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Commons Chamber

Volume 167: debated on Wednesday 14 February 1990

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House Of Commons

Wednesday 14 February 1990

The House met at half-past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Oral Answers To Questions

Trade And Industry

West Germany

1.

To ask the Secretary of State for Trade and Industry what is the current balance of trade in manufactured goods with West Germany.

The Parliamentary Under-Secretary of State for Corporate Affairs
(Mr. John Redwood)

The deficit with Germany in 1989 was £9·6 billion on the manufactured trade account.

As the deficit with West Germany has grown by over £6 billion since 1979 and now accounts for about half the total deficit, will the Minister acknowledge that he has a problem? Does he recognise that it is his responsibility and will he do something about it? When he acts to close the gap, will he develop an industrial strategy based on British rather than foreign industry?

Many good things are happening. The Labour party never looks at the invisible account, yet we export services and earn a great deal of money from investments abroad. Do Labour Members realise that we earn more from invisible credits than from total exports of manufactured goods? Do they realise that exports were up by 15 per cent. in the last quarter of 1989 compared with 1988? Do they agree that the strategy that we have developed of a firm approach to fiscal policy and allowing enterprise to get on with the job is working? Have Labour Members seen the latest export surveys which show that exports are going well? Do they realise that their strategy would cause considerable distress?

Will the Minister at least accept that trade with West Germany has become a trade disaster area? The deficit is twice as large as the one with Japan, which is now a much more open market. Would it not do more good for British trade if, instead of spending a great deal of money on posters telling us that the internal market has arrived, the Minister considered the many examples that have been sent to him of how the Germans restrict imports for wholly bogus and non-tariff reasons?

The Government are dedicated to completing the 1992 programme. We are especially keen to remove barriers to trade in invisibles to complement the good work being done in the manufacturing sector to remove such barriers. If my hon. Friend wishes to send more details of restraints on trade that are against the EEC treaty and against Government policy, I and my right hon. Friend will pursue the matter with vigour.

New York Speech

2.

To ask the Secretary of State for Trade and Industry if he will place a copy of his recent New York speech in the Library.

I have already done so.

In the New York speech the Secretary of State acknowledged that every trading nation had something to gain from lifting trade barriers. However, on textiles he seemed to leave the initiative in the hands of the American negotiators in terms of the current GATT round. It would be interesting to hear the American view of the current textiles position in the GATT round. Will the Secretary of State give an undertaking that he will not begin to dismantle the framework of the multi-fibre arrangement until the United Kingdom textiles industry obtains copper-bottomed guarantees of new export opportunities to new trading countries?

I am grateful for the hon. Gentleman's interest in my speech. I note his liberal attitude to trade liberalisation. The position of the United States Administration is in one respect similar to that of the European Community. It is that the trade in textiles should in due course be returned to the GATT and that a considerable transitional period will be necessary. There is most dispute about what the interim regime should he. The Americans want global quotas, a solution which is unattractive to the other trading partners. The negotiations will be about a system of safeguards and the length of the transitional period. There is agreement that in due course, after a proper transitional period, textiles should return to a more free trading atmosphere.

Was not one theme of my right hon. Friend's excellent speech the opportunities for world trade and prosperity that come from the single market, the Uruguay round and the changes in eastern Europe? Was not a second theme of his speech the dangers of protectionism? Does he agree that that is a great danger to world trade and prosperity from whichever side of the Atlantic it comes?

Both points are correct, but I sought to make a third point—that freedom to invest freely in those countries is an important way for both partners in the transaction to prosper. I criticised the United States tendency to restrict inward investment, but I am sure that the Administration there will ensure that those tendencies are resisted.

In that wide-ranging speech in New York, why did not the Secretary of State explain that Britain has the worst inflation, the highest interest rates and one of the worst trade deficits of our major competitors? Will he now confirm not only that mortgage rises have put 400,000 families into mortgage arrears of two months or more, but that the latest figures from the Lord Chancellor show that there has been a 46 per cent. increase in small business liquidations over the last quarter? As Secretary of State for Industry, will he press the Chancellor for a Budget for industry that will help to bring interest rates down?

There are two reasons why I did not make those points in America. First, it is not my habit to knock my country from abroad. Secondly, the particular copy with which the hon. Gentleman suggests I should knock it is inaccurate and untrue. The hon. Gentleman is always in the business of measuring the gross, not the net. If he examines the net survival of small businesses, he will find that it is very much better than under the Labour Government. If he also examines the total of the mortgage sector, he will find the same.

Does my right hon. Friend agree that one problem may be that, because of the two Germanys' headlong rush to merge, the deutschmark will weaken, and Germany will become even more competitive than at present with its £46 billion trade balance? Does my right hon. Friend have anything in mind to make sure that our manufacturers are not more disadvantaged than they are already?

I think that the deutschmark has strengthened on the latest news, although I am not in the business of forecasting what will happen in view of the events described by my hon. Friend. Policy on eastern Europe is not particularly relevant to the value of the pound in relation to the deutschmark. I am confident that British exports will maintain their good record and their good showing whatever happens in East Germany.

Eastern Europe

3.

To ask the Secretary of State for Trade and Industry if he will make a statement on the United Kingdom's balance of trade in manufactures in 1989 with (a) the USSR, (b) East Germany, (c) Poland, (d) Czechoslovakia and (e) Romania.

The hon. Lady will be delighted to know that in 1989 the United Kingdom had a surplus of more than £100 million with the five countries mentioned in her question, comprising a good surplus with the USSR and deficits with the other four.

Will the Minister confirm that the Select Committee on Trade and Industry said that Britain was lagging behind the countries of western Europe in its trade with eastern Europe because at that time we were importing more than we were exporting, reflecting the mess that the Government have made of our balance of payments overall? Is it not time that the Government took action to implement the Select Committee's recommendations on trade with eastern Europe, given the current massive and important changes that are taking place there?

The hon. Lady has asked the wrong question. She obviously wanted to get a different answer. Had she asked about Hungary and Bulgaria, she would have heard about surpluses. I have just arrived back from Czechoslovakia where I led a delegation of eight British business men to encourage more British trade. The Government will take all reasonable steps to encourage British businesses to take advantage of the many new opportunities in eastern Europe. I urge more British business men to visit eastern Europe to follow up the advances that many are making in those countries.

The whole House will praise my hon. Friend for the efforts that he has begun to put into trade with eastern Europe. In the process of expanding our connections, does the Department have any mechanism or unit for ensuring more secondment of people from the academic and industrial sectors here who can go over there to encourage those countries to look towards us and our processes, especially in distribution and marketing?

Yes, 25 people in the Department of Trade and Industry specialise in eastern Europe trade matters. Together with those in the Foreign Office, they are working on the distribution of know-how moneys from our know-how funds to strengthen such links for the reason that my hon. Friend so rightly described.

Stock Exchange

4.

To ask the Secretary of State for Trade and Industry when he next plans to meet the chairman of the stock exchange; and what will be discussed.

Ministers meet the chairman of the stock exchange whenever appropriate to discuss topics of mutual interest.

Will the Secretary of State discuss junk bonds with the chairman? The Parliamentary Under-Secretary of State for Corporate Affairs said last November that junkiness was in the eye of the beholder, but does not the Secretary of State know that the chairman of the Monopolies and Mergers Commission has expressed concern about the matter and hinted in the clearest possible terms that he would like it to be referred to him for investigation? Will the Secretary of State agree to such an investigation? If he does not, the public will begin to think that the Government are prepared to condone, if not encourage, the sort of tacky behaviour that we see on the other side of the Atlantic.

No, Sir. I do not believe that issues of corporate financing are ones for the Monopolies and Mergers Commission. They may be for the stock exchange, or even the Bank of England, to consider, but not the MMC. Only if there were a merger involving a highly leveraged bid, together with other factors that affected the national interest, would my policy be to refer the matter to the MMC. I agree with my hon. Friend the Minister that junkiness is in the eye of the beholder.

When my right hon. Friend meets the chairman of the stock exchange, will he urge him to make faster progress towards the so-called paperless transactions for share dealings as it is clear that the interests of the small investor would be greatly assisted if progress were more rapid?

The stock exchange is making pretty fast progress with the Taurus system. When we see the full details, we shall ensure that it contains no conditions that will interfere with the interests of the smaller investor. I agree with my hon. Friend that the sooner we get the system up and running, the better.

Defence Contractors

5.

To ask the Secretary of State for Trade and Industry if he has anything to add to his answer to the hon. Member for Denton and Reddish, of 17 January 1990, Official Report, columns 280–81 about encouraging defence contractors to look for alternative work.

Yet again, no, Sir. As I stated on the two previous occasions when the hon. Gentleman raised this point, it is my firm view that such decisions are best left to those best equipped to take them—business men.

I am glad that the Minister remembers his outbursts on the two previous occasions. Has he had the chance to read the speech that the Foreign Secretary made two days later, when he said that turning swords into ploughshares was a cliché, but that turning tanks into tractors was the politics that the Government were involved in? Is the Foreign Secretary more interested in protecting British industry and converting our arms industry into peaceful use than are Ministers at the Department of Trade and Industry? When will the Minister take notice of the more sensible members of the Government?

I am becoming increasingly concerned for the hon. Gentleman, who has posed exactly the same question on three successive occasions. There are two kind explanations for his bizarre behaviour: first, that he has run out of ideas and the Labour party is intellectually bankrupt, which I know to be true; and, secondly, that he is trying to divert attention from Labour's losing policies—the roof and window tax and the payroll tax. The plain truth is that companies such as British Aerospace and Marconi need no advice from a conversion agency about how to diversify or find new markets.

Is my hon. Friend aware of the efforts being made by British Aerospace, through its involvement in Airbus Industrie, to diversify? Is he further aware of the damage being done to that effort by the continuing luddite strike by the engineering unions, supported by Opposition Members? Will he join me in condemning those unions for their inability to agree to a good deal offered by the company?

As I would expect from my hon. Friend, he has made a powerful point. British Aerospace is participating in the Airbus, which is an extremely successful product. The future of Airbus Industrie is threatened by the strikes of the engineering unions. Those strikes are being supported by the Labour party, which is a discreditable activity and one calculated to damage British industry.

Tobacco Sales

6.

To ask the Secretary of State for Trade and Industry what information he has on the number of retail shops licensed to sell tobacco.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs
(Mr. Eric Forth)

It is not necessary to be licensed to sell tobacco.

Is the Minister aware that the Prime Minister has given her full support to the Parents against Tobacco campaign? It is estimated that at least 50 per cent. of retailers are prepared to sell to children under age, and that as many as 500,000 under-age children are regular smokers of tobacco. What will he do to put pressure on local councils to take up the campaign when they are granting planning permission, or to put pressure on newsagents to refuse to sell tobacco to children under the age of 16? Will he support his Prime Minister by putting pressure on them?

The hon. Gentleman has answered his own question. There is an adequate law to protect children against those who seek to sell tobacco to them. The problem is one of enforcement. It is for all hon. Members to take up where appropriate with local authorities and the police the effective enforcement of the existing law, and I am sure that they will, aided by the excellent campaign.

Does the Minister accept the Department of Health's policy to reduce the consumption of tobacco?

Footwear Imports

7.

To ask the Secretary of State for Trade and Industry what is his policy on the future of voluntary restraint agreements on footwear imports from eastern European countries.

In the light of developments in the EC's relations with Poland, the European Commission has suspended the voluntary restraint arrangement with Poland on leather footwear imports for one year from 1 January 1990. The position will be reviewed before the end of the year.

With regard to Czechoslovakia and Romania, we have asked the European Commission to maintain the voluntary restraint on leather footwear from those countries during 1990. The Commission is considering our request. The United Kingdom does not have voluntary restraint arrangements on footwear with the other east European countries.

Is my right hon. Friend aware that any increase in imports of footwear will considerably increase the problems of the British industry? Therefore, will he support the European Commission's renewed initiative to make voluntary restraint arrangements with South Korea and Taiwan? Will he also work towards the reduction or removal of tariff and non-tariff barriers to enable British exporters to sell much more footwear abroad?

My hon. Friend will agree that one thing that we can do to help the Poles in their gallant efforts to improve their economy and their present parlous position is to increase the opportunities for them to trade. It would be churlish to deny them the things that they need most, for example, trading opportunities. My hon. Friend may know that the Community has not yet made up its mind what to do about Korea and Taiwan. The member states of the Community are split 50–50 on whether the Commisson should take action. I hope that my hon. Friend will be content with that answer.

Is the Secretary of State aware that in the past: 10 years 45,000 jobs have been lost in the British footwear industry—35 per cent. of the entire employment in that industry—and that two jobs are being lost every hour? Last week in my constituency, Glovese, the leading manufacturers of ladies' boots, closed because of the level of imports. Will he give an undertaking to the House that he will not alter any arrangements without full consultation with the manufacturers and the trade unions?

I cannot give such an undertaking. But employment in Britain is running at 26·5 million, the highest ever, and within that remarkable figure it is inevitable that employment will be gained in some industries and lost in others. The flexible work force in the face of fast-changing trading and industrial conditions is one of the virtues that the hon. Gentleman should be preaching to his constituency because he can see with his own eyes the extraordinary effect on employment that such latitude can have.

I congratulate my right hon. Friend on the Government's policy on the provision of training and aid for eastern Europe, in that they are pointing out to all the advantages of privatisation and of joint ventures, and are not engaging in wasteful schemes involving inter-governmental aid.

I am grateful to my hon. Friend and agree with him. I add to his list private investment in eastern European countries. My hon. Friend the Under-Secretary of State for Corporate Affairs recently returned from Czechoslovakia, and there have been other missions. More are planned for the future, when we shall take British business men to eastern European countries to show them the opportunities for investment there. That is the best way of helping those countries to re-establish their economies.

Manufactured Imports

8.

To ask the Secretary of State for Trade and Industry what has been the growth in imports of manufactured goods from the European Community since 1979.

Imports of manufactured goods from the European Community have risen from £16 billion in 1979 to £52·5 billion in 1989. Exports of manufactured goods to the European Community have virtually trebled over the same period.

Does the Minister agree that those figures are disgraceful? Will the effect of the single European market be to worsen them? Is not this the wrong time to dismantle the functions of the Department of Trade and Industry? Would not that be idiotic? Does the Minister agree that wherever the Secretary of State for Trade and Industry goes, acts of madness follow?

No, I do not agree with that. Nor do I agree that the figures are disgraceful. The figures for exports are good, and we should be proud of the export efforts of a number of English manufacturers. The hon. Gentleman addresses only a quarter of the problem. He refers to visible trade but not to invisible trade, and to imports but not to exports. One must consider the total trade picture. It is about time the Opposition started realising that our trade position has been improving for five months. There is every sign in the latest surveys that exports will continue to improve this year.

Will not the development of Japanese-owned car assembly plants in this country do much to redress our trade deficit with the European Community over the next few years?

My hon. Friend makes the most important point of all so far in this exchange. There will be a major expansion of cars assembled in this country from 1·3 million to 2 million, and, as motor vehicles account for the biggest item in our manufactures deficit, right hon. and hon. Members can immediately calculate that a big change will result from the investment made here by Japanese companies.

The Minister seemed strangely reluctant to give the House the actual exports figure. Was that because Britain is in considerable deficit with the countries of the European Community? If so, did the Minister hear the Secretary of State a few minutes ago discarding the multi-fibre arrangement, contrary to the sentiments expressed by the Minister in a recent debate? That must result in an even greater loss to our textiles manufacturing industry, causing job losses throughout the country. Does not the Minister want to do something about that?

I have clearly given the figures required by the original question. Of course I accept that a deficit exists with some countries—most notably the Federal Republic of Germany. I also pointed out that the position is improving. The Government believe that open trading and the extension of the 1992 programme is the best way of narrowing the trade gap. I particularly draw the attention of the House to the important role of invisibles in our total trading performance. They will be improved if we can persuade our European partners to keep the 1992 programme on track and on time.

Export Credits Guarantee Department

9.

To ask the Secretary of State for Trade and Industry when he expects to introduce his proposals to reform the structure of the Export Credits Guarantee Department.

It is the Government's intention to introduce legislation at the earliest opportunity to bring about the changes to ECGD's structure that I announced on 18 December 1989. The aim is to establish the new company to be created from ECGD's insurance services group on 1 April 1991.

I thank my right hon. Friend for that information. I agree that the insurance part of the Export Credits Guarantee Department should be privatised, but can he assure the House that the credit on capital goods will be maintained and that it will be possible for companies such as British Aerospace, which exports £150 million worth of goods per week or £6,000 million worth per year, to maintain their 10-year view on exports?

Yes, I made it clear in December that the projects group would not be part of the privatisation but will continue its activities to aid British exports of the kind that my hon. Friend mentioned, including exports by British Aerospace.

Will the Secretary of State confirm that the insurance services group, which is based in Cardiff and employs many of my constituents, is profitable, that its achievements are a credit to the public sector, and that it has no requirement to be privatised? Can he also confirm that Malcolm Stephens, chief executive of the ECGD, recently made a statement that privatisation of the insurance services group would pave the way for foreign stakes to be taken in the ECGD?

Does not the Secretary of State conclude that it would be a ludicrous irony if in a few years' time a support service for British exports were controlled by a foreign bank or finance house?

I confirm that the Cardiff operation is profitable and held in high respect by its customers. I also confirm that the hon. Gentleman got it totally wrong when quoting the chief executive of the ECGD. I have here statements that he made on radio referring to

"the Chief Executive in a press conference alongside Nicholas Ridley".
I remember no such press conference. [Interruption.]

The hon. Gentleman is advocating an illegal action if he is asking me to say that no national other than a British national may acquire a stake in companies in this country. He must recognise that we are members of a European Community which bans discrimination against its other members. The hon. Gentleman should wait and see who puts forward offers when the time comes to privatise the ECGD. If it is not privatised, it will have no future in the European market.

Can my right hon. Friend confirm that export credits as they will be operated once reformed will make trade with eastern Europe more viable and possible as a reward for the desires and the declarations about human rights and democracy that have been expressed there? If that is so, can he explain the difference, as seen by the Opposition, between that and our similar programme with South Africa?

The subject of ECGD cover for eastern European states also raises the question of their indebtedness and the risk that it poses for insurance cover. Different countries in eastern Europe have different debt situations, so I cannot answer the question in a general way, but I confirm that we are doing our best to make credit cover available for exports to eastern Europe when the country concerned merits the credit.

British Steel

10.

To ask the Secretary of State for Trade and Industry what subjects he expects to discuss at his next meeting with the chairman of British Steel.

In view of the importance of the steel industry to Scottish employment and to the entire Scottish economy, will the Secretary of State draw the chairman's attention to the need to locate a new steel plate mill in Scotland? That is necessary not just for the Dalziel works, but for Ravenscraig and for the whole future of steel making in Scotland. Does the Secretary of State accept any responsibility for the future of the Scottish steel industry, or was privatisation merely a means of abrogating all Government responsibility?

Investment by the steel industry is entirely a matter for the steel industry to decide. The point of investment in the steel industry or in any other industry is to ensure the most efficient production and for no other reason.

Does my right hon. Friend agree that privatisation of the British steel industry in my constituency and elsewhere on Teesside has done much for the economic regeneration of the area and is one of the outstanding achievements of the Government in the past few years? Is he aware that continuation of that policy with the privatisation of the Tees and Hartlepool port authority would be most welcome?

I join my hon. Friend in welcoming the remarkable industrial transformation on Teesside. I should also point to the large increase in British industrial production in the past few years. I believe that both are connected with the policy of letting industry make its own investment decisions.

Given that the overall level of British steel production is still less than half that of West Germany, and given that our share of the continental market is very small, does not the Secretary of State see a great possibility for the expansion of British Steel? In the context of 1992, would not that safeguard the health of all the plants in the United Kingdom? Will he use his influence—or perhaps even his golden share—to secure such expansion?

I am not sure that the golden share would be of use for that purpose, but I agree with the hon. Lady, and pay tribute to her for striking an optimistic note for once. I will do all that I can to ensure that British Steel has opportunities throughout the world—and in the Community—to increase its sales and its share of the market. We are fortunate in having persuaded the Americans to agree to end the voluntary restraint agreement in, I believe, three years' time, which will give British Steel big opportunities in the United States. It will also give that excellent company further opportunities to increase its market share in Europe.

Latin America

11.

To ask the Secretary of State for Trade and Industry if he will make a statement on Britain's exports to and investment in Latin America.

In 1989 United Kingdom exports to Latin America were almost £1·2 billion. At the end of 1987, the last year for which figures are available, the level of United Kingdom direct investment in the region was almost £3 billion.

Should not we bear in mind that the combined economies of Latin America are far greater than those of Africa, the middle east and the Indian sub-continent put together? Should not we be putting more effort into our exports to Latin America, and perhaps expanding the medium-term export finance cover, particularly for Brazil and Argentina?

I hope that the opportunities around the world for both trade and investment will be exploited by British industry to an ever greater degree. I agree that Latin America remains an important market. Medium-term cover is available within an overall exposure limit for some of those countries, including Mexico, Chile, Colombia and Venezuela, which will present plenty of opportunities for our business men to export to them, at least.

The Government are allegedly committed to perestroika and glasnost. Which of the countries that the Secretary of State mentioned is supposedly a democracy, and how does he justify trade with any Latin American country that is not a democracy? Such trade is clearly an abuse of people's rights, when they know that—

I am grateful for what the hon. Gentleman has said, now that perestroika and glasnost have broken out in Leith. [Interruption.]

Order. The hon. Member for Edinburgh, Leith (Mr. Brown) must be able to hear the answer to his question.

Only in the past two weeks, the president of Mexico and the president-elect of Brazil have been in London. They are both democratically elected. Many other countries in South America are also democracies. I believe that we should treat them with all the respect that is due to democratic countries, and seek to trade with them to the maximum extent.

I understand that my right hon. Friend met the president-elect of Brazil when the latter visited the United Kingdom recently. My right hon. Friend has said that he is in favour of British manufacturing industry. What steps did he take to urge the Brazilian Government to reduce the huge tariffs that they impose against British exports, particularly textiles and clothing? Does he agree that British manufacturing industry should have a level playing field on which to operate, and what does he intend to do about that?

I will tell the hon. Gentleman what I have done. I raised my hon. Friend's points with the president-elect of Brazil, who gave me a fulsome undertaking that Brazil would play a full and forward part in the Uruguay round to reduce tariffs and protective devices of all kinds. He agreed with my hon. Friend's policy on free trade, which is also my policy—that we should clear away such restrictions—and I believe that Brazil will be very helpful in the forthcoming discussions.

Technological Standards

12.

To ask the Secretary of State for Trade and Industry what response he will be making to the report produced for the European Commission by the university of Louvain with respect to its assessment of the United Kingdom's technological standards; and if he will make a statement.

The hon. Gentleman misunderstands the nature of the report. The Government are well aware of the challenge of 1992, and we have policies in place to help firms in all regions to rise to it.

I thought that it was for the Opposition to ask supplementary questions. Does the Minister agree that the report places the United Kingdom, with Spain, at the bottom of the technology and training league? Does he agree that any further reduction in the industry budget will make it even less likely that the regions, particularly the west midlands, will be able to recover from the collapse of manufacturing industry brought about by the Government's disastrous policies?

As might be expected, I have two pieces of good news for the hon. Gentleman. First, as regards technology, the hon. Gentleman will be very pleased to know that between 1983 and 1987 research and development investment in the United Kingdom rose by 27 per cent. in real terms. Secondly, the main lesson to be learnt from the report is the need to diversify the economies of traditional industrial regions, such as South Yorkshire. The hon. Gentleman will know that the Government have been pursuing that policy vigorously—often, I may say, opposed by the Labour party—and we have achieved very considerable success with it.

As the Right-wing economic ideologues in this country persist in saying that we misunderstand Germany—which, apparently, is bureaucratic, overregulated, subsidised, corporatist and inefficient—could we send a DTI task force to Germany to acquire some of its bad habits?

In many respects we could give the Germans some very good lessons indeed. For instance, we could give them a lesson in how to reduce unemployment in areas that have suffered economic deprivation. The House will be pleased to know, for a start, that the rate of unemployment in this country is now two thirds of the European Community average. To take Sheffield as an example, in December 1989 the rate of unemployment there was 9·6 per cent., whereas in March 1986 it was 16 per cent. That is a remarkable transformation, and it is due to this Government's policies—not those of the German Government.

It seems as though there are two Louvain reports—the one that the Government have read, and the one that other people have read. Looking to the competition that there will be in 1992, the report shows clearly that there are major structural weaknesses in the regions of the United Kingdom. Will the Minister re-read the report and consider the first survey of state aid in the European Community? He will see that the average investment per head in manufacturing industry, apart from steel and shipbuilding, is £1,050. The United Kingdom comes at the bottom of the league with £448 and the Germans are well ahead. As for investment in research and development, training and infrastructure, the Louvain report shows clearly that that is where we are weakest.

It would help if the hon. Gentleman were a little more candid. He has not read the report. It is in French and the hon. Gentleman does not read French.

Has my hon. Friend read the British textile industry's report? Is he aware that that industry, which is worried about training in this country, sent a delegation to Germany where it found that training in the German textile industry is inefficient, expensive, out of date and no good at all for young people or re-entrants?

I am very well aware of the German textile industry's shortcomings. More broadly speaking, we think—and most sensible people also think—that the textile industry must be brought back within the general agreement on tariffs and trade. That is the only sensible way forward. The proper way forward for the textile industry is to focus on products that add value to what the industry is already doing.

Post Office

13.

To ask the Secretary of State for Trade and Industry when he last met the chairman of the Post Office; and what was discussed.

I last met the chairman of the Post Office, Sir Bryan Nicholson, on 11 January. We discussed various matters of mutual interest.

Will the Minister join me in congratulating the Post Office workers who have coped so ably with the extra-large load of card deliveries today? Despite the blandishments of the directors of TNT and others interested in acquiring the profitable sectors of the Post Office, will the Minister reassure the British public, especially those who live in rural areas, that their needs have not been forgotten?

I am grateful to the hon. Lady for putting the question in that way. I agree with all parts of her question. First, I congratulate the Post Office in Glasgow on its excellent performance and on one of the best staff recruitment and retention records in the United Kingdom. Secondly, I join the hon. Lady in praising the Post Office for having one of the best delivery performances in Europe and for charging less for stamps than almost any other country in Europe. I can give her the assurance that she seeks. Despite the fact that my right hon. Friend has met a number of companies interested in the kind of services provided by the Post Office, none has put forward a proposition of interest to my right hon. Friend or to me. We are concerned to maintain not just the rural network hut all parts of the Post Office network.

Does my hon. Friend recall that 13 years ago, with the support of my hon. Friend the Member for Horsham (Sir P. Hordern) I introduced a Bill to end the Post Office's statutory monopoly in the collection and delivery of letters? Will he now reintroduce that Bill?

My hon. Friend is ahead of his time in many things. That is a reputation which he rightly enjoys. He must know, however—it has often been repeated—that we regard the Post Office monopoly as a privilege, not as a right, and the Post Office well understands that. The monopoly is kept under review so that an assessment can be made from to time of whether any action is appropriate. That process continues.

The Prime Minister has repeatedly said that she believes in keeping the Royal Mail intact. The Under-Secretary of State wrote to me on 1 February saying that there were no plans to break up the Post Office monopoly, so on what basis did the Minister say today that propositions had been received relating to the privatisation of the Post Office? Why did departmental officials admit to the press this morning that they had received propositions and that talks had taken place with road haulage companies? Will the Minister make an honest statement and say whether the Government intend to sell off the letters business to the fat cats in the road haulage industry, or is he prepared to accept the need to protect the service throughout the country, especially in rural areas?

The hon. Gentleman is confusing himself and there is a danger that he may confuse the House as well. It is no secret that my right hon. Friend the Secretary of State has met a number of companies with activities in that sector. Indeed, it would be most odd if he had not, as I believe that my right hon. Friend has shown his usual open-mindedness in wishing to hear all points of view and all proposals. I can reassure the hon. Gentleman, as I reassured the hon. Member for Glasgow, Maryhill (Mrs. Fyfe), that none of the companies' suggestions has found favour with my right hon. Friend, but we shall continue to consider the matter as it is our duty to do so.

I would not wish to stop the Minister talking to anybody, but will he give an absolute commitment to the House that he stands four-square, 100 per cent. behind the principle that the postage rate for letters should be the same no matter where in the United Kingdom they go? That is what matters to constituents in the further-flung areas, particularly in my part of the world.

The hon. Gentleman is absolutely correct. Interestingly, that principle and the principle of universal delivery provide the greatest difficulty for those who seek to provide alternatives to the existing postal services. I believe that our insistence on those principles is crucial and I am glad to have the hon. Gentleman's support.

If newspapers can be delivered all over the United Kingdom at the same price, why should the Post Office continue to have a monopoly? Private enterprise has already shown that it can deliver various goods just as well as the Post Office does.

I am delighted to see my hon. Friend here, obviously in good heart and good spirits. It is untypical of him to confuse deliveries of commercial items such as newspapers with postal deliveries. The two cannot and should not be compared because the Post Office has an obligation to collect an item anywhere in the United Kingdom and to deliver it anywhere in the United Kingdom, and it does so. It is seeking to improve deliveries, but it still delivers at a standard rate. That principle has been re-emphasised not only by my right hon. Friend the Prime Minister but by my right hon. Friend the Secretary of State and we shall continue to do so.

Japan

14.

To ask the Secretary of State for Trade and Industry what is the current trade deficit with Japan; and how much of the deficit is accounted for by manufactured goods.

In 1989 the deficit in total visible trade with Japan was £4·8 billion. In the same period, the deficit for manufactured goods was £5 billion. Last year United Kingdom exports to Japan increased by £525 million to £2·3 billion, an increase of 30 per cent. over 1988.

Now that the Secretary of State accepts that we have a deficit with Japan, Germany, Italy and the United States, and an ever-increasing deficit with other EC countries, does he accept that he ought to be doing something about it? The announcement today of an upturn in output of 4·3 per cent. in 1989, compared with 7·1 per cent. in 1988, is another indication of the devastating effect on the British economy of the Government's so-called economic miracle.

The hon. Gentleman scoffs too much when he derides the increase in output. He is talking about years of unprecedented growth in the United Kingdom economy. There has been strength in manufacturing, in invisibles and in all sectors of the economy. As I have told the House already, the trade position has been improving in recent months and there is every indication that more progress will be made in the current year.

Are not the areas in which our trade with Japan and Germany weakest the very areas in which Socialism applied in the 1960s and 1970s—motor cars, semi-conductors and all the other areas in which the Labour party tried to reorganise British industry?

My hon. Friend makes a powerful point. It is noticeable that the output and performance of those industries are improving by the day as the Government cease to intervene and cease to pursue the policies that the Labour party pursued when in office. The more the Government continue their enterprise-loving policies, the more industry will strengthen.

Will the Minister cast his enterprise-loving mind over the problem of computer manufacture? Can he name one major computer component in which we are in positive balance with Japan'? If not, can he tell us of one thing that he intends to do in the coming year to improve the situation?

I do not have detailed information about all component manufacturers and I would not wish to mislead the House, but I can tell the hon. Gentleman that our trade is strengthening and a great deal of inward investment is coming from Japan which is very welcome here. The hon. Member for Hemsworth (Mr. Buckley) will presumably not be telling the House today that near his constituency, Pioneer Electronics is to make a major investment, creating about 1,200 jobs in a very important sector.

Will my hon. Friend remind the Opposition that a nation that has never suffered any significant nationalisation, that has had low taxation and public spending and a superb education system and that, above all, has never suffered from a Socialist Goverment is always likely to be in better shape economically than one that has suffered from Socialism?

That is so very true. Evidence from the other end of the spectrum can be seen in the way in which the Socialist economies of eastern Europe and the Soviet Union are trying to get information from the West about how to run a proper enterprise economy so to enjoy the fruits of prosperity that we in the West have enjoyed for so many years.

Monopolies And Mergers Commission

15.

To ask the Secretary of State for Trade and Industry what plans he has to change the role of the Monopolies and Mergers Commission.

Does the Secretary of State accept that while competition must remain central to takeover activities, other factors such as the strategic national interest and the impact of takeovers on regional employment or unemployment must be taken into consideration?

I am glad to hear the hon. Gentleman agree that competition is the prime concern of monopolies and mergers policy. I accept there could be examples in which the national interest is involved. We also consider implications such as regional policy, but I stress that that is very much a secondary consideration to the competition issue.

Does my right hon. Friend agree that the Monopolies and Mergers Commission should be opened up and brought much closer to the American anti-trust laws with the ability to break up the large monopolies being created in Britain so that we can have real capitalism rather than over-large, domineering companies in any one sector?

The commission has power to order divestment, or to suggest that I order divestment, in certain cases where monopolies are formed, and that power has been used. The policy that appeared to be evolving in the Labour party in a document called "Industry 2000"—I doubt whether anyone has heard of it—was virtually to put a stop to all takeovers. That would be disastrous for the continuing efficient function of the economy.

Is the Secretary of State aware that W. H. Smith and Son Wholesale, which distributes many of the newspapers to which the hon. Member for Pembroke (Mr. Bennett) referred, is a monopoly? Does he plan to do anything about that?

These matters have been looked at by the Director General of Fair Trading. I do not think that it is a monopoly because others also circulate newspapers.

Manufactured Imports

17.

To ask the Secretary of State for Trade and Industry what has been the growth in imports of manufactured goods from the European Community since 1979.

Imports of manufactured goods from the European Community have risen from £16 billion in 1979 to £52·5 billion in 1989, and exports have virtually trebled, as I mentioned earlier.

Is not a deficit of £14·5 billion a serious matter? Is not that why the Confederation of British Industry is concerned about the impact of high interest rates and the uniform business rate on fixed investment in 1991? Does that not worry the Minister as we approach 1992?

Investment has been running at record levels and we have been enjoying an investment boom. I am sure that that will strengthen our industrial base for the early 1990s and will continue the improvements to which I referred earlier.

Has my hon. Friend had a chance to read the Labour party document "Industry 2000"? Does it contain anything that would indicate—[Interruption.]

Order. The hon. Gentleman should be careful how his question is framed.

Has my hon. Friend read the document and has he found anything in it to help our import-export balance, or does it propose a return to state intervention and central control? Is he surprised—

I think that my hon. Friend asked about Government policy. He asked whether there were helpful ideas in a particular document. Having read the document carefully, I notice that a policy gap is developing as the document refers to very few of the ideas in the original Labour policy review. Apart from schemes that the Government are already pursuing, such as training and enterprise schemes, the document contains nothing that would help and many proposals which might be illegal under the European Community regime.

Manufacturing Industry (Competitiveness)

18.

To ask the Secretary of State for Trade and Industry what representations he has received on the competitiveness of British manufacturing industry.

Most contacts that my Department has with industry and commerce involve matters having a bearing on United Kingdom competitiveness.

Has the Minister had any direct representations on the lack of skill training in the British economy, especially in those areas where the major steel and coal industries have been running down? The lack of skill training has been well highlighted by my hon. Friends in relation to the Labour party campaign, "Industry 2000". Why has there been deskilling in many major industries that, according to EEC reports, lack skilled people for the jobs that we hope will exist in the future?

That was a surprisingly uninformed question, even for the hon. Gentleman. He seems unaware that we have put the training councils in place. On a broader point, British industry is in infinitely better shape than it was 10 years ago. I should have thought that the Labour party would welcome the fact that the volume of exports is 15 per cent. higher than it was 12 months ago—a volume increase unprecedented since 1973. Incidentally, Labour Members would be well advised to tell their union friends not to pursue inflationary policies.

I do not speak French, Sir. I should like to present to the House the report, in English, to which the Minister for Industry referred when he accused the Opposition of not being able to speak French. It is evident that the hon. Gentleman has read the wrong report, that he cannot read French and that he has reached the wrong conclusion.

Further to the point of order, M r. Speaker. I am prepared to accept that the hon. Member for Sheffield, Central (Mr. Caborn) may have glanced at the document and to that extent I withdraw my observation. A more interesting question is whether he understood it and whether he is prepared to submit himself for examination, and I shall report to the House on that.

Points Of Order

3.32 pm

On a point of order, Mr. Speaker. You may recall that, on 17 April last year I was fortunate enough to have an Adjournment debate on the finances of the Mersey tunnels. I have in front of me a letter, dated yesterday, to Councillor Ingham, the chair of the Merseyside passenger transport authority, in which, in effect, the Secretary of State has ruled out any solution to the problems of financing the work on the Mersey tunnels. As my hon. Friends and I have raised this issue in the House, is not it wrong that the Secretary of State did not respond to the House but instead wrote a letter which Parliament has no opportunity to scrutinise?

I must tell the hon. Member with deep regret that I do not immediately remember his Adjournment debate last year. I suggest that he tables a question, and perhaps he will get an answer.

On a point of order, Mr. Speaker. I wonder whether I can ask for your advice before the debate on South Africa begins. I refer you to page 94 of a book called "How to be a Minister" by the right hon. Member for Manchester, Gorton (Mr. Kaufman), in which he said:

"Do not waste your good lines on having"—

Order. It is not a parliamentary book. I shall be very interested to read it. Perhaps the hon. Gentleman will allow me to do so.

If it were possible for me to impose a 10-minute limit on speeches in the coming debate on South Africa, I should do so. Indeed, even if it were possible to impose a five-minute limit on speeches, I do not think that I would be able to call all hon. Members who wish to speak. Points of order will take time out of that debate.

On a point of order, Mr. Speaker. I do not think that it matters whether it takes up time. The liberties of the House are much more important than any debate.

Yesterday afternoon, we had, to quote you, Mr. Speaker, a particularly disagreeable exchange, in which the right hon. Member for Manchester, Gorton (Mr. Kaufman) made an absolutely discreditable and disgraceful accusation, and he was allowed to get away with it. We had a build-up of pressure—in a pressure-cooker sense—because there was real outrage among my right hon. and hon. Friends about what was said on the Opposition side.

Is not it time for you again to examine the time when hon. Members may raise points of order? The idea that points of order have to wait until after however many statements there may be leads to more trouble, not less. Should not points of order, like any punishment or design, be made immediately after the offence, and not need to wait for hour after hour, as sometimes happens? On a most genuine point of order, Mr. Speaker, will you look at this matter again—that points of order are raised before statements and immediately after Question Time is concluded, because—

Order. I have frequently been asked to look at this matter. The hon. Gentleman will recollect that I have made numerous rulings on it. The proper time to raise proper points of order is immediately after private notice questions or statements. That is exactly what happened yesterday. If a matter needs the immediate attention of the Chair it should be raised as a point of order at the time. As regards yesterday, we cannot go back over that. I did not hear the remark of the right hon. Member for Manchester, Gorton (Mr. Kaufman).

The hon. Gentleman may have done. [HON. MEMBERS: "It is in Hansard."] Of course it is in Hansard, because it was subsequently referred to, but I did not hear it. However, I have now had an opportunity of not only listening to it on the radio but seeing it on television. The remark appears to have been somewhat magnified on the medium. However, we cannot go back on it now. [HON. MEMBERS: "Why not?"] Well, it was said from a sedentary position. It was not an unparliamentary expression, but it was certainly an offensive comment to make. It may be that we will have an opportunity today to put that right.

Many Opposition Members would want to go along with your ruling about the remark not being unparliamentary. The remark itself was very opportune, and most of us—

No. The hon. Gentleman is always very helpful. Of course he has a lot of experience in dealing with—

It is not a point of order. The hon. Gentleman has simply prefaced it in that way.

Further to the point of order raised by my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), Mr. Speaker. The observation by my right hon. Friend the Prime Minister was not unparliamentary, but she had to withdraw it.

The House should look at what I said in Hansard. I did not hear that remark, either. What I said was that if the Prime Minister had made an unparliamentary allegation, I am sure that she would wish to withdraw it. She did withdraw it. That is exactly what happened.

On a different point of order, Mr. Speaker. You referred to restricting speeches to five or 10 minutes. Many Back-Bench Members do not think that the quality of debate would be improved by a restriction of either five or 10 minutes, except perhaps in my own case.

I subscribe to that view. It is a pity that the Chair does occasionally impose limits, because I am a believer in personal restraint. If hon. Members could limit their speeches today to about 10 minutes, we would be much better off.

On a point of order, Mr. Speaker. Yesterday, you rightly followed precedent by saying that you could not pursue remarks made from a sedentary position that you had not heard. However, you were equally saying yesterday that we should have regard to the fact that the television cameras are now here. This afternoon, you said that, on reflection, having taken advantage of what the cameras picked up and of programmes this morning, you had heard something today that you did not hear yesterday. Is not there a case for you to reconsider precedent and, when you find something to have been offensive, to require it to be withdrawn the following day?

It is not for the Chair to require offensive remarks to be withdrawn. Offensive remarks are, I fear, frequently made in the House. The role of the Chair is to ensure that unparliamentary expressions are not used here. It is up to the right hon. Gentleman concerned to decide what to do in relation to that, and perhaps today we shall hear something from him about it.

On a point of order, Mr. Speaker. You said some moments ago that it would not be possible to go over an incident that occurred in the House some time ago. Did you mean that? Surely we are constantly going over matters—

It is on a slightly different matter, Mr. Speaker. It is now in the public domain, as we all wearily know, that the right hon. Member for Manchester, Gorton (Mr. Kaufman), a man who chooses his words carefully, said yesterday that the Prime Minister should have done 27 years—[Interruption.]—inside. For the right hon. Gentleman to have said that—

Order. I am not certain that this is going to add to the quality of our discussions in the House. What is the hon. Gentleman's point of order for me?

The point of order for you, Mr. Speaker, is that if the right hon. Member for Gorton has evidence for that remark, perhaps he should bring it before the House. If not, like any other hon. Member, he should do the decent thing and withdraw it.

On a point of order, Mr. Speaker. Are you aware that we might clear the matter up by putting the words used by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) in the form of a motion? There were so many Tory wets laughing yesterday that we might just carry it.

Bill Presented

Control Of Amusement Arcades

Mr. Kenneth Hind, Supported by Mr. Roger Gale, Mr. Den Dover, Mr. Patrick Thompson and Mr. Tim Devlin, presented a Bill to control the licensing of amusement arcades by local authorities; and to restrict entry to amusement arcades to persons over eighteen years of age: and the same was read the First time; and ordered to be read a Second time on Friday 9 March and to be printed. [Bill 72.]

Recycling Of Plastics

3.42 pm

I beg to move,

That leave be given to bring in a Bill to provide that ownership of plastic wrappings and containers shall remain with the manufacturer or retailer; to require the return of such materials for recycling; to provide for incentives in the form of returnable deposits for consumers and a standard labelling format to ease segregation of materials; to impose controls on the incineration and disposal by other means of certain plastics; and for connected purposes.
The Bill is timely because it arises from a recognition by the plastics industry, heavily represented in my constituency, that there is a waste disposal problem with plastic materials, and because it outlines the path down which the industry may wish to go in future.

I begin by paying tribute to the managers and staff of Visqueen Limited, in my constituency, one of the largest manufacturers of plastic bags and film in this country, who first raised this important subject with me.

World consumption of plastics has risen from 1·5 million tonnes in 1939 to 80 million tonnes last year. In the European Community, plastic makes up 7 per cent. of municipal waste by weight, but 25 per cent. by volume. Its use is to be encouraged because it has the inherent advantages of lightness, economical cost and excellent mechanical properties. It is a particularly important material in the protective wrapping of food, in the distribution trade, in building and in the electrical industries.

However, encouragement means that we must think creatively about the disposal after use or possible reuse of plastics. With that in mind, the industry has already taken positive steps actively to collect post-consumer waste and to introduce in-factory reclamation of waste. All the in-factory waste at Visqueen is reused to make black plastic refuse sacks. The parent company now has two further plants on stream—one to deal with agricultural plastic film and bags at Ardeer in west Scotland and the other to deal with supermarket waste at Heanor in Derbyshire, in the constituency of my hon. Friend the Member for Amber Valley (Mr. Oppenheim). It is due to be opened by my hon. Friend the Parliamentary Under-Secretary of State for Industry and Consumer Affairs next Monday.

Recycling has been slow to be recognised as a major option for waste, but we cannot sustain our present throwaway attitudes indefinitely. If we do not move to tackle the problems of plastic waste, we shall increasingly harm our surrounding environment. There are few alternative options open to us.

Refuse dumped at sea leads to plastic film damaging aquatic life, smothering fish and plant life and wrapping round the propellors of ships. Agricultural film which is ploughed into the ground comes back up, choking animals and ruining the countryside. In cities, plastics make up much of the lightweight litter about which we complain so bitterly.

According to William Rathje, an American garbologist—apparently that is the term for someone who excavates dumps—plastics have not been a major problem in landfills. They are inert and compactable. The largest single item in landfills is paper, with telephone directories the main culprits, but landfills are filling up, and thermosplastic materials—the six main commodities—are made from crude oil, which is not limitless.

We must tackle the problems the right way round. The European Commission intends to legislate on the matter, according to Commissioner Schafter-Sotiropoulou. However, as we have found with paper and glass, encouragement cannot be given to recycling until industry has a demand for the collected materials.

The Bill provides for a marking scheme to ease separation of the six basic materials. It might work in the same way as the Australian green spot system, in which a number or code is put on products to say into which group they fall. I am sure that many consumers who currently collect their bottles and paper, could collect and separate plastics to go in with plastic waste collected from supermarkets.

Consumer goods, from lawn mowers to clothing, begin their useful life only when sold, but packaging has almost completed its useful life by the time that it reaches the consumer. Like all products, packaging uses raw materials and energy, which are both costly to the manufacturer. Therefore, there is an economic incentive to keep the use of those resources to a minimum.

Consideration should be given at the design stage to the impact that the package will have as waste. Features that will aid recycling must be considered. These days, few items need only one layer of protection. Most are packed in primary consumer packaging such as a jar, and grouped together by secondary distribution packaging, such as a cardboard box or shrink-wrapped tray. There can come a point where reducing the use of material in the primary pack is counter-productive, because the secondary pack has to be strengthened and more material used.

Some packaging is so efficient that its secondary packaging gives rise to more waste than the primary packaging. The secondary packaging accumulates at retail outlets and can be more easily collected for recycling.

Biodegradability is some times held up as an option, but it is not. First, none of the so-called biodegradable plastics are truly biodegradable. Secondly, the research into biodegradability is far from complete. Thirdly, waste in landfill is so compact that it may take centuries to rot.

If anyone wants a mint condition 1952 newspaper or telephone directory, our American garbologist advises digging down through 38 layers of any tip. With further development of recycling technology, I hope that it will be possible—[Interruption.]

Order. This is a very important Bill. Would hon. Members mind having their conversations outside the Chamber?

With further developments in recycling technology, I hope that it will be possible to reopen landfill sites by the end of the century and to recycle the plastic materials in them.

Plastic materials are one of our best options for the future if they are constantly reusable. We can start by recycling waste from large users, such as distribution, supermarkets, the building trades and agriculture. Deposits would work for large users, but they have been found to be ineffective for household goods. Proper labelling is also vital.

In my part of the world, we want to stop the dumping of rubbish in our North sea. We have run out of landfill space in our county and are looking for more. Our people do not want to incinerate any more than we have to, even if plastic burns well with other materials.

Recycling represents a crucial fourth option. With this Bill, I ask the House to seize the opportunity with both hands.

Question put and agreed to.

Bill ordered to be brought in by Mr. Tim Devlin, Mr. Phillip Oppenheim, Dr. Michael Clark, Mr. David Tredinnick, Mr. Stephen Day, Mr. Toby Jessel, Mr. Anthony Coombs, Mr. Hugo Summerson, Mr. Gerald Bowden, Mr. Robert G. Hughes, Mr. Spencer Batiste and Mr. Kenneth Hind.

Recycling Of Plastics

Mr. Tim Devlin accordingly presented a Bill to provide that ownership of plastic wrappings and containers shall remain with the manufacturer or retailer; to require the return of such materials for recycling; to provide for incentives in the form of returnable deposits for consumers and a standard labelling format to ease segregation of materials; to impose controls on the incineration and disposal by other means of certain plastics; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 23 February and to be printed. [Bill 73.]

Opposition Day

[7TH ALLOTTED DAY]

South Africa

I have selected the amendment in the name of the Prime Minister. I repeat what I said in reply to the hon. Member for Calder Valley (Mr. Thompson): a voluntary restraint of 10 minutes or even less would he extremely helpful this afternoon.

3.51 pm

I beg to move,

That this House salutes Nelson Mandela on his release after more than twenty-seven years of wrongful imprisonment; welcomes the constructive actions taken by President de Klerk to create an atmosphere conducive to negotiations with the African National Congress on the future of South Africa; notes that the basic structure of apartheid remains intact and that the world community, including the European Community, has imposed sanctions in order to secure the dismantling of apartheid; and calls upon the European Community at its Ministerial meeting next Tuesday to reject the untimely call of the United Kingdom Government for the abandonment of key sanctions.
During the past two weeks, the world has witnessed historic events in South Africa. First, there was the dramatic speech by President de Klerk announcing the unbanning of the African National Congress and other organisations; the suspension of capital sentences; the freeing of certain political prisoners, and the decision to release Nelson Mandela. That was a courageous speech, on which we congratulate President de Klerk.

Then, last Sunday, came the release of Nelson Mandela after 27 years in prison, a sentence mostly served in brutal conditions, and a sentence which he should never have served. I note that, although the Government amendment to our motion
"salutes Nelson Mandela on his release",
it does not include our phraseology that Mr. Mandela was wrongfully imprisoned. Opposition members salute this great man on his regaining the freedom which he should never have lost.

Let us be clear that, although the measures taken by Mr. de Klerk are welcome, they do not affect apartheid's basic structure. The Group Areas Act continues, the Land Act continues, detention without trial continues, the state of emergency continues, censorship of the media continues and the police state continues.

Nelson Mandela is free within South Africa, but South Africa is not free. Nelson Mandela is out of prison, but South Africa continues to be a prison, stunting the lives of all in it who, under its racialist laws, are not classified as white. Mandela and his fellow black Africans do not have a vote. They live in poor housing in racially segregated townships. Nelson Mandela, on returning home, returned to a dwelling in one of those townships.

How is South Africa to become free? We are told that negotiations are to begin—negotiations which we in the Labour party believe can end acceptably only with a South African democracy that gives the vote to every man and woman on a common role. What hon. Members from both sides of the House demand for the countries of eastern Europe, we must also demand for the people of South Africa.

What is the balance of power in the negotiations that we hope will soon begin between the African National Congress and the South African Government? On the one hand there is the South African Government, buttressed by the laws made by their stooge Parliament, the army, the police, the prison, and the gallows, which still remain. On the other hand, there is the non-white majority with nothing but its courage, its readiness to suffer and endure, and whatever pressure the international community can exert through sanctions.

Nelson Mandela asks for sanctions to continue. He said that clearly on his release from prison on Sunday, in the historic speech that he made from the balcony in Cape Town. He said:
"To lift sanctions now would be to run the risk of aborting the process towards the complete eradication of apartheid."

I shall certainly give way to any hon. Member who calls me his right hon. Friend.

I am obliged to the right hon. Gentleman for giving way. As the Archbishop of Canterbury suggested that it would be a useful gesture to relax sanctions, and President Kaunda has called on the African National Congress to give up the armed struggle, would not the Labour party find itself in good company if it made a gesture of that nature to celebrate the feeedom of Nelson Mandela?

The hon. Gentleman has ingeniously managed to combine Nos. 3 and 11 of the interventions that the Foreign Office suggested, in a circular, should be made in my speech.[Laughter.]

It cannot be a point of order. I think that the hon. Gentleman did not like the answer.

On a point of order, Mr. Speaker. I have not had an answer, and I combined nothing. This House would do itself a great service in South Africa if it tore up the Gleneagles agreement and allowed sportsmen—

Order. Perhaps the hon. Gentleman will have an opportunity to outline that matter later on.

Order. Many hon. Members have a great interest in the debate, and interventions take up time.

I am selective about my friends, Mr. Speaker. But if the hon. Gentleman would, from a sedentary position, care to call out the number of his intervention, I shall do my best to deal with it as I proceed.

On a point of order, Mr. Speaker. The right hon. Gentleman has twice referred to a list produced by I know not whom. Am I to understand that, if any Conservative Member wishes to raise a matter that he genuinely feels to be important, it can be dismissed just because it happens to be on somebody else's list as well?

I have no knowledge of any list. If anyone has one, perhaps I could have a look at it.

I quoted Mr. Mandela, and most of the international community agrees with him—the United States, the United Nations, the Commonwealth and the European Community. Mr. Manuel Marin, the European Commissioner for developing countries, said on Monday that sanctions should continue until the situation is sufficiently clear to accept that the end of apartheid is a reality. Against that near-unanimity in the international community that sanctions against South Africa are essential, only one significant country stands out—the United Kingdom, and especially the Prime Minister.

The Prime Minister is not only completely isolated on this issue: she glories in her isolation. She has turned being alone into a political way of life—in NATO, in the European Community and, above all, on this issue of sanctions. Her retort to the rest of the international community is, "Don't try to confuse me with the facts of apartheid."

I shall give way to the hon. Gentleman, because his question will have been supplied not by the Foreign Office but by the South African embassy.

I am grateful to the right hon. Gentleman, who, as usual, is giving misinformation to the House. The right hon. Gentleman is right to say that Mr. Mandela has called for sanctions to be continued, but will he give an assessment of other voices within South Africa, which represent far more people? Mr. Mandela represents the Xhosa tribe, with 3 million members, but Chief Buthelezi, who represents 7 million people, is against sanctions, at least 2 million coloureds are against sanctions, 1 million Indians are against sanctions and 4·5 million whites are against sanctions. The right hon. Gentleman is fond of quoting numbers from Britain and the rest of Europe, but will he consider the matter from a South African perspective rather than choosing Mr. Mandela as a reason for continuing sanctions?

To take one of the hon. Gentleman's examples, Chief Buthelezi has already announced that he would like to enter into association with the ANC in the negotiations to take place with the South African Government. The South African Government have released Mr. Mandela and unbanned the ANC because they are the people with whom the South Africans wish to negotiate. Therefore, it is especially appropriate to pay heed to what they say.

No, not at this stage.

The Prime Minister is alone in the international community among leaders of significant countries in opposing sanctions. This weekend her press secretary, Mr. Bernard Ingham, talking about the Prime Minister's isolation, said:
"The truth is the Prime Minister is in command in this situation. She is leading the world."
Leading the world sounds all very grand, but what was ever achieved by a procession of one? To be alone in the world and right is to be heroic, but to be alone in the world and wrong is futile and destructive. That is the position in which the Prime Minister has placed herself and this country.

For years, at every conceivable international meeting, the Prime Minister and her Government have striven to block sanctions. The episodes stand out: at Nassau in 1985, making a space of half an inch with her fingers, and boasting that she had moved just "a tiny little bit"; at Vancouver in 1987, ordering her press secretary deliberately to distort the Canadian record on sanctions; at Brussels in 1988, ordering her then Foreign Secretary to block a joint declaration by the European Community warning of punitive action if the Sharpeville Six were executed; at Kuala Lumpur in 1989, allowing her then poor novice Foreign Secretary to sign a declaration in good faith, and within an hour betraying him and the Commonwealth by issuing a separate declaration—and now, rushing headlong into taking unilateral action in consequence of the recent developments in South Africa.

The Prime Minister's actions have been surrounded by great confusion. There was the episode of the rebel cricket tour of South Africa—now sensibly called off, as we sensibly demanded. Mr. Gatting seems to have learnt more about the facts of South Africa in three weeks than the Prime Minister has learnt in 11 years in Downing street. But then, Mr. Gatting has a clear advantage over the Prime Minister. He admits that he knows nothing about the realities of South African politics. Questioned in the House, the Prime Minister said that the Gatting tour was
"not contrary to the Gleneagles agreement".—[Official Report, 23 January 1990; Vol. 165, c. 735.]
But the Gleneagles agreement—to which the Prime Minister is, in her words, "signed up"—calls on participating Governments to take every practical step to discourage contacts or competition by their nations with sporting organisations, teams or sportsmen from South Africa. The Gatting tour, contrary to the Prime Minister's statement, is a clear breach of the Gleneagles agreement.

At the time of the Moscow Olympic games, the Prime Minister personally wrote to the chairman of the British Olympic Association urging the British Olympic team not to go to Moscow. Why did she not write to Gatting and Graveney in the same way? The answer is that she did not care whether or not that team went to South Africa.

Then there was the press conference that never was. Recently, the Prime Minister has taken to turning Downing street—fortress Downing street as it has become, since the barricades were erected to keep out the populace—into an equivalent of the White House lawns. On Sunday, journalists were kept waiting for one hour in the rain there before the ubiquitous Mr. Ingham came out to see them. Incidentally, I was touched to learn that Mr. Ingham was briefing the press against me last night. I am honoured to join the company of the right hon. Member for Shropshire, North (Mr. Biffen), the deputy Prime Minister, and a cast of thousands.

Mr. Ingham told the soaked journalists, "She is not coming down. She does not think she has anything further to say." The Prime Minister with nothing further to say? I bet that the Cabinet would not have minded being soaked to the skin in exchange for such an unprecedented bonus.

Confusion extends to the Prime Minister's view of the sanctions' legal status. She has scrapped one sanction already. On Sunday, she announced that she has lifted the ban on artistic and cultural contacts with South Africa. That is a harsh decision. Exposing innocent South Africans to the plays of Jeffrey Archer and to the musicals of Andrew Lloyd Webber is a form of punitive sanction in itself.

Then we come to the sanction on new investment, which the Prime Minister also said on Sunday she wanted to lift. Is this a voluntary sanction which we are free to lift, without the agreement of the European Community? Yesterday, I contacted the Foreign Secretary's office and asked for a definitive ruling. After some delay, the right hon. Gentleman's staff courteously telephoned my office with their reply. They offered no guidance other than to refer me to what the Prime Minister had said in the House at Question Time. It is no wonder that the Sunday Telegraph said last Sunday:
"The Prime Minister's good relations with her new Foreign Secretary have caused some surprise."—
said a Minister.
"He accepts rebukes and he isn't operating an independent Foreign Office policy."
In the House yesterday, the Prime Minister was unclear. She said that this sanction was voluntary, but she did not say whether it could be lifted unilaterally. My advice is that it cannot. The decision of the ministerial council of 27 October 1986 says:
"Member states shall take the necessary measures to ensure that new direct investments in the Republic of South Africa by natural or legal persons resident within the Community are suspended."
We
"shall take the necessary measures."
That seems pretty binding to me, and it is especially binding for the United Kingdom because of the circumstances in which the decision was made.

The document containing the decision on the ban on new investment in South Africa concludes:
"Done at Luxembourg, 27 October 1986."
It was signed "The President G. Howe".
The circumstances under which sanctions may be relaxed are strictly laid down in agreements to which the Government are a signatory party. The United Nations declaration of December 1989 demands the release of all political prisoners and detainees, removal of all troops from the townships, the end of the state of emergency and the repeal of the Internal Security Act. None of those conditions has been fulfilled. By seeking to drop sanctions now, the Prime Minister is seeking to breach a united declaration which she has signed.

Does my right hon. Friend accept that, underlying the points that he has correctly made about the isolation of the Prime Minister on the question of sanctions, is the fact that Britain is the largest single investor in South Africa, with £12,000 million-worth of investments? Consolidated Gold Fields has regularly made more than £100 million a year profit out of the blood and bones of black miners. That is why the Prime Minister is such a friend.

When I was in South Africa last July as a guest of the South African Council of Churches, I visited the people who had been sacked by the subsidiary of a British company—BTR Sarmcol. They were thrown out of work, on to the scrap heap, with no job, no wages and nothing to live on. That is the way in which British investors are taking advantage of conditions in South Africa.

The statement by the Commonwealth Heads of Government at Kuala Lumpur last October declares that the

"justification for sanctions against South Africa … was … to abolish apartheid by bringing Pretoria to the negotiating table and keeping it there until that change was irreversibly secured."
That change has not been irreversibly secured. By seeking to drop sanctions now, the Prime Minister is seeking to breach a Commonwealth statement which she signed. It was a part of the statement that she assented to, and did not disclaim. The statement of partial disclaimer, issued separately at Kuala Lumpur by the Prime Miniser and the Foreign Secretary, clearly states "the necessary steps" under which
"it would be right to lift some of the measures imposed by the international community."
Those steps—listed in a statement issued by the Prime Minister as her personal policy—include lifting the state of emergency. But the state of emergency has not been lifted. In seeking to drop sanctions now, the Prime Minister is trying to breach a personal statement that she herself drafted and signed. It is impossible to imagine anything more unprincipled.

The fact is that the Prime Minister has never wanted any sanctions to be imposed on South Africa at any time. She is now falling over herself at what she regards as a golden opportunity to get rid of them. She is trying desperately to wriggle out of commitments on sanctions that she made apparently in honour.

In the House yesterday the Prime Minister said, again creating confusion:
"The sanctions … are totally voluntary".
But there are several sanctions that, as the Foreign Secretary must know, are absolutely binding on us in international law. The Prime Minister is wrong about that. She also said in the House yesterday that the sanctions imposed by the United Kingdom were
"some very minor gesture sanctions".—[Official Report, 13 February 1990; Vol. 167, c. 136–38.]
At other times she has warned of the dire effect of sanctions and their capacity to cause economic damage to South Africa. Most notable, of course, is the ban on new investment presided over in Luxembourg by the deputy Prime Minister in 1986.

The Prime Minister is confused about every aspect of sanctions except one. The point that she is clear about is that she wants to lift them. Why? There is no doubt of the damaging affects of the ban on new investment: the Trust bank of South Africa calculates that the country has lost $14 billion in loans and direct investments over the past five years, and that 280 foreign companies have abandoned it since 1984.

A few months ago, the South African Finance Minister spoke of the "economic onslaught", the "beleaguered community", the
"need to break the isolation imposed on us … the elementary but remorseless truth … for both the economic and the political policymakers that no country can stand alone."
The South African Law and Order Minister has also admitted the effect of sanctions on his country:
"Our ability to make decisions is limited. If sanctions are introduced against us we can do nothing … We do not live alone in the world."
There is no doubt that sanctions have worked; there is no doubt that they are working. Nor is there any doubt that that is why the Prime Minister wants to get rid of them. She wants to rescue the very regime that sanctions are helping to bring down: she is the world's best friend of apartheid.

The most sickening aspect of the Prime Minister's opposition to effective sanctions is the argument against them that she has offered. She says that they would put hundreds of thousands of black South Africans out of work, and would cause deprivation and starvation. When did the Prime Minister ever care about unemployment? When did she ever care about poverty? It is true that South Africa contains unemployment and poverty on a horrendous scale, by any standards in the world; that unemployment and that poverty, however, are caused not by sanctions but by the system—the very system which the Prime Minister wants to prop up.

Let us be clear that apartheid is not racial oppression for its own sake; apartheid is racial oppression to make possible the use of the cheap slave labour of millions of blacks to provide a luxurious standard of living for the minority of whites.

I do not accuse the Prime Minister of condoning the racialism of apartheid, but I do say that, shorn of its racialism, the economic objective of the South African Government is Thatcherism in its ultimate form: the poor financing the high living standards of the rich. That is what exists in South Africa, and that is what the Prime Minister, given the chance, wants to bring about in this country too.

Speaking in Soweto yesterday, Mr. Nelson Mandela said:
"South Africa is a wealthy country. It is the labour of black workers which has built the roads and factories that we see … Our people need proper houses, not ghettos like Soweto."
Mr. Mandela said:
"They"—
the black people of South Africa—
"cannot be excluded from that wealth."
This great man, his mind crystal clear after 27 years of incarceration and suffering, states the position in its starkest terms. Mr. Mandela explains the situation and the product and the objective of apartheid in South Africa. He explains why the Prime Minister of the United Kingdom is so wrong. He explains why sanctions must stay. He explains why this House should vote for this motion tonight.

On a point of order, Mr. Speaker. During exchanges before this debate started, you said that you hoped that an apology might he given during the speech of the right hon. Member for Manchester, Gorton (Mr. Kaufman). No such apology has been given. Perhaps that was an oversight. Could you, Mr. Speaker, invite the right hon. Gentleman to give that apology?

4.22 pm

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

"salutes Nelson Mandela on his release and welcomes the constructive actions taken by President de Klerk to create an atmosphere conducive to negotiations with all parties in South Africa towards a non-racial constitution enjoying the support of a majority of South Africans; and believes these steps deserve a positive and practical response from the international community."
It is always difficult to know how to qualify a speech such as that which the right hon. Member for Manchester, Gorton (Mr. Kaufman) has just delivered. Fortuntely, he has come to my help on this occasion. In his book, "How to be a Minister" he gives this advice:
"Your final paragraph should be grandiloquent, even if almost meaningless."
The right hon. Gentleman is certainly consistent. Indeed, he has expanded on his own advice by covering in that way not only the final paragraph but the whole speech.

I am glad that the Opposition chose this matter for debate because it enables me to set out, in what I hope will be a coherent way, the approach and reasoning behind Her Majesty's Government's policy towards South Africa. I am glad to be able to do that as, up to now, I have not had the opportunity.

As the right hon. Gentleman said, the world had seen remarkable changes in recent months, but few have been more remarkable, or more welcome, than the transformation being wrought in South African politics—a transformation symbolised by the scenes that we saw last Sunday and thereafter. I congratulate Mr. Mandela on his release. Even those who, like myself, have been able to watch only snatches of the events that have followed the release must have been impressed by the overwhelming warmth of the welcome that Mr. Mandela has received and by the dignity with which he met it. It has been a formidable welcome—this is a serious point—bringing with it a formidable responsibility for one man to carry, and we wish him well as he begins to shoulder that responsibility.

Contrary to the thrust of the right hon. Gentleman's speech, the Government's policy towards South Africa has always been based on our rejection of apartheid. It is wrong; it does not work; the sooner it is ended the better. If the right hon. Gentleman had heard my right hon. Friend the Prime Minister speaking as forcefully in private as in public about apartheid, he simply would not have made the misleading and perverse remarks that he did about my right hon. Friend. What we have done in the past and what we are doing now is designed to speed up the end of apartheid.

Will the right hon. Gentleman be kind enough to inform the House whether, before the Prime Minister decided to abandon certain of these sanctions, she bothered to consult her Foreign Secretary or even that amiable dumb-bell, the deputy Prime Minister?

Order. I do not know whether the hon. Gentleman was here yesterday, but I do not think that remarks of that kind add any quality to our debates.

On reconsideration, Mr. Speaker, I withdraw that. I have considerable regard for the right hon. and learned Gentleman. I am only sorry for I he suffering that he has to put up with.

I do not wish to contradict you, Mr. Speaker, but I thought that the contribution from the hon. Member for Warley, East (Mr. Faulds) was rather above the level that we have had so far from the Opposition. The answer to the hon. Gentleman's question is yes. What has been said and what is being done is part of a measured response, worked out well in advance, to the kind of actions that we hoped the President of South Africa would take and that he is now taking.

I should like my right hon. Friend to clarify one point. There are different ways of interpreting different events. I understand that the Government's interpretation of the situation is that it would help Mr. de Klerk if we began to lower the sanctions barriers. Does my right hon. Friend accept that there is also the opposite argument: that at the moment Mr. de Klerk's main problem is the white Fascists in South Africa, not the African National Congress? If sanctions are lowered, Mr. de Klerk faces the possibility of the white Fascists saying, "We are doing quite well out of what the Government have already done." Since Mr. Mandela's release, has Mr. de Klerk specifically asked the British Government to do anything about sanctions?

President de Klerk made it clear in our contacts with him throughout that he very much hoped that if he began to move down the path that we and others—but eminently we—have been urging, there would be some response. That seems to be an entirely reasonable point. It is highly desirable that he should have that response to be able to reply to his critics on the Right who are pressing him fairly hard and who have been pressing him even harder since he made his speech on 2 February. We want to help to bring about in South Africa the peaceful replacement of apartheid by a non-racial, representative system of government that is fair and acceptable to the people of South Africa as a whole.

No, I must get on with my speech.

To this end, the Government have maintained a consistent policy towards the South African Government of pressure and encouragement. We want to bring about an environment in which the negotiations that the right hon. Gentleman mentioned—on an end to apartheid—can take place. We believe that that requires encouragement.

I shall give way to the hon. Gentleman a little later, if he persists, but I must make some progress with my speech because many hon. Members wish to speak.

We believe in encouragement when steps have been taken in the right direction and pressure when they have not—a combination of encouragement and pressure. That is why we supported the mission to South Africa in 1986 of the Commonwealth Eminent Persons Group. The group developed a negotiating concept. That, in our view, represented the most feasible basis on which to get the negotiations under way.

Order. The hon. Member for Aberdeen, North (Mr. Hughes) is, I believe, one of those who wishes to participate in the debate. Perhaps he could leave his point until then.

The core of the EPG concept was one of matching and reciprocal commitments by both sides in South Africa. It is worth recalling what it asked them to do. The EPG called on the South African Government to unban the ANC and the Pan-Africanist Congress, to release Mr. Nelson Mandela and other political prisoners and detainees, to remove troops from the townships, to provide for freedom of assembly and discussion and to suspend detention without trial; in short, to normalise political activity in South Africa. It called on the ANC and others, for their part, to suspend violence and enter negotiations.

The negotiating concept of the Eminent Persons Group had wide international support. The whole House should be glad that President de Klerk has now gone so far towards meeting the EPG's conditions for dialogue. We urge the ANC and other opposition groups to make an equivalent response by suspending their campaign of violence.

Let me justify what I have just said. President de Klerk came to office on 21 September last year. In October he released from long years of imprisonment eight black leaders, including Walter Sisulu, the former general secretary of the African National Congress. In November he announced the dismantling of the national security management system. He began an investigation into serious allegations of covert activities by the South African security forces against anti-apartheid activists, an investigation which has since been raised to the level of a full judicial inquiry. In the same month he opened South Africa's remaining segregated beaches to all races and promised that the Separate Amenities Act, which permits segregation of other facilities, would be repealed.

Those in themselves were major steps, but they were overshadowed by the further steps announced in President de Klerk's speech on 2 February. Before he made his speech in Parliament on 2 February, we urged him to release Mr. Nelson Mandela unconditionally, to unban the ANC, the PAC and the South African Communist party, and to lift the state of emergency. We expressed the hope that the South African Government would look again at the law on capital punishment and think in terms of protection for minority rather than "group" rights. President de Klerk has taken many of the steps we urged on him and which the Prime Minister urged on him when she saw him in London last June. We have exerted our influence to the full in that direction in South Africa, and we have been able to do so more directly and more successfully than most other countries.

Every one of those steps is therefore something for which Britain has repeatedly called and pressed over the years. Now they have been taken, it is absurd to say—as the Opposition do in their motion—that we should behave as though nothing had happened. To propose, as the Opposition do, that sanctions should be maintained in all their forms merely reveals the irresponsibility of their policy. Talk of intensified, comprehensive sanctions, in which the Opposition still dabble from time to time, now clearly belongs to another world.

The Leader of the Opposition suggests that we should do as Mr. Mandela asks and maintain all sanctions. That is not our analysis. To do that would be to shirk our responsibility. The ANC is a key participant in negotiations about the future of South Africa but, as has already been pointed out, it is the only one. It is the job of a British Government not to favour one party or another, but to try to do what we can to contribute to a peaceful, democratic solution in South Africa.

It is precisely the point of a peaceful and democratic achievement that I want to raise with the Secretary of State. If sanctions are lifted, the tragic fact is that the only force for change remaining in South Africa will be mass action, with all the risks of tension and upheaval that come with it. In the knowledge that that is the case, and that if sanctions are lifted, the ANC and the other forces striving for the abolition of apartheid are left to their own internal devices, is he prepared to reconsider any of his current views on sanctions?

The right hon. Gentleman is making the same mistake as I think he made yesterday, although I was not in the House. He is assuming that we propose the abolition of all sanctions, but we are not doing that. We propose a step-by-step, measured response. The President of South Africa has taken a large number of the measures which we, with the support of the House, have urged upon him. That response, which is a courageous one on his part, requires a response from us if he is to be taken seriously. He has not gone the full way, and we are not proposing to go the full way. Surely the right hon. Gentleman realises that if someone has started a process that we have urged upon him, it is sensible that we should respond by some encouragement so that he can proceed. If we give him no encouragement and say that nothing that he has done is worthy or deserves any response or relaxation, we are throwing him away and discouraging him from taking any further action. If the right hon. Gentleman does not understand that basic point, he is not looking at it through straight eyes.

I apologise to the Secretary of State for intervening again, but it is a fundamental point. First, the right hon. Gentleman is representing a Prime Minister who has shown that she is antagonistic to sanctions in principle. Secondly, she has described the sanctions that she installed as gesture sanctions. What real case can he build for suggesting that by the withdrawal of sanctions on which the Government put no value he can exert an influence over or offer a reward to President de Klerk?

Perhaps I can answer the right hon. Gentleman by continuing my speech and dealing with the sanctions in question.

I return to my main point—that we have to encourage the process that is under way. It does not make sense to take punitive actions when the South African Government are doing all the wrong things and to maintain all those punitive measures when the South African Government, at long last, are doing many of the right things. There is an obvious need to encourage the South African Government to take further steps, including the complete lifting of the state of emergency. That is where the right hon. Gentleman has got it wrong. We are not rushing to lift all sanctions. Ours is a measured response. Mandatory sanctions, including the arms embargo which is crucial, remain. We stand by the Gleneagles agreement, to the disappointment of some of my hon. Friends. There is no question of reviewing the arms embargo or associated military sanctions until there is a full democratic constitution in South Africa. We are giving a measured but positive response to President de Klerk's bold moves.

I now deal with the European Community, on which the right hon. Member for Gorton spent some time. In 1986, the Foreign Ministers of the European Community agreed to impose restrictive measures on South Africa in response to the actions of the South African Government. The European Community imposed those measures to send a signal to the South African Government that they should take steps to open the road to dialogue. In particular, it mentioned the unconditional release of Nelson Mandela and other political prisoners, and the lifting of the ban on the ANC, the PAC and other political parties. Community Ministers also called for the ending of the state of emergency, and on 10 February President de Klerk made it clear that that could take place within weeks if there was no upsurge of violence.

We propose a logical, step-by-step response; not to lift all our measures, but to consult our Community partners about lifting those measures adopted in 1986, starting with the Community ban on new investment which was always voluntary in our case.

The right hon. Member for Gorton may not know that our approach has been endorsed by a letter to a number of Community Foreign Ministers from Helen Suzman, who is one of the leading veteran opponents of apartheid in South Africa, asking the Community to revise the policy of sanctions against South Africa to fortify President de Klerk's ability to combat white fears and resistance, and to enable the South African economy to grow to provide education, social services and employment opportunities to all South Africans in a non-racial society.

Before I give way to the right hon. Gentleman, it is worth remembering that the population of South Africa will grow by nearly 1 million people a year over the next 10 years. There are 7 million children at school today in South Africa. By the turn of the century there will be 12 million people needing education. If we were to inflict the serious economic damage on South Africa that the right hon. Gentleman favours, we would leave any future South African Government with a hopeless task.