asked the Secretary of State for Defence what are the latest figures available for the costs and numbers of British forces stationed in Germany; and what progress has been made in obtaining offsetting payments.

asked the Secretary of State for Defence when he will announce the new offset agreement with West Germany on the costs of the British Army of the Rhine.

asked the Secretary of State for Defence if any further discussions have taken place with the West German Government about the costs of BAOR during the course of recent months; and if he will make a statement.

We are still in touch with the Federal German Government and I cannot predict when an agreement will be concluded. I have nothing to add to the figures given to my hon. Friend the Member for Cannock (Mr. Roberts) on 13th July regarding the costs and number of British forces stationed in Germany.

I congratulate my right hon. Friend on his recent appointment. Does he not feel that it is absolutely absurd that one of the weakest economies in Europe—that of Britain—should be subsidising in this way the wealthiest economy in Europe, that of Germany? Is it not time we told the Germans "Either pay up or we get out"?

I am obliged to my hon. Friend for his personal good wishes. Whilst I would not necessarily adopt his language or tactics, I attach great importance to a successful outcome to these negotiations.

Is not the right hon. Gentleman aware that the reason why he is having difficulty in getting agreement with the Germans to increase their contribution is that we have repeatedly cut our defence contribution to the Alliance in the face of all our allies and the facts of the world situation?

I think that the hon. Gentleman is a bit short on facts himself. We are fully in accord with the Brussels Treaty commitment of 55,000 troops and a tactical air force. As the hon. Gentleman should know, the defence review conducted by my predecessor was on the basis of the commitment of practically the whole of our forces to the Alliance.

Does not my right hon. Friend agree that we have repeatedly had trouble with the Germans ever since the Brussels Treaty was signed, and that during this period we have been filched of thousands of millions of pounds, most of it at great cost to the British balance of payments? It was a major factor in the past and still is an important factor.

I agree that the balance of payments element presents particular difficulties to us, not least at this time, but the stationing of forces in Germany is part of NATO's general defence posture and is not solely to the benefit of one particular country.

Can my right hon. Friend give any figures which would show the effect of the recent depreciation of sterling against the deutschemark on the real cost to this country of maintaining this army? Is it not time that Conservative Members, who are continually saying that we cannot afford to pay to meet the needs of people who want housing and health and welfare services, turned their attention to this wasteful expenditure? Unless a change can be made, is it not time we began to withdraw our forces from Western Europe?

I do not accept that the expenditure is wasteful, although I accept that the foreign exchange burden is particularly heavy, not least at the present time. The budgetary cost of our forces in Germany is about £600 million. The foreign exchange element at the beginning of the financial year was estimated to be £413 million, but obviously, since the pound has depreciated by about 20 per cent. against the deutschemark, the cost both in foreign exchange and in budgetary terms will be increased as a result. It is impossible to give an estimate as to the outturn of the financial year.

I join in the congratulations to the new Secretary of State. He said that my hon. Friend the Member for Ayr (Mr. Younger) was short on facts, but surely he will not start his period in office in the belief that our allies are happy about the cuts his Government have undertaken.

I accept that no one is happy. I have never met a soldier, sailor or airman who could not make a most convincing case for additional expenditure, just as in my previous job I never met anyone in education who could not make a case for further public expenditure. We hear from the Opposition Benches a constant scream about the total of public expenditure but opposition to every attempt to reduce it in a particular case.

Does my right hon. Friend realise that, when he says that negotiations are proceeding and that he hopes for a successful conclusion, that is the kind of answer I have been receiving ever since the Brussels Treaty was signed in 1954? As the deficit now amounts to £1,200 million or £1,300 million, and having regard to the state of our respective economies, will my right hon. Friend make it clear to the Germans in the negotiations that we can no longer continue to bear this burden and that they are in breach of the treaty they signed in 1954?

There is no treaty commitment on the part of the Federal Republic of Germany for offset commitments, but I can tell my right hon. Friend that some offset negotiations were concluded. Indeed, I concluded two particular sets of such negotiations myself in the late 1960s. I shall certainly bear in mind the strength of feeling that I know exists that we should have a satisfactory outcome to the present negotiations.

I also welcome the right hon. Gentleman back to the subject of defence. I am a little surprised that he has not already understood that he will get much more support for his duty of maintaining adequate defences in this country and for Europe from these Benches than he can expect from the Government Benches. He will not, I think, need to be told that again after this afternoon.

I thank the hon. Gentleman for his kind personal remarks. I do not think there is any connection between the American offset arrangement and our own. Indeed, some arrangement was made in the summer, not exactly of an offset character, between the American Government and the German Government whereby the Germans are paying some part of the American costs of repositioning a brigade, but I do not think that the two items are necessarily connected.

asked the Secretary of State for Defence if he is satisfied with the arrangements whereby boy soldiers can get their discharge prior to their eighteenth birthday.

Yes, Sir. As I told the House on 22nd July 1975, this matter was fully reviewed by Lord Donaldson's Committee on Boy Entrants and Young Servicemen, and the Army's terms of engagement now incorporate certain options designed to safeguard the interests of junior entrants.

I thank my hon. Friend for that reply and for the sympathy he has shown to one of my constituents. Will he not agree, however, that the easiest and fairest way to ensure that young soldiers are not tricked into staying in the Army would be to get them to sign a positive agreement on their eighteenth birthday committing them to stay in, rather than the present arrangement by which they have to make an approach prior to their eighteenth birthday if they wish to leave the Army?

As my hon. Friend knows, a junior soldier has the right, for six months after entry, to leave the Army at any time within that period at a fortnight's notice if he so desires. A junior entrant also has the right, on reaching his eighteenth birthday, of either confirming his original commitment to service or electing to reduce his period of service to three years, counting from his eighteenth birthday. I do not think we can go much further than this.

Does not my hon. Friend agree that it is an offence against natural justice that a minor should have a contract of service made for him which he is unable to repudiate when he reaches the age of 18? At present, that right is constrained. Will not my hon. Friend agree that it would be simpler and fairer for everyone concerned if these young soldiers were given the same rights as everyone else?

No, Sir. Enlistment in the Armed Forces does not involve entering into a contract. The engagement of members of the Armed Forces is at the discretion of the Crown. Consequently, the law relating to contracts as it affects entrants does not apply.

asked the Secretary of State for Defence whether he is satisfied with the current level of funding for the development of an AEW Nimrod.

asked the Secretary of State for Defence if he will make a statement on the progress made towards the choice of replacement United Kingdom and NATO airborne early warning systems.

At the June 1976 meeting of the NATO Defence Planning Committee, Ministers decided that further comprehensive proposals for a NATO airborne early warning system should be presented to them at the next DPC meeting in December. Work on this is in hand. In the meantime, we are continuing to finance initial development work on the Nimrod option.

Is it not the case that an AEW Nimrod would cost much less than AWACS? Have the Government now arrived at contract definition for the Boeing E3A, and, if so, on what cost effectiveness is it based?

A great deal of work still remains to be done in determining what would be the total cost of either option. We are certainly not in a position to take any decision before the December meeting, although we are well aware of the urgency—and we have impressed this on our NATO allies—of getting an agreement as soon as possible.

If we must spend a great deal of money on sophisticated weapons—and I take no pleasure in conceding that we must—will not my hon. Friend at least ensure that it is British technology and British factories which produce the goods required? Will he push for Nimrod in the belief that it is as good as anything which could be supplied by any other country?

I can assure my hon. Friend that we shall take very seriously into account the industrial implications of a choice for Nimrod or AWACS. I am sure he would be the first to appreciate that considerable advantages would flow from having a uniform NATO system, if we can get one agreed.

Has the Minister yet tumbled to the fact that if we purchased the Boeing AWACS it would mean the termination of a line of development which could not subsequently be reopened in this country? Will he therefore make it a precondition of such a purchase, if one is made, that a new line of collaborative development, with guaranteed sales in the United States and among our other partners, will be opened up and that that collaborative venture will have British design leadership?

I do not know whether I tumbled to what the hon. Gentleman described as a fact, but clearly one looks at the range of collaborative possibilities between NATO partners over the whole field and does not take simply one example in isolation. Clearly, in a high technology development of this sort, if the decision goes one way rather than the other, certain options are foreclosed. This is to speak in platitudes with which the hon. Gentleman will be familiar. If one were to go for AWACS, one would be looking for further collaborative ventures in which the balance would be more in our favour.

Will my hon. Friend ensure that, if it is not possible to find a common airborne early warning system for the whole of NATO, the two systems will have a large degree of interoperability?

Certainly. As I am sure my hon. Friend will be aware, as he studies these things closely, the Nimrod system differs from the AWACS system, particularly in its characteristics in regard to overland or oversea capabilities. As I understand it, however, it would be possible to operate a split system without any problems of incompatibility.

Does the Minister agree that, if the Government's decision is to support the AWACS project, this will mean cancelling the British project, with an effect on British technology and also eventually an effect on employment?

If I understand the hon. Gentleman correctly, obviously if we were to go for AWACS we would not go for Nimrod as well. But I emphasise that we are still some months away from having to take a decision either way.

Will the hon. Gentleman explain why he thinks we are some months away from having to take a decision? Is he not aware that there is great pressure to get a decision on this by January? Is he also aware that there are other very important decisions which will be taken in the near future, in particular the American decision on the XM-1 tank? Can he say whether he regards these as interlinked, or how he expects to be able to go on spinning matters out?

I think that the hon. Gentleman cannot have been listening to my earlier replies. I made it clear that we could not expect a decision until the next DPC meeting, which will be in December.

That is not months away.

It is at least two months away. The hon. Gentleman cannot count. Secondly, while one would not wish to be specific in tying one project in with another, obviously one looks at the whole range of possible collaborative projects. It is very far from a question of our spinning things out. All the pressure at the moment for getting an early decision is coming from the British Government.

asked the Secretary of State for Defence when he last met the other NATO Defence Ministers.

asked the Secretary of State for Defence when he next intends to meet his NATO counterparts.

asked the Secretary of State for Defence when he last met the other NATO Defence Ministers.

I look forward to meeting the other NATO Defence Ministers at the NATO autumn ministerial meetings. The Nuclear Planning Group will meet in London on 17th and 18th November. Eurogroup Ministers will meet in Brussels on 6th December, and the Defence Planning Committee will meet there on 7th and 8th December.

Does the Secretary of State recall that his predecessor made it clear in the House on 13th January of this year that if any defence cut jeopardised the security of the Western Alliance he would not accept it? Will the right hon. Gentleman take this opportunity to make it quite clear to our allies that his position is the same?

I very much share my predecessor's view on these matters. There are other Questions on the Order Paper about the NATO response to our recent intimation on our defence expenditure, and I shall deal with them when we reach them.

When my right hon. Friend meets the Defence Ministers, will he point out to them that France has recently decided to withdraw 10,000 of her 60,000 troops from West Germany, some of them to be demobbed immediately? If France can do that, why cannot Britain, bearing in mind that we are in a far worse financial position?

My hon. Friend knows that France is in a rather different position from the rest of the Alliance in that her forces are not fully integrated with those of the other NATO countries. But I am sure he will also have noted that it is the intention in successive years for the French Government to increase their defence expenditure, and that is not my intention.

Has the right hon. Gentleman discussed with his colleagues the impact of the decision announced in the White Paper to cut the fuel programme? Does not this have considerable implications for stockpiling in NATO and for training?

Since I have not yet met my colleagues, I have not discussed this or any other matter with them.

Can my right hon. Friend confirm that at a recent meeting of the Eurogroup in The Hague a decision was taken on joint armaments procurement with a slight change enabling the French to co-operate in NATO? I understand that a meeting took place in Rome which the French attended.

I am happy to say that the French play an important part in the new European Programme Committee, although they are not part of the original Eurogroup. We hope that, as a result of the work of the European Programme Committee, it will lead to greater collaboration in Europe on the procurement of equipment.

In welcoming the Secretary of State and his hon. Friend the Minister of State to the Defence Department, may I ask the right hon.

It is very difficult to be absolute, and even in Opposition the Conservative Party's posture is far from precise. I do not myself deal in absolute terms, and I would never in any circumstances give an absolute commitment which in the events which unfolded might be impossible to fulfil.

asked the Secretary of State for Defence whether he remains satisfied that he is able to fulfil Great Britain's NATO commitments.

Yes, Sir.

Are we to assume from the right hon. Gentleman's reply to my hon. Friend the Member for Blackpool, South (Mr. Blaker) that he in no way agrees with the argument propounded by his hon. Friends in the Tribune Group about our defence commitments?

It is a little difficult to deal with particular groups because, like most groups, they have views of varying character. I stand by the defence review which has already been announced and the fact that the greater part of our forces are wholly committed to NATO, and it would be my intention not to weaken our commitment to the Alliance because the Alliance is an essential part of the defence of this country.

Is not it intolerable cant by Opposition Members who only last night were stamping up and down the Chamber demanding cuts of £4,000 million, £6,000 million and £10,000 million in public expenditure now to be demanding that there should be no cuts in public expenditure? Can my right hon. Friend name a single country which has slashed expenditure on social and welfare services and maintained expenditure on defence, other than military dictatorships—[HON. MEMBERS: "Russia."]—absolutely, other than military dictatorships, which are able to oppress the popular will?

I share my hon. Friend's concern about the Opposition's enthusiasm for the generality of reduction in public expenditure while, not only in this area but in many other areas, objecting strongly when the impact of such reductions happens to be politically convenient to exploit. A number of countries have had to reduce their social expenditure and their defence expenditure as well. The great problem of this country is that our gross national product has not risen at a rate which would have made it possible to sustain all that we want to do on both defence and the social side as well.

Will the Secretary of State explain how the recent axing of specialised commando shipping, which necessitated the Government chartering civilian car ferries for a recent reinforcement exercise on the northern flank, can possibly be described as fulfilling NATO commitments?

I do not think there is any NATO commitment specifying that personnel shall he carried only in ships of the Royal Navy. The requirement is that forces should be in the right place at the right times.

Will my right hon. Friend bear in mind whenever the question of covering NATO commitments arises that the Soviet Union and the Warsaw Pact Powers have an overwhelming superiority in Eastern Europe which is explicable only in potentially aggressive terms?

I am aware, as the whole House should be, of the difficulties which could arise from the increasing strength of the Warsaw Pact forces as they were set out clearly in my predecessor's White Paper earlier this year. At the same time, I would not expect that we could cope with it alone. That is why I regard the NATO Alliance as an essential element in the defence of this country.

asked the Secretary of State for Defence what recent representations he has received from other NATO Governments about the level of defence expenditure of the United Kingdom Government.

I have not yet received the formal response from the Alliance to the information which we have provided on the reductions in planned defence expenditure that have been announced this year.

Will the Secretary of State take this opportunity to tell us that he regards it as being the Government's first duty to secure the territorial integrity of these islands against any possible assault? At the same time, will he confirm that, at a time when the Warsaw Pact countries are increasing their military strength, this is the wrong moment to be diminishing our own capability?

I share the hon. Gentleman's concern that we should always be in a position to the maximum extent to ensure the defence of these islands. At the same time, I view with concern the evidence that we have of increased Soviet and Warsaw Pact expenditure. However, the defence review conducted by my predecessor was on the basis that we reduced commitments elsewhere and in support and ancillary purposes and that we did not reduce the very important and effective contribution that we make to the forces of NATO.

In wishing my right hon. Friend the Secretary of State well, may we hope that he will be as concerned about public expenditure as he was in his previous post? Will he refute the nonsense that Britain has slashed arms spending by billions and admit that there has been a real increase since last year?

We have this argument —I had it in my previous post—about planned expenditure and actual expenditure. The reductions made by my predecessor on planned expenditure amounted to several billion pounds over a period of time. I do not intend in my present job to do what I did in my last job, which was to increase expenditure in real terms by 2 per cent. It is imperative that we go through with the reductions in defence which have been announced. Consistent with the defence of these islands and our contribution to NATO, I shall be looking for economies.

I am sure that the right hon. Gentleman does not want to deceive the House. He must be aware that the Government's defence cuts so far have harmed our commitments in Europe both on the flanks and on the central front. It is really much too late to pretend otherwise.

If we were able to do so, naturally we would like to do more on both the northern and southern flanks. The right hon. Gentleman knows, however, that NATO's demand of us is primarily our very important contribution to the central front together with the Tactical Air Force and our very substantial naval contribution in the Channel and the Eastern Atlantic.

I was saying that the Secretary of State appeared to imply that the cuts did not affect our contribution to NATO. That is quite untrue.

The cuts are on the margin, and obviously there is room for argument here. NATO naturally would like us to increase our commitment, but, compared with the situation which we inherited in 1964, we are now up to our 55,000 commitment. In the early 1960s we were below our target in Germany.

asked the Secretary of State for Defence how many civilian jobs will be affected by the decision, announced on 22nd July, to cut defence expenditure by a further £100 million; and which establishments will be most concerned.

asked the Secretary of State for Defence how many civilian jobs he expects to be lost as a result of the decision to cut defence expenditure by a further £100 million.

The further cut of £100 million in defence expenditure which formed part of the public expenditure reductions announced in July will be achieved mainly by rephasing works and equipment programmes. It will have no effect on the numbers of Service personnel and is not expected to have any significant effect on the numbers of MOD civilian staff either. There will, however, be some reduction of job opportunities for non-MOD employees, mainly in the construction industries.

Would my hon. Friend care to answer the Question and say how many civilian employees will be involved? What active steps are being taken between his Department and the Department of Employment to transfer these people into useful manufacturing industry?

I am not in a position to give an answer on precisely how many people will be involved. That will be known only when we complete the review for 1977–78.

Would not the Minister agree that previous cut-backs had a significant effect on the total unemployed? There is great anxiety and apprehension among workpeople engaged in defence industries about what is in store for them. Can the Minister confirm what the Chancellor of the Exchequer let slip yesterday in an aside to the hon. Member for Bolsover (Mr. Skinner) that the trade unions concerned had made representations to him expressing considerable fears about the future?

The hon. Member is quite right. My right hon. Friend and I have received representations from the trade union side of the defence contracting industries about what might be in store for them.

asked the Secretary of State for Defence if he is satisfied with British defences.

I have no doubt that the Government's policy of concentrating our defence resources on the North Atlantic Alliance provides the best guarantee of our continued security. I am satisfied that we are continuing to make an effective military contribution to the collective security of the Alliance in accordance with the priorities established by the defence review.

Is the Secretary of State aware that his satisfaction is not shared? Has he seen the literature put out by his Department saying that the vast military resources of the Warsaw Pact countries continue to pose a substantial threat to our security? When will he show himself to be alive to that threat?

The fact that my Department is making this fact known shows that we are alive to the threat. However, we do not consider, and have not considered for the past 20-odd years, that this is a threat which we can contain by ourselves.

Does my right hon. Friend agree that in present economic circumstances the retention by the United Kingdom of an independent nuclear deterrent is an expensive absurdity and that it would be possible to make cuts in public expenditure in this area without dramatically affecting employment?

I do not think that the nuclear deterrent and its contribution to the total forces of the Alliance is valueless. Also, if we disposed of it I do not think that the result would be entirely painless in terms of employment, despite what my hon. Friend suggests.

Will the Secretary of State make quite plain whether he endorses the views of his predecessor, given to me in a reply in July, when he said that to accept the proposals of the Tribune Group to cut defence expenditure still further would be at best neutrality and at worst surrender?

I hope that I shall not be expected to confirm every answer given by my predecessor over two and a half years. But certainly, if the hon. Member has in mind the very large sums sometimes bandied about, I agree that to reach that target would greatly reduce our defence capability.

asked the Secretary of State for Defence what representations he has received regarding proposed cuts in defence expenditure.

I have received a number of representations from various quarters, some protesting about cuts already announced, some in favour of further cuts in defence expenditure and others expressing anxiety about the effect which these cuts will have on employment prospects.

Will my right hon. Friend resist demands from the Tory Party calling for massive cuts in public expenditure but at the same time urging massive increases in defence expenditure? It is an immoral stance to demand greater expenditure on the Army, Navy and Air Force while calling for cuts in pensions and benefits to the disabled and sick.

I have already made it clear that it is a little inconsistent to require additional expenditure on par- ticular items and at the same time to beat the drum about total public expenditure. However, I have received many representations from colleagues on this side of the House and from trade unions strongly opposing the implementation of the cuts already announced.

No doubt the Secretary of State privately shares our concern about the north and south flanks of NATO. Will he do all he can to see that the deficiencies caused there are remedied?

Of course I would like to see a strengthening of the flanks, but through the contribution we make to the ACE mobile force and the reserve RAF and naval contingents which we make available, we are playing our part, and it would be wrong to think that we can provide additional forces on either of these flanks.

asked the Secretary of State for Defence whether he will make a statement about the implementation of defence cuts.

asked the Secretary of State for Defence if he can now define the areas in which the proposed £100 million cuts in defence spending will take place.

asked the Secretary of State for Defence what will be the effect of the latest round of cuts in appropriations for defence.

I have nothing further to add to the answer given by my predecessor to the hon. Member for Harrogate (Mr. Banks) on 29th July 1976.

Does the Secretary of State agree with the statement by Field-Marshal Sir Michael Carver, when he was Chief of the Defence Staff last year, that we are down to absolute bedrock on defence cuts? If he does not agree, why not?

I agree that it would be difficult to make further cuts without reconsidering some of the commitments involved. However, as my hon. Friend the Minister of State said, the £100 million cuts involved will be made. We are having a detailed assessment now of the rephasing of the works and equipment programmes which will not directly affect the level of our defence forces.

Will my right hon. Friend comment on the Chancellor of the Exchequer's remarks about pressure from the trade unions concerning defence contracts and cut-backs? Will he advise whether similar protests have been made by trade unions representing the public sector? What has been the response in that area?

I think that some of the representations we have received about defence cuts come from trade unions engaged in the public sector, because a number of cuts will involve a reduction in both the non-industrial and the industrial Civil Service as well as having an indirect effect on employment outside.

Is it not a fact that the Government's White Paper was designed to give stability to the forces for the next decade and that since then there have been four major cuts in defence expenditure? What has been the effect of the last two cuts, and how will they be implemented?

We would all like stability in this uncertain world, but I fear that no one in this nation can at present be very secure for very long because of the serious economic situation. That situation is the culmination of a very long period of industrial stagnation. If I were a Conservative Member, I would get no satisfaction from the present situation. On the contrary, I would have hoped that the Conservatives would assist the nation to overcome the difficulties which are a challenge to the whole nation.

Which would produce a greater loss of jobs, a £100 million cut in defence expenditure or an equivalent cut in, say, the National Health Service or education?

It would depend upon the salary levels. All the cuts in defence represent jobs, as they represent jobs in other services. I do not think there is any way of getting round that fact. In some cases of cuts in planned expenditure, jobs are not yet at risk.

The right hon. Gentleman's predecessor is now Secretary of State for Northern Ireland. Will the right hon. Gentleman consult his predecessor about the closure of defence establishments in Northern Ireland? That is making thousands unemployed in the Province, which already has the highest unemployment rate since the last war. Will he reverse that decision?

I shall consult my right hon. Friend, but the facts of life are that we cannot reduce defence expenditure without in many cases causing either redundancies or the loss of job opportunities.

I sympathise with the right hon. Gentleman in not being allowed to speak at his own party conference. Will he take advantage of this considerably more democratic and pro-western assembly to repudiate the defence aspects of the totally absurd 1976 Labour programme?

The right hon. Gentle. man is misinformed. I addressed the party conference, but in order to demonstrate my versatility I spoke about the National Health Service and child benefits.

asked the Secretary of State for Defence if he will make a statement on the naval building programme.

The naval shipbuilding programme is proceeding satisfactorily.

Is the hon. Gentleman aware of the concern felt in the Yarrow yard in Glasgow that nationalisation in the shipbuilding industry might result in a change in the present arrangements, whereby the Government concentrate naval shipbuilding in Vosper's, Vickers and Yarrow? Will he give an assurance that after nationalisation the policy of his Department of concentrating naval shipbuilding in these three yards will continue?

Yarrow is at the moment building six frigates for the Royal Navy and it is expected that it will be invited to tender in the future for similar vessels. It has also been chosen as the second builder for glass reinforced plastic. Neither of these will be affected by the nationalisation Bill which is now before Parliament.

That was not the question.

Is my hon. Friend aware that the deepest anxiety is felt by all fishermen because of poaching by alien vessels off Scotland and elsewhere? What plans does he have for enlarging the fishery protection fleet? We shall need these boats when we extend our fishing limits as every other nation is doing at the moment.

That is a slightly different question. But the Island class, which is under construction, is designed for this purpose and it will go into service next year with the four Nimrod aircraft which also will be available. Any further tasks which need to be undertaken will be provided for by existing resources.

Is the Minister aware of the concern of my constituents about the problems of Vosper-Thorny-croft, which is now short of orders in naval shipbuilding? There is concern that the nationalisation of shipbuilding will mean that in future naval shipbuilding will be concentrated in the North and in Scotland. Will the hon. Gentleman give an assurance that Vosper's will get its fair share in the future?

Yes, I will give that assurance. Vosper-Thorneycroft was awarded the Type 42 destroyer contract earlier this year and it has tendered for the next Type 42 destroyer, on which no decision has yet been made. The nationalisation Bill at present before Parliament will not alter the situation.

asked the Prime Minister if he has any plans to visit India.

I have at present no plans to do so.

Since India is the largest country in the Commonwealth and is of immense importance, will the right hon. Gentleman explain why there has been no visit to that country by a leader of the Labour Party, I think, for the last quarter of a century? Will the Prime Minister follow the example of my right hon. Friend the Leader of the Opposition, who clearly recognises the importance of India's rôle, particularly in the Commonwealth and particularly of its influence on today's world problems?

I agree that no Prime Minister from this country has visited India for some years, but let me remind the hon. Gentleman that my right hon. Friend the Lord President has just returned from a very successful visit and he has given me an account of his discussions with Mrs. Gandhi and other Ministers there which I think have helped to strengthen the tics between us. However, I would certainly consider such a visit if it is possible to fit it into the programme.

Has my right hon. Friend had any reports from Hans Janichek, Secretary of Socialist International, about the continuing detention of George Fernandes, the leader of the Socialist Party of India? Grave disquiet is being felt about the conditions of his detention.

A number of representations have been made about Mr. Fernandes. The Indian Government are aware that we are concerned about the proceedings being taken there. I trust that that action will result in his receiving a fair trial—I am sure that it will. I trust that in the end justice will prevail.

What lessons did the Lord President bring back from India about the freedom of the Press and the freedom of journalists to write freely in it?

That might be an interesting question to put down to my right hon. Friend. I am sure that he will be glad to answer it. I think that everybody who is not an enemy of India will welcome the fact that restrictions on the Press were lifted, I believe towards the end of September. I am sure that that will be welcomed by everybody who has connections with that country.

asked the Prime Minister if he will list his public engagements for 12th October.

I shall be meeting Mr. Nguza, the Foreign Minister of Zaire, and this evening I shall be holding a reception in honour of the British Team at the 1976 Olympiad for the Disabled. In addition, I shall be holding meetings with ministerial colleagues and others.

Will my right hon. Friend say whether he has been able to report to the Cabinet yet about his consultations with Chancellor Schmidt of West Germany? Is he aware that we Labour Members congratulate the Chancellor on his recent election success? He is on record as saying that the pound is grossly under-valued. Will the Prime Minister make a statement to the House on that conversation?

I have not so far made such a report. I congratulated Chancellor Schmidt on the success of his Government in the elections, and I am sure that the House will join with me in that. Our discussions covered a very wide range. They were without officials and went on for three and a half hours. We discussed a number of very important topics concerning not only such matters as East-West relations, but questions affecting the world economy and the interdependence of world trade. I found these discussions to be of very great value in enabling each of us to influence the other's attitudes.

Will the Prime Minister be putting into his diary for this evening a possible meeting with representatives of the offshore module and platform construction yards, who are presently facing redundancies, in view of the emergency situation and the fact that they have travelled all the way from Scotland to discuss these matters with Ministers and those Members who are interested?

I am afraid that I cannot add now to my engagements for today. I had no previous notification of this proposal. I am sure that Members representing certain constituencies, and any Ministers that the representatives have arranged to see, will be glad to hear their representations.

Will the Prime Minister seek to emulate Herr Schmidt at the next election by ending up with fewer seats than the Opposition? As regards today's announcement that the right hon. Gentleman is to take the Chancellor of the Exchequer with him to his meeting with President Giscard d'Estaing in France next month, is he satisfied that the condition of the economy will allow both the First Lord of the Treasury and the Chancellor to be out of the country at the same time?

I must remind the Opposition, who are in danger of forgetting this, that at present the Labour Party has 36 more seats in the House than the Conservative Party—[Hors. MEMBERS: "SO what?"] The conclusion to be drawn is that we sit on the Government side and the Opposition sit opposite us.

Do I take it that the result of Chancellor Schmidt's visit to this country was that the Prime Minister learnt from him that if the Government hold an election early they may lose a large number of seats and will have to be saved by the Liberal Party?

The German elections, unlike ours, are held at fixed intervals. Although it is possible to hold elections early, on this occasion the election was held at the appropriate time as laid down by statute. As regards depending upon the Liberals, I have made it clear many, many times that as long as I can manage even a modest degree of support from my colleagues, the Labour Party will continue as the Government of this country and I shall be happy to lead it.

The Prime Minister will know that the Leader of the Opposition was a member of the Government who did their damnedest to get the Liberal Party to bail them out. In the course of his conversations with Herr Schmidt, did the right hon. Gentleman discover exactly what the German Chancellor meant by the word "under-valued" in the context of the British economy? Would the right hon. Gentleman like to amplify, having taken his tutorial from Herr Schmidt, exactly what an undervalued currency means?

I did not exactly cross-examine the Chancellor on this matter, but I think that he had in mind the competitive nature of British industry in the export market. Our goods can be sold at a much higher rate of exchange than sterling is commanding in the foreign exchange market. That is not a strange phenomenon. Indeed, I believe it was referred to in yesterday's debate. I am aware of some Midland manufacturers who are valuing their exports at a much higher rate than the short-term foreign exchange market. Although I did not cross-examine the Chancellor, I imagine that it was that to which he was referring.

asked the Prime Minister when he last met the CBI and the TUC.

asked the Prime Minister when he last met the TUC.

asked the Prime Minister when he last met the CBI.

I am frequently in touch with leaders of the TUC and the CBI, both at the National Economic Development Council and on other occasions. Further meetings will be arranged as necessary.

At the July meeting of the NEDC the Prime Minister emphasised the importance of profitability for industrial investment, job creation and job preservation. How does he honestly view the prospects for profitability in industry now when £1,700 million is to be taken out of the system by the increase in the minimum lending rate and employers' national insurance contributions?

Obviously the additional national insurance contributions will lower profitability. However, it is interesting and reassuring that the liquidity position of companies has been building up during the past few months. Companies now have more liquid resources from which to finance new investment, or whatever it is they wish to undertake, than they had some time ago, and that is to the good.

When my right hon. Friend next meets the CBI, will he draw to its attention, and to the attention of Opposition Members, that even before the regrettable increase in lending rates and, indeed, when lending rates were much lower, industry was drawing less than 40 per cent. of the facilities available to it from the banks? As my right hon. Friend has said, it is in current gross surplus from its own cash flow. Nevertheless investment is currently 12 per cent. below what it was last year. While we welcome the CBI's intentions for next year, we see no reason for its not getting on the with the job now.

The most important thing still for the Government to stick at is overcoming inflation. That, I think, will undoubtedly improve the desire of companies to invest, just as it will improve the objective of securing more jobs. According to the latest views and proposals, I understand that companies will invest about 15 per cent. to 20 per cent. more next year. [Interruption.] Certain Opposition Members are now becoming sedentary prophets. None of us knows what are the intentions, but when we work out the arithmetic it does not work out in the way that some hon. Members suggest.

Will the Prime Minister be stressing to the TUC that he remains unalterably opposed to the Labour Party conference resolution about the nationalisation of the banks, not just because it is an electoral albatross, but because it is bad for Britain?

Perhaps the hon. Gentleman will be good enough to leave relations between myself and my party to me. If he were to offer to join, I should send him a membership form, but I doubt whether we should let him come in.

Does my right hon. Friend agree that one of the most complex and difficult problems facing the Government in the forthcoming year will be putting some bones on an orderly return to free collective bargaining? What plans do the Government have for discussing this with the TUC so that it can help to sustain the present pay policy and restore the confidence in the pound, which is so necessary now?

I said at the end of last night's debate, though I am not sure whether it was heard above the hubbub from the Opposition, that it is necessary to have a policy for prices and incomes next year. We are about to begin discussions with the TUC at the appropriate time and we shall also be discussing the matter with the employers in due course. The first thing to find out is whether it is possible to get an agreement on that approach. I have read with care the speeches made at the TUC conference and I am not without hope in this matter. The TUC leaders understand the situation perfectly well and they know that there cannot be a complete return to free collective bargaining.

Is the right hon. Gentleman aware that my hon. Friend the Member for Melton (Mr. Latham) was asking him to answer to this House on where he stands on banking and insurance nationalisation? Where does he stand?

I answered to the House last night, and we got a majority of 13.