hope that the PLO will do that, so that it can play a proper role in the unfolding peace process, which, as I said earlier, we very much welcome.

Does the Minister accept that the unfolding peace process, as he put it, has been unfolding for a terribly long time without any real progress? We warmly welcome his support for an international conference, but would he go as far as to say that there will be no progress until Mr. Shultz makes proposals which go considerably beyond those that he has made so far?

I thank the hon. Gentleman for his consistent support for a bipartisan approach to the matter. I welcome that. Mr. Shultz is properly taking all possible pains to consult as widely as he can among the Governments in the region. He is trying to break down the old objections to peace, to which the hon. Gentleman referred, in order to see whether some new development is possible. Our role is to assist him in that. Of course, we assist him by talking frankly to him about difficulties and the need for the United States to tackle some of those difficulties. I think the hon. Gentleman will find that that is exactly what my right hon. Friend the Prime Minister did in her talks with Mr. Shultz yesterday.

Is my hon. and learned Friend aware that in 1973 the United Nations Commission on Human Rights described Israeli conduct on the West Bank as

"an affront to humanity and tantamount to war crimes"?
The only thing that has changed there is the presence of the television cameras. In the circumstances, should not the Palestinians, after all these years of injustice, at least have the right to choose their own representatives?

Our condemnation of many of the practices in the occupied territories by the Israeli defence force is well known. Sadly, those problems appear to be growing rather than diminishing. I believe that they will fundamentally undermine the reputation of the Government of Israel unless something is done about them. I hope very much that out of this will come the progress that my hon. Friend seeks.

We wish to see the Palestinians properly represented at any conference. Of course that is primarily a matter for the Arab side. The idea that has been floated—that there should be an international conference — of a joint Palestinian and Jordanian delegation would appear to be the right way forward.

The Minister must know that the Shultz mission will fail because Shultz is unable to talk to the Palestine Liberation Organisation. If there is to be a peace settlement in the middle east, the Minister, Shultz and the Americans must drop this reluctance to talk to a main player. Shultz can talk to the Israelis, but he must talk to the other side, the PLO. The best thing that the Minister and the British Government can do is to urge the Americans to drop their refusal to accept that the Palestine Liberation Organisation is the representative of the Palestinians.

I know the hon. Gentleman's serious concern for this issue. I urge him, as I have done in the past, to make the PLO aware of the central inhibition of the Americans in talking to the PLO and of the British Government at Cabinet level in receiving the PLO because of the need for it to make a break with the past.

The Minister is not on television now—he has had his knuckles rapped by the Prime Minister.

Of course the Americans would like to talk to the Palestinians, just as a number of us have been able to do and just as I was able to do when I visited the occupied territories during a visit from which the hon. Member for Bolsover (Mr. Skinner) says I am retreating. There is no question of retreating from that or anything else.

It is important that the Palestinians should be able to put their case direct. That will best come about when the PLO has legitimised itself in a form that enables it to repudiate the past, which, as the hon. Member for Dundee, West (Mr. Ross) knows, was disfigured by terrorist actions that caused grave difficulty and resentment in Europe. That is the way forward that we all want to see.

Does my hon. and learned Friend agree that a necessary condition of peace in the middle east is that Israel's Arab neighbours must accept Israel's right to exist and its right to secure borders? Does he agree that it is an international scandal that, 40 years after the foundation of the state of Israel, only one Arab country has done that? Does he regard it as significant that those Arabs who are willing to bankroll the PLO have also been seen to be supporters of the IRA?

That last observation is a bit strong and I do not think it is in accordance with the facts. Nor do I think that the football supporter approach to this problem—taking a position on one side rather than striking a balance — is at all helpful in resolving this difficult matter. A sensible policy for the peace process, which I believe we have, is based, first, on the right of the Palestinians to self-determination and, secondly, and every bit as important, on the right of all states in the region—including, of course, Israel—to exist behind secure boundaries. I am sure that no progress is possible until all states in the region appreciate that.

Is the Minister aware that, from my own talks with the PLO and the Governments of Iraq, Egypt and Jordan, it is perfectly clear to me that there is no problem about their taking part in an international conference under the auspices of the five permanent members of the United Nations, which could lead to a settlement that would provide security for Israel as well as self-determination for the Palestinians? Is he also aware that the principal, and so far immovable, obstacle to the holding of such a conference is Mr. Shamir, the Prime Minister of Israel? Is he further aware that, instead of trailing new and circuitous solutions to the problem, Mr. Shultz and the United States Administration should tell Mr. Shamir, in no uncertain terms, to sit down at a conference and negotiate with the Arab countries?

The right hon. Gentleman's progress around the middle east has been most welcome to me, as it has allowed a great deal of bipartisan agreement between the two Front Benches. I certainly agree with him about the attitude of the Arab world towards an international conference. It is our view just as much as his—and I believe that it has all the more authority because it appears to be a view that commands majority support in Parliament—that an international conference is the best way forward. There is no doubt that one section of the Israeli Government has consistently rejected that, and I hope very much that, as part of the tireless work that Mr. Shultz is doing, he will be able to tackle that issue.

Unchr (Special Rapporteurs)


To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received on the question of the reappointment of the United Nations Commission on Human Rights' special rapporteur on E1 Salvador; and if he will make a statement.

We have received a number of representations. We find the special representative's repots balanced and objective. He states that the situation in E1 Salvador has improved, although there is still room for further progress. We will take his view into account when deciding how to vote. We shall also discuss the draft resolution with our European Community partners.

I thank the Minister for his reply, although it is somewhat depressing, as there is sufficient evidence of a deterioriating human rights situation in E1 Salvador. The death squad is on the march, and killing and torturing are taking place at this moment. What do the Government need to be able to commit themselves to supporting the relacement of the special rapporteur to E1 Salvador? Will the Minister tell the House why the Government are holding back on this important issue?

When the Human Rights Commission appoints a special representative, it is only right that all members of the Commission should take his report into account because it is the most objective report available on human rights in that particular country. If the hon. Gentleman is asking us to vote for the special representative's reappointment, surely he will agree that, in making our decision, we should take account of that special representative's report. That is what we shall do.

Has my hon. Friend noted, from the report of the special rapporteur, Senor Ridruejo, that considerable progress has been made on the civil rights records of the armed forces and the police of E1 Salvador? Does he not think that we should now see an improvement from the guerrillas, who continue to sow mines causing innocent deaths among the civil population?

The special representative's last report shows that the earlier improvements in the situation have continued and that President Duarte has made efforts to curb death squads. In addition, the special representative found no evidence to prove that the Government connived at human rights abuses. It is right that we should take that into account when deciding how we shall vote. We have not yet made up our mind.

Will the Minister confirm that the Government are as much against repression in E1 Salvador as they are against it in the occupied territories? Does he agree that, since the special rapporteur produced his report, the situation in E1 Salvador has worsened? The human rights activist Herbert Anaya has been murdered and there have been attacks on the camp at Calle Real. Does he agree, therefore, that it would be quite intolerable and would be a green light to the death squads and a 'click in the teeth for all human rights workers if the British Government did not vote in favour of the reappointment of that special rapporteur?

Naturally, we are concerned about human rights violations wherever they occur. It is also right that where there are improvemens we should recognise them.

The hon. Gentleman asked about the attack on the Calle Real refugee camp. We are aware of it and our chargé d'affaires visited the camp soon afterwards to ensure that the British volunteers were well. We shall take into account the hon. Gentleman's views and those of others concerned about human rights in E1 Salvador. Equally, we have a duty as a member of the Human Rights Commission to make an objective judgment on the wording of the motion, which has only just been put before us, in discussions with other members of the commission.



To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he made to the Soviet Government in the course of his recent visit on their policy towards Afghanistan.

My right hon. and learned Friend recalled our long-held objective of a neutral, non-aligned and independent Afghanistan and welcomed the announcement by Mr. Gorbachev of a date for a withdrawal of Soviet troops.

Will my hon. Friend please take note of overwhelming world opinion, which is that the Soviet Union should withdraw its army of occupation immediately and that it would be in its best interests to do so? [Interruption.]

I agree with my hon. Friend. I find the reaction of Opposition Members extraordinary. They seem to be so pleased with the Russian withdrawal that they forget that the Russians marched in in the first place.

Is it not the case that the Afghan Government have done everything possible to secure peace and reconciliation within the country? Indeed, is it not important that the Government understand that to install a bunch of ayatollahs in Kabul will do nothing for the West and will create further disaster, as we have seen in Iran?

I understand the hon. Gentleman's concern about recent developments in Afghanistan. It may be that a future regime will not be as free with its hospitality to him as the last regime was. I suggest to him that he is as quick to be photographed on Russian tanks leaving Afghanistan as he was when they were in Kabul.

Will my hon. Friend ensure that Her Majesty's Government lose no opportunity to remind the Russians that when they leave Afghanistan they do so with bloody hands, having slaughtered and maimed hundreds of thousands of people, and left 5 million refugees in Pakistan? Should they not leave with shame rather than with their heads held high?

I fully understand the thoughts behind what my hon. Friend says, and naturally it is important that the Russians stick to their commitment to withdraw.

Does the Minister agree that although Pakistan has justified anxieties, there would be a heavy responsibility on Pakistan if the talks beginning today were to fail? Does he agree that both the Soviet Union, to a much greater extent, and the Americans, to a lesser extent, have poured vast sums into the armouries of both sides of the conflict? Will he now use his good offices to ensure that a similar amount of money is used by the super powers for the immense task of the reconstruction of the shattered infrastructure of Afghanistan?

Obviously, we hope that the talks which started today in Geneva will reach a suitable conclusion, and I hear what the hon. Gentleman says about Pakistan. I agree with him about aid within Afghanistan in the light of a settlement. Recently, I returned from a visit to the Afghan border. There is a major problem ahead of the world international community, and it is important that the reaction today, assuming there is a settlement, is a coordinated one involving all the major countries.

Ussr (Ministerial Visit)


To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent discussions with the Soviet authorities during his visit to Moscow.

My right hon. and learned Friend had full and wide-ranging talks with Mr. Gorbachev, Mr. Shevardnadze and others covering bilateral matters including trade, arms control, human rights and regional issues. He also met human rights activists and was able to put our views direct to the Soviet public in their press and on television. The visit was a further contribution to our active dialogue with the Soviet leadership and to the improving atmosphere of East-West relations.

On the assumption that my right hon. and learned Friend's successful visit also included talks on middle east peace prospects, does my hon. and learned Friend agree that it is no good the United States objecting to the Soviet and Syrian presence in a possible future international peace conference, and it is no good us repeating that we think that the Jordanian cum Palestinian option is the best way forward, if, quite manifestly and clearly, the Jordanians object to the Palestinians being included with them rather than having their own independent and legitimate position in the negotiations?

Perhaps I should explain to my hon. Friend the inhibiting factor in some of the earlier answers. While Mr. Shultz is still active—as he is and there is no question of his mission having come to an end—it is difficult for us to comment on the substance of it when it is at the heart of Mr. Shultz's efforts that the substance should emerge as a result of his careful negotiations. However, in private we advise Mr. Shultz with all candour about the ways we think things should move forward. Let me correct my hon. Friend on one point. I was in Jordan yesterday, and I can assure him there is no question of the Jordanians objecting to a mixed delegation. It is their policy to press for one.

When the Foreign Secretary was in Moscow, did the Russians raise with him the question of human rights in the United Kingdom?

There was a full discussion on human rights and I am delighted that one of the consequences of my right hon. and learned Friend's visit was that Mrs. Sosna has been permitted to leave the Soviet Union. It was also true that, largely as a diversionary tactic, questions of human rights in the United Kingdom were raised by the Soviet side. From the smile on the hon. Gentleman's face, it appears that he associates himself with those observations, and I think that it is a jolly bad thing that he does.

Did my hon. and learned Friend, in the course of his discussions, give as part of his appreciation of the middle east situation the view that Israel is entitled to secure frontiers, but not to occupy all the territory up to those frontiers?

I think I understand the point that my hon. Friend is making. Israel is entitled to have internationally recognised borders, but those are not the borders that are taken as a result of war, and the occupied territories are not part of Israel. It is the view of the British Government and, I believe, of the world community as a whole, that they should not remain so. Nor will that secure peace, so long as the Israeli Government fail to recognise that the principles of territories at peace will be the crucial element in any future discussions.


To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he had in Moscow on arms control during the recent visit.

My right hon. and learned Friend had extensive discussions with the Soviet leadership on issues covering nuclear, conventional and chemical arms control.

Did Mr. Gorbachev and Mr. Shevardnadze express their concern about Britain's role in the foot-dragging on conventional and chemical arms talks and on the compensatory build-up of arms in the wake of the intermediate nucler forces agreement? Did they urge the Foreign Secretary to show common sense and abandon dangerous dogmas? Will not the proclaimed friendship be superficial unless the Government show the political will for arms reductions instead of arms expansion, which is what the Prime Minister is arguing for at NATO today?

I am glad to welcome the hon. Gentleman's return, but he might have marked it more appropriately than by acting as a voice and echo of what the Soviet Government officials said to my right hon. and learned Friend the Secretary of State while he was in Moscow. The hon. Gentleman should appreciate that the Soviets have their position on these matters. They would like to see a denuclearised Europe, which would further entrench the massive and overwhelming power of their conventional weapons. It should not be the business of any British parliamentarian, from whatever side of the House he comes, to associate himself with those ideas.

The other thing that Opposition Members should recognise is that the Soviet Union respects strength. It was the strength of purpose of the NATO Alliance that led to the INF deal and that will lead to further deals, whereas the weakness of Opposition Members would simply allow the Soviets to roll over by default.

Was there any recognition in Moscow that tension can be reduced in Europe only if there is a substantial and permanent reduction of Soviet conventional forces in Eastern Europe?

My hon. Friend is absolutely right. Why have the Soviets spent 15 years at the mutual and balanced force reductions talks and failed to agree a mandate on these issues? They do not even tell us exactly what their conventional strength is, but it is clear that they have 51,000 tanks pushed forward, many of them 600 miles from the border of the Soviet Union, and last year they produced some 3,400 tanks, 30 per cent. more than in 1983. That is the reality of the build-up of Soviet conventional forces. Until they are prepared to tackle that seriously and to bring about a reduction there can be no security and no reduction of tension in Europe.

Is the Minister not aware, when he tells my hon. Friend the Member for Leyton (Mr. Cohen) that the NATO Alliance must demonstrate strength of purpose, as is being shown in the NATO summit, that there are different views among the NATO Alliance, that the Prime Minister, to her great discredit, wants to step up the nuclear threshold, whereas Chancellor Kohl of West Germany seeks to negotiate away the battlefield nuclear weapons which would turn Germany into a radioactive desert? Will he, therefore, tell the Foreign Secretary that it would be much better for this country to support the Germans in wishing to bring about a nuclear-free Europe than to go with the Prime Minister, the last nuclear dinosaur?

The right hon. Gentleman, I am sorry to say, is wrong. Perhaps on his next journey overseas he should go and see Chancellor Kohl. He has distorted Chancellor Kohl's position. The Chancellor is not in favour of the third zero. It is true that some elements, representing quite a lot of people, in German politics are in favour, but Chancellor Kohl is not, because he realises as much as the rest of us that if there were to be a denuclearised Europe, what the Soviets mean is a denuclearised Western Europe, which simply builds in the superiority that they possess.

Before the right hon. Gentleman says "No, no", as if he were at the latest Manchester pantomime, coming in, as he does, with a fresh mind to the Labour party's conduct of foreign affairs, surely he should realise that if we had followed the principles that the previous Labour spokesmen laid down with equal dogmatism and certainty that they were right over INF, and failed to deploy Pershing 2 and cruise, we would not have these agreements at all. The right hon. Gentleman would do well to realise that it was the firmness of purpose of the NATO Alliance, led by the Prime Minister, that got us into the good position that we are in today.

Ec (Single Market)


To ask the Secretary of State for Foreign and Commonwealth Affairs what part his Department is playing in furthering progress towards a single market in the European Community.

We shall continue to work for rapid progress in dismantling barriers to trade within Europe and for early adoption of the measures necessary to complete the single European market. The Government are mounting a programme to ensure that British business is fully aware of the opportunities and challenges involved.

While I welcome the constructive approach of Her Majesty's Government, as outlined by my right hon. Friend, does she agree that the ill-judged proposals from the Commission for the harmonisation of VAT, including the abolition of zero-rating, are in no way essential to the completion of the internal market, and that the facts are rather the reverse and the proposals of Lord Cockfield are likely to be an obstacle rather than a help?

There are a lot of doubts, including those expressed in the recent study by the Institute of Fiscal Studies, about the need for a regimented approach of the kind that the Commission has proposed. It was only yesterday that my right hon. Friend the Prime Minister said in the House:

"tax harmonisation in the European Economic Community is not necessary for the completion of the single market in 1992."—[Official Report, 1 March 1988; Vol. 128, c. 816.]
Nor are we the only member state that would have difficulties with Lord Cockfield's proposals. Each country would have its own particular difficulties. We shall study what is being put forward. There is absolutely no question but that any vote concerning taxation is by unanimity, just as the vote in 1977 was supported by the then Labour Government— a vote which led to the decision in the EC on spectacles just a week ago.

Will not the development of the single internal market lead to a lack of control over drug traffickers, terrorists and the spread of rabies? As the Minister knows, Lord Cockfield is determined to harmonise VAT. As he is a Conservative appointee by the Prime Minister, will the Minister say, in order to make the Government's position clear, that they will not renew Lord Cockfield's appointment when it becomes due?

The last point of the hon. Gentleman's question is not for me to answer. As for drugs, terrorism and rabies, the general declaration, as the hon. Gentleman probably knows, as he is a Member of the European Parliament, in articles 13 to 19 of the Single European Act, makes it clear that member states such as Britain and others are not prevented from taking their own measures to combat drugs, terrorism and other problems. At the same time as moving towards a single market, controls at the Community's external frontiers are to be strengthened.

Will my right hon. Friend continue to bear in mind that there are large numbers of hon. Members on both sides of the House who believe that the scope and rates of value added tax in Britain should be settled by the Chancellor of the Exchequer and approved by the House?

Indeed, they will be settled by the Chancellor and will come before the House, but my hon. Friend should note that no such changes to our present system could be made without unanimity. Unanimity is required, and we have no intention of changing our position on zero rates.

How did the Minister respond to the criticisms of the Government's proposals on the internal market by the director general of the CBI?

I believe that the job of the director general of the CBI is different from that of the Government and politicians in general. It is right that if the CBI has a view it should put it forward, but it is not necessarily one that is in the interests of the British people and the European Community.

Will my right hon. Friend ensure that the debate on the internal market does not become sidetracked by repetitive remarks about VAT, terrorism and all the byways of Europe, but concentrates on the essential task of creating a single industrial market place, which would be overwhelmingly in the interests of Britain?

My hon. Friend is absolutely right. Certainly there is a danger that the behaviour of the press, Opposition Members and some others, will mean that the real issues of a single market, which would so benefit this country and the whole of Europe, will be bypassed. We are pressing for progress in key areas such as the liberalisation of capital movements, financial services including insurance, the opening up of public purchasing across the Community, and the improvement of standards. We hope for progress in all those areas in 1988. It is no mistake that in our six-month presidency 48 out of 100 measures taken on in the internal market were achieved.

Is it not clear to the right hon. Lady that there is deep concern that in 1992 the sovereignty of the British people will take a further step backwards, that we shall increasingly come under the control of multinational companies and that Britain will suffer as a result? Is it not also clear that the time has come, despite what right hon. and hon. Members on my Front Bench might say, when we should say that the option is still there for the British people, if they so decide, to come out of the Common Market, if they consider that it is in our interests to do so?

I have often thought that the hon. Gentleman was living in the past. I am now sure. He cannot even keep up to date with his own Front Bench.

Whatever the rights and wrongs of tax harmonisation, does my right hon. Friend agree that if we are to get to 1992, which is in the clear British interest, there has to be a great deal more give and take than has been evident in the exchanges so far?

My hon. Friend is right. I cannot understand why something that is in the interests of this country and, indeed, of the whole of Europe—the high priority which the British Government have given to completing the single market by the end of 1992—is not understood by Opposition Members. The recent speech by the hon. Member for Dagenham (Mr. Gould) about the managed economy was protectionism by yet another name. It may have been published in Madison avenue, but its contents were firmly Bennite.

As Lord Cockfield is so out of touch on VAT with the views of the Government who nominated him, how could he possibly be nominated by the Government for another period in Brussels? Will the right hon. Lady confirm to the House the rumours that she is brushing up her languages and that her flitting has been ordered from Wallasey to the Berlaymont?

I can assure the hon. Gentleman that there is no truth in the rumours that he and others have been peddling in the press for some time. Whatever view any commissioner takes, it is his view and that of the Commission, and not that of the country from which he comes.

Drug Trafficking


To ask the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied with the action taken against drug trafficking in the British dependencies of the Caribbean; and what action the Government are taking to facilitate international co-ordinated action against the drug trade in the Caribbean as a whole.

We have taken the lead in promoting co-operation to combat drug trafficking and strengthen drug law enforcement both in our dependencies and in independent Caribbean states. Next week we will be jointly hosting a Caribbean regional drug law enforcement conference in Barbados to discuss ways of improving co-operation further.

My hon. Friend will be aware that the big money involved in drugs can easily corrupt small countries. Is this not an area where we should co-operate urgently with our American friends?

Yes, indeed. One Caribbean Prime Minister has said to me that he regards drug traffickers as the biggest single threat to the long-term stability of his country. We are working very closely with the Americans; indeed, they are a co-host of the conference next week.

Will the Minister tell the House whether there is any truth in the story in The Times of 27 February that Sir Lynden Pindling, the Prime Minister of the Bahamas, has been receiving millions of dollars from drug-smuggling cartels for laundering? Indeed, it is said that the British Turks and Caicos Islands are also being used as a major drug-trafficking area. Will he tell us whether these stories in The Times are true? Does he agree that if the United States Government did something to cut down on the market for drugs within their own country supplies would not come from the Caribbean or Latin America?

Not for the first time, the hon. Gentleman is behind the game. The whole attitude that he is putting forward, of it being the fault of the consumer countries or of the producer countries, has long since passed. There was an important conference in Vienna as long ago as last June when all countries — producing countries, countries involved in trafficking and consuming countries—agreed to co-ordinate the fight against drugs. Because drugs are a common threat, we have to have a common action plan against them.

Does my hon. Friend agree that, in the light of experience in the Turks and Caicos Islands, it is dangerous to give independence to small dependencies because they can easily come under the influence of the major drug barons without being able to protect themselves?

My hon. Friend is right to point to the fact that the then Chief Minister of the Turks and Caicos was convicted of a drugs offence in the United States. We have since that time strengthened the resources available in that territory against the threat of drug traffickers. I know that my hon. Friend is aware of the announcement that I made just before Christmas about our policy on independence in the remaining dependent territories.

South Africa


To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the South African ambassador to discuss human rights in South Africa.

I last met him on 25 February. My right hon. and learned Friend the Foreign Secretary and I have made plain to the South African Government on numerous occasions our concern at human rights abuses in South Africa.

Would the Minister care to reflect on the fact that if recent events in South Africa, such as the arrest of religious leaders, had been taking place in the Soviet Union, the Conservative Benches would have been filled with hon. Members jumping up in indignation and demanding action? Today we have heard nothing. Will the Minister tell the House whether recent events in South Africa have altered the Government's position in any way? Have the Government moved at all—even a "teeny weeny" bit or even a smidgeon? Is there any change at all?

Whatever the hon. Gentleman may think he sees, I can assure him that all my hon. Friends are at one in condemning the action in South Africa [Interruption.] There is no way that we should take hasty and ill-judged actions on the very serious move by the South African Government last week and their further failure at the weekend to intervene in a very nasty march towards the Parliament building. We are having discussions, and at that I shall leave it for today.

Does my right hon. Friend accept that some of the organisations that had their activities controlled and curtailed—[Interruption.]

Order. It very frequently happens that we hear things in this Chamber with which we may not all agree.

Order. This is disgraceful behaviour. Every hon. Member has a right to speak.

To those who say that the hon. Gentleman is always called, I must reply that I seek to balance opinion in the Chamber. Mr. Carlisle.

At the fifth attempt, may I remind my right hon. Friend that some of the organisations that have had their activities curtailed by the South African Government were nothing more than respectable fronts for those perpetrating violence? Does she agree that Archibishop Tutu, having deliberately got himself arrested, is now advocating illegitimate acts as a form of protest?

All Governments are entitled to protect law and order, but in the Government's view the recent suppression of peaceful political activity is totally wrong. My hon. Friend tried to say that some of the organisations affected by last week's ban advocated violence. I have no proof that any of them adopt violent means. I believe that they have sought to follow the legitimate path of civil protest and peaceful political activity, and that some of those organisations are primarily humanitarian. Furthermore, we are completely opposed to the suppression of protest by Church leaders. I do not believe that Archbishop Tutu was going along to create trouble as my hon. Friend sought to suggest. I have to say to my hon. Friend that, knowing people who were at that church service, I think that the story is very much more serious than he perhaps appreciates.

Leaving aside the contemptible remarks of the hon. Member for Luton, North (Mr. Carlisle) —[Interruption.]

Leaving aside the contemptible remarks of the hon. Member for Luton, North, who prostitutes the House of Commons by his remarks, is the Minister aware that the Opposition accept her sincere intentions regarding South Africa? They are in no doubt whatever, but is she aware that, unhappily, there is a feeling that although the British Government, the Foreign Secretary and herself, condemn the actions of the South African authorities, they are not willing to take any effective measures? Is it not time that the British Government realised that the only way to make the South African Government recognise the strength of feeling in this country is by the use of sanctions? Will the Government therefore recognise that sanctions are essential if we are not to condemn South Africa by words alone?

If the hon. Gentleman thinks that the spending of £45 million for projects through the Southern African Development Co-ordination Conference, the pledge to provide 30 per cent. to the new Commonwealth special fund for Mozambique, the continuing scholarship programme for black South Africans, and other help, are not positive measures to help Southern Africa, he is living in a very peculiar world.

Is my right hon. Friend aware that if she continues to speak out firmly against the abuses of human rights, be the victims unknown blacks in Soweto or leading clerics in Cape Town, she will have the support of the vast majority of the people of this country? Secondly, does she agree that the best way of communicating with the South African Government is through diplomatic channels, which should remain open, and by using every other form of contact, including commercial contact, available to us?

I thank my hon. Friend for what he has said. I made it quite clear in the debate on Monday, if anyone could hear what I was saying in the end, that we shall not close the diplomatic channels, which provide us with the most important information from all sectors of the South African people. We shall certainly continue those contacts far and wide.

In view of the deteriorating situation in South Africa, the gravity of which the Minister appreciates, will the Government consider making mandatory the sanctions to which we have agreed in the United Nations, the Commonwealth and the EEC, and if not, why not?

The hon. Gentleman knows full well that if the measures already taken were made mandatory the front-line states would suffer in a way that they themselves consider they could not bear. Otherwise, why have some of them not taken the sanctions to which they committed themselves in name? They believe that for the economic future of their own people they should not take that action, and I believe that they know more about the situation than does the hon. Gentleman.

In the frequent representations that the Government have so rightly made on this matter, has my right hon. Friend made it clear to the South African Government that if they persist in their lamentable record on human rights they will increase the rate at which private companies disinvest, which cannot be in the interests of the black community?

My hon. Friend is absolutely right. The effect of disinvestment by foreign companies has meant that many shares were picked up cheaply by Afrikaners, who will not continue the social programmes and the education and health programmes which have been helping the black community to advance. We want to see more ways in which the black community is helped by business to advance. I believe that companies with interests in South Africa can help the black community to further not only their experience but their opportunities.



To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom votes at the United Nations Commission on Human Rights with respect to Chile.

Human rights in Chile were first considered by the United Nations Commission on Human Rights in 1975. We have consistently spoken out about human rights abuses. This has been reflected fully in our votes on resolutions or in our explanations of vote.

I thank the Minister for that answer. He will be aware that last year the United States attempted to withdraw the mandate of the special rapporteur of the United Nations Commission on Human Rights. Given that such a withdrawal would almost certainly lead to an intensification of the breaches of human rights, detentions and tortures by the army in Chile, will he give an assurance that the Government's policy will continue and that any future attempt to end the mandate of the special rapporteur will be opposed? Will he say what the result of the withdrawal of the special rapporteur would be on exiles from Chile who are now in Britain? Does he think that such a withdrawal would lead to an increase, or decrease, in the instances of detention and torture?

I do not think that the hon. Gentleman is entirely right in his assessment of the position. We support the work of the special rapporteur in Chile, and we are in favour of a renewal of his mandate. We do, however, have some reservations about consideration of Chile in the UNCHR under the separate agenda item, but that is another and rather technical issue.

Will my hon. Friend mark the 40th anniversary of the signing of the United Nations Charter on Human Rights by writing to all the countries, such as Chile and E1 Salvador, who are offending against that charter? Will he bring to their attention the undertakings that they gave when they signed it 40 years ago?

Chile and other countries are well aware of our views. During the speech that I made in Geneva to the commission — that was during my second visit to the Human Rights Commission—I made our views on these matters very clear.

On a point of order, Mr. Speaker. May I urgently seek your advice, on a matter affecting the honour and integrity of the House?

Order. It may not be for the convenience of the hon. Member for Workington (Mr. Campbell-Savours) to return—

—but for the convenience of the whole House, I shall take it immediately after the statement.

Order. I must tell the hon. Gentleman that I am not prepared to take it now. I ask him to sit down, please.

Scottish Electricity Industry (Privatisation)

3.33 pm

With permission, Mr. Speaker, I shall make a statement about privatisation of the electricity supply industry in Scotland.

The Government's proposals to privatise the electricity supply industry represent a major extension to our successful programme of privatisation, and they will put one of Scotland's most vital industries on to a new and dynamic basis. They will make an important contribution to the continuing regeneration of Scottish industry and to the growth of the private sector in Scotland.

Scotland is fortunate in having an efficient, well-managed and successful electricity industry, which has an impressive diversity of generation sources, including hydro, pumped storage, nuclear and the full range of fossil fuel capacity. In framing proposals, my aim has been to build upon the strengths of the present structure and to correct its weaknesses so that an even more efficient industry, which is sensitive to the requirements of all its customers, can develop. My purpose is to give the industry's customers and its employees a better deal, and to ensure that it strives towards greater efficiency and better standards of service.

I wish to create a structure that is appropriate to the full range of circumstances faced by the industry in Scotland. Prominent among those are the sparsely populated character of much of the area served, the high level of nuclear capacity and the level of surplus generation capacity.

I therefore propose to create two companies based on the present regionally based utilities. This will build on the existing structure of the industry in Scotland and ensure that it maintains its distinctive characteristics. I have considered carefully the attractions of other structures. I do not consider that it would be acceptable to create a single monopoly which would place the ownership and control of the entire Scottish industry in a single set of hands, whether or not involving a regional sub-structure. [Interruption.]

Order. Scottish Members have been waiting for this statement. I ask them to listen to it.

This would ignore the regional diversity of the present industry, which has brought considerable benefits to consumers. A single company would also require heavy regulatory oversight. This option is inconsistent with the Government's overall objective to maximise the competitive potential and commercial pressures within the electricity industry, and it would be contrary to the interests of consumers. The two-company structure will provide competitive pressures within the industry in Scotland. In the short term, there will be potential for competition by comparison—[Laughter.] Mr. Speaker: Order. Mr. Rifkind.

—by which means customers will have a basis for comparing and assessing the prices and service they receive. By helping to ensure effective regulation of prices, this will be an important gain for the consumer. The shareholder will similarly be able to compare the performance of the two companies. A two-company structure will also increase the scope for direct competition for large industrial loads and for marginal exchanges of energy within Scotland.

The Scottish industry has an important competitive role to play in the overall electricity market in Great Britain. There is significant over-capacity in the Scottish system, which can be used to export electricity to England and Wales to the benefit of both buyer and seller. In the longer term, the structure will provide scope for substantial direct competition in generation: the regulatory framework will be designed to encourage independent generators to enter the market on a profitable basis.

I have considered whether the existing boards are candidates for privatisation as independent companies in their present form. My conclusion is that the generating assets in the system are not ideally distributed between the two boards. However, I am confident that two strong, well-balanced and commercially sound companies capable of independent operation can be established by means of some modest reallocation of assets and possibly customers between the existing boards.

I shall therefore invite the boards to consider, in consultation with Government, detailed proposals for achieving this reorganisation to create two companies which, although of different sizes, will be satisfactorily balanced in terms of mix of generating plant, the amount of spare capacity and forecast levels of profitability. The Government will ensure that neither company has an undue competitive advantage in the areas where there is scope for competition between them. We shall also ensure, as a first priority, that security and stability of supply are maintained.

One of the central principles underlying the restructuring will be a sharing of the benefits and costs associated with nuclear assets between the two companies. All of Scotland's electricity consumers have contributed to the creation of these assets, and it is therefore right that they should benefit from that investment in terms of economic baseload of electricity. I propose that the nuclear stations should be owned jointly by the two companies, with each receiving its proportionate share of the benefits and meeting its proportionate share of the total costs. [Interruption.]

Order. We have an important Welsh debate in front of us. Hon. Members will have an opportunity to ask their questions when I call them, rather than from a sedentary position.

The legislation that I propose to introduce will create strong and effective safeguards for the customer on prices. An effective regulatory regime will be established to safeguard the interests of consumers, including those in remote rural communities, and to promote competition. Tariffs will be regulated. The development of the regulatory system will require the close consideration of a wide range of complex issues, and will be the subject of detailed consultation with the industry, An electricity supply code will also be included in legislation updating the laws governing electricity supply and setting out the basic statutory rights of customers to receive a supply. Safety standards will be fully maintained.

I propose that the legislation should also establish new rights for the consumer and provide for a new system of guaranteed standards of service. When a company fails to meet these levels of service, customers will receive a predetermined level of financial compensation from the company. The companies will also be required to provide a range of indicators, which will be published. They will enable comparisons to be drawn between companies, and encourage them to improve their efficiency and standards of service to the benefit of consumers.

The interests of the industry's employees will be carefully considered. Pension obligations will be safeguarded and the legislation will not change the present negotiation and consultation machinery. Employees will also be given attractive opportunities to acquire shares, as will the general public.

My proposals are of major importance to the future of Scotland's economy, and I am today publishing them in a White Paper.

My proposals for privatisation will help to secure even greater efficiency in the supply of electricity in Scotland, thus ensuring the maintenance of stable and competitive prices. They build on what is best in the industry and provide opportunities for further improvements. In this way, a modern competitive private-sector industry will be created in Scotland, with a major stake held by the Scottish public; it will be fully responsive to the needs of customers and employees. Privatisation of electricity offers real benefits and new prospects for the customer, the employee and the Scottish economy.

I do not think that the right hon. Gentleman's statement was well received by the House, because privatisation of electricity is no more than asset-stripping. The Government are living like spendthrifts, selling the future to finance today's expenditure. There is no case for replacing public utilities with a brace of private monopolies. If it is not acceptable to create a single monopoly—the Secretary of State has just said it is not—is he really arguing that if there are two the problems will somehow disappear? A monopoly is a monopoly and "competition by comparison" is nonsense. If the industry is

"efficient, well managed and successful",
what is the case for privatisation? Why should the public believe in a scheme that makes nuclear safety the responsibility of directors whose overriding duty is to maximise profit for their shareholders?

Is it not nonsense to hand the most basic of utilities over to commercial instinct and then to struggle to build in regulatory machinery in an attempt to prevent the profit-driven companies from abusing their power? There is a startling silence in the Secretary of State's statement on safeguards of the independence of these privatised companies. What guarantees can he give that they will be in a position to withstand the attack of a determined predator? What price such guarantees after the Britoil fiasco?

Privatisation makes no sense, but if the Government insist on it the decision to maintain a Northern board at least gives some prospect of preserving the Hydro board's social charter. The Government must produce a workable structure that will protect the interests of the consumer and guarantee services at a fair price to scattered rural communities. The White Paper is strong on prejudice but thin on argument and detail. No one will be impressed by promises of a new and dynamic future selected at random from the Scottish Office's glossary of Toryspeak.

The House will notice the accuracy of the many leaks that the nuclear stations will be jointly owned and operated. What arrangements are being made for the apportionment of debt, and will the restructuring mean large sums being written off by the taxpayer? When will we know about the transfer of population or the redrawing of the boundaries between the boards implied in the statement? Is it true that the Government are considering the transfer of a coal-fired station to the Northern hoard? Does the Secretary of State accept that there are real problems in joint control of nuclear capacity when commercial interests may diverge? What would happen, for example, if there were a disagreement between the boards, or the privatised companies, over pressurised water reactor and advanced gas-cooled reactor technology for future plants?

Guaranteed standards of service must be enforced, and we want to be sure that the consumer watchdog has the power to protect customers on prices and to insist on a humane and balanced approach to personal debt and disconnections. Is the Secretary of State aware that the number of disconnections for non-payment of gas hills in that privatised industry rose by more than a third in the first nine months of 1987? Will the Secretary of State assure us that that will not happen in a privatised electricity industry?

The crisis over the South of Scotland Electricity Board's coalburn graphically underlines the dangers of privatisation with thousands of jobs at risk and the national interest pushed roughly aside in the rush to make shares more attractive to the market. The way in which the Secretary of State has shirked his responsibilities and watched the developing tragedy as though it was a spectator sport does not inspire confidence. His sale of the electricity industry will no doubt produce windfall profits for the Chancellor of the Exchequer, but it represents a real threat to the consumer and to the wider interests of the Scottish economy and we will oppose it to the best of our ability and right to the end.

May I put a point of order that arises directly from the statement. It is not a question—

Order. It is very difficult for me to judge whether it is a point of order as we are at the beginning of the statement. I will hear it when the hon. Gentleman raises his question afterwards.

I will call the hon. Gentleman at the end after the statement, but I cannot interrupt the statement in the middle.

I cannot see how I can raise a point of order arising directly from the statement at the end of the statement rather than at this stage.

If the hon. Gentleman would wait until I call him, I will hear his point of order and judge it then.

I cannot see how I can raise a point of order in a question when my point of order is a point of order for you.

Is the hon. Gentleman alleging that an unparliamentary expression has been used?

Order. Exceptionally — it is quite exceptional—I will call the hon. Gentleman. But I warn him that he will do his colleagues and the House a grave disservice if his point of order is not a genuine one.

Thank you, Mr. Speaker. I am glad that you have confirmed the right of hon. Members to raise a point of order at the appropriate stage.

My point of order is that, as there are only a handful of Conservative Members on the Conservative Benches —in fact, less than 20—would it be right for us and for journalists reporting the proceedings of the House to assume that the absentees are either drunk, lazy or incompetent—

Order. That is an absolute abuse of a point of order. [HON. MEMBERS: "Hear, hear."] It is reprehensible and it merely confirms what I had hoped would not happen.

I was somewhat intrigued by the questions raised by the hon. Member for Glasgow, Garscadden (Mr. Dewar). He began by saying that the Government's proposals do not involve the introduction of meaningful competition, but simply continue a system of monopoly. I suggest that the hon. Member for Garscadden might like to consult his hon. Friend the Member Glasgow, Cathcart (Mr. Maxton) who only last Thursday was quoted in the press as saying:

"If the Government's justification is competition, the only way Scotland can have competition is to have separate boards."
I suggest that the Opposition get their act together. Clearly they have failed to do that so far.

The hon. Member for Garscadden then asked about the safety of nuclear power stations. If he had done his homework, he would be the first to appreciate that the ownership of a nuclear power station has little to do with questions of safety—[HoN. MEMBERS: "Oh."] On the one hand, many power stations in the United States are in private hands and on the other stations like Chernobyl in the Soviet Union are in public hands. Few people who know anything about the nuclear industry would agree with the hon. Member for Garscadden that the question of ownership is relevant in one way or another. Of course the regulatory framework ensuring matters of nuclear safety remains exactly the same irrespective of questions of ownership; the hon. Gentleman should have been aware of that already.

The hon. Member for Garscadden also asked about safeguarding the interests of rural communities. I am very conscious of the fact that one of the great achievements of the Hydro board in the north of Scotland has been to ensure easy access to power for island communities and remote rural communities in its area on a common tariff basis. That is one reason why we said in the White Paper that the successor company will be required to maintain a common tariff throughout its area and that that will protect the interests of those in the island communities in a way that will be warmly welcomed.

The hon. Member for Garscadden suggested that considerable problems would arise from joint control of nuclear power stations. He ought to know that, around the world, particularly in the United States, joint ownership of nuclear power stations has been a common feature. It does not create insuperable problems. Indeed, it does not create any substantial problems of the sort referred to by the hon. Gentleman. That is a factor that he should bear in mind.

I am well aware that, inevitably, the Opposition have a knee-jerk reaction to any proposals for privatisation. That is their philosophical position and they are entitled to it. However, they should realise that the interests of the Scottish economy will be greatly boosted by the creation of important companies of the sort proposed. The interests of the consumers will be greatly assisted by the downward pressure on prices that the structure proposed will achieve. If the hon. Gentleman does not appreciate that, he does not have the best interests of the Scottish economy or Scottish consumers at heart.

Contrary to the dogmatic prejudice against change held by the Labour party, does my right hon. and learned Friend realise that his proposals will be broadly welcomed by Conservative Members and in the country beyond? I congratulate my right hon. and learned Friend on his decision to retain the integrity of the North of Scotland Hydro-electric board, which is valued in the north of Scotland. Can my right hon. and learned Friend say what arrangements will be put in place to ensure across Scotland the best use of low-cost generation and the best opportunity of exporting south of the border? Will they be in the legislation or will they be left, contractually, to the companies after privatisation?

I thank my right hon. Friend for his welcome for the proposals I have outlined today. It will be in the best interests of both the companies concerned to maximise the use of the capacity available. There is plenty of evidence from elsewhere in the world where companies operate together to ensure the maximum use of capacity in terms of the interests of their consumers. I have no doubt that both boards will be responding in a constructive and responsible way to ensure that the opportunities that exist for export of Scottish capacity to markets south of the border and the provision of cheap, secure supplies of electricity to consumers throughout Scotland will be not only safeguarded but enhanced as a result of the proposals.

Will the Secretary of State reflect on the fact that what he has produced is a two-headed pantomime horse over which we put a nuclear veil? Does he accept that joint ownership of nuclear power stations is really joint ownership of baseload capacity? How does that come under the argument of competition? Can he tell us whether any of the power stations in Fife are likely to be transferred to the Hydro board and who will own the gas-fired station at Peterhead?

The hon. Gentleman has not said whether he would have preferred the creation of a single monopoly in Scotland.

The hon. Gentleman may have his views about the principle of privatisation, but he should appreciate that, if privatisation is to take place, we will be interested in hearing his views as to the form of privatisation—[HoN. MEMBERS: "Answer the question."] I will answer the question. [Interruption.] Mr. Speaker: Order. Give the Secretary of State a chance.

Scottish Opposition Members were quoted last Thursday as saying that they believe that there should be a two-company structure if privatisation takes place. The hon. Member for Cathcart, speaking on behalf of the Labour party, specifically said that.

The hon. Member for Dunfermline, West (Mr. Douglas) began his question by referring to competition and the structure of the proposed industry. On the second part of the hon. Gentleman's question, the issue concerning an exchange of assets is, as my statement clearly said, a matter that is being discussed with both the electricity boards. Once we have had the benefit of their advice, we will be able to tell the hon. Gentleman and others what is proposed. The hon. Gentleman must appreciate that this is not a matter on which we should like to reach a conclusion without a most detailed discussion with both boards and those who are interested in it.

I give the warmest possible welcome to my right hon. and learned Friend's statement, since it concentrates on the future economy of Scotland and the interests of industrial and domestic consumers. I have total confidence in the nuclear generation plant's being run by private industry. Is there within my right hon. and learned Friend's plan a long-term future for the British Nuclear Fuels plc plant at Chapelcross to generate electricity?

I thank my hon. Friend for his warm welcome, which I believe will be replicated by many people throughout Scotland. In the past, the precise role for Chapelcross had to be discussed with the South of Scotland Electricity Board. Any needs of the future South company with regard to Chapelcross will obviously be a matter for that company to discuss. I assure my hon. Friend that we shall keep a close interest in this matter.

Do these public utilities operate efficiently in respect of the provision of services and prices? Can the right hon. and learned Gentleman give a comparator, other than the boards themselves, against which we can measure the new boards' effectiveness, efficiency and prices?

The present joint generating agreement has certain advantages and disadvantages. It has advantages in that it allows, through the merit order system, the best utilisation of capacity. It has the disadvantage that it conceals almost entirely the relative efficiency of both boards, because they are required to share costs according to a predetermined formula and not according to the basis on which they run their establishments. Therefore, there are major problems as well as major disadvantages in the present joint generating agreement. The proposals which I have outlined will substantially remove that difficulty, because there will be a basis of transparency that will enable the public to be safeguarded with regard to costs and tariffs.

Does my right hon. and learned Friend agree that his announcement represents a major opportunity for employees, customers and financial institutions in Scotland and elsewhere to take a direct stake in a major Scottish industry, which will have the great advantage of now being free from the inevitable constraints of Treasury control?

Further to the point made by my right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith), can my right hon. and learned Friend give a categoric assurance to those in industry, such as the CBI and the Scottish Council, who have expressed concern that the end of the present integrated generation system might result in increased costs? Does my right hon. and learned Friend agree that, if he can give that assurance, his statement should be unequivocally welcomed by Scottish consumers?

I can give that assurance. I am happy to say that I believe that consumers, especially industrial consumers, will benefit from the kind of structure proposed. As to the earlier part of my hon. Friend's question, it is significant that the Labour party appears to prefer a situation in which the investment requirements of the Scottish electricity industry are decided by Labour or Conservative Governments rather than by the Scottish industry.

Will the Secretary of State acknowledge that there is an element of farce in suggesting that the disposal of a public utility will be the principal engine of growth in the Scottish economy? Does the right hon. and learned Gentleman agree that there is an element of farce also in introducing the concept of competition by comparison? We oppose privatisation but of course we welcome— [Laughter.] As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, if there has to be privatisation, we welcome it being done on the basis of two boards. What safeguards will exist to ensure that these two boards are not prey to companies outside Scotland moving in and buying them up? Will the right hon. and learned Gentleman give an assurance that the social contract presently in the Hydro board's provisions and charter will apply not only to the Hydro board but to the SSEB in the new set-up?

I noted with some amusement that the hon. Gentleman said that his party was opposed to the privatisation of the electricity industry. Yet only a few days ago, he was quoted as saying that the Liberals were "not wildly keen" on privatising electricity.

Yes, there was a "but". The quotation from the hon. Gentleman continued by saying:

"but if it was going to happen, certain conditions were absolutely essential to its success."
That appears to be a traditional Liberal approach. We wait with interest to hear the textual analysis and to see the precise difference between "not wildly keen" and "opposed".

The social contract has been a feature not of the SSEB, but of the statutory basis on which the Hydro board operates. It was intended to ensure that the distribution system extends to the remote rural and island communities. As the hon. Gentleman will know, that has largely been completed, but there is another major factor —the maintenance of common tariffs in the island and remote rural communities. The hon. Gentleman and his colleagues will be pleased to see that the White Paper states specifically that the successor to the Hydro board will be required to maintain common tariffs throughout its area.

May I warmly congratulate my right hon. and learned Friend on returning to the Scottish people, for the first time in our programme of denationalisation, the assets of Scotland, which go solely to the workers of Scotland and benefit consumers in Scotland, because they can sell the product to consumers in England? If he had proposed a monopoly, would not the Opposition have complained that it was a monopoly? When he has proposed competing boards, they now complain that those boards are competing. Is not the Opposition, both from the Liberals and the Labour party, a sign that they are horrified that Scotland is having its assets given back to its people to the benefit of industry in Scotland?

I thank my hon. and learned Friend. [Interruption.] Mr. Speaker: Order. I appeal to the House to settle down and listen to the answers, in the interests of Welsh Members whose debate is to follow. It is rare to have a Welsh day. I shall endeavour to call those hon. Members who are rising, within the time scale, but I ask them to put only one question each, bearing in mind that there will be subsequent opportunities to ask questions on this matter.

I thank my hon. and learned Friend for his question. As the House will be aware, in previous examples of privatisation, preference has been given to employees and consumers of those industries with regard to the acquisition of shares. All the employees and consumers of both Scottish boards reside in Scotland, so it will be a unique opportunity for those living in Scotland to acquire a significant proportion of the shares in the electricity industry. My hon. and learned Friend is absolutely entitled to draw those conclusions.

Is the Secretary of State aware that much of what he has said this afternoon was positively farcical? The business of competition between the two boards does not bear serious examination. Is not the Secretary of State creating two private monopolies which will be able to operate with scant regard for the interests of consumers, not to mention the overall Scottish interest, as we are already seeing with the outrageous behaviour of the SSEB in respect of coal purchases? When will he do something about that, instead of standing back and allowing the Scottish coal industry to be destroyed?

There will indeed be opportunities, particularly for industry, to acquire power from either of the two companies. There will be access to the transmission of both companies, so bulk purchasers of electricity will have a choice that has not been available in the past. In addition, we are establishing a structure that will exist for many years. The right hon. Gentleman may approve of the creation of monopolies, but neither I, the Government nor the vast majority of people in Scotland approve of that.

Do not these proposals represent a double mugging of the Scottish electricity consumer? Has not the strength of those companies — their asset base and capacity strength —been paid for by Scottish consumers through their electricity bills? Why, therefore, should the proceeds from a sale go to the Treasury rather than being returned to Scottish consumers? Furthermore, is it not inevitable that, in the private sector, electricity bills will rise because the two companies are saying that they want to double their rate of return? Is not privatisation just another word for higher electricity bills?

It is interesting to note that the hon. Gentleman had not thought it appropriate to agree with the structure proposed by the Government and has therefore shown himself to be entirely out of touch with opinion in the north-east of Scotland. It is significant that he appears to be uninterested in the views of his constituents and those who represent the interests of the north of Scotland.

The idea that a single state monopoly or a single private monopoly is in the interests of consumers is not a view with which those who have any knowledge of the real world would normally associate themselves.

Is my right hon. and learned Friend aware that both the Scottish boards and Scottish industry have sent detailed submissions to the Select Committee on Energy welcoming privatisation because the competition will benefit the Scottish economy and lead to a better deal for the electricity consumer? Is it not typical of Opposition Members to show yet again that they are not interested in representing the interests of the electorate whom they are supposed to represent and the interests of the consumer and the Scottish economy?

I am grateful to my hon. Friend, who has more knowledge of the electricity industry, through his work on the Select Committee on Energy, than most Opposition Members. He is absolutely right in reminding Opposition Members that the electricity industry, in the shape of both the SSEB and the North of Scotland Hydro-electric board, has expressed its view that privatisation is entirely in the interests of the industry and the consumer. Opposition Members may not like that, but they will have to appreciate it.

Since, in his preamble, the Secretary of State talked about the regeneration of Scottish industry, does he think that it is a good start that we should wipe out the Scottish coal industry as a consequence and lose thousands of jobs in Scotland? The Secretary of State was cagey when we mentioned the debt. How will this proposal be implemented so far as the debt is concerned? He is aware that the SSEB owes £1·8 billion. He knows that it has £1·1 billion of foreign debt as a consequence of Torness and that it pays £240 million per year in interest. How do the Government propose to tackle that? Do they propose to wipe off the debt, as the Treasury will get the filthy lucre involved in the privatisation?

The hon. Gentleman will know that, as in previous privatisations, those matters are dealt with at a later stage; therefore, I cannot give a detailed response on that matter at the moment.

With regard to the earlier part of his question, the hon. Gentleman will appreciate that, because of the present legal proceedings, it is difficult for any of us to comment in detail on the matter, but I understand his reasonable concern about the future of deep-mined pits in Scotland as a result of the present issues. It is perhaps unwise of him to refer to the death of the Scottish coal industry, because about half the coal produced at present comes from opencast mines in Scotland, which have grown substantially over the past 10 years.

When the Secretary of State said at the start of his statement that he had been seriously considering the privatisation of the electricity industry in Scotland, why does he not be more frank with the House? Why does he not tell us that he considered nothing and that he comes along, like the lapdog he is, to do what he is told?

There is one significant omission from his statement in comparison with the statement made by his right hon. Friend the Secretary of State for Energy, who made a statement announcing tariff increases before the privatisation statement itself. When will the SSEB announce its tariff increases? Contrary to what the hon. Member for Eastwood (Mr. Stewart) says, does the Secretary of State realise that there is widespread anxiety throughout Scottish industry that the SSEB tariff increase will be of the order of the CEGB tariff increase to fatten up the industry for privatisation?

The hon. Gentleman should do his homework first. Then he would appreciate that the announcements made about tariff increases south of the border related to the need to attract the necessary level of investment because of the gross under-capacity of the electricity industry. I presume that the hon. Gentleman is aware that under-capacity is not a problem north of the border, where we have considerable over-capacity in the system.

If the hon. Gentleman is interested in a way of dealing with the requirements of the industry while recognising the Scottish dimension, he should appreciate that there are three specific Scottish characteristics of the industry, all of which have been recognised and safeguarded by my statement. The first is vertical integration, which exists only in Scotland and which is maintained under these proposals. The second is the high proportion of nuclear power in Scotland, unlike south of the border, which is also safeguarded by the joint ownership proposals. The third is the great over-capacity, which is more than safeguarded by the exciting opportunities that exist for exports south of the border.

Will the successor company of the SSEB have built into it a social clause along the lines of that of the North of Scotland Hydro-electric board? Can the Secretary of State give an absolute guarantee that those successor companies will remain, post-privatisation, in Scottish hands?

I would have been somewhat appreciative if the hon. Gentleman had recognised that today's announcement coincides with what I believe are the interests of his constituents. He, like his Liberal friend, appears to like to take that for granted and not to comment on that matter.

Indeed. The hon. Gentleman is the first spokesman for his party to speak, and it might have been relevant to have some reference to that fact. The particular points that he raised on the social clause have never applied to the SSEB. As I said earlier, the main requirement with regard to the Hydro board is the preservation of a common tariff which has been safeguarded by the terms of the White Paper and by the preservation of the Hydro board as a separate company post-privatisation. That is what the Hydro board said was necessary to protect the interests of those who live in the hon. Gentleman's constituency and similar areas.

Have not Opposition Members got their priorities wholly wrong? Scottish electricity generation does not exist to provide an easy, safe, uncompetitive, overpriced market for Scottish coal; it exists to provide low-cost electricity to Scottish consumers, and that is what the priority should be.

That is indeed the case, and why the electricity industry as a whole believes that privatisation will be in the interests of its consumers. I agree with that view.

While I am opposed to the principle of privatisation, I welcome the Government's decision to privatise the two existing companies separately. As Hunterston A nuclear power station is bound to be decommissioned soon, who will finance it — the shareholders of the new privatised company or the Treasury?

First, I thank the hon. Gentleman for his welcome of the two-company structure if privatisation were to take place. No decision has been taken on whether Hunterston A should be decommissioned and, if so, when. Clearly, these matters will have to be determined by the successor private company whenever a decision is reached that the decommissioning of Hunterston A is appropriate.

How does the Secretary of State propose to ensure that the ownership of the two boards remains within either Scotland or the United Kingdom? What is to stop the boards in future selling their shareholding to an Arthur Daley or Eddie Clockerty of the electricity industry?

The question whether there should be specific requirements to prevent foreign ownership or other changes in ownership will be addressed in clue course. There are no proposals on that for Scotland or England and Wales in the White Paper, but the Government will consider these matters in due course.

Since the Tory party was rejected by more than three quarters of the people of Scotland, what possible mandate does the Secretary of State have to sell two great Scottish electricity companies, which were created by the people of Scotland for the people of Scotland and which are the property of the people of Scotland? What right does he have to sell them to some rich friends of the Tory party whose main motivation will be to line their pockets, rather than public service and public safety which will best be ensured when a future Labour Government restore these companies to public ownership?

If the hon. Gentleman is genuinely interested in Scottish control of Scottish industry, I am sure that he will be in the forefront of encouraging his constituents, who are either consumers or employees, to buy shares in the Scottish electricity industry. That will help to achieve the objective which he so rightly seeks.

Is my right hon. and learned Friend convinced by the mindless reaction of Opposition Members this afternoon that he certainly has this absolutely right and that he will deliver to the consumers of electricity in Scotland the best possible deal for the future? Can he assure the House in the interests of industry in Scotland and jobs in industry throughout Scotland that he will liberate the electricity industry to provide its energy from whatever source provides it best and most cheaply?

My hon. Friend is right to assume that the fact that we are subjected to an enormous volume but little content from Opposition Members speaks louder than words. Naturally, the SSEB has a statutory duty to put the interests of its consumers before other considerations, and that factor must be borne in mind.

Is the Secretary of State aware that his statement is an act of industrial sabotage of the Scottish economy? Is he further aware that nobody believes either the Government or the SSEB when they suggest that the argument over coalburn has nothing to do with privatisation? How can it be right to write off thousands of jobs and thousands of millions of pounds of investment in the Scottish coal industry for what at best is a marginal, temporary, short-term economic gain? Does the fact that these matters are now in the courts mean that the Secretary of State has abdicated any responsibility for Scotland's industrial base?

Mr. Rifkind: It means that, even with two nationalised industries, it is at times impossible for them to agree.

Albeit that the Secretary of State thinks that he has his Gatling gun, could he return to the unanswered question that was first put by my hon. Friend the Member for Dunfermline, West (Mr. Douglas), which was, given that there will be joint ownership of the baseload nuclear power stations, where will the competition come from that supposedly will put a downward pressure on prices?

It will come from several places. First, it will come from the opportunity for industrial consumers to consider placing their requirements with either of the successor companies. Secondly, it will be provided in the long-term access for new generators to come on to the market. Thirdly, it will be provided by a basis by which the regulator, who will have to protect consumers' interests on tariffs, can compare the relative efficiency of the two companies.

If we have a single monopoly structure in Scotland, given that Scotland is the only part of Britain with vertical integration, there is no way in which the regulator could check the claims of the company in question and thereby give full protection to consumers. If the hon. Gentleman and his hon. Friends are interested in the protection of consumers, there is no doubt that yardstick comparison is an important, indeed essential, requirement to ensure that tariffs are maintained at the lowest possible level for the purposes of both industrial and domestic consumers.

Is it not the case that the governor-general's statement, backed up by his entourage from the Institute of Directors and the Confederation of British Industry, amounts to one thing —legalised robbery with violence against the people of Scotland? The electricity supply industry belongs to the people of Scotland. It was built up by their efforts. It is wrong to suggest that to privatise it is to create a wonderful new world for the people of Scotland. It is a wonderful new world for the big business interests behind the Tory party, and that is clear.

Will the governor-general accept that the slogan outside the power stations will be, "Capitalism rules OK"? That may be OK for his friends, but the struggle will continue and Scottish workers will fight back. The Labour party has to carry out its historical role to organise the working classes because we are ready, willing and able to challenge any statement such as this.

As we are providing a unique opportunity for Scottish employees of the electricity industry and for Scottish consumers of electricity, which covers the whole of the Scottish population, to acquire shares in the ownership of this industry, the Government are entitled to say that our policy can be summed up by the phrase, "Power to the people".

Given my right hon. and learned Friend's emphasis of the fact that the Scottish industry has considerable over-capacity, does not his statement have considerable significance for consumers in England and Wales, as well as for consumers in Scotland? Is he aware that those of us in England who are keen to see greater competition, and who believe that that is essential in the provision of electricity, will heartily endorse all that he has said today?

I am grateful to my hon. Friend. Serious consideration is being given to strengthening the interconnector between Scotland and England, because that would double the export potential of electricity from the Scottish boards to the markets south of the border. That is entirely in the interests not only of the electricity industry but of consumers in Scotland. It is a United Kingdom electricity industry, and the requirements of the public as a whole are entirely safeguarded by our proposals.

Does the Secretary of State recognise that he is bringing the unitary state of this Parliament into disrepute by having here this assortment of English Tory Back Benchers, no fewer than four of whom have put questions about the privatisation of Scottish electricity? If they are so interested in Scottish affairs, why are they not serving on the Scottish Standing Committee? Will he also recognise that the Scottish consumers do not want this privatisation?

I am interested that the hon. Lady and her hon. Friends do not apply the same criteria to Scottish Labour Members serving on the community charge Bill.

Earlier, the Secretary of State expressed his confidence that the nuclear capacity of the two electricity boards could safely be placed in private sector hands. Is he not aware of a report by the European Parliament committee on energy, which looked into this very matter in great detail and which concluded that the running of nuclear installations and the management of nuclear radioactive wastes must be kept in the public sector because the private sector cannot be trusted to put the interests of safety above its own interest of private profit?

Of course, there has to be a regulatory body answerable to Government to ensure that standards of nuclear safety are fully safeguarded — that goes without saying. However, the hon. Gentleman does not seem to appreciate that the ownership of a nuclear power station will not, in itself, determine questions of safety, as long as the highest standards of regulatory control are maintained. As the Government have every intention of doing that, he should be reassured.

Will the Secretary of State recognise that it is arrant nonsense for him and his colleagues to claim that there is widespread support for this measure in Scotland? Is it not a pathetic sign of what little support he has that he has to rely on the support of hon. Members with no direct interest in Scotland, some of whom did not even have the interest to be in the House when the Secretary of State made his statement? Is not the truth that there are so few supporters in Scotland for this case that they could easily have fitted on to the Benches behind the Secretary of State? Had it not been for the intervention of my hon. Friend the Member for Bradford, West (Mr. Madden), which sent the Tory Whips scuttling to the Tea Room, one could have fitted almost the whole population of Scotland on to the Benches behind the Secretary of State.

Despite promptings from my hon. Friends the Members for Glasgow, Garscadden (Mr. Dewar) and for Edinburgh, Central (Mr. Darling), the Secretary of State has not admitted that there will he no guarantee to defend the independence, economic autonomy and Scottishness of these boards. Will the Secretary of State give us a guarantee that, unlike the "Kuwaiti Kid", he is prepared to defend the Scottish industry over the coming years?