My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, it is not our practice to give details of this kind, nor is it possible to calculate meaningful proportions. Activity in all three Services has been reduced, leading to some loss of operational training. In some areas activity has been cut; in others it has been maintained at or about normal. Levels of training will not be cut below those required for essential operational efficiency.

My Lords, I am grateful to the noble Viscount the Minister for that unsatisfactory and incomplete reply. Might I ask the Minister further what is now regarded as a reasonable minimum number of flying hours for front-line pilots in both the Royal Air Force and the Royal Navy, and, secondly, to what extent has our participation in both national and NATO exercises been curtailed for the reasons given in my Question?

My Lords, I am sorry that the noble and gallant Lord believes that that was an unsatisfactory reply; I have indeed had detailed discussions with the Services to see whether I could make it a more informed one. The fact is that the policy of trying to curtail the over-expenditure on the defence budget means that only after the event will one be able to work out details of the kind that the noble Lord asks for. So far as the flying hours are concerned, I think it is well known that the NATO guide on minimum hours is an average 15 hours a month, and we shall maintain that level as an absolute minimum. So far as exercises generally are concerned, some lower priority exercises have been curtailed, but major exercises, which as the noble Lord knows include "Crusader", have been maintained at normal level.

My Lords, would not my noble friend the Minister agree that the most important conclusion from the United Kingdom air defence exercise nicknamed "Elder Forest", held last year, was the need for such exercises to take place more frequently, not only to practise the defence of the United Kingdom base but also to co-ordinate all the elements of the NATO air defence environment known as NADGE? Can the Minister say to what extent this vital training programme will now be curtailed?

My Lords, I cannot answer the detail of my noble friend's question without notice, but I will write to him on that detail. I think that in general all I can say once again is that there is a difference between what we acknowledge is a thoroughly desirable level for operational training and a minimum which one has, with some reluctance, been forced to adopt in order to curtail within reasonable bounds—and "reasonable" may be a slightly unwise word—the over-expenditure on an already increased defence budget.

My Lords, may I ask the noble Viscount whether he would agree with me that the manoeuvres that were undertaken about 12 months ago in Europe disclosed inadequacies in operational training, and why have they never been revealed?

My Lords, if the noble Lord is referring to "Crusader", I believe that this exercise was in effect thoroughly successful; it showed that in the main we were able to increase the effective defence in Europe roughly according to plan. Yes, the purpose of the exercise was to highlight shortcomings. Some shortcomings were highlighted and some of them have a training application, and where these are a priority they will still be included.

My Lords, is my noble friend aware, as regards the figure he gave for a pilot in training—I think it was 16 hours a month—that taking into account leave periods and all the things that could go wrong, it is barely enough for a man to keep in flying training, let alone the flying equipment that is worth many millions of pounds?

My Lords, I am not one to argue with my noble friend as to the exact correctness of a NATO guide, advised, I think, by all experts in this area, that 15 hours a month should be the minimum. That is what is advised as the minimum and we shall not drop below it, and as soon as we possibly can we shall increase it.

My Lords, will the noble Viscount bear in mind a bit of history—that in the early 'thirties the same sort of stupidity was carried on by the Government of the day? Will he remember what was said at the outbreak of war: that if it had not been for the Navy being called out on patrol for the Spanish Civil War they would have forgotten how to navigate and signal?

My Lords, I take note of the noble Lord's historical lesson.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, Sir Henry Yellowlees has reported that these estimates are fairly accurate. The accuracy falls with increasing age. For example, at three years of age 68 per cent. of the children examined would be expected to have a bone age within about five months above or below their chronological age, and 95 per cent, within about 10 months; at 16 years the respective figures would be about 13 months and about 26 months either way. However, bone X-rays are not the sole determining factor in a medical opinion of age, and a doctor would normally only use them to verify an assessment based on his clinical examination.

My Lords, while thanking the noble Baroness for that reply, may I ask whether she can explain why her colleague, the noble Lord, Lord Belstead, told me in an Answer to a Question on 20th January that, in estimating the age of children by X-rays, the accuracy attainable was of the order of plus or minus six months, when on the noble Baroness's own admission it can be as much as plus or minus 23 months? Is she aware that Dr. Cameron of the Institute of Child Health at the University of London has said that chronological age varies by as much as two years on either side of skeletal age and that variations of as much as three years can exist if one is looking at populations of children who are malnourished or under-nourished, such as those who are likely to be found in the Indian sub-continent?

My Lords, as the noble Lord will be aware, this is a highly technical matter. I am quite prepared to give him the evidence upon which my Answer is based. It is based on the most accurate information that we have to date.

My Lords, can the noble Baroness say why it is necessary to X-ray children for Immigration Act purposes?

My Lords, as I have indicated, it is sometimes necessary, for Immigration Act purposes, to identify an applicant's age as accurately as possible, and in the course of that X-rays are sometimes used.

My Lords, is there any risk to the health of the children concerned in this apparently rather meticulous process?

My Lords, the whole question of safety is again a highly technical matter. However, I understand that calculations by the National Radiological Protection Board show that the radiation risk associated with the single hand or wrist X-ray, using the accepted precautions to avoid the scatter of radiation, is extremely small.

My Lords, in that case why do the Government refuse to give an undertaking that X-rays will be confined to the wrist and hand which are the parts of the body which are commonly used in the Tanner-Whitehouse method of age estimation? If the noble Baroness is ready to give me the information for which I asked in my first supplementary, how is it that I am still awaiting an Answer which was promised to my Question of an earlier date as to how the Government correlate the bone ages of children in the Indian sub-continent with the sample of British children on which the Tanner-Whitehouse method is based?

My Lords, it is true that the noble Lord did put down a Question to my noble friend Lord Cullen of Ashbourne and I can assure him that there will be no delay in his getting an Answer. I hope that he will get it within the next two weeks.

My Lords, will the noble Baroness answer the first part of my question?

My Lords, on the first part of the noble Lord's supplementary question, I point out that the Government are naturally studying the report of Sir Henry Yellowlees and, of course, will take into account the results of the consideration of that report and any other considerations, such as questions like the ones which have been raised today.

My Lords, that was not what we asked. The noble and learned Lord asked about whether there were any considerations of safety and the noble Baroness correctly replied that the risks to children are minimal if they confine themselves to X-rays of the wrist and hand. But since the Yellowlees Report has been published has there not been a demand made of the Government that no X-rays other than of the wrist and hand should be carried out on children, and have not the Government refused to comply with that request?

My Lords, once again the whole question of safety is a very technical matter. If the noble Lord wishes a reply to that specific question, he must put down a separate Question and I will do my best to answer it.

But, my Lords, surely that question is highly relevant to the concern of the House about this matter? If the Minister is temporarily waiting for an answer from a certain place, we shall give her a moment or two while I continue to address the House, if that will be of assistance.

My Lords, I am not waiting for an answer from the Box; but I think that the noble Lord will appreciate that questions of safety with regard to X-rays are very technical subjects. I have given an answer to the best of my ability and I am quite prepared to give an answer to any Question that either the noble and learned Lord or the noble Lord, Lord Avebury, may care to table. However, it is a matter which is slightly wide again of the highly technical Question that the noble Lord has asked.

My Lords, would the noble Baroness agree that, if there is a question of danger to the health of children, the Government should err on the side of the children rather than on the side of technicalities?

My Lords, I should like to make it quite clear, in any case where a child is going to be subject to an X-ray, that when deciding whether or not to ask for a bone X-ray the doctor will balance three factors: first, the accuracy to be expected from the estimation; secondly, the extent of the risk of radiation; and thirdly, the degree of importance to the applicant or to the immigration service of having an estimate of bone age.

My Lords, I should like to ask a non-technical question. Is there any risk of a child being exposed to X-ray both in the country of origin and on this side when he or she arrives?

My Lords, the X-rays take place in the country of origin; they do not take place in this country. My understanding is that the precautions that I have identified would take place in the country of origin because, of course, the risks are known to all those who would be responsible for taking the X-ray.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government how many new engineering and science students from Commonwealth countries had been admitted for their first year to United Kingdom universities and polytechnics, whether at undergraduate or at post-graduate level, as at 1st November 1980 compared with the numbers admitted in 1978 and 1979.

My Lords, in United Kingdom universities 2,739 new first-year engineering and science students from Commonwealth countries were admitted at undergraduate level in 1978 and 2,245 in 1979; at post-graduate level the numbers were 1,436 and 1,393 respectively. In polytechnics the corresponding numbers at undergraduate level were 942 and 906, and at postgraduate level 17 and 39 respectively. The polytechnic figures for undergraduate level students are solely in respect of those commencing first degree courses; there were an additional 539 students in 1978 and 456 students in 1979 starting non-advanced or advanced courses other than of first degree level. I regret that corresponding information for 1980 will not be available for several months.

My Lords, I thank the Minister for that reply and appreciate the evident trouble which the department has taken in producing these complicated statistics. Does she realise that from my point of view the significant period is not the two years 1978 and 1979, which she quoted, but the year starting 1st November 1979 and ending 1st November 1980, the figures for which I understand are not yet available but hopefully will soon be available?

Are the Government aware that the Association of Commonwealth Universities' Vice-Chancellors will shortly be meeting in Hong Kong to consider proposals for mitigating some of the more dangerous results of the recent very heavy increases in overseas students fees upon student mobility within the Commonwealth? Will the noble Baroness give an undertaking that when these proposals are available they will be given very serious consideration by the Government?

My Lords, I regret that the information for 1980 is not yet available, but as the noble Lord, Lord Gladwyn, will appreciate, it is very difficult to get the information for this current academic year. We expect it to be available from the universities within the next few months and from the public sector at the end of the academic year. On the noble Lord's second point, we shall of course consider the findings of the conference of Commonwealth Universities' Vice-Chancellors.

My Lords, do the Government recognise that the success and proper working of almost all aid schemes depend directly on the availability of competent engineers and technologists in developing countries?

Yes, my Lords, I appreciate that point, and my noble friend will recognise the very high numbers of overseas students taking engineering courses.

My Lords, can the noble Baroness say whether it is not the case that the Government undertook to monitor the results of their policy on fees? Can we expect a report on this at some time in the near future? Further, when the noble Baroness gives us this information, will it be possible for it to be broken down between the countries of origin of the students attending British institutions of higher education, so that we may see how many come from the oil-rich states and how many come from the poorer Commonwealth countries?

My Lords, the Government published a statistical bulletin, a copy of which is in your Lordships' Library, giving the effects of the figures that we have so far relating to the 1980–81 entry. That information is, of course, available to any noble Lord. This forms part of our monitoring of the numbers of overseas students which we accepted we would have. As for the other statistical information, I shall certainly take note of the point raised. I think that it will be available, as it has been available in the past.

My Lords, is the Minister aware that there is considerable concern in the Commonwealth, and in the third world, which is not necessarily included in the Commonwealth, about the great disparity in fees between those charged to Commonwealth students and those charged to students from Europe or, indeed, from very poor countries in the third world? Is not this grossly unfair and also very shortsighted in view of the fact that the more Commonwealth students we train and influence in this country, the better is the reception to both our commerce and our diplomacy in their home countries?

Yes, my Lords, this is of course a matter that we have discussed and debated in your Lordships' House on many occasions. Much as we all wish that more money was available for overseas students, the fact is that the education budget has to make its share of the economies for which the Government have asked, and under these circumstances the Government believe that it is right that these students from overseas should pay the full cost of their education here. The Government still believe that it is very good value for money to be able to get a first degree course in three years. Of course, we value and appreciate the need to have internationally recognised universities, and the advantage of overseas students being educated in this country, but we are still educating many thousands of them–2,000 more this year than were proposed under the former Labour Government's scheme.

My Lords, I should like to ask one further supplementary question. Is the noble Baroness aware that the Commonwealth Secretariat has appointed a committee to make constructive proposals regarding the fees paid by overseas students generally, and will she be in touch with the Commonwealth Secretariat in this regard?

My Lords, I am quite sure that my right honourable friend will be happy to look at any constructive proposals about this problem, but the noble Lord must recognise that the Government's commitments to making the savings are not something on which we can go back.

My Lords, is the term "overseas countries" deemed to include Europe?—because Commonwealth students pay substantially more than students from Europe do for the same tuition.

My Lords, no; the home rates of tuition fees apply to students from the EEC.

My Lords, is it not a fact that many independent countries within the Commonwealth are well able to pay the fees of overseas students? We should not lose sight of that fact. Has my noble friend any information as to where difficulties with regard to the payment of students' fees by overseas Governments are being experienced?

My Lords, I thank my noble friend for that question. The fees of many students from the developing countries of the Commonwealth are in fact paid by the Overseas Development Agency, which to the Government seems the right way of helping poorer students from the Commonwealth. We have also established a special scholarship fund for oustanding post-graduate students, which has been fully taken up.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether the will instruct parliamentary counsel that Statutes in Force and recently consolidated legislation should be amended by the textual method as envisaged and recommended by the Committee on the Preparation of Legislation (Cmnd. 6053) in paragraphs 13.23 and 13.24 of their report.

My Lords, partly as a result of the report by the committee chaired by my noble friend, textual amendment has become the prevailing practice, not merely in recently consolidated legislation, but generally, and the Government accept and encourage this attitude, Nevertheless, in the last resort the matter is one for the discretion of parliamentary counsel and in the view of the Government a formal instruction would be inappropriate.

My Lords, I thank my noble and learned friend for that mainly encouraging reply. Nevertheless, may I again take the liberty of reminding him that there are occasions when parliamentary counsel are not infallible, and that it would be far better if it were made abundantly plain that there is scarcely ever any occasion which justifies the use of the non-textual method.

My Lords, I think it is possible that none of us is infallible, but it is likely that parliamentary counsel know their own business better than I do.

My Lords, it might be for the convenience of those of your Lordships who are taking part in the Wildlife and Countryside Bill if I announce that the Government very much hope that it will be possible to complete the Committee stage in the course of tomorrow, Thursday, 19th February, and therefore to avoid the necessity for the House to sit on Friday, 20th February. I am sure that the whole House would welcome this. If in the course of the Committee stage tomorrow it becomes clear that the Committee stage cannot comfortably be concluded on that day, and that a Friday Sitting is therefore essential, I shall make a further Business Statement.

My Lords, the House will wish to thank the noble Lord for that announcement and his usual courtesy. Owing to the remarkable character of this Bill, and, if I may say so, the indecisiveness of the Government in dealing with it, we must just hope for the best. Those noble Lords who were in the Chamber late last night will have heard the noble Lord, Lord Winstanley, say that he thought that the noble Lord, Lord Denham, was getting twitchy, and offered him a prescription to cure his twitchiness. I just wonder whether the prescription has arrived?

My Lords, I only hope that it will not be necessary on Friday.

My Lords, while entirely accepting that the Committee should seek to make as good progress as possible with the Wildlife and Countryside Bill, may I ask whether the noble Lord is aware that yesterday I imposed a self-denying ordinance on myself by not speaking for the whole of the day, as I mentioned to him, and that it is unfortunate that he should make this announcement just at the point when my two amendments are first on the list?

My Lords, I thought that Lord Avebury's amendment would be a very happy one to start off the next day with.

rose to call attention to the state of the British civil aviation industry with special reference to the condition and situation of British Airways and of the airports operated by the British Airports Authority; and to move for Papers.

I am sure that the House would like to thank the noble Lord, Lord Glenkinglas, for introducing this debate this afternoon, so enabling your Lordships to have a comprehensive discussion on the aviation industry. Over the past year or two we have had a number of debates on different aspects of the industry, but the Motion before us today enables us to look at the aviation industry as a whole. As the noble Lord said in his final remarks, your Lordships' House has in particular excelled itself in acting as a watchdog for the consumer interest—travellers' interest—and that work has been spearheaded by the noble Baronesses, Lady Burton of Coventry and Lady Trumpington, on many occasions in this Chamber.

I was sorry that I was not present last week when the House debated Concorde, to which the noble Lord, Lord Glenkinglas, referred in his speech. Unfortunately I had to be in Geneva, performing some of my duties as chairman of the London Convention Bureau, which exists to attract conferences to London. However that engagement gave me the opportunity to lunch with Mr. Hammarskjold, the Director-General of IATA, for whose views on the industry I have respect.

The noble Lord, Lord Glenkinglas, spoke in particular of the history of the industry over the past 10 years and reminded us of some of the problems that it has had to face during that time. On the whole I want to look at the situation as it is now and to consider what problems lie in the future. The most obvious, stark problem which we see is that of the grave financial trouble which British Airways is in at present, though there must be considered side by side with that the general overall state of the industry throughout the world. British Airways' revenue last year was £300 million down on expectations, and the indications are that the situation is worsening. The bottom line loss for British Airways as at the end of December was over £40 million, and the remaining three months of the financial year, which are traditionally loss-making months, are unlikely to show any improvement.

It should be emphasised that no European airline is prospering at the present time, and for the first time ever 1980 was a zero growth year in passenger traffic for IATA member airlines. For British Airways it was a year in which it saw a drop in its traffic of 10 per cent., compared with an annual growth rate of 10 per cent. throughout the 1970s.

As a consequence of that situation, airlines have filed negative sets of operating results, which means that there is no profit to bank to compensate for depreciation and to buy the next generation of aircraft that are vital for greater productivity and fuel economy. For IATA members 1980 can be assessed in stark terms: costs up 27 per cent.; revenues up only 19 per cent. Whereas British Airways had expected to fund about half of its capital expenditure programme this year from internally-generated funds, it is now found that this is impossible and all capital expenditure will have to be financed from external sources. The Government have recently given approval to further external borrowing by British Airways of £85 million beyond that originally set as a part of the public sector's external financing limits.

In the next few years we shall see a number of European carriers in serious trouble, and they are already reacting in different ways. They will be cutting back on staff, routes and facilities, and I believe that the industry needs a fuller understanding of the cost problems—both fuel and non-fuel—that it faces.

I think it helpful to remind ourselves that six of the top 10 airlines in Europe are British, and that there is a situation which might not be widely realised, in that a British airline such as Dan-Air is in fact a larger airline than Swissair.

As was said by the noble Lord, Lord Glenkinglas, in speaking about the multiple usage of particular routes, the Hong Kong situation which has developed over the past year means that there are airlines offering below-cost fares on long routes such as this. It is quite clear that such a situation cannot continue and that the honeymoon which the airlines at first thought they enjoyed when deregulation was taking effect is fast coming to an end. That inevitably means that there will be commercial airlines that will go to the wall during the coming years. But it should be added that one cannot see that happening to national airlines.

One of the problems which the committee so ably chaired by the noble Lord, Lord Boyd-Carpenter, was looking at concerned the question of why European air fares are so much higher per mile than air fares in the States. The committee came up with a number of different reasons for that. Undoubtedly one reason lies in the fact that there are too many airlines in Europe, all with their establishment costs, and that is a situation which I think will be very difficult to resolve. If there is, as there is bound to be, continued national support—which one thinks is only right—for national airlines, it will create an artificial situation for competition in the industry. However, one should say that the airlines are more fortunate than the operators of airports, because if an airline finds it is in trouble it can switch its capital from route to route, or it can divest itself of its capital by selling off surplus aircraft; but, of course, an airport authority cannot take that particular action.

The year 1980 showed very starkly for the first time in the United Kingdom the link between prices and costs. The Government's policy on the future financing of airport development could be seen as directly affecting current airport charges, and thus the airlines' non-fuel costs. The industry has questioned the British Government's support for the campaign for lower European airfares in the context of its domestic policies on charges, which affect all major European airlines. The noble Lord, Lord Glenkinglas, mentioned the question of airport charges. The particular remark made to me last week by Mr. Hammarskjöld was that he felt that British airports were non-competitive; and one can understand what he meant by that. Lord Glenkinglas referred to them as being expensive.

Airlines have reacted to greater competition in different ways. Some are concentrating on the top end of the market and are limiting their capacity and sales in the lower yield sectors, like Swissair. Others are making a clear distinction between business and leisure traffic and are offering sharply defined products to both ends of the market, like Air France. A third group is down-grading its first-class service and relying on the emergence of a new, middle-market product, like British Airways. Innumerable promotional fares are now available to the public, and fewer than 25 per cent. of European air travellers buy a normal economy ticket. These evolutionary steps have the encouragement of the EEC Commission, the European Parliament and the Government. As to the ways that these particular airlines are adopting to solve their problems, one does not know, until one has hindsight, whether or not these will in fact prove to be the right solutions.

In the lengthy debates we had on the Civil Aviation Bill last year we discussed the case of airport charges, but this continues to be a sub judice matter, I assume. However, one can say on airport charges that the security levy has been held for the forthcoming year. However, a general point remains, which is that as the Airports Authority enters on to a period of intensive capital expenditure it needs to attract external finance, and it is up to the Government to provide support and to act as a broker in encouraging private investment and the underwriting of future programmes.

So far as airport siting is concerned, the endless Maplin-Stansted-larger Heathrow debate always fails to mention the user. There is, as I have said on many occasions previously, no God-given guarantee of the continued high-level involvement of British airports with the airline industry, and we must continue to make it attractive for airlines to use our major British airports. We must ensure that our London airports continue to be a major gateway for the airlines, and in particular the No. 1 gateway for airlines coming from North America into London.

Over the years there have been in this House continual criticisms of the facilities offered at Heathrow, of over-crowding there, and of lack of space. One should say that a lot of this has been caused by the need for the British Airports Authority to continue to manage at Heathrow, in many cases erecting more expensive buildings than they need erect because of the contraints of the site; because of the need to build down into the ground and of the need to build up. And the continued vacillation by many Governments of different complexions over the ultimate siting of a third London airport should be recognised. I think we know only too well (and I spoke previously about this) of the ability of airlines to switch their capital and of the inability of airports to do that.

Of course, the building of an airport which is found to be not commercially useful is a wasted expense. One can think of airports which were built on the assumption that aeroplanes would have to refuel before they landed in Europe, followed by the development of aircraft which did not have to refuel in the same way, as airports which were in fact in the wrong places at the wrong times. However, I feel that we have a fair assurance that the London airports will continue to be—and I hope the Government fully support this—the No. 1 gateway, and that the continued need of additional space in the area is one which will have all encouragement.

Having referred, on the one hand, to the poor financial results for British Airways, I think one should recall that during the most recent financial year Gatwick showed an increase of 12 per cent. in the number of passengers using that airport and Heathrow an increase of 1 per cent., whereas Amsterdam showed a decrease of 7 per cent. This, I think, shows a satisfactory situation for the British Airports Authority in their desire to switch an increasing amount of traffic to Gatwick.

There is one other aspect of the problem which I do not think has been mentioned so far, and that is the question of cargo. This is an area where British Airways have made considerable advances in the handling of air cargo in the last year, and this is obviously an area where one can see very considerable growth in the future. I was not expecting to speak for as long as Lord Glenkinglas but I see that it is almost coming up to 20 minutes. I have tried to touch on some of the problems concerning the different aspects of the industry. These are obviously problems which will have to be discussed again and again in the future and it is very difficult to focus one's telescope absolutely clearly on what the state of the industry will be 10 years from now.

My Lords, before the noble Lord sits down, may I intervene for a moment on his reference to the question of British Airports Authority charges? He will know that there are legal proceedings on this matter at present, and I should like to refer to the second paragraph of page 84 in the Companion on this matter. It reads:

"Matters awaiting or under adjudication in a civil court should not be referred to in any Motion or debate on a Motion or in any Question, including any supplementary question, from the time that the case has been set down for trial or otherwise brought before the court".

I have to say the matter has now been set down for trial in January 1982, and I am advised that it is strictly sub judice.

My Lords, I, too, should like to thank the noble Lord, Lord Glenkinglas, for raising this Motion but he has raised it in such wide terms that, in the interests of brevity, I think I shall confine myself to drawing attention to some of the more salient points. British Airways is the first "special mention" on the Motion and, like most airlines in the West, this airline is now suffering from a monumental slump in traffic. This condition is not helped by the current rises in fuel and airport charges; but as the noble Lord, Lord Trefgarne, has said that this matter is sub judice I had better say no more on that except that I hope that an examination will be made of this, with particular reference to how these charges impinge upon the very high fares charged within the United Kingdom for local services which are sometimes short- and sometimes very short-haul services. Compared with the passengers carried in 1979, in the first nine months of the current financial year the figures have dropped by something like one million passengers, which has resulted in a cut in British Airways' revenue of something like £3 million. I think that this was mentioned by the noble Lord, Lord Ponsonby of Shulbrede.

There is a considerable outcry over the high fares now charged for scheduled services in Europe. I am told that at a recent meeting in Geneva, British Airways was reported as having been successful in obtaining agreement with some of its opposite numbers in Europe to reduce some of these fares. Presumably, such reductions will have to be referred to the appropriate governments under the bilateral agreements affecting fares and rates. I wonder if the time has not come when we should seek to have these agreements revised, at least so far as they affect fares and rates, if only to bring an end to those airlines who sometimes oppose reductions for reasons of their own finance or prestige and then get their governments to exercise a veto by not approving the proposed fares. Perhaps the noble Lord may have something to say about this when he comes to reply.

I do not propose to go into the vexed question of bucket shop discounted tickets as to do so might preempt the discussions on this subject on a Motion that the courageous and (if I may say so) indefatigable noble Baroness, Lady Burton, is going to raise in a short time. On retrenchment to adjust capacity and costs to the traffic situation brought about by the slump, British Airways have undertaken massive replanning to cover this winter season which has involved the following cuts. The service from Gatwick to Düsseldorf, Frankfurt and Zurich has been cancelled and so has the service to Georgetown as well as the Concorde service to Singapore. The services to Stockholm and Copenhagen from Gatwick have been combined and frequencies on some 40 routes and 80 services have been reduced. British Airways have recently sold off some £20 million-worth of aircraft. They are examining the possibility of leasing or selling one or two of the 747s now on order and have been able to arrange for a postponement of delivery of these.

In the past 18 months, British Airways has been able to reduce its work force by 4,000—and this by normal wastage, without having to resort to enforced compulsory redundancy. In each of the last two years, British Airways have increased their productivity by 10 per cent. on average which, I am told is a considerably higher increase than obtains generally in the industry. In the last two months of 1980, a 90 per cent. punctuality for departures and a 100 per cent. regularity was achieved—which are even better figures than that given last Monday by the noble Lord, Lord Lyell. We discussed the Concorde operations last week, so there is no point in discussing that again today.

To turn to airports, the second of the special references made in the Motion, I understand that the public inquiry concerning the provision of a fourth terminal at Heathrow has been completed, planning permission is now awaited and, if there is no delay in obtaining this, the building will be complete by 1985. The completion of the extention of the Piccadilly Tube from the central area to the new terminal is awaiting the outcome of negotiations as to who is to be responsible for the funding of what is known as the "station box", which is the structure which will house the tracks, platforms and other ancillary equipment required for the station which will lie under the new terminal. Can the noble Lord give any information about these negotiations and their progress? As I have told your Lordships before, while the operators welcome the provision of the fourth terminal, many of them (notably British Airways) regard it as a stop-gap and better than nothing and hope that the present policies will be reversed and that eventually the Perry Oaks site will be developed as a fifth terminal.

In regard to improvements, Pier No. 3 in Terminal One, which is a very long one, if not the longest in Heathrow, is now to be widened so that a travelator can be installed. This was originally asked for by BEA before that corporation took over the buildings, but the pundits of Whithall said no. It is good news to hear that the airport authorities have grasped the nettle so that in due course elderly travellers such as myself and others will not have to trudge its dreary length. A central control is also being installed, so that if a travelator or a moving staircase does not move, its location will be recorded immediately and engineers can be sent to make repairs. Some new model carousels have been installed where the cubic capacity allows, and this, it is hoped, will alleviate some of the delays that passengers have to endure and the long wait that they have had to put up with before they could claim their heavy baggage. It seems that much effort is being made to get rid of the causes of so many delays and inconveniences that have long been complained about.

It was estimated before the slump that a ceiling of 30 million passengers would be the order of the day at Heathrow; but only the figure of 27 million was actually reached. The slump and, it is likely, the move to Gatwick of British Airways' Spanish services may account for this. However, until the fourth terminal comes it is probable that the continued passenger congestion will remain. As regards Stansted, it is reported that the public inquiry concerning its development will not start before next September. It will probably take some time, so, in the meantime, presumably no actual development work can start, apart from some planning.

From the report of the British Airports Authority which was recently published, it seems there are plans for British Rail to run a spur into the airport building from the Bishop s Stortford/Cambridge line. There are to be four special trains an hour going to and from St. Pancras which is a much more convenient London terminal for most passengers than Liverpool Street station. Special passenger facilities are to be installed at St. Pancras. Even so there will be considerable problems in effective, quick interlinking with services using Heathrow and Gatwick. The road running from the south end of the M.11 to the centre of London, even if you use the North Circular Road, will be lengthy and tiresome, especially at peak times. I wonder whether the noble Lord, Lord Trefgarne, can tell us whether there are yet any plans for transferring services from Heathrow and Gatwick, and, if so, which airlines and what services will be affected?

Last December, in his declaration of airport policy, the Minister expressed a hope that the congestion in the London and South-East area could be eased if more services could be dispersed to provincial airports and more services from those airports to Continental destinations could be developed. I wonder whether the noble Lord can tell us whether any progress has been made in the matter. I seem to have asked a great many questions of the noble Lord; but, as I have given him some prior notice, I hope that he will be able to answer some of them.

My Lords, I should like to ask for your Lordships' dispensation as unfortunately I shall probably not be able to be here for the last speeches, because I have an appointment with the Under-Secretary of State for Defence and the All-Party Defence Study Group. I hope that I may be forgiven. I shall read Hansard tomorrow with great interest. Last Monday, when I raised the matter of British Airways' punctuality, it was said that it was very much improved. I have already mentioned two figures—that is to say, on the short-haul the punctuality percentage has improved from 45 per cent. two years ago to 82 per cent. this January; the long-haul figures from Heathrow are that about 70 per cent. of the flights are punctual, and that compares with the figures of 54 per cent. for Pan Am and 65 per cent. for TWA. I should like to reiterate that this can only reflect great credit on the management and staff of British Airways and, in particular on Sir Ross Stainton, who has just retired.

However, not everything is rosy in Britsh Airways. There appeared to be inconsistencies between public policy in attracting a private sector shareholding in British Airways and the effects of licensing policy in British Airways' principal asset: its route structure. My noble friend Lord Glenkinglas referred to that. To enlarge briefly on this, a previous Conservative Government and a subsequent Labour Government thought that Britain would achieve and maintain its maximum share of global air transport if dual designation of British carriers were, at the very least, severely limited. As has been mentioned this afternoon, this policy was beginning to show some success, but of late it has begun to erode slightly. An excess of new competition on international routes in conjunction with the world recession makes it nearly impossible for British Airways to keep a balance between profitability and the maintenance of its market share, and Hong Kong has already been mentioned as a good example.

Many think that the negotiation of the so-called Bermuda 2A Agreement with the United States has produced a very unfavourable result for the United Kingdom. The British Government's exercise of choice in the new route options, which were ostensibly to help Laker and British Caledonian, may well have helped them but it has also given a considerable advantage to American operators; and so Laker's and British Caledonian's traffic to Hong Kong has no doubt, wrongly or rightly, hived quite a considerable amount of Gulf traffic away from British Airways. Of course, the same principles and arguments will apply to the Australian route.

Perhaps I could mention here that other carrries, not unnaturally, show a great interest in the "fattest" routes because these routes have been developed by British Airways with British Airways' money and expertise. We do not seem to see many applications for the less popular routes on which there are at present no scheduled services. Many, if not most, of the countries which run principal airports see it as their duty to help and give preferential treatment and exposure to their national carriers, but this does not appear to be the policy in this country. I was going to say something else about this, but in view of what my noble friend said about the British Airports Authority I shall remain silent.

I should like briefly to mention the security service which currently, in a full year, costs British Airways about £16 million, which is not an inconsiderable burden. I am led to believe that the security fund is already significantly oversubscribed. When my noble friend answers for the Government perhaps he could mention this. May I also mention helicopters? I know that my noble friend Lord Glenarthur is very much more expert than I am and will probably go into it in far greater detail, but if we look at the United Kingdom, over a period of years we have been virtually non-existent in helicopter development, despite that fact that geographically our country is one of the most suited for this type of air transport.

It must give us a lot of satisfaction that the only British manufacturer of helicopters—namely, Westlands—have at last realised the tremendous potential that the civil helicopter has. Perhaps it should be brought home that we ought to export our high technology projects such as this. Westlands would be more than capable of doing this, particularly with the assistace of British Airways. Each Westland WG30 helicopter is worth about £1¼ million on the world market. I believe that we should really try for this because I am told that there is a market for at least 400 of these helicopters and it is an opportunity we cannot ignore.

That brings me to what appears to be reluctance on the part of the Civil Aviation Authority and the British Airports Authority to allow the helicopter service to link Milton Keynes with London Airport. I believe that progress is being made but the wheels are still turning very slowly. While on the subject we must remember that the Westland helicopter is full of British steel and British avionics and has a British Rolls-Royce engine. As the Government are well aware, there has been a lot of talk about a London international heliport. It has been discussed, I believe, between the Government and the Opposition, and there does not appear to be any objection to siting such a heliport down in the docks. Of course, this would again be a further way of alleviating the present depression being felt in the East London area. It would appear that if we had a heliport, there it could comfortably accommodate sometwhere between 6 million and 8 million passengers a year. I wonder whether the British Airports Authority have taken this into consideration when they have been considering Stansted.

I think it must be appreciated over the years that fixed-wing aircraft cannot always make profits over short sectors, and this is where the helicopter proves its worth. One has only to examine the successful service between Penzance and the Scilly Isles, which has been operating for something like 17 years highly successfully and highly profitably.

Let us hope that the Concorde operations, which were so ably debated the other night in connection with the Unstarred Question of my noble friend Lord Glenarthur, will continue. Let us hope that the punctuality will continue to improve even further and that the policies so well started by Sir Ross Stainton w ill continue. Sir John King, whom I personally know and who has a great expertise in the nuts and bolts as well as in the pursuit of the uneatable, will, I am sure, devote his considerable charismatic leadership as the new chairman to seeing that British Airways will be able to improve its performance in every sector, so that when we fly the flag every passenger will not cost the company £6 per head, as is reported in one of the newspapers today.

My Lords, before I start I should like to apologise because I also have to slip out at a quarter to five to discuss with the Minister for Air, defence matters which we are to debate shortly, but I shall be back in my place very soon thereafter. Therefore the Front Bench need not wag their heads in disapproval: I am just apologising because I shall not be here for one and a half hours.

I should like to join with others in congratulating the noble Lord, Lord Glenkinglas, for initiating this debate. It is one with very widespread interests among the taxpayers of this country and among nearly 50 million travellers who travel by air every year. It is of interest, I think, to all those who wish to see Britain prosper through our invisible exports which foreign travellers earn for us and, above all perhaps, through our export trade. I hope to deal with those points in my speech.

First, the taxpayers. Among our nationalised industries which come up for quite a lot of debate in your Lordships' House, British Airways and British airports until very recently have been somewhat unique in that they have been profitable. It is sad, though, that possibly as a result of, or accentuated by, the world economic downturn or recession, British Airways, who in 1978–9 were making £90 million profit, only just broke even last year; and in the current year it is now forecast that there will probably be a loss of some £100 million.

The British Airports Authority, which is also included in this Motion, is expected to continue to make some small profits. Certainly these two corporations are not the voracious consumers of taxpayers' money which we have discussed when debating British Steel, British Rail or British Leyland. Until recently they have had a near monopoly position, and I would suggest that competition has too often been very restricted through licensing, through the pooling agreements to which my noble friend has referred and, to some extent, because of the IATA fare-fixing rules. I believe the time has come to amend these restrictions.

Until recent years, the growth of air travel has really been sensational. I am a believer in regional airports so that we are not centralised around the London area, but I shall concentrate on the performance of London's two main airports at Heathrow and Gatwick, since they handle so many more passengers than any other airport in this country or in Scotland or Ulster. Last year 27,500,000 went through Heathrow and nearly 10 million through Gatwick. Therefore in the period 1979–80 those two airports handled some 37 million passengers. At Heathrow on eight days during last August—many of us experienced this and thought there were even more—there were 100,000 passengers a day. That is a pretty formidable task to cope with. What is also significant is that of the 37 million travelling through Heathrow and Gatwick, 17 million were foreign visitors; not only travellers for holiday purposes, but also businessmen coming to this country.

The impression which these 17 million annual visitors get is absolutely vital. If a bad impression is created it may take years to rectify. If a good impression is created it will make a lot of difference to whether they start subsidiaries in this country, whether they buy our goods when they are back in their own countries and whether they decide to create jobs by the creation of businesses here—and we all want to see more jobs created. So part of the impression which is given when you come to this country, perhaps for the first time, is the way you are treated at London Airport or Gatwick. That is why I want to accentuate their importance.

What else does the traveller want? He wants first, perhaps, courtesy; secondly, efficiency; and thirdly, the maximum of punctuality and the minimum of frustration. Who would say there is not one of those categories in which we could not do better? Could we not, as a race, be rather more courteous to our visitors? Could we not be rather more efficient in every facet of handling air travellers? And could we not reward punctuality? I shall develop these points very briefly.

I have to travel, as probably many of your Lordships have, once a month or more, sometimes to the United States and sometimes within Europe. When you arrive at London Airport—and incidentally you now, for security reasons, have to report one and a half hours before take-off, so it is probably 2½ hours at least after you have left your home—you have to consider the following things. Can you quickly find a baggage trolley? Most of you will find it is not all that easy. Do you have to queue for check-in, taking your heavy luggage along as you edge up the queue? Are all the desks fully manned? Is passport control, both for overseas visitors and for United Kingdom passport-holders fully manned? My personal experience is that they are generally restricted and that there is a queue.

Too often the lounges are grossly overcrowded and sometimes, when I have tried to get into the Executive Lounge, I have noticed very considerable criticism when the door is locked or there is no room. That airport has been there now for 35 years, and surely it is possible to enlarge the facilities for first-class passengers, who very often are business people and who expect a little more comfort and courtesy. They do not expect to be locked out if they are entitled to go there on their first-class ticket.

Is our punctuality beyond criticism? It may be Sod's Law, but one of the things I always seem to find with my particular aircraft—and I have realied that other travellers find the same—is that it is always in the very last position along those "fingers". You walk past the first one, which has always got meal wagons, petrol wagons, baggage wagons and everything else by it; you walk past the second, the third and the fourth. For those who are elderly it really is a long drag with your hand-luggage to walk half a mile without a travelator, right to the end of a finger where the aircraft always seems to be parked. In addition, en route you have generally to queue for security, though I think it has got better since the X-ray machines have been installed.

Inside the aircraft, is your seat as comfortable as it might be? Do you get a drink promptly offered to you?—because that seems to be something one needs amid the frustrations of air travel, and it seems to me that very seldom does it come within the first 45 minutes. When you arrive at the other end do you immediately get a bus, a taxi or your rail connection? The trouble is that this is a complicated chain and any single weak link of efficiency in that chain reacts back along the chain, and everyone is blamed. So I come back to the fact that people want efficiency, courtesy and punctuality.

I should now like to say something about British Airways in general. Your Lordships may have seen in Flight International a series of tables showing airline efficiency. In that article, which was published on 3rd January, there are eight sets of comparative tables which show how 12 different airlines use their capital, their personnel and their aircraft. It is difficult to make sure that you are always comparing apples with apples and pears with pears, but if one airline is consistently at the bottom, or nearly at the bottom, of all those tables there must be something wrong with it. If you study that article you will find that, sadly—for every one of us is loyal and patriotic—British Airways are near the bottom of every single one of those tables.

My noble friend Lord Glenkinglas mentioned overmanning. When those two great organisations were put together—I am afraid that it was done in the era when biggest was best—it was believed that it would save manpower. But instead of saving manpower, the numbers have actually gone up and peaked recently at 59,000. I am sure that the new management, under Sir John King and the chief executive, Roy Watts, are doing their damnedest to bring those figures quietly and painstakingly down. I believe that the aim is to get them down to 50,000, but my own guess is that they ought to be nearer 40,000, if they are to compare in efficiency and make reasonable profits for future investment.

I should now like to say a word about punctuality. Two years ago on international flights, 80 per cent. of British Airways flights were more than 15 minutes late on departure or arrival; that is to say, only 20 per cent. took off punctually. I am delighted to see that there has been a campaign and that those figures have improved. I always try to travel by British Airways, while some of my friends travel by the alternative route. I have to go to Switzerland quite often, and my friends seem to get off on time and to arrive on time.

Some of your Lordships were part of the Lords and Commons ski club, which went across to compete against the Swiss parliamentarians in January. I am sad to say that we had 20 on one flight and 20 on the other, because you cannot put all your eggs in one basket when you have a majority of only 40. So we shared the risk between two aircraft, and both were over half an hour late leaving. Coming back, there was the usual announcement: "We are sorry to announce that owing to a late incoming aircraft from London, British Airways flight 000 is delayed for 30 minutes." We were actually 40 minutes late on that occasion. But when I travel by Swissair, I seem to take off on time and arrive on time.

So I suggest to the Front Bench that this has something to do with the pooling agreement. At the moment, as my noble friend pointed out, if 50 people go from London to Geneva by British Airways and 150 are attracted by the punctuality and service of Swissair, they chop the revenue right down the centre, after adjusting for the seat capacity. I am sure that this is a restriction of competition which cannot be in the interests of the traveller, so I ask my noble friend to examine this most carefully.

In the USA, where I have to go once or twice a year and travel around a number of centres for business purposes, I fly by a number of different airlines. I see there the intense competition to get the aircraft door closed absolutely on time. Even if there is only one minute's delay, they start to ask questions about it. There is not that drive here. There is no such pooling agreement there, and on most routes they have competition between two airlines in order to attract the traffic.

I suggest that the time has come when we really must abolish the pooling agreement, in the interests of passengers as well as in the interests of improved cabin service. I do not say that cabin service is bad on British Airways, but I say that it has deteriorated over the last 10 years. I am sure that we must do our best to put that right. There is no substitute for competition in this field. I would also urge my noble friend to get out of IATA. It is a restrictive, fare-fixing cartel. The USA airlines left it some time ago and it has done them no harm. It has increased the competition and the efficiency of their airlines.

Heathrow and Gatwick are now the main gateways to Britain. I hope that this debate will encourage the authorities, and particularly the British Airports Authority and British Airways, to redouble their efforts to improve and to compete with their rivals. Thereby, they will benefit the 40 million or 50 million air travellers every year and, above all, help Britain's reputation.

My Lords, in the days of ancient Rome, Cato the Elder used to end up every speech with the phrase "Delenda est Carthago", which reminded his hearers that Carthage must be destroyed. Whenever we have a debate on the civil aviation industry, I hope your Lordships will allow me to remind you that cargo must not be forgotten. It is on that subject of air cargo that I should like to make a contribution.

Last time we had a debate here, in November 1979, on British Airways' future strategy, all the speakers and the Minister concerned concentrated on the passenger element and assumed, I suppose, that cargo looks after itself. But it does not. The situation is highly complicated. It needs the collaboration of many bodies—the unions, the customs, the International Trade Procedures Board, the Civil Aviation Authority, British Airways, the British Airports Authority, the freight forwarders industry and—as the noble Baroness, Lady Burton, will doubtless be reminding us in her own context—industry itself, which pays for all these things. That is, perhaps, why the task of looking after international freight movement was pushed over to Neddy, as being a neutral forum.

I remember reporting in that debate how the little Neddy for international freight movement, of which I had the honour of being chairman, had just been disbanded. However, I am glad to be able to tell the House that the Air Cargo Committee, which was perhaps one of its most important elements, has a new lease of life. The valuable work of comparing our situation with rival airports on the Continent has already brought signs of astonishing contrast, particularly on the transshipment of air cargo. When the little Neddy was closed down in October 1979, this very committee was examining how we could increase the United Kingdom's share of transit air freight which, as many of your Lordships may know, is the long-distance cargo which is arriving to go on to other European countries, or long-distance cargo coming from other European countries for further destination. There is open competition in this very important business with all the European air freight gateways.

My own little Neddy made a contribution at the time, by helping to set up at Heathrow the freight forwarders' bond, which at least allowed the freight forwarders the opportunity of helping in this work. We initiated at the same time this study, about which I have been talking, of the five European transit air freight gateways; that is, of course, including ourselves. Now, as a result of one or two minor problems on this freight forwarders' bond, the British Transport and General Workers' Union, British Airways and the freight forwarders have got together and have asked for a general agreement to see how they can increase the growth in transit air freight.

Already it is clear that the proportion is lower, or much lower, than at competitor airports, and yet the goal is a tremendous one: possibly, 65,000 tonnes annually, which will mean an income to this country of £70 million. Incidentally, of course, we should be helping the passenger trade because, as many of your Lordships know, air cargo is not always carried in air freight carriers. The biggest passenger plane of today can carry 22 tonnes of cargo in its hold.

Our other advantage which has not been touched on yet, but it is an advantage, is that we have the biggest number of flights of any airport in this continent of ours, so there is a golden opportunity to be grasped if we can tackle the problem. Incidentally, how intriguing and in some ways romantic is the air cargo aspect of Heathrow. On one day last week they had, side by side, the Grand Prix racing cars coming back from South Africa and going on, I fancy, to the States and cartons of live tropical fish from Hong Kong.

But it is already apparent that there is a startling contrast between what goes on in our airports and what goes on in Europe. This is perhaps excusable because it is due partly to history and geography. We have been so used to being an offshore island. Now we have become part of Europe. Therefore, some of the philosophies of the past may have to be changed.

One can think of an example in the customs area, and also in the airport itself. The extraordinary position at Heathrow is that there are no less than 17 foreign airlines with depots there. These have grown up over the years. You do not see those depots at the continental airports we have been talking about. Therefore, I am hoping that the Air Cargo Committee will steer this project through. It will involve all the principal interests which I have mentioned and I hope it will come forward with some conclusions and recommendations.

I can see that at the end of the day the persuasion of Government may well be needed to resolve some of the differences among the parties concerned. I do not think that this will involve the Government in more money other than that dictated by the airports themselves as growth in their own industry expands. I hope that there may be an indication from the Minister that he approves of this enterprise and wishes it well. If we clearly define the objectives and the way to achieve them, we shall have done something for which I hope this country will be grateful.

My Lords, as for the first time I am not speaker No. 27, or thereabouts, I hope that I might have something original to add to this excellent debate which has been initiated by my noble friend Lord Glenkinglas. Although not entirely original, it may be worth accentuating certain aspects which have been touched on both by my noble friend and the noble Lord, Lord Ponsonby of Shulbrede. May I thank the latter for his very kind remark.

I should like to direct my few words to the question of the uncontrollable costs which are incurred by the British Airports Authority. Airport charges in Britain are exceptionally high and those for the British Airports Authority airports are among the highest in the world. Some alleviation of the present high costs could be achieved by alternative methods of financing. I shall be interested to hear the Minister's reply on why bond financing, successful elsewhere, cannot be undertaken by the British Airports Authority. Foreign airlines feel aggrieved by our high airport costs, and so do passengers. It seems ironic—

My Lords, I hesitate to intervene during my noble friend's speech but I mentioned earlier that this matter is now very much sub judice. I hope my noble friend will take care as to what she says.

My Lords, will the noble Lord tell us exactly what the matter is which is sub judice? I think that the matter which is sub judice is the right of the British Airports Authority to increase charges rather than what the charges are.

My Lords, I cannot immediately spot the difference between the two things which the noble Lord has put to me. Perhaps I may read a short sentence, with your Lordships' permission, which I was planning to use later in winding-up. I understand that in open court this morning Mr. Justice Parker granted an injunction to the British Airports Authority against Air Canada and the other airlines which have been withholding a proportion of the landing charges for the use of Heathrow Airport, pending trial of the main legal action which has now been fixed for January 1982. Therefore, I am advised that it would not be appropriate for me or other Members of your Lordships' House to comment in any way on this decision, or the contents of the main legal case to be heard next January.

My Lords, may I say to the Minister that I think I am all right but that he must stop me if I am not. If he will not mind me continuing my Tallulah-like intervention before my voice finally goes, I shall make it as quickly as possible. It seems ironic, to say the least, that today's passengers are paying through the nose to finance the provision of facilities for tomorrow's. Why should you or I, if we take an aeroplane flight this week, finance the capital expenditure of the British Airports Authority?

My Lords, I am sorry to intervene again, but that is the core of the case which is to be put before the court next January.

My Lords, if nobody is going to be able to comment for a whole year, surely it is a totally ridiculous situation which the Minister cannot substantiate in this House.

My Lords, is my noble friend saying that no aspect of the British Airports Authority can be discussed until January 1982? It cannot be so clearly defined as that.

My Lords, I wonder whether we should have the advice of the noble and learned Lord the Lord Chancellor on this matter.

My Lords, he is not here. I hope noble Lords will forgive me for intervening once more. I apologise for pressing this point. I want to emphasise that I have no desire to stifle the discussion of this or any other matter in your Lordships' House, unless there is a clear danger under the sub judice rule. The matter which is to come before the court in January of next year is the question of the charges of the British Airports Authority. Both the British Airports Authority and my right honourable friend the Secretary of State for Trade are defendants in the case. As I understand it, the case is that the charges are too high and that the British Airports Authority is not complying with its duty in laying charges at the rate that it does. Questions therefore which may fall to be considered by the court following that action seem to me to be sub judice and not therefore proper to be discussed in your Lordships' House at the moment.

My Lords, we all appreciate very much this standing order of the House and we all want fully to comply with it. I attempted, I believe, to comply with it fully in the speech which I made. However, it seems to me that the matter before the court is primarily the right of the British Airports Authority to increase its charges. That is the issue in dispute. I should have thought a comment on the level of charges was quite different from the matter which is to be taken before the court. Neither I nor the noble Lord are lawyers, so it may be that we should seek advice elsewhere.

My Lords, may I ask a question before I continue with my remarks? What happens to how far I have gone with regard to Hansard?

My Lords, it is all there.

My Lords, it is not going to make any sense unless I am allowed to continue.

My Lords, while my noble friend is having consultations, for which I see he needs a little time, I may be able to assist by suggesting that what he has said so far is that the question of landing charges, if referred to, might (because none of us really knows what was said in court this morning and we are not all familiar with the case which is being put) lead us to stumble, without meaning to, into the sub judice area if we were to talk about the policies of the British Airports Authority concerning landing charges. However, I do not see why some of us should not talk about those charges which are not landing charges, but quite different kinds of charges. I have risen not only to give my noble friend time to receive messages on this technical point but also because I am due to speak shortly. I intend to speak in my capacity as the chairman for Scotland of the International Year of Disabled People and therefore to talk about a specific charge on the handling of a disabled passenger. That has nothing to do with landing charges.

My Lords, I apologise yet again for intervening. If I may say so, I think my noble friend has got it just right; the level of landing fees ought not to be discussed. I feel certain that the risk of straying into the area of the legal proceedings if we do discuss the level of landing charges is very great indeed. Therefore, I hope your Lordships will agree that it would not be appropriate to discuss the level of charges in your Lordships' House this afternoon. Another matter that is to come before the court is whether my right honourable friend the Secretary of State has the power to impose certain financial duties upon the British Airports Authority, and thus comment upon that matter, too, might be inappropriate.

My Lords, the noble Lord has made me very nervous!

Quite right, too! This is very dangerous ground.

My Lords, I am still worried, but I will press on until I am told to sit down. I still cannot see why the general public should finance the British Airports Authority's capital expenditure or the development of Stansted. Is that also part of the case?

Yes.

I will leave that, then, in order not to cause any more embarrassment. Am I allowed to talk about the security levy?

Yes.

I am?—right. My Lords, my final point, on which I know the noble Baroness, Lady Burton of Coventry, and I fully agree, concerns the cost of security at airports. Naturally I am in total favour of the best and most efficient methods of security. Equally, I am certainly against the appeal made by my noble friend the Lord Chancellor, as related by the noble Lord, Lord Glenkinglas, for strippers in pursuance of this aim; but unless the cost of security at airports is funded nationally, as it is in most other countries, then I fear that airline passengers may well be down to their last shirts to pay for the ever-rising costs of the matters about which I have spoken and had hoped to speak. At present domestic passengers are paying an extra £4 on a round trip for security, and both airlines and passengers are constantly complaining about the seemingly unrestrained growth of the brown army of uniformed security personnel employed by the British Airports Authority.

At other airports where private enterprise security firms fulfil the same function the actual cost per passenger can be as little as 85p, although he is still charged at the standard rate of £2, £1.60 of which has to go to the Government-controlled security fund and 40p to the airline for administering the complex system involved. There is still a certain amount of difficulty when user representatives seek to obtain information regarding the breakdown of cost and revenue. I really apologise to the Minister for causing him any embarrassment. I shall look forward to his reply with eager anticipation and I shall now hurry off and take a course in law!

My Lords, luckily I do not want to talk about either landing charges or security charges. I think the views of this House on both those matters are well known and have remarkable unanimity right across party lines. I should like to move on from there and I should like to thank the noble Lord, Lord Glenkinglas, for giving us this opportunity today and for drawing his Motion so wide. I should also like to thank him for his kind remarks and to emphasise that such progress as we have been able to make in this House, particularly in connection with the users of air transport, I think has been due to the support given by this House on these matters, quite irrespective of party. I believe we all feel that very strongly.

Given such a wide choice in the Motion before us today, it seems ungrateful that although there are several areas with which I should have liked to deal I intend to confine myself to one particular aspect. I want to talk about the marketing policy of British Airways in relation to the bucket shop and discounted air fares. Obviously this affects the state of the British civil aviation industry, which has always been held in high repute throughout the world.

Perhaps I may say straight away that I should have preferred to deal with this subject in a debate specifically so entitled, but having been unlucky in the ballot for short debates it did not seem to me to be desirable, nor indeed advisable, to wait until late March for another possible opportunity. Indeed I would say that in 29 years in both Houses of Parliament I have never once been fortunate in even the smallest of ballots. Waiting seemed to me to be neither desirable nor advisable because of the considerable public interest both concerned and involved. I would suggest that the existence of a widespread market in such tickets shows not only the absurdity and the inefficiency of the existing price-fixing system but also the level of public demand for low-cost air transport. My regret is that I have to use British Airways as an example, because many scheduled airlines are involved but, under the terms of the Motion today, I really have no alternative but to select them and to hope that they will understand. I must say that, nuisance though I am, they have usually been kind enough to do so.

I believe, as stated in the Travel Trade Gazette on 28th November last, that scheduled airlines and their agents realise that there must be give and take on both sides to achieve a solution to the bucket shop problem. I think that agents realise that a deal will have to be done with British Airways and the other scheduled carriers and, for their part, the carriers now know that they have to find legal channels to sell off their cut-price tickets. That is why I pursued the noble Lord, Lord Trefgarne, on 27th January concerning the proposed meeting of the Retail Agents' Council and British Airways in an effort to find out not only the attitude of those two organisations but also that of the Government. That is at columns 624 and 625. We did not get very far. We often do not get very far; we have to make very slow progress, but the noble Lord did say that he would welcome a debate to give him an opportunity to expand in more detail on Government policy. I cannot give him a debate but I can give him the necessary details in a speech, which is a better vehicle than Question Time. I have of course informed him that I should be raising this today in connection with the marketing policy of British Airways.

Many people, in this House and elsewhere, alarmed at the possibility, have asked me several times during the past three months whether I was trying to stop cheaper air fares. I am glad that they did so because it gives me the opportunity of stating once again what perhaps I did not make clear on other occasions, that my aim is that cheaper and/or discounted air tickets shall be on sale at all retail outlets and available to all travellers.

I think perhaps I had better start by quoting from an article in the Sunday Times Business News of 4th January by a Mr. Andrew Cornelius, whom I do not know. Mr. Cornelius opened by saying:

"The scramble for passengers among the world's airlines has become so tough that the officially regulated fares structure is near collapse. On many flights out of the UK, after a year in which IATA's member airlines lost more than £1bn, tickets are being sold through unlicensed sales agents or 'bucket shops' at discounts up to 60%.

"Racked by falling profits, increasing fuel costs and a projected downturn in traffic on many of its routes, British Airways, once regarded as a bastion of the airline establishment, has shocked discounters by beating them at their own game. One foreign airline's manager says BA's sales drive has intensified 'in the last two to three weeks to the point where they have hit my marketing activity by 10%'. The travel trade now widely confirms that BA's tactics include:

"Turning a blind eye to the sale of 'instant' APEX tickets by bucket shop. Normally these must be booked at least 30 days in advance to qualify for a cheap fare. At a 'bucket shop' they can be written out on the day of a flight by back-dating the validator date stamp…

"Ticket sales staff can gain authority within minutes to match, or beat any rival fare.

"BA is actively seeking more 'bucket shop' custom by closely watching discounted prices and then undercutting other airlines."

Fourthly, and lastly:

"BA has admitted that its tickets do reach 'bucket shops' but will not go into details about its marketing policy".

My Lords, in this House on 10th December, at column 724, I told the Minister that on 30th September British Airways had admitted on television that they sold tickets to bucket shops. At least they were honest. May I make clear to the House that I am not seeking prosecutions, nor am I condemning practices that are certainly not confined to British Airways? I merely think it is time that the whole affair was brought out into the open for the benefit of travellers, agents and airlines. And that commonsense is allowed to prevail.

The figure may or may not be correct, but I am informed that some 40 major airlines discount to their own bucket shop operators. The other day one of your Lordships asked me a very simple question, what is a bucket shop? Well, I offered him the definition of the noble Lord, Lord Trefgarne, at column 725 on 10th December—namely, that it was one of those places where you can buy a ticket at other than the correct fare.

This practice of discounted air tickets goes back a long time. Indeed, Lord Glenkinglas, whose Motion we are discussing today, did tell us in the House on 20th January at Question Time that he had tried to deal with the matter in 1970 and 1972. Well, if we go back to 1967, BARUK, which is the Board of Airline Representatives in the United Kingdom, initiated a clean-up campaign. It soon faded out. Why? I think it faded out because it really was a quite ridiculous situation. Here you had a collection of national carriers, the majority of whom were discounting to their own bucket shop operators, sitting round a table laying down the law, or presumably discussing the possibility of laying down the law, to stamp out these very practices. At the moment I understand the so-called bucket shops sell an estimated five million tickets a year in Britain at prices up to 60 per cent. lower than the Government-approved fares as airlines try to fill seats which would otherwise be empty.

The Minister will correct me if I am wrong, but, as I understand it, Section 21(5) of the Civil Aviation Act 1971 and the amended Section 11 of the 1978 Act make it quite clear that if an airline or a charterer sells a ticket to a passenger who has not paid the full approved fare set by the Civil Aviation Authority it is committing an offence, although the person who buys the ticket is in the clear. The noble Lord, Lord Trefgarne, was very firm about all this at column 343 on 20th January. Indeed he even went on, at column 344, to say:

"there may be steps I can take which fall short of prosecution, and I shall consider what might be done".

As I have just said, although not wanting prosecutions and holding no brief for IATA on this matter, these facts do give substance to their statement that I mentioned to the House on 27th January—namely, that Mr. Hammarskjöld had said that IATA were powerless to stop the bucket shop trade in illegally discounted air tickets while Britain was lax in applying the law.

If we move on from IATA to ABTA, which is the Association of British Travel Agents, their chief executive, Mr. Michael Elton, has just said that the ABTA policy is that the Government should either enforce the law over the sale of airline tickets or change it. It does seem to me that it is nonsense to have a law that people, and the Government, ignore. In this respect, particularly to the despair of travellers, I would contend that both IATA and the Government have been so busy passing the buck one to the other that progress has been absolutely nil. I am glad the noble Lord shakes his head, and I hope he will prove me wrong when he comes to answer. Perhaps now we shall at last get some action on this.

On 14th January, Mr. David Hewson wrote an article in The Times headed, "Why the travel trade is angry about air fares". This article has considerable bearing on what I have just said about the law, and I would like to quote a section from it. Mr. Hewson says:

"With a few notable exceptions, the last place to find the cheapest international air fares available in Britain at present is a travel agency"—

the last place—

"That more than anything explains the travel trade's anger with the price-cutting campaign now being waged by the airlines.

The bargains on offer may be riddled with restrictions but they are undoubtedly bargains and available to anyone—anyone, that is, except a travel agent. The diligent traveller, for instance, by following up newspaper and magazine advertisements can find himself a reserved return London to Bombay with Gulf Air for about £290. If he went to a travel agent or booked direct with the airline the price would be £800…

"ABTA's position, not unnaturally, is that its members should also be able to avail themselves of bucket shop prices and pass them on to their customers.

"BA, and the other airlines who decide to go down the mass discount road would no doubt be happy to do so, but it is difficult to see how such widespread flouting of the law could be sanctioned without a lead from the Government. If the Government is convinced of BA's strategy of seeking volume above all else, it may give that lead".

On 20th January the noble Lord, Lord Trefgarne, did tell us, at column 343, that this problem was one which he proposed to pursue with the utmost vigour. On 27th January, at column 625, he told us of his determination to see that the law in this matter was properly upheld. I am sure that, in common with everyone in the House, I doubt neither the determination nor the honesty of the noble Lord, Lord Trefgarne. I am hoping that when he comes to wind up today he can tell us just where we have got to on this matter.

In conclusion, I should just like to say that all sorts of information comes my way from people who are kind enough to help, including airlines, agents, bucket shop operators, and, of course, passengers. Information comes even from "moles" and I do not think we need explain to anybody that the moles are the underground guerrilla operation of the British civil aviation industry. Some of this information is prejudiced, some is incorrect, but much is true.

I end as I began. I hope that British Airways will understand why they have been cast as the villains, but I would emphasise that it is as only one villain among some 40 others. Perhaps if we succeed in all this they will be glad to have helped, even unwittingly, in what I have had to say and they will not overbook me or refuse me passage on their airplanes as a result! I want to help and I want our House to be instrumental once more in putting right something which is so obviously unfair.

My Lords, I am sure that the whole House is grateful to my noble friend Lord Glenkinglas for initiating this debate. I hope that the noble Baroness, Lady Burton of Coventry, will forgive me if I do not follow her line, although I think that she has raised a very valid point which requires looking into.

The general theme of the debate today has been that most airlines are having a very rough time, but some are doing rather better than others. As has been said, when BOAC merged with BEA one expected very real economies. They had a very able Chairman at the time, Sir David Nicholson, but those economies have not been forthcoming. As has been said, the number of those employed in the British Airways Corporation has increased by 5,000 or 6,000. That has happened throughout British industry, not just in British aviation. We are seeing it every day. The fat is being taken off by people who are employed by companies which cannot possibly afford to employ them. We are now paying the price as a nation.

In 1971 the Corporation employed 52,500. That figure has increased to 59,000. We are told that much has been done about it. But it should never have been allowed to happen. It would only happen to that extent in a nationalised industry. It may be said that the services have expanded. Yes, they have of course expanded, but so have the traffic and the number of passengers carried. My noble friend Lord Orr-Ewing referred to Flight International, which gave eight charts. It is very difficult to determine what is an efficient airline except by the final balance sheet of profit or loss. As regards Flight International, on eight different charts which it gave British Airways was bottom of the league. There must be something radically wrong to get into that position.

I would say with great respect to British Airways that most international airlines are more efficient than British Airways. Let us take as an example what happened three weeks ago. I think that it was a Friday and all the ground staff of British Airways—an airline that is losing about £100 million a year—went on strike. Those people endangered their own jobs and those of all their fellow workers. As a consequence thousands of would-be passengers had to be transferred to other airlines, and many of those passengers will not go back to British Airways. However, when it comes to inconvenience it is the passengers who pay the price. I do not understand what is going on as regards the personnel relationship between the management and the workers of British Airways. They are even threatening action again. Any time we shall have another one-day strike, turning tens of thousands of people away and losing millions of pounds in revenue.

Punctuality has improved, but not very much. I frequently travel between Malta and London and invariably I am late if I travel by British Airways. They are courteous and give very efficient service, but a small airline—Air Malta—admittedly operating from its own terminal, invariably arrives on time. This must be looked into. My noble friend Lord Orr-Ewing said that most airlines in America leave on the dot because there is competition. It is clear from the charts referred to that the most efficient airlines are Delta, Scandinavian Air Services, Lufthansa and, I think, Swissair.

But, of course, it is difficult to compare European operations with those in the United States. In Europe for the last three summers we have had air traffic control causing delays either in Spain or France and we have had aeroplanes ticking over or shut off and waiting for anything up to one or two hours. That causes great delay to the services generally and costs a great deal of money. I think that it should be looked into. We now have the EEC to co-ordinate all these matters. Vast sums are spent and I hope that something will be done about it.

As I have said, British Airways operates a good service and their safety is as good as any other airline. But what about the procurement of aircraft? I read recently that they have now sold two 747s and they are probably trying to sell more. Why have they over-ordered? I have noticed that they have abandoned the routes that did not pay—routes to the Channel Islands and the Isle of Man. The independents had to take them on because they did not make a profit. I am not surprised that they did not make a profit. There are too many people hanging around. One sees all the girls and young men in uniform with their gold braid. They all have to be paid and they are in the pension scheme. The whole thing wants skinning down very rapidly indeed.

I should be very careful what I say about the British Airports Authority, which has already been mentioned by my noble friend the Minister. I shall not refer to landing fees although I suppose that the rents of cubicles and desks come into it as well. I shall not refer to those matters. Heathrow is a terrible mess, and that goes back to 1945 when the late Lord Winster, then Minister of Aviation, dug up the first sod of soil on 1st January 1946. The Labour Government of the day rushed the airport through, determined to get it up in the lifetime of the Attlee Government—I mean no disrespect, but this is what happened—and they put everything into a triangle and it was obvious then that there would be little room for expansion. Every bag of cement had to go through the tunnels. The tunnels became flooded or something went wrong. I know that in the early 1950s when a Conservative Government were in office I begged them to start again, to scrap the lot and to build the terminals round the airport like any normal international airport. Now we are paying the price. I met an American recenty who said that when he arrives at Heathrow he either falls down a hole or trips over a sleeper. He is not far out, because that is what happens.

Gatwick has great potential. One can get there in 33 minutes by rail from Victoria. It has one runway. Nobody likes an airport near their home. Millions of people want to fly but nobody wants an airport within 20 or 30 miles of their home. When Gatwick went up there was an outcry from all the residents of Surrey and Sussex. At the time I lived in Surrey. I was in the take-off path. Why is there only one runway at Gatwick? Vast sums are being spent on the buildings. It is the second airport and, to make matters worse, a second runway can now never be built. They have put the large cargo freight sheds where the second runway would have gone. I think that it was probably done deliberately by some planners or somebody involved. It is a monstrous situation. All that I shall say about the British Airports Authority is that from October 1975 to February 1980 they would not set a financial target, though that was remedied later.

Nothing in today's debate has been said about Manchester Airport. I have watched Manchester Airport grow up because it is next door to what was my own constituency 35 years ago. Of course it is run by the Manchester Corporation and, if I may say so, it is run far better than any of the airports of the British Airports Authority. They have planned ahead and got the runways organised and they are doing extremely well. One never hears much criticism about Manchester.

In conclusion, I think that British aviation should be all right, but there are too many meddlers. It wants skinning down rapidly because there are too many controls. As I have said, I despair of Heathrow. I dread going there and arriving there. One either loses one's bag or it takes 45 or 55 minutes to arrive. I hope that the Government, who believe in free enterprise, will get really busy and tackle the problem, because an international airport is the shop window of a country. I beg the Government to get on with the job.

My Lords, I congratulate my noble friend Lord Glenkinglas on having initiated this debate and for having introduced it in such an effective and agreeable way. I was a colleague with him in the Cabinet between 1970 and 1972 and well remember the problems with which he had to deal, particularly the amalgamation to form British Airways and his help in organising a British private enterprise sector internationally. Air travellers and the British public should be very grateful to him for what he did, which resulted in British Caledonian. In particular some of the British leaders in the private enterprise sector—and I think particularly of Mr. Adam Thomson and Sir Freddie Laker—have played leading parts in keeping the costs of air travel from becoming prohibitive for ordinary people. My noble friend's policies also led to the expansion and competitive success of British private airlines. This was illustrated by the noble Lord, Lord Ponsonby of Shulbrede, when he told us that six out of the 10 largest European airlines are British airlines.

My noble friend and others have drawn attention to several of the most important issues and problems. I propose to address myself simply to one subject. This year is the International Year of Disabled People and I am the chairman for Scotland of the International Year. Now, of all times, we should endeavour, where improvement is needed, to improve arrangements in air travel for very severely handicapped people.

I start by saying that on the whole British airports and British airlines take a great deal of trouble over assisting severely disabled people, particularly if reasonable notice is given before travelling. Wheelchair passengers can be catered for and can be well looked after. There are lifts and ramps—in fact, British airports and airlines set an example to many other public buildings where such assistance does not exist, though it should—and there are special vehicles and lifting devices. British Airways has a medical unit at Terminal 3 at Heathrow which seems well-equipped for various types of physical handicap. Good organisation and communications between ground and cabin staff are needed in order to make the best use of that equipment.

However, I regret to say that there is a serious flaw in the system, to which I now draw attention. Forklift vehicles are now being used, and used effectively, for raising a wheelchair with a passenger to the door of an aircraft. They belong to the British Airports Authority. I understand that the authority is imposing a financial penalty on an individual airline amounting to £15 for each disabled passenger so assisted. Hitherto, the airlines have not been passing on that penalty to the passengers. I believe that one airline has been an exception, but in general the airlines have not.

But, I ask, why should an airline be subjected to this penalty for carrying a severely handicapped person? How long will the airlines feel that they can carry this penalty themselves?—for there is a built-in financial disincentive here to airlines to fly such disabled passengers. To me this is a monstrous and offensive state of affairs. What about the airline which finds itself asked to take a wheelchair team to a session of paraplegic games, either at home or abroad? It will be landed with a penalty for every wheelchair.

Severely handicapped people do not travel unnecessarily. If there were to be any wealthy, disabled eccentric who indulged in whims to be flown around the world unreasonably, I can assure the Government and the authority that those of us involved with disabled organisations and in this International Year would express our disapproval, publicly, of that action by a disabled person. But I think that just to consider that indicates that it is unlikely. Such people do not travel by air for fun. A change must be made. To have a financial penalty on flying wheelchair passengers must be wrong. In 1981, the International Year, this is surely the time for change.

My noble friend Lord Orr-Ewing pointed out that there are very long walks to departure gates at British airports, and he was talking about the able-bodied. There are few travelators, like those in some modern European airports—and I give Schipol and Brussels as examples. This leads to wheelchairs and men to push them having to be provided for people who normally never need to use a wheelchair. They are the partially handicapped who normally can walk short distances in ordinary life but who cannot walk the hundreds of metres which some of these corridors involve. There is also usually nowhere to sit and the long passages provide a vista, for those who cannot walk very far in one go, with nowhere to perch or to have the rest which in many cases is required by their doctors. There has recently been an improvement which I was shown at Gatwick a few weeks ago: an electric jeep, which is how I can best describe it. It can go through all the small entrances and can take such passengers some of the long distances. But I would point out that it is really the elderly who mostly fall into this category of partially handicapped persons, and there are quite a number of elderly people who have to travel. Therefore, I suggest that more must be done to find methods between using the wheelchair, for people who do not really need it, and assisting people who are not completely able-bodied to pass through airports and on to aircraft.

My last point on this concerns the shuttles operating in the United Kingdom. Again, there are shortcomings here for those people who can walk only short distances and cannot stand for long. Your Lordships who have experienced the shuttles will know that when the announcement is made, there is an ugly rush for the small, single-file gap. Moreover, those involved are herded through this gap, and those of us who need only a small tap on one hip to be knocked over and then have some difficulty getting up again find this quite impossible. I can tell your Lordships that British Airways is very good at helping those who cannot cope with the "shuttle herd". I would ask British Airways to do more to make this known, because if someone taking the shuttle says that they need to be dealt with separately, British Airways takes the trouble and does it; but I have seen elderly ladies in great distress and, as I say, people being knocked over. I simply suggest that more needs to be done, especially in the way of encouraging those who cannot survive the stampede to speak up beforehand and so be allowed to proceed separately.

There are three principles which I have been promoting in this International Year in order to assist very severely disabled persons. I call them the three As: Access, Awareness and Adaptation. There is nowhere where these three principles are more relevant than in air travel for the severely disabled.

My Lords, I should like to confine my remarks exclusively to the commercial use of helicopters, which play an increasingly significant and important part in aviation in this country and indeed throughout the world. The subject was last discussed in your Lordships' House almost exactly three years ago. There have been some impressive developments since then to which it is right to draw attention. Here, not for the first time, I must declare an interest. As many of your Lordships know, I fly helicopters for British Airways, specifically on the North Sea.

The offshore oil industry has certainly been the area of greatest activity, and it is as true to say now as it was three years ago that the development of our North Sea oil resources would have been quite impossible without the very extensive use which has been made of helicopters. Increased sophistication, refined operating techniques, particularly under instrument flight rules, and our ever-increasing experience have combined to qualify the helicopter as a means of transport in a fairly hostile environment which is second to none in safety and reliability. Twin engines, duplicated essential systems, advanced avionics and automatic flight control systems have enabled helicopters and their operators to demonstrate completely the integrity and reliability of the aircraft they use.

The offshore population at present is about 15,000. Some 100 helicopters operate in the United Kingdom sector of the North Sea, moving about 2,000 people a day to and from oil rigs, production platforms, diving support vessels, crane barges, pipelaying barges, et cetera. Between 1970 and 1980 some 10 million passengers have been flown in this way and only one life has been lost because of a helicopter accident. I believe that this is a startling statistic and one which is better than some comparable fixed wing operations can claim. It demonstrates that the helicopter has come of age, that it has adequately exhibited the special characteristics its design allows, and for those reasons it is important that we now actively pursue the other roles for which it is eminently suitable in the transport field.

Currently three ordinary commercial routes are operated by helicopters in this country: Penzance to the Scilly Isles; Gatwick to Heathrow; and a small one between Glasgow and Fort William. Each of these is profitable, and in the case of the first two, which I know rather more about, achieve 98 per cent. or so regularity using only one aircraft in each case. A further route is in the melting pot and has been for some time. It was referred to by my noble friend Lord Kimberley. That is Milton Keynes to Heathrow, which is an imaginative route with a known market for passengers and, as my noble friend said, is a particularly good platform for the introduction of the first British civil helicopter, to which I shall come later.

This route has been beset however by difficulties at the Heathrow end associated with the arrangement of approaches to and from the airport from the North; problems of air traffic control sequencing, and "traffic slot" times, as they are called, and so on. I am afraid that these have been problems which have been caused to a large extent by the reluctance I think, without being unfair, almost amounting to intransigence on the part of the Civil Aviation Authority (including National Air Traffic Services), and the British Airports Authority, to identify and latch on to the key characteristics of the helicopter which allow it to be used in a much more flexible manner than fixed-wing aircraft.

Instead modified principles applying to fixed wing are adopted for helicopters which have effectively negated many of the helicopters' considerable advantages, although should it be necessary to conform on special occasions helicopters can of course still fully conform with standard fixed-wing practices. I understand that progress is being made but at the expense of an additional seven minutes flying on what is only a 22 minute leg in order to approach Heathrow from the South in the same way that the Gatwick to Heathrow helicopter link does at present.

There is no properly valid reason in my mind for not allowing helicopters to approach and depart from the airport using the North side, especially since it is acceptable to do it from the South, particularly when sophisticated modern specialist helicopter precision approach aids are available to operators. I detect a reluctance on the part of conventional fixed-wing theorists in the Civil Aviation Authority to appreciate the fundamental differences between fixed wing and helicopter operations, and fully to capitalise on the opportunities which the latter affords, and also realistically to appraise the way in which the special flight characteristics of the helicopter can be used to best advantage.

There have been two recent developments in this country which are milestones in the use of helicopters. One, which was referred to by my noble friend Lord Glenkinglas, was the arrival of the first Boeing Vertol 234, which is the civil derivative of the well-known twin rotored Chinook helicopter of military distinction, which will carry 44 passengers in airline comfort and which starts operations on the North Sea in July of this year, and will operate directly from Aberdeen to oil rigs to the North East of the Shetland Islands, thereby removing the need to operate through Sumburgh.

The second has been the announcement a couple of weeks ago, to which my noble friend Lord Kimberley also referred, that Westland are at last entering the commercial helicopter scene with the introduction of the WG30, which is a private derivative of the military Lynx. This is going to come into British Airways Helicopters' service later this year. Personally I am delighted that a British civil helicopter venture has come about. I have every confidence that it will be a success internationally. I have in your Lordships' House criticised Westland in the past for failing to get into the civil market. I now congratulate them on seizing the initiative, and I hope that they will maintain it.

I would also urge the Government to give every support and encouragement to the aerospace industry generally in this country to think not only of pure helicopters and the need to develop and refine them but also to consider the logical extension of vertical flight through helicopters; compound aircraft which can take off and land vertically, but with the ability to cruise at high speed. The Americans are developing these now with various technical innovations—counter-rotating rotors, tilting pods on the ends of the wings with large diameter propellers—and I think particularly of Bell and their XV15 which is being developed into a possible commercial venture in due course.

We ought to remember that we once led in this field in the late 1950s and early 1960s with the Rotordyne project, which was dropped for technical as well as financial reasons. We must not allow the state of the art to be lost completely. Entry of any of these current ideas into commercial service is 10 to 15 years ahead anyway; but I do implore the industry to pick up the lead which we once had, taking advantage of collaborative arrangements to get back in on the act.

If I may return to the introduction of the BV234, the civil Chinook, we have here the basis for a type of helicopter which makes inter-city, particularly cross-Channel, helicopter operations much more viable economically than has been the case hitherto. Seat mile costs are already a distinct improvement on existing types, and projected developments to capacities of 70 seats in the near future and heavy-lift helicopters capable of carrying in excess of 200 passengers in about 10 years' time all point towards commercial viability in this respect, provided that they can be operated from sites close to city centres. Once airports have to be used, the advantage is lost.

To give just one example: last year a modern helicopter, an S76, flew from Battersea to central Paris where it landed, took off again and flew back to Battersea, all in two hours and 18 minutes. This speaks for itself. With suitable sites near city centres—and, as we heard earlier, parts of London dockland have been mooted as possibilities—and adequate surface links, it will be possible to halve the time it takes a businessman to get from the city of London to the centre of Paris, or to central Brussels or central Amsterdam, this without the need to use colossally extravagant airfields and the considerable infrastructure necessary to operate them.

Here I must add a note of caution. As I hinted earlier, it seems that at present the advantages of vertical flight are being undermined by the rather illogical and outdated thinking of part of the regulatory authorities. I am told that in the case of the United States, the FAA have imposed conditions which almost certainly will result in the loss of many of the advantages of vertical flight. I know that a reviewed code of practice in relation to operating techniques of helicopters in this country is under active consideration by the Civil Aviation Authority. I sincerely hope they do not follow the disadvantageous course which the FAA seem to have adopted.

It increasingly concerns me that twin-engined helicopters, which are supposed to be safer, are more restricted in the sites from which they can operate than single-engined machines. Again, this stems from views which go back to applying fixed-wing criteria to those of helicopters in the case of one power unit failing. The point I wish to emphasise, notwithstanding the safety implications, which in my professional life I am only too well aware of, is that rigid adherence to modified fixed-wing principles is beginning to diminish the useful properties of helicopters.

Of course, to some extent the manufacturers have a role to play here. They must develop helicopters with such reserves of power that twin-engined machines have a true single-engined performance in all parts of the flight envelope. In a sense, too, some double standards are applied because by no means all twinengined fixed-wing aircraft have guaranteed singleengined performance throughout all phases of flight; and if they have to make a forced landing they can do so only at much greater risk to passengers and people on the ground than is the case with helicopters.

In summary, therefore, what I look forward to in this specialist field is for us to capitalise on the wealth of experience we have so far gained in a realm of civil aviation which is still comparatively immature, for every support and encouragement to be given to the manufacturing industry, not only to refine pure helicopters but to look ahead to what comes next, and to encourage a much more enlightened and far-sighted approach by the regulatory authorities.

Even railway engines and motor cars were not for long preceded by a man waving a red flag. But that, to me, seems very much the case with the CAA so far as helicopters today are concerned. Helicopters have proved themselves, they are different, and people must think differently about them so that the civil aviation industry can make the best use of the potential they offer.

My Lords, before the noble Lord sits down, may I ask him a question which I hope he will not think is absolutely frivolous? Being such an expert on helicopters, he may be able to answer it. Over 30 years ago, when I was Minister of Civil Aviation, I inaugurated a helicopter flight from North to South Wales. Can the noble Lord tell me what has happened to it and why there is not a service of that kind 30 years afterwards?

That was in the fairly early days of helicopter operations, my Lords, when they were not so economically viable as they have become. I entirely support the noble Earl's view and should be delighted to see an operation between North and South Wales.

My Lords, I hope that anyone who considers at all seriously taking steps to abolish your Lordships' House will pause for a moment to reflect on the extraordinary characteristic, so familiar to us, of having in our midst not only experts but actual professional experts in almost anything one can think of, from beetles to bombers, and, in this connection, helicopters; where else could one hear a speech such as the one to which we have just listened from my noble friend Lord Glenarthur? He made a great contribution to this debate.

For myself, I have attracted a certain amount of criticism before now for referring to the way in which the airport system round about London has grown, if that is not too strong a word to use; it has come into being by a series of planned or unplanned environmental disasters, such as the fourth terminal at Heathrow. Nobody planned it until they suddenly found they wanted it, and then they told an engineer to draw up some plans. That is not planning for an airport, but the whole thing has grown in that way. This is a pure truism and if anybody doubts the truth of what I say they need only take a look round the airport system that we have to serve the capital, and ask whether anyone but a lunatic would plan what we have now.

It makes a change, therefore, though not a particularly attractive one, to realise how much planning is going on—again, if "planning" is not too strong a word—in connection with the airport at Stansted. It is slightly ironical that there have been no fewer than three promises that no such planning would take place, but here we are and it is going ahead, not only in the British Airports Authority but in the Government. A spin-off from that is that I do not suppose anybody will ever again believe any undertaking given publicly by a British Government, certainly not in the field of aviation.

Oh?

That is my opinion, my Lords, and it is probably not without foundation. I say that in connection with Stansted for a particular reason, especially in relation to the magnitude of the planning. The planning which is now the subject of an application which is coming up for inquiry in September of this year is for an expansion to an airport capable of handling 15 million passengers a year. But beyond that the possibility is envisaged—this is where I speak with some admiration for the new idea of planning in advance—of expanding the same airport to a capacity of 50 million passengers a year. We must remember that 50 million passengers a year is more than all the passengers handled in one year by all the London airports now.

That should give pause for thought to anybody who is interested in the future in the countryside round about Stansted. It means an expansion to a total area of 5,000 acres and a town of about the size which Sir Colin Buchanan estimated some time ago—about 200,000 people. As for the statement of the case which the British Airports Authority will be putting before the inquiry in September, I do not know how much it weighs but it is about three-quarters of an inch thick. So far as I can discover, it does not in any way mention the people living at Stansted now, except in one case on page one, and then it refers to them in connection with what will happen when the area—the big, far out area which may never be taken into use but which is part of the overall forecast plan—is taken into use; the blight that will fall on the land, the houses and the people who live there.

To avoid that blight, the British Airports Authority, it is said, are prepared to buy that property now at a fair market price. One way of looking at it is to say that that is a fair and reasonable offer. Looking at it another way, one might say that, as in places like Soho, it is a protection racket: "You may take your choice. Sell to us now and do not have your house or land taken away from you in the future". It is a fearful prospect. It goes with what Sir Colin Buchanan, who is well worth quoting in this connection, describes as,

"the largest single deliberate act of urban-industrial development ever to be thrust upon rural England, and in a particularly important sector into the bargain".

I hope the Minister will not be too put out by my strictures about government; I assure him that nothing personal is meant. About a year ago I asked whether there had ever been an inquiry into or project for the building of a new bridge over the Severn—the point of my question will become clear in a moment—or a tunnel in order to get across the Severn estuary. My noble friend informed me then that he would try to discover the answer. He never has let me know, and, although I am raising the matter now, I assure him that I am not complaining. There was such a project in about 1973, but we need not go back so far as that.

I believe that there is now sitting a committee or interdepartmental commission—I am not sure of its correct description—consisting of civil servants from the Welsh Office and the Department of Trade, considering the possibility of either a new or another crossing of the Severn estuary. One of the projects that is being considered, I believe, is an enlargement of an existing crossing, or perhaps a new bridge at Gloucester. I should like to ask my noble friend whether he can tell me when we can expect a report from that committee, since the local authorities in South Wales are being thrown into some doubt and confusion while awaiting it.

In the past the objection to building a new airport not at Stansted but at Severnside has been based on the expense of constructing a new bridge to carry the road and a new tunnel for the trains. The question is, is a new bridge going to be needed? It appears that in any case in a few years' time there will have to be a new bridge in connection with the M.4 crossing the Severn; this is accepted. If the crossing is to be higher up, at Gloucester, there will have to be a new road to reach it. So regardless of whether an airport is built there, new bridges or crossings will have to be devised. There is no reason why they should not incorporate a motorway which would lead, by means of a spur of no more than a mile long, to a site where there could be an offshore airfield at Severnside. When may we hear about this?

With regard to the building of a new tunnel, which the Government say is necessary, at a cost of, I think, £650 million—I am not exactly sure about the cost—I am advised by railway experts that the existing tunnel is perfectly adequate to carry the traffic. Perhaps my noble friend will comment on that point, if he cares. Reverting to Stansted, according to the case which has been prepared, the rail connections would involve the railway running from St. Pancras to Cambridge. Frankly, I do not believe that the railway could carry 50 million passengers, though at the moment that figure is not envisaged; it is only 15 million. However, let us suppose that it could do that. That would be very handy and agreeable for people who wanted to go to London, but if they wanted to go to anywhere else, they would have to travel to Cambridge and change, which would not be the best way to enter England.

On the other hand, if one wanted to go to Severnside one could board a high-speed train and travel directly to the airport, without interruption. Customs and Excise procedures could be carried out on the train, which would travel at 120 miles an hour and the journey would take, I think, 1 hour 40 mins., which is as quick as one could travel from touchdown at Stansted to city centre.

On both sides of the Severn estuary there are tank farms fed by pipeline, and so there would be piped fuel within easy reach of the airport. I should like to ask my noble friend whether in fact there is a pipeline to Stansted, since it is quite clear that it would not be possible to carry by road adequate aviation fuel to a major airport. This point involves an item of expenditure that I do not find mentioned in the British Airports Authority's case. Nor do I find any mention of who is to pay for the railway. A vast amount of railway construction work and alterations would have to be carried out, in particular in the North-East of London, which is the longest way into London. It is suggested that an Act of Parliament would be sought by British Rail. Is British Rail to pay for this work? I should not think so. May we have from the Minister a forecast of how much this is likely to cost?

I wish once more to quote Sir Colin Buchanan. He ends by saying:

"There is no place inland in the whole kingdom where an airport would not be bitterly opposed by local people".

Now just for once Homer nods; Sir Colin is in error. There is one such place: at Severnside not only would an airport not be opposed, it would also be heartily welcomed by the county council and the people of Gwent. Here is the possibility of an enormous brand-new gateway international airport, with runways in the sea, disturbing almost no one, with road and rail communications already passing within a mile, and with very high-speed transit to London, Birmingham, the North of England and all the great centres of population. The people there want it to happen. Yet so far as I can tell, the Government are proposing to go ahead with a vast development which nobody wants, at everybody's expense, in the worst possible place.

The only real problem that I believe would be encountered in siting an airport at Severnside rather than at Stansted would arise from the extreme difficulty of persuading the airline operators to use it. That would be a difficulty, I agree. However, it is a difficulty which the Government might face if they consider what otherwise could be the consequences for our nation, with the benefit going to those airline operators and nobody else.

My Lords, there are always problems between the British Airports Authority and the aviation industry and the airlines. First and foremost is the lack of adequate consultation by the British Airports Authority regarding the needs and limitation of needs by airlines operating the authority's airfields. In the past there has been inadequate response and reaction to the needs of airlines at local executive level and often there has been too ambitious local investment beyond the needs of the airlines. There are cases where capital has been invested in airfields to create desirable new facilities, but facilities which have been far above the needs of operating airlines and which have jacked up unnecessarily the ever-increasing airport charges.

It is therefore a good development that the BAA has at last agreed that changes should be made to the present procedure for consultation with its air transport customers and that a council is to be set up, and will meet for the first time in April. The proposed consultation co-ordinating council will allow consultation in excess of that required by statutory obligation, but the success of the council, which should benefit both authority and user, will depend on the willingness of the different representative airline associations to participate together in one consultative form. Of airlines themselves, only British Airways will be represented, in view of its massive use of BAA facilities. One wonders whether it would not be right for there to be a seat on the council for the Board of Airline Representatives representing the needs of all foreign airlines, with their rather different problems to those of our own home-based airline.

The next problem is that of landing charges and parking fees in general, and I am sorry not to be able to discuss them. An article in the Sunday Telegraph, which may or may not be true, states:

"A row has been growing since last year when the authority issued what it described as a discussion document on increased airport charges. Although the increases averaged only 35 per cent."—

I do not know whether I am allowed to quote.

My Lords, I think it would be appropriate to remind my noble friend that this item is sub judice—a point to which my noble friend Lord Trefgarne drew attention earlier in the debate.

My Lords, I thank the noble Lord for that intervention. I felt that perhaps it was in order to quote something which existed; I was not really producing anything new.

According to press reports, security costs are a further worry—and I do not think that this point is subject to the sub judice rule. BAA airports have far higher charges than private airports. For example, Heathrow's charges were doubled from 83p in 1979 to 160p in 1980. That is peculiar because the high traffic flow could be thought to maximise the use of security personnel per passenger, and it seems to be another case where the public authority charges so much more for its services than the private company under greater competitive pressures. According to press reports, high charges have not appealed much to foreign operators, and now that this point is sub judice I must say no more about it. To say no more than the Minister himself remarked, the present situation is that the fees are going into a holding account and some airlines are talking about leaving London airport and flying to Amsterdam instead.

The cold wind of competition is blowing even on to Heathrow, and if airlines leave it the position there can only get worse. It seems necessary that, whatever the result of the court decision, the BAA should strive urgently and immediately for efficiency and economy, going from the very top to the very bottom of the authority, rather than just demanding higher charges. Further, airlines fear that in the future—not the present, the future—interest on the cost of developing Stansted may be spread overall by the authority and will result in further charges at Heathrow for operators who will not even benefit by using Stansted. I think I am all right there, because it deals with the future.

Further afield, and in particular at Aberdeen—which, again, I do not think is the subject of the court case—the parking rate rose for one operator from a monthly rate of £828 in 1979 to £2,217 in 1980.

My Lords, I think we are touching upon an area which is sub judice. I speak without reference to this particular case, but I think my noble friend should be very wary of what he says in this regard.

My Lords, in supporting the noble Lord, Lord Sandys, the point of the sub judice rule is that the outcome of the case shall not be affected one way or the other. Therefore, though certain areas may be commented on, anything which is commenting on the propriety or otherwise of certain actions of the British Airports Authority could be said possibly to have an influence on the case.

My Lords, I apologise, and I will leave out all about Aberdeen. With regard to Stansted—again, this is in the future—would it be possible for the authority, when it comes to consider it, to consider raising its funds for capital development by way of loans in the money market, as other commercial enterprises are obliged to do, rather than doing it by raising charges, violently and often? With regard to the Stansted of the future it might be desirable to make of it a separate company owned wholly or partly by BAA, with its own profit centre to create good management policies and discipline. If the private sector could own 51 per cent. and the authority 49 per cent., the loan would no longer fall within the PSBR. The problem would be to design an adequately attractive and guaranteed investment to attract the public. Perhaps this could be achieved by novel and imaginative tax incentives on the eventual and inevitably delayed dividends to attract both private and institutional investments.

There is almost certainly large scope for economy within the British Airports Authority. There is no reason to suppose that it does not suffer from overmanning, along with all other public bodies; and there is equally no reason to suppose that its attempts to become more efficient have not been thwarted or at least slowed down by union resistance.

But looking ahead, there is nothing to stop the authority from increasing its charges year by year to cover these mounting costs, where any private company would long since have had to raise its own efficiency to contain its price rises and to retain its customers. It is, in practice, impossible for a monopoly to become competitive as there is no competition (period). This has been recognised in the case of the Post Office, as a result of which the Government have recently taken some steps to open up the Post Office monopoly to competition from private industry. Would it not be possible to move the BAA into a more competitive position? In particular, would it not often be cheaper for the authority to subcontract many of its activities to private firms in competition with one another?—and, in particular, one would refer to security.

Finally, my Lords, there is the small but locally important question of the use of MOGAS as against AVGAS. The requirement to use AVGAS for even light aircraft involves a very high cost for recreational flying, both for fuel and for delivery and handling, particularly on smaller airfields. While the use of AVGAS is mandatory by the Airworthiness Board, the supply is a near monopoly by Shell and BP, and the recreational flying movement in the United Kingdom consider they are being "ripped off" by its excessive and unnecessary cost. In practice, MOGAS is being used clandestinely, and this is particularly so in certain types of engine where flight manuals do not specify 100 LL or other grades.

Aviation insurers are happy with the use of MOGAS, and experience of its use has proved satisfactory. There is therefore no reason why the Airworthiness Board should not permit the use of MOGAS for certain groups of engines and for certain categories of flying, such as non-public transport, unsupercharged and low-compression engines, and other conditions, thereby reducing the cost to light aircraft. An example of this would be the towing of gliders, where a tug, even with engine failure, could always glide to an open field or back to its base. Many sports get subsidies, but this is no request for a subsidy for recreational flying. It is a request that this particular recreation should not be unnecessarily penalised.

My Lords, I want to start, if I may, by apologising to my noble friend Lord Gisborough and to my noble friend Lady Trumpington for the repeated interruptions of myself and my noble friend Lord Sandys on the vexed sub judice question. It is a matter which clarified itself only this morning, and I am not surprised that my noble friends were not aware of the precise position. I deeply regret that I was obliged to interrupt the calm flow of their oratory on more than one occasion while they were speaking, and I apologise to them for the rudeness that that appeared to be; but I was intervening in what I thought, and what I still think, were the best interests of the House and of your Lordships.

My Lords, there have been a number of occasions in recent weeks when we have debated specific matters concerning civil aviation. This is a useful opportunity to stand a little further back from such detailed questions (although I shall deal with some of them later) and consider the situation of the United Kingdom aviation industry as a whole. It is entirely appropriate that this opportunity should have been given us by my noble friend Lord Glenkinglas, who, as we have heard, was closely involved with the industry in the early 1970s and whose knowledge and experience is therefore invaluable to our debate.

Civil Aviation is one of this country's success stories. Throughout the world it is an industry with considerable potential for growth and in which the United Kingdom has been a major force. The industry is also at the forefront of technological progress, and is constantly changing. Governments must be prepared to change their policies towards the industry accordingly. My noble friend himself presided over one such period of change, which was reflected in the Civil Aviation Act 1971 and the policy towards United Kingdom airlines which followed that legislation. Since then I think it is no exaggeration to say that further changes in the industry worldwide have been fast and furious, and that process of change continues unabated.

In addition to change, the international aviation industry has had to cope with two periods of severely adverse market conditions since the early 1970s. The first of these followed the massive and unprecedented rise in oil prices in 1973. It has become something of a cliche, but is none the less true, that fuel is the lifeblood of all airlines. The 1973 price increases placed a gigantic strain on airline costs as well as depressing demand for air travel, and the poor financial results of airlines in 1974–75 and 1975–76 bear witness to these effects.

The industry nevertheless recovered, and there followed a period of growth and relatively healthy profits. But in 1979–80 worldwide economic factors began to lead to a second trough in airline fortunes. Again, the problems began with much higher oil price rises than the industry had assumed. The significance of this factor was well illustrated by the chairman of British Airways, who said in the airline's 1979–80 annual report:

"Our total fuel bill was £413 million compared with £240 million in the previous year—a 72 per cent. increase".

He went on to add:

"The average cost of aviation fuel is now nearly eight times higher than it was nine years ago".

But the problems caused by fuel prices were compounded in 1980 by the effects of the world economic recession, and the state of the airline market last year, and now, can only be described as grim. In 1980 airline capacity grew by 8 per cent., but scheduled international passenger traffic showed no growth at all. During the year, the 108 member airlines of the International Air Transport Association are estimated to have lost between them over £1 billion—equivalent to 7·6 per cent. of their collective revenues—after depreciation and interest. It is therefore not surprising that the Director General of IATA has described 1980 as the worst year in civil aviation history. Nor do the immediate prospects look much brighter—to quote IATA again:

"1981 will be better than 1980 only because 1980 was such a deep and unprecedented trough".

That is the general background against which we must consider the United Kingdom civil aviation industry, which has, of course, not been sheltered from these problems. Before speaking about British Airways, to which the Motion before us makes particular reference, I think it only right to pay tribute to the United Kingdom airline industry as a whole. Although British Airways tends to dominate debates of this nature, and I would not for one moment seek to undermine its importance in the structure of the United Kingdom industry, our independent airlines have come a long way over the past decade and now represent a significant proportion of our total airline capacity. My noble friend Lord Glenkinglas was involved as a Minister of the day in the establishment of British Caledonian and, since then, a number of other independent United Kingdom airlines have developed and flourished. I also think it true to say that all our airlines—whether in the public or private sector—exhibit the spirit of innovation necessary to succeed in such a rapidly changing and increasingly competitive international industry.

I turn now to the particular situation of British Airways. This year is the tenth anniversary of the legislation which preceded the merger of BEA and BOAC into the British Airways Board and to which my noble friend Lord Glenkinglas referred in his own speech. There are those who argue that the two corporations should have been left separate and, indeed, it is argued in some quarters that they should now be separated again. In the Government's view it would be folly to reverse the process when so much has been done, and in any case we do not believe that a return to the previous structure would provide any answer to British Airways' current problems. The merger was undoubtedly a mammoth task and none of us should underestimate the problems involved, not least in respect of individual loyalties of employees who had spent long careers with either of the erstwhile air corporations. It would be foolish to deny that such loyalties are still held by some, even though the British Airways Board has now been in existence for almost nine years. That is a matter of human nature which no amount of efficient management can fully overcome, although I know that the board has made every effort to fuse British Airways into a single airline which maintains the best aspects of each of the old corporations.

Equally, the board has had the task of achieving economies of scale and rationalising labour resources following the merger. I have already referred to the problems suffered by all airlines in the mid-1970s. British Airways had to contend with those problems at a time when management was still heavily engaged in implementation of the merger and it is to the credit of all concerned that the airline weathered that particular storm and returned to net profit in 1976–77 after two very difficult years. Relatively healthy profits continued in 1977–78 and 1978–79, and I would remind your Lordships that, to make profits, British Airways has to compete with many other airlines both at home and abroad. It is anything but a monopoly and the market is highly competitive, so profits cannot be made merely by increasing fares.

As we all know, British Airways' financial performance after 1978–79 has been less satisfactory. The airline managed a small net profit in 1979–80, but made no secret of the fact that it had planned a much better result. Fuel prices and the strength of sterling were part of the problem, but there were already signs of the effects on the market of the world economic recession which has since made 1980–81 an unprecedented difficult year.

At present, the revenues and profits of all major international airlines are being hit by the recession in the market, and many operators are making large losses. British Airways has forecast that during 1980–81 it will earn around £400 million less revenue than originally planned for the year. Much of this has been made up by savings both in capital expenditure and operating costs, together with proceeds from sales of assets, but it has not been possible to meet the anticipated revenue shortfall in full. Your Lordships will recall that the Government have agreed that British Airways may borrow an additional £85 million to assist the airline in meeting its immediate financial commitments to the end of the current financial year.

I will take this opportunity, if I may, to correct some misinformed comment that there has been about that decision. The additional £85 million is not a subsidy, and, indeed, is not being provided from Government funds. We have simply agreed that British Airways may borrow £85 million more in 1980–81 than we had previously been prepared to allow. The money itself will be borrowed by British Airways from banks—as are all the airline's loans—and will be charged at commercial rates of interest. So it is not a "soft option" by any means.

As I have indicated, the current problems are not unique to British Airways and in the short term there has been little that airlines, including British Airways, can do to escape from the effects of the depressed market. But any business must have a long-term strategy and it is right that we should also examine British Airways' plans in this respect.

I have mentioned that the international aviation market is increasingly competitive, and your Lordships will be aware that there has been an established trend in recent years towards lower air fares. British Airways' long-term strategy takes those two facts as its starting point and assumes that heavy competition on routes and fares will continue and probably grow. The airline has also assumed that over the next few years an increasing proportion of the airline market will be represented by leisure travel at low fares. I shall have more to say about the Government attitude towards air fares generally in a few moments.

There are basically two main elements in British Airways' long-term plans to meet these developments successfully and profitably. The first is to offer the whole range of airline users the products they want. Because British Airways intends to continue to serve all sectors of the market, this means recognising and meeting the needs of business and leisure travellers. With the move towards lower fares aimed primarily at the leisure market, there has naturally been a degree of resentment by business travellers and others paying the full fares that they are getting an unfair deal from airlines. British Airways has therefore examined the nature of services offered to full-fare and discount-fare passengers respectively and made changes to meet the interests of each group. The results are already to be seen in what British Airways call their new European product, which comprises only two classes—club, catering for passengers paying full fares with a higher standard of service to match and tourist class for those who pay considerably below the club-class rates. I understand that these changes are proving a commercial success. The same general principles are being applied to all British Airways' international services but with first class being retained outside Europe.

Of at least equal importance to offering the right product for the market is the ability to do so at the right price, and this is the second element in British Airways' strategy. Profits can only be made from low fares if an airline's costs are contained within commensurate levels and the airlines which succeed in the future will be those who maximise efficiency in the use of both capital assets and labour.

A significant contribution towards cost reduction will be made by the rationalisation of British Airways' fleet which is at present under way. This is mainly concerned with replacing old aircraft with new models which will consume less fuel and reduce operating costs as well as meeting more stringent noise regulations due to be applied in the United Kingdom from 1st January 1986. These fleet changes involve a very large capital investment programme, of which the funding has contributed to British Airways' present cash flow problems, but they are essential to the airline's cost reduction targets.

But more efficient equipment alone will not be enough to enable British Airways to compete profitably, and must be accompanied by significant improvements in labour productivity. One of the main criticisms made of British Airways is that it is overmanned and its productivity is poor compared to its international competitors; and these points have been raised by previous speakers in our debate today. I accept that there is substance in these criticisms but, more important, British Airways' own management acknowledge that they are valid and that improvements must be made.

That is not to say that productivity has been stagnant. In 1979–80, the number of available tonne kilometres produced per employee rose by 7 per cent. compared to 1978–79, which itself had shown an improvement of 10 per cent. over the previous year. That is commendable but there has until recently been no reduction in staff numbers and it is impossible to achieve sufficient productivity improvements without reducing manning levels, particularly when there is no traffic growth. British Airways have therefore begun to make such reductions: manpower will have been reduced by 4,000 in the current financial year and there are plans for this process to continue thereafter at the rate of 2,500 a year.

Having described the present problems and future plans of British Airways, I should complete the picture by referring to the Government's own proposals to give the airline private sector status and offer shares for sale to the public. Because of present difficulties in the market, it has not been possible for us to implement that policy as soon as we would have wished, and we have already announced that there will be no flotation this year. The fact that we are prepared to wait until the time is right does I think prove the validity of the assurances, given when Parliament debated the Civil Aviation Bill—not least by me to the noble Lord, Lord Ponsonby, that we would not rush into a sale of shares at the wrong time for the wrong reasons. But I should make it clear that the Government maintain firmly the belief that privatisation offers the best chances for British Airways' future success; that the right time to make the change will come and that we shall implement the policy as soon as it does.

Before I move on to the matter of the British Airports Authority, I turn to some of the points which have been made in connection with British Airways during the course of the debate. I fear that I am going to take them in a somewhat random order. The noble Lords, Lord Orr-Ewing and Lord Glenkinglas, referred to the question of pooling. I have noted what my noble friends said about these arrangements. The vast majority of pooling arrangements are essentially commercial agreements made between airlines, to which the Government are not a party. In the uncompetitive environment in which they often find themselves operating, they are in many ways a rational, if admittedly self-interested, response. They can promote sensible solutions to a variety of problems such as the need for capacity to be provided at the right times of the day which suit the convenience of the passenger. I shall, if I may, reflect upon what my noble friends have said in the light of the words that they put to me.

My noble friend Lady Trumpington and at least one noble Lord referred to the question of aviation security arrangements. My noble friend proposed that we should change the system so that security is funded nationally. The previous administration decided to pass the cost of aviation security measures from the taxpayer to the industry in the 1978 Civil Aviation Act. The present Government do not wish to change that policy. We believe it right that those who benefit from aviation security should pay for it. The noble Baroness also suggested that details of the costs and revenues of the aviation security fund are difficult to obtain. In fact a great deal of financial information is given to the working group on the fund twice a year. A representative of the Airline Transport Users' Committee attends these meetings. Such information includes, for example, total income and expenditure for the previous year; an estimate of income and expenditure for up to two years ahead; costs at individual airports, any significant variation in manning levels and major wage awards in the previous year. It is my department's intention, whenever it is necessary to revise the levy rate, to put a report containing such information in the Library of both Houses of Parliament.

Before the noble Lord leaves that point, since they are recruiting staff for security and presumably at a certain maturity—that is to say, 35 years of age, when they have the experience and level-headedness—are they not going to have a shorter working life and will not the future taxpayers be saddled after that short period is over with paying them fully-indexed pensions for the rest of their lifetime? Is not this unproductive as compared with hiring persons to do the job for a limited time?

My Lords, the costs of the security operations at both BAA airports and indeed at some others have been kept under review for a long time. I can assure my noble friend that the present arrangements, of which of course future pensions play a part, are kept under consideration and we are convinced that the present arrangements are the most cost-effective that can be devised. It is necessary of course for us to ensure that the effectiveness of the security arrangements remains unimpaired. That is one of the reasons why we have the arrangements which are presently in force.

The noble Lord, Lord Hayter, referred to air cargo. I can assure the noble Lord that the importance of that industry is not forgotten, if only for the fact that I have spent most of my working life in it. I certainly welcome and appreciate the work in which the noble Lord is personally involved in this important area. If he will allow me, I shall study more carefully the words he used today and see if there is anything further that I can say to him, and if so, I shall write to him.

May I now turn to the question of air fares? This has interested several noble Lords and Baronesses, not least the noble Baroness, Lady Burton, the noble Earl, Lord Amherst and my noble friend Lord Orr-Ewing. The noble Baroness, Lady Burton, mentioned the subject of air fares again and although it is not immediately within the compass of today's debate perhaps I may mention it briefly. It is in Europe that the level of air fares gives me the most concern. Here we have a number of developed democratic companies with a sophisticated air transport system which can no longer be considered an infant industry. Yet, nevertheless, we see a tightly regulated system which prevents airlines from offering fares to their consumers at price levels and on conditions which they believe that their customers want. This is not only against the interests of consumers, but I believe in the longer term it is against the interests of the airline concerned and it is certainly contrary to the whole philosophical background of the European Community, which envisage a wide measure of free trading conditions in goods and services.

We are not looking for revolution in the air transport system which could bring chaotic conditions with it and we do not seek the kind of overnight United States-style deregulation which some of our partners fear. We are however pressing them very hard indeed—and was in Amsterdam earlier this week doing just that—to accept some sensible liberalising steps which could allow new innovative fares and some new services to be introduced. At our initiative there are now three aviation issues under discussion in the European Community, including the one of air fares. The Commission is currently studying this with national experts with a remit to report back to the Council, and we very much hope that the Council will be able to take action on this during the course of the year.

My Lords, I am sorry to interrupt. Is that the answer on bucket shops or is the noble Lord going to tell us a little more?

My Lords, I have not finished yet.

My Lords, if the noble Lord has finished it, may I ask him whether he thinks that what he has said constitutes any answer to a case which I think has—

My Lords, I said, "I have not finished yet". On the bilateral side, we cannot unilaterally introduce lower fares but we can and do disapprove fare increases where we believe that they are unreasonable. For example, the normal economy return fare to Rome would be over £70 higher now if we had not taken such action, and to Stockholm nearly £100 higher. In our bilateral negotiations with other European countries, we shall continue to negotiate vigorously for the introduction of fares which our airlines wish to charge and which we believe are entirely reasonable in relation to the terms and conditions and the costs of operations.

It is encouraging that British Airways have now secured agreement for the introduction of its new and somewhat lower fares structure extensively throughout Western Europe. Our experience with other innovative fare types has been less encouraging. I was acutely disappointed, for example, by the unwillingness of the Austrian Government at talks last month to accept the new low Mini-prix fares proposed by British Caledonian. But we shall persevere with determination, and I believe that other European Governments will come in due course to accept that a balance needs to be struck between the interests of the traveller and the interests of airlines which is rather different from that in the past.

I do not pretend that this is going to be an easy task, because other governments take a very different view of this matter from us, and many give pre-eminence to the legitimate commercial objectives of their national airlines without, in our view, paying enough attention to the equally legitimate needs of their citizens as consumers in the air travel and the air freight markets. I believe it is quite wrong that the market should be restricted in this highly regulated way, and it also leads to the kind of abuses and illegalities which we have discussed in this House recently in connection with bucket shops. It is a matter which I and my department intend to pursue with the utmost vigour.

The noble Baroness mentioned the views of Mr. Elton, the chairman of ABTA, who suggests that we should either enforce the law or change it. I am sorry to have to tell the noble Baroness what she knows already: that there are difficulties in both of those courses. To enforce the law to secure a prosecution we need to have adequate evidence, and to persuade the court that a breach of the law has occurred and indeed who has done it, which is far from easy. To change the law, we have to persuade our international partners. That too is proving difficult, but is likely I think in the end to be the best course along which to proceed.

My Lords, I do not want to make this into another debate, but is the Minister really saying that the sale of 5 million tickets in a year in this country through bucket shops is something which can just be left? I am glad the noble Lord indicates that is not so. Is the noble Lord telling the House, then, that the Government intend to take this matter to IATA, because it is IATA which is concerned also with this problem? Could he give us an assurance that that will be done?

My Lords, Britain is not a member of IATA; IATA is an organisation of airlines. The British airlines—British Airways and British Caledonian—are themselves members of IATA and they are as aware of this problem as we are and as the noble Baroness is. IATA, like other bodies, has to proceed with some form of consensus and it is some of the other airlines in IATA which are obstructing what we think to be proper progress in this direction. I want the noble Baroness to understand quite clearly that I attach the greatest importance to this matter. It is something I have been considering almost every day since I took over the post that I now occupy, and I am determined to see that something is done as soon as possible.

My noble friend calls attention also to the condition and situation of the airports operated by the British Airports Authority. He and others have raised a number of matters which bear on this. Therefore, it may be helpful if, before replying to these points, I speak briefly about the responsibilities of the authority, about its success and about its plans for the future so that my replies are seen in the proper context.

As your Lordships will recall, the authority was established on 1st April 1966 to own and manage four major airports—Heathrow, Gatwick, Stansted and Prestwick—formerly under the direct control of the Government. It has since acquired Glasgow, Edinburgh and Aberdeen airports which, together with Prestwick, are now managed by the Scottish Airports Division of the authority. The authority therefore now owns and manages seven major airports in the United Kingdom which during 1979–80 together handled 78 per cent. of all passengers and 84 per cent. of air cargo traffic in the United Kingdom.

The authority's primary task is to plan, develop and operate those airports to meet the present and future needs of the international and domestic air transport system. Since 1966 the annual total aircraft movements through BAA airports have doubled, while the annual total number of passengers has increased threefold. That difference reflects the introduction of wide-bodied jets in the early 1970s. Indeed, it is the continued development of aircraft capacity which has changed the nature of the business to the extent that passenger-handling capacity rather than runway capacity is now the main limiting factor.

I see that I have gone on for longer than I had hoped on this matter. I shall delete a number of paragraphs which I have still before me. However, can I say that a number of points that have been raised by a number of speakers dealing with the British Airports Authority are very valid ones and, if I may, I will write to noble Lords on them. Can I now bring my remarks to a close by saying that this has been a timely and constructive debate and we have been fortunate to hear from a number of speakers who either have direct experience or a considerable knowledge of aviation matters. I conclude by repeating a remark I made at the beginning of my speech: the British aviation industry, in all its forms, is a success story and one in which we can take genuine pride. It is right that parts of our debate should have concentrated on certain problems which face the industry at present and it would be quite wrong to pretend that those problems do not exist or can be easily overcome. But I think all sides of your Lordships' House would agree that the problems should not overshadow the achievements, and would join me in wishing future success to all those involved in our civil aviation industry.

My Lords, when I opened this debate I said I was confident that there were enough people in this House who would fill up any gaps in my rather hasty opening with a great deal of useful flesh—if one can actually do that; I am not quite sure! But that has happened and we have had some most helpful and useful speeches on all sorts of specialist topics. The noble Lord, Lord Hayter, referred to cargo and my noble friend Lord Glenarthur spoke on the helicopter side of it. We also heard some more general and very useful comments from other noble Lords on every side of the House. Two of my noble kinsmen spoke. My noble friend Lord Campbell spoke very ably about the disabled, and I could not help feeling a certain sympathy as he spoke about the partially disabled, because I find the walk from one end of London Airport to the other almost feels as though one were walking to Glasgow in order to get to the beginning of it, and I have to stop pretty regularly on that way myself. I also have great sympathy with my other noble kinsman, Lord Cork and Orrery, when he talked about wanting to plant an airport on Severnside.

But the person who really has my deepest sympathy is the noble Lord, Lord Trefgarne. He has all the worries that I had 10 years ago. I think some of them are a little less. For example, I do not think he gets woken up by the telephone at 2.30 every morning by somebody ringing to say that they have just been woken up by an aircraft and what is he going to do about it. That happened so regularly with me that in the end the Post Office had to cut off my telephone from 10.30 until four. I knew perfectly well how to deal with the situation, of course. That was merely to ask the caller for his telephone number and ring him back the next night at 2.30 and say: "I was just going to bed and I hope you were sleeping well!" But for some reason my civil servants did not think that was a proper way for a Minister to behave.

In asking leave to withdraw my Motion, I would thank all those who have taken part in what I believe has been an interesting and useful debate. As the noble Baroness, Lady Burton, said, we all want to help. We know that British Airways are improving daily. We have great confidence in their new management and we hope very much that, as a result of our debate, a little greater speed in some of the improvements referred to will come about. I beg leave to withdraw my Motion for Papers.

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

moved Amendment No. 1:

Page 1, line 7, after ("trees") insert ("of a species set out in the Schedule to this Act").

May I support the noble Lord? We had a good discussion earlier and I welcome the Bill. I know that others took a different view, but I believe that what the noble Lord has now done will help considerably. So I hope that the Bill will get a speedy passage through the House.

May I agree with the noble Lord, Lord Peart? I feel that this Bill is becoming something of an old friend—small, but an old friend none the less. This is an improvement and I shall support the noble Lord's amendment.

I am afraid that I have some rather bad news to impart from this Bench. I think it is an open secret by now that the Government have very little enthusiasm at all for this Bill. As my noble friend Lord Avon said on Second Reading on 29th January, at column 87 of the Official Report:

"Our main objection … is that it runs counter to our policy of reducing the statutory duties of local authorities"—

and a little later on:

"We believe that this Bill is unnecessary because most local authorities already plant a substantial number of trees each year".

However, we recognise the great efforts that the noble Lord, Lord Somers, is making to change our minds.

We know that the noble Lord's intention is to ensure that local authorities plant more hardwood trees. But, unfortunately, the effect of these amendments to the Bill now before us would be to force local authorities to plant only those trees which are currently in the schedule, which is the subject of Amendment No. 3. These are, of course, mixed hardwood and softwood trees and we consider it totally inappropriate for local authorities to be constricted in this matter as to what they should plant.

Regretfully, we still feel that even if the Bill were amended in this way, it would remain unsatisfactory and unnecessary for the reasons that I quoted earlier. Indeed, this series of numbered amendments falls far short of anything that is needed for a change of heart on our part, and it is difficult to envisage any amendments which would bring about such a change. I hope, therefore, that the noble Lord will be prepared to reconsider his ideas and at this stage I must urge him to withdraw the amendment.

I am not prepared to withdraw this amendment, because I must point out to the noble Lord, Lord Skelmersdale, that there is an amendment later which withdraws the clause which forces local authorities to take any action at all. That clause was introduced merely because I felt that unenforceable law was undesirable, and that was the nearest I could get to what was needed. But I am about to withdraw that. As regards forcing local authorities to have a narrow choice, they really have quite a wide choice in this schedule, and if we are to preserve the hardwood trees and the slow growing trees I cannot see any other way of doing it.

The Question is that Amendment No. 1 be agreed to? As many as are of that opinion will say Content; to the contrary, Not-Content.

The Contents will go to the right by the Throne; the Not-Contents to the left by the Bar.

Did I hear anybody say "Content"?

I am afraid that the Chair heard a "Content" from that side, and therefore I took the necessary action.

moved Amendment No. 2:

I had a great deal of heart-searching over this clause and thought of various ways in which it might be possible to make this Bill enforceable, but there has been so much opposition to this particular clause, owing to the fact that it would mean a lot of extra paperwork and a certain amount of bureaucracy, that I decided in the end to withdraw it and to leave the Bill to the judgment of local authorities, which I think on the whole is very sound. Therefore I think that Clause 4 should be left out.

The noble Lord has obviously taken great note of the remarks of my noble friend Lord Avon, and others, at Second Reading. On that occasion my noble friend was extremely critical of the proposed enforcement duties to be imposed on the Secretary of State. Their removal will certainly improve the Bill to this extent. The Government therefore support the noble Lord.

moved Amendment No. 3:

rose to ask Her Majesty's Government whether they are satisfied that the EEC initiatives in the Middle East will add to the progress being made under the Camp David arrangements and not undermine its achievements, strain relationships with the USA, Israel and Egypt, and create serious problems for a new Israeli Government.

My Lords, we are all grateful to the noble Lord, Lord Byers, for the constructive and balanced speech with which he has opened this debate. The Middle East is indeed a vast area of instability and a constant threat to its own peace and the peace of the world, and in recent years the factors of instability have increased instead of diminishing. In the Islamic revolution we have a new accession of Muslim consciousness and power, much of it understandable but some of it, as in Iran, capable of unleashing new and disturbing forces. The Soviet invasion and occupation of Afghanistan is related to all this and has given an added dimension of instability in the area.

Then there is the cost and the availability of oil seriously affecting the economy of the western world, of Japan and indeed of the Third World, perhaps more vulnerable than any to the abrupt changes in oil prices. Then there are the antagonisms within the Arab world itself, leading, in the case of Iraq and Iran, to actual war, and that, too, is an increased factor in the difficulties and dangers which beset the region. It is against the background of increasing instability and danger to peace that the Arab-Israeli dispute presents an especial urgency.

The noble Lord was quite right in concentrating the attention of the House on the Arab-Israeli scene, which is more than ever the heart and centre of the instability of the whole area, from which has flowed since 1973, the series of acute oil crises which continue to distort our exchanges and the economy of the western world, The new aggressive oil pricing policy, however, was not solely dictated by considerations of finance and conservation, important as those were in the calculations of OPEC, but also in part by a vehement reaction to the continuing plight of the Palestinian and Arab refugees. They see 1½ million Arabs still without roots or rights, a fertile ground for the extremists and the men of violence and a source of deepening despair for the men who counsel moderation, and they include Arabs and Jews.

Conversely, a just and durable solution of the Arab-Israeli dispute would have a far-reaching and beneficial impact on the whole Middle East scene, helping perhaps to stabilise oil policy, taking some of the politics out of that policy, and turning the Arab mind from the obsession with the West Bank and Gaza to wider regional problems and the undoubted role which a free, secure Israel could play in their solution.

There are two main approaches to the solution of this problem; the Camp David procedures and the Venice Statement of the Heads of Governments and States of the European Community. I think it is essential that the two should be regarded as complementary and not conflicting. They have a common objective, a just and lasting settlement based on the resolutions of the United Nations, notably Resolution 242 and Resolution 338, which still stand the test of commonsense and practicality, and which establish the two-fold basis for a settlement; namely, security for the State of Israel and justice for the Palestinians and the refugees. Neither is possible without the other. We can spend the rest of this century and more contemplating in the Middle East murder, destruction and despair, without a solution of this problem, and creating there the possibility of an even wider conflagration than we fear may be possible in the area at the present time.

Israel can never attain real security so long as 1½ million Arabs cherish a deepening bitterness about their lot. Nor can the Palestinians hope to secure a role and a home, however defined, next door to Israel unless they finally, firmly and publicly renounce the destruction of Israel as their fundamental aim. Many of us feel that now is the time to effect a conjunction of the two approaches. My noble friend has quite rightly pointed to the dangers of inserting the Venice Statement into the procedures of the Camp David talks. But it is possible to effect a conjunction of the two approaches, Camp David and Venice, avoiding the dangers which the Question sets out and which my noble friend's speech so clearly defined.

Camp David, as he said, has very considerable achievements to its credit, the actual return—not a blueprint, but the actual return—of occupied territory to Egypt by the Israelis; they handed over the Peninsular of Sinai together with its oil wells. That was an actual act of renunciation and restoration, something we have talked about since 1949. That has been done. It is a practical example of how the two-fold basis of lasting peace can be achieved. It has happened in part of the disputed territoties already, in Sinai. That is a negotiated restoration of Arab land balanced by the recognition of Israel and its security. That has been done in regard to Sinai.

I believe that what proved successful in Sinai can be applied to the West Bank, and this is why I support my noble friend in calling on the Government to be very careful indeed that the techniques which succeeded in Sinai shall not be jeopardised or impaired by the intrusion in an untimely way of other proposals and other techniques, however well-meant and however well endorsed. Nothing could be more highly endorsed than a summit meeting in Venice putting forward a declaration on any subject. I repeat I do not myself see that the Camp David procedures and the Venice objectives are incompatible. But there is a question of timing, as to how far the Camp David procedures and agenda, which includes the points made by my noble friend, should proceed before the Venice techniques are added. This is a point of reservation which my party generally feels. We wish to see the achievements of Camp David built on, and at the appropriate times the perceptions of Venice added to that process. It is a question of timing, Indeed, I understand that the Israeli Labour Party, which is likely to form the next Government of Israel, shares this view.

The Venice Statement does have this advantage—and I am quite sure my noble friend would defer to this: it pays particular attention to the all-important matter of guarantees once a settlement is reached. No one is going to a conference table without the question of guarantees that will stick being ever-present in his mind before he begins to talk about terms. He is going to look to the end before he starts talking about the means.

I believe we are in a position now to move forward decisively towards a solution of the problem of the West Bank and of Gaza. I, too, am familiar with the area and dealt with these matters for years in the Foreign Office. I know that the problems in those parts of the disputed territories are ten times more complex and difficult than they were in Sinai. Nevertheless, the principle is the same and the techniques of solution could be the same, and the sooner we move the better.

I started by reminding the House and myself of the added dimensions of instability in the Middle East in the last few years. Fifteen years ago, 20 years ago, the Arab Israeli dispute stood pretty much on its own. Look what has been added to it, feeding its rancours and in turn deriving a new strength of hatred and antagonism from the continuation of that dispute. So the sooner we move the better. Now the Iran-Iraq war; yesterday Afghanistan; tomorrow, what new disturbance which will further emphasise the urgency of a solution to what I call the heart and centre of this problem?

But whatever form the negotiations take—and I am sure that the Government will have listened with very great care to my noble friend Lord Byers who spoke about the danger of confusing, of muddying, the waters by mixing the two prematurely—there are, I think, a number of preconditions which all who aspire to a place at the table must accept beforehand. There are conferences which are best started without preconditions, but there are conferences—and this is one such situation—where there are bound to be preconditions before we get any kind of meaningful conference.

The first precondition is, of course, that while all who have a genuine interest in the solution should be represented, no individual or organisation can possibly qualify unless it unreservedly, publicly and irreversibly renounces the destruction of the State of Israel as a political aim. The Palestinians should have a voice, but only on that condition. Secondly, all parties must accept that a settlement will mean a readjustment of boundaries. That is a very difficult thing to do, as my noble friend reminded us, in conditions of this sort and in territory of this kind. There must be a readiness to compromise territorially before anybody enters the conference room. At the very least, what the Arabs see as an Israeli encroachment on Arab land should stop, and recent advances—which as a friend of Israel I must say have done very great damage to the Israeli case—should be abandoned. There is a growing feeling in this country, and I believe a growing feeling in Israel too, that these settlements have been pushed too far and too hard and have overcast the Israeli case for security with something else which the more unscrupulous and violent of their critics are not slow to use.

Thirdly, the parties must accept a demilitarised zone. Here I speak entirely for myself, although, like my noble friend, no doubt some people may agree with me. The parties must accept a demilitarised zone because that is the nature of the terrain. They must accept a demilitarised zone internationally policed and guaranteed. I believe that the United Nations is capable of a thorough and adequate action of surveillance and of defence. Its record in various parts of the world is not simply confined to the examples that my noble friend gave. It has been most successful in other parts of the world. But, having created a demilitarised zone between the new Palestinian entity and to the West of the Israeli State, then surely the Israelis should, in addition, have the line on the West of the demilitarised zone placed in such a way that it adds effectively to their possibilities of defence. I believe that the Israelis would respond to a suggestion somewhat on those lines; namely, that there is the buffer of demilitarisation, but, on the West, the actuality of Israeli capacity to defend itself.

In conclusion, I hope that this debate will stimulate the Government to promote a fresh initiative but not in challenge of any sort to the Camp David talks, but in support of them, using the perceptions of the Venice Statement to strengthen what is already proved to be effective in the Camp David procedures. We must grasp the virtues of both approaches to the solution of this problem if we are to conquer the necessity of the immediate future and so, hopefully, move into a stage when the constant instability in the area fed by hatred, murder and destruction, can be converted into stability and co-operation in which both Arab and Jew—who belong to the same family, ultimately—co-operate together to develop the Middle East, as they well can if they co-operate, and restore to it stability and peace, and thereby ensure the peace of the world as well.

My Lords, I am indebted to the noble Lord, Lord Byers, for the Question he has raised with Her Majesty's Government. I have listened with careful attention to the noble Lord, Lord Goronwy-Roberts. In the conclusions of the EEC's council meeting at Venice last June the statement referring to the Middle East includes the following:

"All of the countries in the area are entitled to live in peace within secure, recognised and guaranteed borders … A just solution must finally be found to the Palestinian problem, which is not simply one of refugees".

The communiqué continued:

"The achievement of these objectives requires the involvement and support of all the parties concerned in the peace settlement which the Nine are endeavouring to promote. These principles apply to all the parties concerned, and thus the Palestinian people, and to the PLO which will have to be associated with the negotiations".

That is what the Venice Statement said. I appreciate that the Secretary of State for Foreign Affairs the noble Lord, Lord Carrington, whenever he refers to the need for a settlement of hostilities in the Middle East says that a pre-condition is that all countries, including Israel, are entitled to live in peace within secure, recognised and guaranteed borders. He is, of course, right. This is what he said in your Lordships' House on 1st December 1976, at column 299:

"Those of us who know that part of the world or who have been there will realise how militarily indefensible would be the position of Israel if the West Bank were returned to the Palestinians … no settlement of this problem is possible if the Israelis believe that the terms that they are asked to accept are worse than the alternative of sitting it out or fighting it out".

I should like to ask the noble Lord, Lord Trefgarne, what Her Majesty's Government understand now by "secure boundaries" and whether they fully appreciate the nature of PLO terrorism today.

I hope that your Lordships will forgive me for refer ring to some family experiences. My mother lived in Israel six months of each year. In the late 1950s terrorists came in from the West Bank to murder her, mistook the gardener's house for her house, blew it up, murdered the gardener, and were back across the border within 15 minutes. Telmond, where the house was located, is eight miles from the sea and one mile from the West Bank. This incident took place when Israel existed within the pre-1967 boundaries before the Six Day War. What is security for the State of Israel where at a vital point in one of her most populous areas the country is nine miles wide?

In 1973 the Popular Front for the Liberation of Palestine, an arm of the PLO, was nearly successful in murdering Edward Sieff in his home in London because he was Zionist and helped Israel with her social problems. He was grievously wounded but survived because the gun jammed after the first bullet had been fired into his head.

One can, of course, say that these incidents occurred one over 20 years ago and the other seven years ago, and that the PLO is more moderate today; that we should not take seriously what its leaders say publicly, but what we are told they say in private—namely, that they desire a peaceful settlement. Let us briefly examine that. In March 1977 the Thirteenth Palestine National Committee, which formed the PLO, reaffirmed that:

"The liberation of Palestine, from an Arab viewpoint, is a national duty, and it attempts to repel the Zionist and Imperialist aggression against the Arab homeland, and aims at the elimination of Zionism in Palestine".

So less than four years ago the PLO again called for the destruction of the State of Israel, but we are to forget that.

But what has happened since? There has been a continuing stream of assassinations of Arabs and Palestinians, never mind Jews or Israelis, for which the PLO claim credit. Mr. Kadi, the district education officer of Nablus, and Mr. Janhu, perhaps the most prominent businessman of Romallah, were both murdered by the PLO in 1978. In 1979 the Imam of Gaza, Sheikh Khuzendar, after a visit to Cairo to congratulate President Sadat on his peace initiative, was murdered on his return by the PLO. In the last three months 12 Arabs in the Gaza strip have been murdered by the PLO, the most prominent being Mr. Wardah, deputy head of the municipal council of the town of Jabaliah, who supported the Egyptian-Israeli peace treaty. The PLO claimed credit for those murders. A PLO spokesman in Beirut threatened a similar fate for other West Bank Arabs who collaborate in any way with the Israelis.

I suggest to your Lordships that the reason many Palestinians on the West Bank agree that the PLO should represent them is not due to any democratic or voluntary form of election, but is due more to fear of assassination if they do not support the PLO. I do not agree with all the policies and activities of the present Israeli Government, but I ask Her Majesty's Government whether, if they were in the Israeli Government's shoes, they would be prepared to negotiate with a group which publicly declares to this day that its objective is the destruction of the State of Israel, its continued method of operation the murder of any prominent Arab who works with the Israeli authorities or who supports the Egyptian-Israeli peace treaty.

Like the noble Lord, Lord Byers, I believe that it is essential that whatever action Her Majesty's Government propose or take, or we support as a member of the EEC, we ensure that this does not in any way undermine the progress already made under the Egyptian-Israeli peace treaty. And progress is being made, as I learned when I recently visited Egypt and had discussions with President Sadat and his Ministers, and even more recently this morning when I had discussions with the Deputy Prime Minister of Egypt.

We should build on what has been achieved. It is impossible for any Israeli Government to negotiate or to enter into negotiations with the PLO until that organisation and the Palestine National Committee publicly renounce their policy of eliminating Israel and murdering any Palestinian or Arab who cooperates with the Israelis. Only in this way will we in the end achieve peace between Israel and her immediate neighbours, and see a fair and satisfactory solution for the Palestinians.

My Lords, I, too, should like to thank the noble Lord, Lord Byers, for initiating this debate. It is the latest but by no means the least of the many valuable contributions that he has already made towards the cause of peace in the Middle East. It was a bold stroke on the part of the noble Lord the Foreign Secretary to persuade President Sadat to attend the meeting of the European Parliament at Luxembourg, and one that paid off handsomely. It added still further to President Sadat's stature as a world statesman and endorsed the European initiative on the Middle East taken at Venice last June.

But, according to The Times report of his address at Luxembourg, there were two notable omissions in the President of Egypt's speech, which nevertheless earned him a standing ovation from all the assembled delegates. One was the omission of all reference to the PLO. There can be little doubt that his attitude to the PLO is at least somewhat lukewarm, as he confirmed by his later remarks in Paris. This fact is indeed hardly surprising. Ever since Camp David the PLO, as has already been said, has been responsible for waging a campaign of murder and terrorism in the occupied territories of Gaza and the West Bank against those Arabs who showed the slightest signs of approving President Sadat's policy of moderation and acceptance of peace with Israel.

The PLO, moreover, is not short of funds. It has been liberally subsidised from the Gulf and it is determined to crush out of existence all opposition to the creation of a Palestinian state. That is why the Arabs of Palestine have been compelled to accept, willy nilly, the PLO as their sole representative; and this, despite the wishes of the vast majority of the Arab moderates in Palestine who, in their heart of hearts, long for peace with Israel and who know that another war can only bring them disaster.

How much wiser would the Declaration of Venice have been if, like President Sadat at Luxembourg, it has omitted all reference to the PLO. Yet we brought the PLO quite unnecessarily into the Venice Declaration, to the surprise and consternation of both President Sadat and our American allies. This was surely somewhat gratuitous, unless it had been demanded of Venice by the Arab powers of the Gulf. For not once, but again and again, Britain has committed herself to guarantee, not only absolute recognition, but also safe and secure boundaries for the state of Israel. Why do we fail so abysmally to convince the Arab states that we mean what we say, and persuade them to accept with good grace the stark reality of Israel's existence, instead of continuing their futile vendetta? Surely President Sadat's formula, so powerfully declared at Luxembourg, to proclaim a mutual and simultaneous recognition between Israelis and Palestinians, is the only logical solution. All the efforts of the EEC should now be concentrated in convincing the moderate Arab states to accept this formula, and emphasise that the continued use of oil as a political weapon will not make us budge from our position.

In passing, may I add a word about the position of Jerusalem. Peace in Jerusalem can never be achieved, whatever well-intentioned theorists may say, by stationing there an international force of hired, timeserving mercenaries. Peace in the Holy City can only be achieved by a force of those who love the city and who are prepared to dedicate their lives to the cause of peace within her walls: not a force of arms, not even arms of self-defence, but a force of men and women of goodwill from all over the globe who are refugees from religious persecution. That is the best way of ensuring peace in the Holy City.

An international force, on the other hand, sponsored by the United Nations as we know it today is foredoomed to failure, as it has already failed to bring peace to the Lebanon. A similar failure in Jerusalem would be a tragedy for the whole civilised world, infinitely worse than the present uneasy peace that now hangs over the city. Yet even amid this uneasy peace there are signs of hope, thanks to the wise, conciliatory approach of the Mayor of Jerusalem, Mr. Teddy Kolleck, and the spirit of justice that pervades the Israeli courts. At least all religious and all denominations now have access to their holy sites, a state of affairs which did not exist during the period of Jordanian occupation.

So I ask the Government now, if the price of oil is raised further and further above its present height, will they ultimately yield to Arab pressure and agree to the annihilation of Israel? If so, they had better declare their intention here and now. That would resolve a lot of doubts in the minds of the Arab rulers in the Gulf, and might possibly achieve some stability in the price of oil which is now impoverishing the whole world.

Why can we not declare openly to the Arab states that however much they raise the price of oil it would still be cheaper for us to pay that price than to be involved in another Middle East war, with all the horrors that it would create for the whole of humanity? A war between Iran and Iraq is bad enough. At least it can be localised. But a war again in the Holy Land is unthinkable. We should all share in the blame if the EEC and Russia and the United States became involved. Here President Sadat has shown the way. He already has some notable achievements to his credit. The first was his complete break with Soviet Russia. If other Middle East states had followed his lead the whole world would know today where the Arabs stand, and the journeys to and from the Kremlin would cease. The minds of the EEC and the United States would be set at rest. But any Arab stand against Russia seems as far off today as ever, despite the bitter lesson of Afghanistan.

The second great achievement of President Sadat is that without openly adopting the Christian ethic of "love thy neighbour" he has demonstrated to the whole world that he believes sincerely in Israel's desire for peace, and by his dramatic act in visiting Jerusalem in November 1977 dispelled at once the atmosphere of suspicion and mistrust that hung over these two neighbouring states. Let us be in no doubt whatever that these two states hold the key to eventual peace in the Middle East. Without them neither oil nor wealth can hope to prevail.

The pity is that the one great leader who understands the true needs of the Arabs still remains an isolated figure. If only one of the moderate Arab states, say Jordan, or Lebanon, or Saudi Arabia were to rally to his side a great step forward towards peace will have been achieved; but, thanks to the activities of the PLO, an atmosphere of terror still hangs over Lebanon, Syria and Jordan, though mercifully it has now been cleared from Egypt. Here we in Britain, in concert with the EEC and our American allies, should reaffirm our attitude again and again to leave the Arabs in no uncertainty as to where we stand.

But let us have no doubts whatever; the liquidation of the state of Israel will never bring peace to the Middle East. On the contrary, it will only exacerbate the warring elements in that region. There would still remain the war between Iran and Iraq; the emnity between Syria and Jordan; the wiles of Colonel Gaddafi, and the horrors in the Horn of Africa. In the end still remains the PLO with its rival factions and all its discordant voices. In the end still remains Russia, waiting in the wings ready to stir up the muddy waters in Afghanistan and its restless surrounding regions. At least with Egypt and Israel we can no longer have any doubts about their attitude towards Russia. We know they will always stand solidly behind the West.

The other notable feature of President Sadat's Luxembourg speech was that according to The Times report he omitted all reference to a Palestinian state, but spoke repeatedly, as we have already heard, of a Palestinian entity. In this he was fully in accord with the agreement reached at Camp David: Absolute autonomy; autonomy to the freeest and fullest extent. But to campaign for the creation of yet another, 22nd, Arab state on top of all the existing ones would be as illogical as campaigning for an independent Italian state in Switzerland—and who would campaign for that?

Surely the cause of peace is deserving of some sacrifice. The great tragedy of the post-war world is that it has become polarised into the peace-loving states and the states that still believe in war as an instrument of national policy. After Afghanistan we can no longer harbour any illusions as to where Russia stands, and until the last Russian soldier is withdrawn from Afghanistan no one can hope to believe in Russia as a peace-loving state. But in the Middle East we have no doubt about Israel as a peace-loving state since peace is essential to her continued progress.

President Sadat's third and perhaps greatest achievement is to have allied Egypt with the ranks of the world's peace-loving states. No one seems to have fully recognised the sacrifices that Egypt has already made for the Palestinian cause, sacrifices far greater than those of any other Arab nation, certainly far greater than those of Saudi Arabia and all the Gulf states put together; at least 80,000 of her sons killed and wounded in five Middle East wars and countless families bereaved of their breadwinners.

Now at last peace reigns over Israel's western frontiers. The great Islamic state of Egypt, with its 40 million inhabitants, with the largest and most powerful of all the Arab armies, has determined to live in peace with its eastern neighbour; and with Israel's western border now neutralised, to the inestimable benefit of both nations, no Arab state or combination of Arab states can hope to defeat Israel by war. Their only remaining hope is by a diplomatic victory with oil as their weapon.

Let Britain once again, through the EEC, declare to the world that, however high the price of oil, we stand committed to the survival of Israel and that, however astronomical the price of oil becomes, it will always be lower than the price of human lives and human suffering that another war would entail. The Middle East, alas! has been the graveyard of many reputations in the past. Our hope now is that this short debate may herald the ultimate closure of this graveyard and give a new lease of life and added strength to those who are striving for peace.

My Lords, in asking his Question, my noble friend and Leader, Lord Byers, said he spoke on his own personal responsibility. So do I, because on a matter of this importance I do not know any other way to speak. I have listened with interest and admiration to all that has been said so far and I agreed with nearly everything the noble Lord, Lord Goronwy-Roberts, said, as has often hitherto been the case. In listening to the other speeches I have at times had the strong feeling that I was listening to a very able exposition of one side of this essentially two-sided question.

I am as totally and immovably committed to the continued existence in peace and prosperity of Israel as any other noble Lord in this House. But having been obliged fortuitously to study the Arab-Israeli complex in some detail this past year, I have been driven to the conviction that it is not a black and white affair, that it is not a matter of right and wrong. What we have is one of those tragic cases of two good causes in conflict. It often saddens me that so many men and women of goodwill in the Liberal Party, in other parties and in no party, and indeed in other countries, are so blinded by their fervent attachment to one side or the other, whichever it be, that they are unable to see the strength and justice of the other side's case.

I find this not only sad but strange because both emotions—admiration for the Israelis and sympathy for the Palestinians—spring from the same source, which is a recognition of the need in every man and woman for somewhere to call home, somewhere where you can live if you want to, go home to if you are away, somewhere where you incontestibly belong. Israel has magnificently provided a home for the survivors of the ghastly events of the 'thirties and 'forties, and for thousands of others of her scattered sons and daughters. The Palestinians have lost their home and they yearn and ache to retrieve it. Does it not require almost some defect of the imagination for an outsider not to be able to accommodate both those emotions? That is my first assertion, that it is a two-sided question and that supporters of either side, if they want peace—and who does not?—must recognise that the other side also has a good case.

My second assertion is simply that the status quo is not an option. It is not tolerable that babies should be born in the camps in which their grandparents took refuge a third of a century ago. It is not tolerable, but it is happening every day. It was an Arab mayor who said to me, "We are paying for our past mistakes, and our first big mistake was in not taking what was offered in 1947". That was a terrible mistake. It was one of those historic mistakes which the leaders of all peoples make from time to time; the leaders make the mistakes and posterity pays the price, and that would almost serve as a pessimistic definition of history. But in this enlightened twentieth century it is surely our aim not to punish people for the mistakes made by their ancestors' leaders but, on the contrary, to relieve them wherever possible of the hardship to which those errors have led.

Just as it would be inhuman to opt for the status quo, it would also be politically impractical and foolish The lid simply will not stay on the kettle much longer. Hence, both the Camp David and EEC initiatives. Both surely sprang from the realisation that something had to be done and that things could not be left as they were. One of the standard clichés in the Middle East is, "No war without Egypt. No peace without the Palestinians". And it is of course the shining achievement of Camp David that at least it seems to have taken care of the first half of that saying, "No war without Egypt".

But what of the second half? I suspect—this is where some noble Lords will disagree with me—that we should perhaps amend the second half to read, "No peace without the Palestinians, including the PLO". I do not particularly like it, but I believe it is a true statement of the facts. Like it or not, I believe the PLO now has an effective power of veto at any rate on any settlement. It was of course the recognition of this fact in the Venice Declaration which displeased the Government of Israel and dismayed many of the friends of Israel in many countries. I believe a lot of that displeasure and dismay amounted to over-reaction, though I find it very easy to understand.

There are all too many people in Western Europe who seem determined on every possible occasion to unroll the red carpet in front of Mr. Arafat, without even asking him to leave his gun in the ante-room, and shower concessions on him without asking anything in return. That is the very antithesis of negotiation and the height of folly, and I suspect that it may have been an unfounded fear that the EEC Foreign Ministers were jumping on that bandwagon which gave rise to the displeasure and dismay to which I have referred.

In support of my contention that those fears were unfounded and did constitute over-reaction I should like to read to your Lordships two quotations. The first is from a speech made by our own Foreign Secretary at a dinner given by the Arab community in London on 21st January. Just before the part of the speech that I propose to quote he had made a number of statements which must have been extremely acceptable to his Arab hosts. The Foreign Secretary ended that part of his speech by saying:

"I have made myself rather unpopular in some places by spelling all this out".

He then went on:

"At the risk of making myself unpopular here as well, I must spell out some facts on the other side.

"Israel too exists, not merely on the map but as a member of the family of nations. Her future must be secure. A peaceful solution to the Middle East problem must mean that Israelis and Arabs—Palestinians—find a way of living in peace side by side.

"I think many, or perhaps most of you, accept this in your hearts. I want to emphasise the importance of facing the facts.

"Talk of expelling Israel from the UN, or 'liquidating the Zionist entity' does no service to the Arab cause. The only result of saying them is to convince the Israelis that there is no point in trying to negotiate with the Arabs.

"And negotiations and a just peace settlement without the Israelis are impossible. Each side must accept the rights of the other.

"It is precisely in this area of reconciling the rights and interests of the two sides that the European Community believe they can play an important role".

Remember, my Lords, that that was said to a gathering of no doubt very distinguished Arabs here in London.

I should like to follow it with a much shorter quotation from what Mr. Sadat said to the European Parliament on the 10th of this month. He said:

"We should like you to participate with us in persuading Palestinians and Israelis to accept mutual and simultaneous recognition. That should be the start of any initiative."

I should like to repeat the four key words from that quotation: "mutual and simultaneous recognition".

I have been involved in many discussions and arguments about the PLO and I have often thought that the question of whether X ought or ought not to meet Mr. Arafat is really less important than the question of what X ought to say to Mr. Arafat if, and when, he does meet him. If some spokesman for the EEC—Mr. Van Der Klaauw—or anyone else could really get it through to Mr. Arafat that he will never find himself seated at a conference table with any conceivable Israeli Government until he has sincerely, openly, and irrevocably repudiated the obnoxious clauses of his charter, would we not all feel that that journey had been well worth making?

It is time that I gave my answer to the question posed by my noble friend. It seems to me that the EEC initiative is neither good nor bad in itself. It all depends on how it is conducted. If it were designed to upstage or scupper, or, as my noble friend more elegantly puts it, to undermine the achievements of the Camp David arrangements, then it would be a disaster. But remember, my Lords, the passage that I read from the Foreign Secretary's speech. If it is conducted in that spirit, as I believe it will be, if we work with, and not against, the USA, if it is to complement rather than to frustrate Camp David, then I do not see that it will do any harm, and it just might do a great deal of good. It is a long shot because the problem is terribly difficult, but for the sake of our friends in Israel and in the Arab countries, and for the sake of world peace we must not give up hope.

My Lords, I have listened with very careful attention to the speeches which have been made, and I should like to compliment the noble Lord on having introduced this subject for discussion. I think that it is tremendously important from the point of view of peace, not only for us, but for the very many countries involved. I am very anxious that the matter should be considered in its proper perspective. We are talking about a very small state. If one looks at the map one sees how easy it is for an attack to be made upon Israel in so many different orders. Already the Arab states have a vast number of entities which can, and should, be described as Arab states or as Arab existencies.

Egypt contains half of the world's population of Arabs, and Egypt has taken a step which we would do well not only to follow, but to encourage with all our skill and ability, particularly in conjunction with the United States of America, which has done something which perhaps is incredible in our time. The Camp David arrangement was outstanding in the diplomatic field. Certainly Egypt itself cannot complain about the result of the Camp David negotiations.

I am not going to cover much ground that has already been covered. Your Lordships will understand that naturally I agree with the noble Lord. It would only be repetition if I pursued matters that have already been raised, particularly with regard to the question of security and the question of an undertaking. And let me deal with that. I refer to an undertaking to be given by all the parties concerned that the attack on Israel as a state should stop. Where on earth will the whole situation end up unless—and until—in the course of negotiations that principle is observed? How can one possibly expect any state at all to enter into negotiations with another entity or with another state or set of states unless—and until—that state is assured of the security situation from its point of view and is assured that its existence shall be recognised?

I have listened carefully to the speeches that have been made and with due respect to the noble Lord who has just spoken, I would say that it is not a question of negotiating with people who are expected to recognise a state. The United Nations is supposed to be a body consisting of national existencies, but that is not the question. There has been the Camp David agreement, which has avoided the attempts by violence. After all, it was a diplomatic achievement of a tremendous nature, and I think that—

My Lords, if the noble Lord could face this way we would be able to hear him a little better. His voice is not reaching the microphone.

My Lords, I am terribly sorry, but I have had some difficulty. I have just had an operation, as the House knows, and am just recovering from it. Let me go back to the point that I was endeavouring to make. A meeting is to be held in the United States. My view, and the view of many thousands of people throughout the world, is that that meeting is one which should be based upon the continuation of the Camp David agreement; that every effort should be made to see to it that that is pursued with vigour; and that the undertakings which had to be given before any other entity was brought into the talks should be found by the meeting which is to be held to be of a nature which cannot be broken. It is all very well; we carry on stating that we accept the situation provided an undertaking is given that Israel will be recognised. But how on earth can anyone expect people to go into consultation with those who have not yet accepted that particular point of view and that promise which the other people participating in the negotiations have put forward?

I do not intend to repeat the very strong arguments that have already been used in the course of this debate with regard to the situation, but I want your Lordships, in dealing with the question of the meeting that is to be held in the United States, to realise that the security of a state like Israel, a small state, should not be regarded as being just a detail, but should be right at the heart of any negotiations that take place; and that the action taken at the Camp David negotiations shall continue and shall be fortified by all the action that can possibly be taken by the parties when they meet.

My Lords, we are much indebted to the noble Lord, Lord Byers, for putting down this Question, which is of passionate interest to all of us. It is now quite a while since we had a debate in your Lordships' House on this subject, and I think the situation has changed dramatically since that time. To begin with, there are quarrels and wars between Arab countries—between, as we know, Iran and Iraq—and they have nothing to do with Israel; Israel is not involved with them. The Arab states are conducting, most unwisely, wars against each other, and Israel is outside it. The production of oil is suffering, which also affects the whole world.

I think these are the problems that the United Nations should deal with, and that the questions of Israel and Mr. Sadat should be left to be dealt with, as they have been dealt with very happily and successfully, I think, under the Camp David agreement. Israel has signed a peace treaty with Egypt; there have been many sacrifices on the part of Israel to carry out what was agreed at Camp David; and she is prepared to continue on this course. The European invitation comes at a time when the Arab wars are causing a crisis in oil and when Israel is living in comparative peace. The mix-up of the oil crisis with the Camp David policy for peace is doing things in the wrong way and at the wrong time. To call on Israel to recognise the PLO as having territorial rights, and the PLO refusing to recognise the state of Israel, is no basis for negotiation.

The noble Lord, Lord Sieff, has told us of things that happened (some years ago, it is true, but not very long ago) which are of a terrifying kind, and it is impossible to ask a nation like Israel, a member of the United Nations and a recognised state, as are all the other United Nations states, to enter into negotiations with a group of avowed and declared enemies, with no status at all—simply known as the PLO—in order to discuss proposals with which they totally disagree and which in my opinion would probably lead to active war, since many other nations of the United Nations would be involved. Such prospects are alarming beyond all imagination, and must not be allowed to take place.

The whole world knows that in recent years UN countries have been selling arms to Arab countries. So far these arms have been used in Arab state wars. That is bad enough, but if inter-state quarrels should turn into war against Israel then the whole world would be involved, and God forbid that that should ever happen! I believe that there is only one hope, and that is to keep the conditions in the Middle East as low-key as possible, and to support the initiative of Camp David, and Mr. Sadat and the Israeli Government. Should there be a change in Israel after the next election, I feel sure the new Government will be as anxious to keep the peace and the negotiations going on under the Camp David agreement as any other Government, and, my Lords, these can be carried on better outside the EEC countries and directly between the two countries. That is my strong view, and I feel that that is the way to deal with it.

My Lords, for the past three years the Middle East has been subjected to a chain reaction of turbulence. The power vacuum left by the Shah's demise has brought forth reverberations and reopened latent feuds from the Western Sahara to the Eritrean Desert, from Kurdistan to the Gulf, and from the Lebanon to the Sudan. Old power struggles, temporal and religious, have flared up, with probably graver feuds and threats to come. Amid this darkness the solitary shaft of light is the settlement between Israel and Egypt. Imperfect, open-ended, equivocal, it may well be, but it has already been an enormous achievement—constructive and positive. It has been achieved through American mediation and through the courage of the leaders of Egypt and Israel, with only faint applause and very little help from Europe. For underneath its lip-service and diplomatic nicety, Europe's attitude has been ambiguous from the start, and America has been, to be absolutely frank, puzzled by Europe's reaction, crystallized in the Venice Declaration, and apprehensive about its motives, its thrust and its possible consequences.

What are these motives? In the eyes of many observers in Washington and elsewhere, it is perhaps Europe's search for a role in the world, a search which is as old as the European Community, which is born of a desire to play a part which would lift its image above the mundane trading rivalries and financial squabbles of everyday life. Europe has, of course, a vital interest in the Middle East and has a vital role to play. But for reasons which are complex to explain though simple to demonstrate, Europe has allowed herself, through faint-heartedness and discord, to be held to ransom, to turn client rather than partner of that part of the third world which lubricates its industries and daily life with oil. Hence, there are many elements in Europe's initiative which reflect more a desire to appease than to pacify.

A distinguished American, who speaks for quite an influential section of Republican opinion, went so far as to accuse many Europeans of what psychologists nowadays call the Stockholm syndrome, which is the tendency of a kidnapped victim to identify with his abductors and, in consequence, it is argued that such a state of mind is not ideally suited for the task of mediation. Bluntly, many people see in the Venice Declaration an attempt at ingratiation with one side—the Arab States—and a concerted effort to lean on America, to lean in her turn on Israel, in order to extract maximal concessions which I understand, the European "position papers" spell out with great precision and clarity, in exchange for minimal assurances and compensations which are expressed in a nebulous and open-ended way. Enough has leaked from the consultations of the Nine or Ten to know that these precise and concrete plans or options drafted and circulated, allow for substantive suggestions of procedure, time-tables, negotiating goals, peace aims, deviating from the Camp David Accord.

Of course, it is perfectly true that in the Washington of Jimmy Carter there were some voices—in the State Department or the White House—which whispered more or less discreetly to the Europeans that some sort of initiative to help to speed the momentum, to curb the recalcitrance of the negotiators, might not be unwelcome, but those voices did not come from the highest level and they are certainly not likely to come from the new incumbent in the White House and his team. The European initiative, lacks even-handedness and a sense of symmetry—political, military and psychological symmetry; for it contains elements that spell danger to the peace process. These, I submit in all diffidence, might be summarised as follows:

First, anyone who pronounces Camp David as either stagnant or doomed to failure unless it is significantly changing its whole procedures, time frames, negotiating partners and new final objectives, throws dangerous doubt into the minds of many Arabs, Governments and individuals, who might have stood for moderate policies. That doubt is immediately contagious and tends to make the moderate immoderate, and the immoderate intractable. Furthermore, Europe's plea for a decisive role for the PLO legitimises a terrorist organisation which, already condemned by the Carter régime, is anathema to the Reagan administration.

Europe's espousal of the PLO is particularly offensive, because there is nothing which leads one to assume that the European leaders have even begun to dent that organisation's fundamental rejection of Israel and its covenant of total intransigence. The opposite is the case. The latest full reunion of the PLO Executive in Damascus last year reiterated the call for the "extinction of the Zionist entity". Arafat's most recent interview in The Times, while confirming that the PLO would accept any part of Palestine vacated by Israel as a spring-board, reaffirmed that the PLO's ultimate aim remains the secular and democratic state of Palestine, where Jews, Christians and Moslems may live in peace together—which is the well-known euphemistic shorthand symbol for the obliteration of the State of Israel.

Of course, among some of the whispers in the wings, you can also hear some more sophisticated arguments in favour of PLO association. European statesmen, involved in the initiative, are wont to tell their friends that if Arafat were to have his flag, his uniforms and his foreign embassies, with Saudi backing, he would soon make short shrift of his own extremists. Moreover, so runs the argument, the Israelis would greatly benefit. For of each billion dollars of Saudi or Kuwaiti aid, a few hundred millions would be sure to find their way into Israeli coffers, since the two neighbouring economies would be bound to be inextricably linked. But, my Lords, what if the scenario is reversed, and, as is more likely, the radicals gain the upper hand, funded, fuelled and armed by kindred spirits or a mischievous super-power? Who takes the risk? Not the European Community, nor even the Arab League, but the people on the ground, and especially the Israelis.

Among supporters of PLO involvement, especially in Britain, it is now fashionable, as the noble Lord, Lord Byers, so aptly indicated, to compare the PLO and Arafat to Kenyatta and his Mau Mau, or Mugabe and the various freedom movements in the Third World. Apart from the absurdity of the analogy, which was pointed out by the noble Lord, Lord Byers, does the world realise that today at Israel's borders the front-line and second-line Arab states—excluding Egypt—now possess nearly 10,000 tanks, a larger concentration of armour than was massed at any time during World War II and probably larger than the whole armoured arsenal of NATO? We in Britain, for instance, pride ourselves of a tank force numbering hundreds, not thousands; but on Israel's borders the rejectionist Arabs have all the aircraft, rocketry and sophisticated arms that money can buy: to be precise, all that 50 billion dollars could buy between 1974 and the end of 1980.

Europe's implicit endorsement of an independent state on the West Bank and Gaza, wedged between Israel and Jordan, is known to be wholly unacceptable to all shades of Israeli opinion, for it is incompatible with her security. Such a state is economically not viable, it cannot absorb more than a fraction of the Palestinian disapora, it leaves unresolved, for instance, the bulk of the refugee problem in Lebanon and creates a security problem for itself, as well as for Israel, which is desperately serious. In this context, the noble Lord, Lord McNair, drew a very moving picture of the plight of the wretched people of the three generations of refugees in huts, camps and tents—a great dishonour to humanity. But may I point out to the noble Lord, Lord McNair, and to your Lordships that each successive Government of Israel from David Ben-Gurion to Menachem Begin has begged, urged and implored the Arabs on the grounds of the West Bank, the Arab States, the Arab League, to sit down at the conference table without precondition in humility to negotiate every single aspect of this wretched problem, and the reaction, the answer, has been invariably and monotonously negative?

We are talking of the security problem. How do you create security for an independent Arab state? On the one hand, as some have suggested, to demilitarise an entire state is incompatible with its self-respect. On the other hand, to look for a system of demilitarised zones both on the West Bank and across the border in Israel, as some Europeans suggest, would create a totally false sense of symmetry. You see, my Lords, an Arab Palestinian state, however small, will in an emergency always have as its hinterland the huge resources and the vast expanses of its Arab neighbours, whereas Israel stands with her back to the sea. Israel's security in any peace plan must be set against that of its neighbours—in the plural—not its neighbour. Hence many Israeli leaders, and notably the leaders of the Opposition, Shimon Peres and Abba Eban, prefer the involvement of Jordan because a possible Arab commonwealth linking most of the West Bank with Jordan is paradoxically less of a security risk than a small West Bank state. For it is clear that such a larger commonwealth would be able to absorb people and investment and allow the kind of flexible security arrangements and territorial adjustments which could lead to the ultimate pacification of the region.

We are told that there is not such a thing as a such Jordanian "option". Perhaps there is not as yet a Jordanian option in the dictionary meaning of the word; namely, that an option is a choice freely available to the parties. But as a concept it still holds out by far the best prospect for a peaceful solution. Just as Israel's withdrawal from Arab territory is as yet no "option", but a goal achievable only through far-reaching penetrating negotiations without pre-conditions and in good faith.

Now what about Egypt? From the outset she has not been enthusiastic about the Venice Declaration. For, prima facie, it undermines President Sadat's unique role as peace-maker who has recovered lost ground through negotiation, recognition and normalisation. Of course, he is a consummately skilled statesman and if he could turn the sympathies of Europe to good account for Egypt's sake, he would be foolish not to do so. But he has in all his pronouncements, in Luxembourg and Paris, adhered most loyally to the letter and spirit of Camp David, played down the PLO, avoided prejudging the shape and scope of a future Arab entity and upheld the role of the United States.

President Sadat is, let us remember, first and foremost on Egyptian nationalist and a patriot, and there are certain nuances in his attitude which primarily reflect the interest of the Egyptian State, especially in respect of Jordan. Each Arab state has its own views of what the political complexion, future direction and allegiance of an Arab state in Palestine might be. Egypt would, of course, like to see neighbouring Gaza and the West Bank—that strategic highway linking the northern and southern tiers of the Arab world—under her own protection rather than attached to Jordan. Syria has not abandoned the dream of Greater Syria ruled from Damascus. Iraq has her own ambitions of regional hegemony; and Saudi Arabia—while we may have forgotten it—has not herself forgotten that King Hussein's great-grandfather was driven out of Mecca by King Khaled's forebear, Ibn Saud.

Nothing would be more helpful to the cause of peace if the Prime Minister and the Foreign Secretary were to come back with a consensus of thought and action, an agreement on strategy and goals, which would, in the phrasing of Lord Byers' Question, add to the agreement of Camp David and not strain relations between the Western allies, Egypt and Israel, and bring back a policy utterly untenable or incapable of being accepted by a new Government of Israel.

That Europe has a role to play has recently been acknowledged both by President Sadat and Mr. Shimon Peres. It is not too late for Europe to change its course and balance its tone of voice. A constructive European initiative should strive, first of all, fully to acknowledge the primary role of the United States and allow her to determine the pace and procedure of further talks.

America's faith in "step by step" diplomacy inherent in Camp David has borne fruit. European attempts at an immediate "widening" of the talks, the notion of "comprehensiveness", can only mean that Europeans would willingly or inadvertently bring the Soviets sooner or later to the conference table and into the arena. In fact, let us admit it, there are some European statesmen today who would like to do so. Is this really the moment to even contemplate such a contingency? The moment when Afghanistan is infested, and Poland ringed round with Soviet divisions in full war kit—is this the moment to inflict this prospect on an American Administration which is bent on stemming the tide of fresh Soviet advances into the region?

Europe should use all her persuasive powers with the Saudis, and all those bent on peace, to support a Palestinian Arab representation weighted with Arabs living on the West Bank and Gaza which should be either freely elected or at any rate recognise Resolutions 242 or 338 without new substantive alterations. Europe should use its sincere influence with those Arab régimes to make it clear, now that at the end of a negotiation and as an incentive for a settlement all the Arab states would join in recognition, normalisation and real peace.

If Europe wishes Israel, and especially a new Isreali Government, to respond positively and flexibly to new suggestions for security, she should play down United Nations involvement. Isreal has had traumatic memories throughout her history of the lack of efficacy and impartiality of the United Nations; and as to allusions to a European military force, these are not too reassuring, either. Surely there are tremendous problems of raising, and maintaining a European contingent for service abroad at a time when Europe is beset with so much agonising doubt and argument about her own defences.

There is something which is very important that Europe can do: it can endeavour to create a better climate while the parties negotiate. Europe should come out more strongly than before against the Arab boycott which not only represents a state of economic warfare but humiliates the western world, undermining its moral standards and business ethics.

Europe has a historic responsibility and hence a deep complex commitment to Arab and Jew. Many-faceted, tragic, delicate are the links that tie each and every one of Europe's Ten with the Jewish people and the state which, for Jews, both is centre as well as outpost. Complexity quite often breeds ambivalence. In fact one might, in borrowing and adapting the title of a famous modern classic of English literary criticism, describe Europe's relations with Israel as Ten Types of Ambiguity.

When we look at the Ten, what do we see?—the Germans still self-absorbed with the horrific heritage of Hitler's holocaust; the French partly swayed by recent memories of comradeship of arms, yet propelled by what they perceive to be their national interest; Catholic Belgium, Ireland and Italy, their historic attitudes quite subtly different from those of Protestant Holland or Denmark; and even Greece, in spite of warm popular support, reluctant to offend the Arabs and hesitant about sending an ambassador to Tel Aviv.

Of all the Ten, the British people and Britain's political establishment reflect, in my view, the widest spectrum of feeling as well as articulated opinion about the issue: Arab versus Jew. There is a tradition of deepseated friendship and profound affection and understanding for the Israeli cause, including, still, a certain pride in having helped to sow the seed of modern Israel. Within the square mile bounded by Westminster and Whitehall, Pall Mall and St. James's Square, there is perhaps more expert knowledge as well as prejudice and there is more benevolence as well as bile and bias where Israel is concerned than almost anywhere in the world.

Side by side with profound sympathies for Israel is much dismissive scepticism. There are still those who have not forgotten the years 1945 to 1948 and are immovable in their reserve and implacable in their resentment. There is still that feeling that Israel may be a nine-day wonder, a 99-year leasehold on Arab ground, a latter-day crusader kingdom, as bloodied by war and as transient in history.

It is the historic duty and opportunity of European policy-makers and of the British Government to ensure that a true balance is restored. Let us hope that in Washington and on the return home the British Ministers will try to readjust the scale, restore evenhandedness and speak up for Camp David and for a settlement which would be worthy of Britain, worthy of Europe and worthy of the professed ideals of the free world.

My Lords, I should first like to thank the noble Lord, Lord Byers, for initiating this debate, and I hope I shall be as brief as he was when he spoke. This is not a debate which is conducive to a detached view, but I shall try to be as detached as I can. Regarding the speech of the noble Lord, Lord McNair, from the Liberal Benches, I should like to repeat something that I have said before in this Chamber. I was the United Kingdom delegate in the Human Rights Committee of the United Nations seven times, and I was there when Arafat made his spectacular debut. I also heard a New York television interview which an American television interviewer had with him. The interviewer asked Arafat: "Are you really intent on the destruction of Israel?" and Arafat replied in ringing tones: "This is the first step". That is just a little homily for the noble Lord, Lord McNair.

I have also, in the Human Rights Committee, had to listen to and endure the battles and debates between the Israeli and Arab delegates and I agree with the noble Lord that there are two rights to be considered. I absolutely agree with him about that. All the same, we have to take into account all the many things that have happened.

I confess, as a Jew, that I cannot hide a certain sympathy for the Israelis but I believe, as I said, that the two rights keep one on a fairly even keel and that in the Middle East the Arabs and Israelis simply have to live together. But I certainly think that the European initiative which appeared in The Times on 13th June 1980 was set out very clearly in an article by Mr. Abba Eban, the former Israeli Foreign Minister, and I would rely heavily on his judgment because I have not been seduced at all by the idea of the European initiative. I believe it has been too much inspired by the European need at this time for Arab money and Arab oil, and we should not dismiss that summarily.

I can quite understand why the Israelis are apprehensive and even suspicious about this European initiative. The Europeans made no noises at all at the time when President Sadat made his wonderful intervention on world affairs. It was an absolute miracle when he put forward his proposal, and no one should ever forget how much he has done to try to get peace between Israel and the Arabs.

I am trying to be as brief as possible, my Lords. The PLO, at its Damascus meeting, swore eternal war against Israel while, as I say, President Sadat was not only praying for peace but acting for peace. He achieved an enormous amount, and I really must repeat again that one can understand that no European influence was suggested at that time. The European did not come in and praise Sadat in a way that one might have expected. Many of us, and I am one of them, are critical of Israeli policies but at the same time have no confidence in Europe's good intentions. They are totally obsessed with Arab oil and Arab money.

My Lords, the Question tabled by the noble Lord, Lord Byers, refers to the impact of the "EEC initiatives" on other peace efforts and relationships. Before addressing his Question directly, it may be helpful if I say something about the background to current European diplomatic efforts, a description which I believe applies more accurately to the current state of play than the word "initiatives".

There is nothing very new about European attempts to formulate a common policy towards resolving the Arab-Israel dispute. They have been going on since at least 1971, when the six original members of the Community accepted a report of the then Political Committee setting out a common position. We have been closely involved ourselves since 1973. Since then the members of the Community have made a succession of statements of principle about the search for peace in the Middle East, clarifying and refining their position. Notable among them for its scope and balance was the Declaration of the European Council issued in London on 29th June, 1977. This set out the view of the Nine that a peace settlement should be based on Security Council Resolutions 242 and 338 and on the principles of the inadmissibility of the acquisition of territory by force, the need for Israel to end the territorial occupation she had maintained since 1967, respect for the sovereignty, territorial integrity and independence of every state in the area and their right to live in peace within secure and recognised boundaries, and recognition that account must be taken of the legitimate rights of the Palestinians. The declaration also spoke of the need for a homeland for the Palestinian people and for representatives of the Palestinians to participate in negotiations. It called on Israel to recognise the legitimate rights of the Palestinian people and the Arabs to recognise the right of Israel to live in peace within secure and recognised boundaries. It signalled the then Nine's readiness to contribute to the search for a settlement and to consider participating in guarantees within the framework of the United Nations.

I quote this at such length not only to illustrate the consistent interest which the members of the Community have shown in efforts to promote a peaceful solution but also to demonstrate the consistently evenhanded and careful approach which has characterised European thinking.

Subsequent to the declaration of June 1977, the Nine welcomed President Sadat's historic trip to Jerusalem in November, congratulated President Carter on the historic achievement of Camp David in September of the next year, and in March 1979 expressed their belief that the Egypt-Israel peace treaty, signed shortly before, represented a correct application of the principles of Resolution 242 to Egyptian-Israeli relations. But in all this they constantly reiterated their commitment to a comprehensive settlement and to the principles of the declaration to which I have referred.

The background to the next major step of the Nine, the issue of the Venice Declaration, was the failure of of the tripartite autonomy talks based on the Camp David framework, on the future of the West Bank and Gaza Strip to reach a conclusion by the date which had been set by the parties. That date was 26th May 1980. The Nine, who had hitherto believed that the best contribution they could make was to set out the principles on which, in their view, a settlement should be based, and to offer such support to the efforts of others as individual member countries felt able to give, came to the conclusion that progress towards a settlement was more urgently required than ever, and that a more active collective European role could be helpful to the prospects for peace. The Venice Declaration of the European Council on 13th June, 1980 was the result.

The Nine decided at Venice to engage in consultations with all the parties concerned and, in the light of the results of these consultations, to consider what form an initiative on their part might take. The declaration also spelled out, in clearer and more specific terms than ever before, the balanced principles at the heart of European thinking. If I test your Lordships' patience by repeating them now, it is because so much of the criticism of the Venice Declaration has focused on only one side of what it had to say.

The declaration said,

"the time has come to promote the recognition and implementation of the two principles universally accepted by the international community: the right to existence and to security of all the states in the region, including Israel, and justice for all the peoples, which implies the recognition of the legitimate rights of the Palestinian people".

The declaration went on to make clear what these principles mean: the first means that,

"all of the countries in the area are entitled to live in peace within secure, recognised and guaranteed borders".

The second means that,

"the Palestinian people … must be placed in a position, by an appropriate process defined within the framework of the comprehensive peace settlement, to exercise fully its right to self-determination".

A later paragraph states that,

"these principles must be respected by all the parties concerned, and thus by the Palestinian people, and by the PLO, which will have to be associated with negotiations".

We believe that this is a scrupulously fair and reasonable approach to a settlement, and we reject accusations that we are biased towards one side or the other.

The careful phrase about the PLO has attracted particular attention. It is criticised by the Arabs, because it does not give the PLO the status which they believe the PLO deserves. Some of the claims made for the PLO go so far that they seem to make the very concept of self-determination for the Palestinians redundant. The same phrase is criticised by Israel, because it so much as mentions the PLO in connection with the peace process. But there is a growing awareness that there is no substitute for involving the Palestinians directly in the settlement of the ArabIsrael dispute. And it is increasingly accepted that the PLO, which has widespread support both in the occupied territories and eslewhere among the Palestinian people, cannot be ignored.

Officials have for some years maintained informal contacts with the PLO. We make no apology for this. It is clearly in our interests, and in the interests of peace, that we should seek its views and explain our own, and that we should urge on it the abandonment of the path of violence, on the one hand, and public and explicit acceptance of the principle of a comprehensive settlement freely negotiated with Israel on the other. Such contacts will therefore continue. They will be stepped up, if we believe this to be helpful to the cause of peace. The PLO will have to change; we will not help it to do so by pretending that it does not count, or by leaving to others, whose views may not be so balanced as ours, a monopoly of advice to the PLO.

The issue of the Venice Declaration marked the beginning of an active and practical process on which the members of the Community remain engaged. There should be nothing surprising to anyone about Europe's desire to play a more active diplomatic role in this vital area. It is natural that the members of the Community should seek a concerted foreign policy, particularly in areas of vital concern such as the Middle East. Stability in this region is crucial to world peace and the countries of the area are, of course, of enormous economic importance to us as trading partners. It is right that we should maximise our diplomatic weight, in order to influence developments towards a just and lasting peace. In the interdependent world of today, we cannot afford to stand back from important world problems and leave all the running to others.

The Venice Declaration was followed up by a series of visits to the interested parties by M. Gaston Thorn, the then president of the Council of Ministers, in order to explore reactions to the Venice principles and seek out common ground wherever possible. Reactions were, of course, mixed; but he was received with interest everywhere and established that Europe was, indeed, regarded by the vast majority of those concerned as having an important part to play in Middle East peace efforts.

The results of M. Thorn's contacts were used as a basis for further work in political co-operation on the practical implications of the Venice principles. This work concentrated on the four key areas of Israeli withdrawal from occupied territories, Palestinian self-determination, security guarantees in the context of settlement and Jerusalem. The European Council meeting at Luxembourg last December decided that the presidency, held by the Dutch for the first half of this year, should undertake further contacts with all the parties to discuss these key issues with them, as well as urging mutual recognition of rights as called for at Venice. The Dutch Foreign Minister will be taking a lead in this task. He will begin his visits to the parties very soon.

This is where European efforts now stand. It is clear, I hope, from what I have said, that Europe has not so far put forward any plan for peace: rather we have been engaged in the essential groundwork designed to prepare the way for the necessary practical steps towards a settlement. I cannot predict now what the next stage in our efforts will be; much will depend on the results of the Dutch presidency's efforts. But I can assure your Lordships that we intend to press on with our efforts with vigour and determination, so that we, in our presidency in the second half of this year, will be prepared to take up the reins of this activity with a view to making a concrete contribution. If there are any opportunities for real progress, we shall not hesitate to take them.

This is the background against which I now turn to the specific questions raised by the noble Lord, Lord Byers. We and our partners in the Community have made clear from the beginning that we are not in the business of cutting across or undermining the efforts of others, notably the Camp David process embarked upon by the Americans, Egyptians and Israelis. I do not think we can be fairly accused of having done so. The Camp David process is still in being; the autonomy talks have continued. The fact that progress has been slow, and that many substantial issues remain to be resolved, cannot be attributed to the existence of European determination also to contribute to peace, if at all possible.

The achievements of Camp David are there for all to see; peace between Israel and Egypt, Israeli agreement to withdraw from the whole of occupied Sinai and dismantle the settlements there and the progressive normalisation of relations between the two countries. It was an outstanding feat on the part of the three leaders involved and we pay unreserved tribute to them. It is vital to preserve these achievements; they are an essential element in the comprehensive peace to which we are committed. It is also vital to build upon them.

If the Camp David arrangements could lead to further progress in this direction, we should be the first to applaud. An interim arrangement acceptable to, and workable by, the Palestinians could be a valuable step forward. But we are bound to ask whether the present negotiating framework can lead to such progress. Is there not rather a need to take a fresh look at the problem? At the very least we cannot ignore the fact that the vast majority of the Arab world, including Jordan and the Palestinians, have made clear their rejection of this framework and their inability to join it. We see little if any chance that this opposition can now be reversed. We also believe that attempts to produce fresh progress must take fully into account the Palestinian dimension of the problem.

But our efforts do not in any sense contradict efforts under the Camp David framework. Rather we see them as complementary. Should the fact that the Ten have decided to intensify diplomatic efforts in this area give rise to concern on the part of our American allies? Does it lead, as has been suggested, to damaging rivalry and diversion of effort? I do not believe so. We and the Americans are working towards the same goal: the achievement of a comprehensive peace settlement which will give to all the countries and peoples of the area a secure and dignified future. We and the Americans must undoubtedly work together. But our efforts do not need to be identical. The Americans have a position in the area which gives them a unique ability to exercise influence. We in the Ten can call upon a depth of experience and a network of relationships which enable us, too, to make a distinctive contribution.

Are European efforts likely to upset the Egyptians? Again I do not believe so. President Sadat welcomed the Venice Declaration as balanced and constructive. Moreover, he recently made clear to my noble friend the Foreigh and Commonwealth Secretary that he regards a European role as useful, and even essential. And in his address to the European Parliament on 10th February he called the Luxembourg Declaration by the Nine of 2nd December 1980 which reaffirmed the principles stated at Venice:

"a turning point which is likely to have a constructive impact on the peace process in the near future."

We for our part attach the greatest importance to co-operation with Egypt in the search for peace.

The present Israeli Government have rejected the Venice Declaration as a basis for peace efforts. They have said that they cannot accept references to the Palestinian right to self-determination or to the PLO. They have made clear that they do not regard our efforts as helpful. We regret this and believe that they have paid insufficient attention to the balance of the ideas contained in the Venice Declaration. But they received M. Thorn with interest and have been at all times ready to talk to the Ten about the problems involved in a settlement. We have every intention of continuing to work with Israel. We shall continue to take full account of her interests and concerns, as we have always done, and to defend her right not only to exist but to be a full and accepted member of the international community. There can of course be no question of imposing a settlement on Israel or, for that matter, on any of the parties.

Our task must be to persuade the Israelis of our goodwill and commitment to a secure and independent future for Israel as part of a comprehensive settlement. But we cannot allow Israel or any of the other parties to dictate what form our ideas about a just and reasonable settlement should take. We do not expect our views to be instantly acceptable to either side. We have been much criticised on the Arab side, too.

I cannot properly comment on the prospects for a new Israeli Government, as the Question we are discussing invites me to do. We are of course prepared to work with whatever Government is in power in Israel. But I do not believe that our efforts need cause difficulties for whatever Government emerges from the Israeli elections in June. We are advocating a balanced approach which we believe to be in Israel's interest. We are prepared to support all reasonable efforts aimed at a comprehensive settlement, but these must be based on a realistic assessment of the situation.

I turn now to just a very few of the points which have been raised during the debate this evening. First, the noble Lord, Lord Goronwy-Roberts, referred to the problem of the Israeli settlement. I should like to endorse what he said about the damage done to the Israeli position by their continuing policy of establishing and expanding settlements in the occupied territories. We have repeated on many occasions our view that the settlements are not only illegal but an obstacle to peace. We appeal once again for an end to this policy which has, to our great regret, even been stepped up in recent weeks.

The noble Lord, Lord Sieff, referred to the "defensibility" of Israel's borders if she chose to withdraw from the West Bank. Clearly, the pre-1967 boundaries of Israel in this area do not form ideal international boundaries, but it is our belief that there will be no peace in the Middle East unless Israel ends her occupation, subject to such minor territorial adjustments as can be negotiated. We believe that a genuine and lasting peace with her neighbours will be a better assurance for Israel's future than any borders can be.

The noble Lord, Lord Byers, referred during his speech, among other things, to the UNIFIL force in Southern Lebanon and criticised her for her impartiality. We think that the UNIFIL force does a commendable job in the most difficult circumstances. This job would be much easier, I agree, if the force received the co-operation it deserves from all the parties concerned in the area, including some of the Israeli irregular forces which are abroad in that part of the world.

The noble Lord, Lord Weidenfeld, referred to the Jordanian option,and I think at least one other noble Lord referred to it, too. We agree that Jordan has a key role to play in efforts to reach a settlement, but we do not believe that the Palestinians themselves can simply be by-passed. King Hussein has made it very clear that he accepts that the PLO represents the Palestinians and that he will not try to usurp this role. This cannot simply be disregarded.

The noble Lord, Lord Segal, referred to the concept of a Palestinian state. Some of the references to the dangers of such a state have suggested that we, the United Kingdom, or the Ten have offered our support to a Palestinian state. We believe, with President Sadat, that a settlement must involve the establishment of a Palestinian entity. We have not attempted to say what form this entity should take. What we have said is that the Palestinians themselves have the right to make this choice. This view is shared by President Sadat who made it clear to the European Parliament that he, too, supports self-determination for the Palestinians.

In conclusion, can I emphasise again that we aim to make a real contribution to peace efforts. If peace is to be possible, both sides will have to move a long way from their present public positions. Israel will have to accept that there can be no peace unless the legitimate rights of the Palestinians, including the right to determine their future, are met. The Arabs, including the Palestinians and the PLO, must grasp the nettle of recognition of Israel's right to a secure and independent future. Nothing less will suffice. Without these commitments on both sides, there will be no peace.

We are of course aware that if our efforts are to achieve any success, we must work with all the parties concerned, and we fully intend to do so. If difficulties in relations arise, they will not be of our choosing. The importance for us of a close and constructive relationship with the United States needs no emphasis from me. And if I may quote from a speech given to the Arab community recently by my noble friend the Foreign and Commonwealth Secretary—I think that speech has been referred to earlier this evening—he said:

"We wish to maintain good relations with the Arab world and with Israel. I see no reason whatsoever why our friendship with one side should give rise to suspicions on the other. But it gives added point to our efforts to achieve a settlement acceptable to both".