asked the Secretary of State for Energy when next he plans to meet representatives of oil exploration companies.

The Minister of State and I regularly see representatives of oil exploration companies. Only last week my right hon. Friend saw members of the Association of British Exploration Companies—BRINDEX—which represents the interests of the smaller United Kingdom companies.

As a result of those meetings, is the Secretary of State better aware that the Government are now putting seriously at risk the future exploration and development of the oil in the North Sea as a result of the unattractive conditions which they are imposing on bidders in the sixth round auctions?

No, I do not accept that at all. I have heard the Opposition say this at every stage over the last three years. Every breath of criticism has been amplified by the Conservative Party as a warning of imminent disaster. It has always been proved false in the past, and it will be proved false in the future.

When my right hon. Friend meets the exploration companies, presumably he will be meeting the BNOC, which has a first-class record of exploration. Will he encourage it to increase its activities in the years ahead? Will he also ensure when he meets the EEC Ministers that BNOC's activities are not inhibited by developments in energy policy in the EEC?

I am grateful to my hon. Friend. BNOC brought the Thistle field on stream and had a welcome discovery recently. It is a safeguard for our national interest in the development of the North Sea. On the second question, I have made it absolutely clear both to other Ministers in the Community and to the Commission that the British Government regard the continued development of our oil policy as a vital national interest.

When the right hon. Gentleman meets the oil exploration companies, will lie discuss with them the latest projection by independent oil analysts that the contribution to current account from oil this year will be not £2·7 billion but only £1·5 billion? Will he give his estimate of the reasons for this very disappointing result and estimate the contribution to the shortfall which has been the result of BNOC being five months late in bringing Thistle on stream?

The hon. Gentleman is quite wrong. In bringing the oilfields on stream—that is to say, getting the platforms properly situated and bringing them on stream—there have been technical difficulties and some slippage, but that has nothing whatever to do with BNOC. It has affected many fields apart from the one field, Thistle, which BNOC has brought on stream. I think that the hon. Gentleman is confusing the delays caused by the extremely difficult physical, geographical and climatic conditions with consequences which have flowed from our oil policy.

In view of the severe industrial and economic difficulties which Britain has suffered as a result of membership of the Common Market, can my right hon. Friend give a clear assurance that Britain will retain the benefits from North Sea oil and will not see them go to the Common Market?

I repeat what I said a moment ago. I have read Press reports and know that there are schools of thought in the Community which would like to attack our oil policy. I have made it absolutely clear to the Commission and to member States that this policy, which was developed with an eye to our international obligations, must be maintained and upheld. There should be no doubt in anyone's mind about that.

May I say how much we on this side of the House welcome the announcement of the discovery of BNOC and welcome any new discovery in the North Sea and the benefit it will bring for the nation? We look for further discoveries in view of the quality of the acreage which has been given to BNOC as an operator. In connection with the sixth round discussions, will the right hon. Gentleman confirm the importance that he attaches to maintaining the confidence and trust relationship between the Department of Energy and the oil companies? In that connection, what comments has he made on the concern expressed to him that allocations of further operatorships to BNOC will not be given until companies have said which they regard as the most promising acreages?

I am grateful for that. Indeed, I think I should place on record that I think it is the first time I remember the hon. Member saying anything about BNOC in a favourable light. I hope that the whole House has noticed this turn in events, coupled with the hon. Gentleman's slightly resentful suggestion that the block in which BNOC found the oil had been specially prepared for it, which is quite untrue.

We are, as the hon. Gentleman knows very well, in the middle of a bargaining round of negotiations about the sixth round in which I published my proposals and am in receipt of comment. I shall be announcing the decision. As on all the other occasions when we have been engaged in trying to improve our national position, the Opposition of the day have always chosen, for reasons best known to themselves, to espouse every little anxiety and to seek to amplify it in a way which causes one to gain the impression that they do not wish British control over the oil to be extended.

asked the Secretary of State for Energy if he is satisfied with the composition and the achievements of the Energy Commission.

The Energy Commission, whose composition was decided after extensive consultations both inside and outside Government, was set up to advise and assist me on the development of an energy strategy for the United Kingdom. I am encouraged by the progress which the Commission has made to date and have at present no plans to alter the membership.

Is it not regrettable that the Secretary of State has chosen to reject the advice of the Select Committee on Science and Technology on this subject? Is it not equally regrettable that neither the United Kingdom Offshore Operators Association nor the Watt Committee on Engineering has been given a place on this very important body? Could it not be that people are right in suggesting that the Secretary of State might on this occasion be guilty of exercising power without responsibility?

I think that the hon. Gentleman is wrong. Two hundred organisations, many of which would like to have been directly represented—I am not saying that the Offshore Operators Association and the Watt Committee on Engineering do not have claims—which had claims of equal interest now receive the documentation of the Energy Commission. The transcripts of the discussions are published. My aim is to combine an effective body with the widest coverage of the discussions that take place. I am very happy that the representations of these committees should be before the Energy Commission, but if it were on the scale and of the size implied by the question there would be a national energy conference every three or four months, and I do not think that that would be effective.

Is my right hon. Friend satisfied that the Energy Commission is so constituted that it pays sufficient attention to alternative sources of energy such as solar energy, wind and tidal power, as well as being concerned—quite properly—with the major sources such as oil, coal and gas?

That issue was discussed at the first meeting of the Commission and the point was made that my hon. Friend has made. I specially circulated to the Energy Commission the paper that he wrote on the subject because I wanted it to be aware of that line of argument. At the last meeting of the Energy Commission, the transcript of which will shortly be published, there was a long discussion about research and development, including alternative sources. I therefore hope that the Energy Commission, which necessarily reflects our existing energy pattern, will never be allowed to forget the need to develop alternative resources.

Does the Secretary of State accept that there is a danger of a certain amount of frustration occurring within the Energy Commission if it sees itself purely as a talking shop? How does he propose to react to the suggestions put to him by the Commission?

I understand that. The alternative to what is called a "talking shop" or parliament is, of course, a central body that would run all the energy industries in the country—a national fuel authority with a chairman, and power to determine policy. If that were done—it would be the only way to do it—we should eliminate or weaken the statutory responsibility to the House of Commons either of the Minister or of the chairman, so I have to strike a balance.

asked the Secretary of State for Energy if he will make a statement on progress of the detailed studies of the extension of the electricity and gas grids to Northern Ireland.

For geographical reasons, any direct electricity link between Great Britain and Northern Ireland would have to be developed by the Northern Ireland Electricity Service and the South of Scotland Electricity Board, which are the responsibility respectively of my right hon. Friends the Secretary of State for Northern Ireland and the Secretary of State for Scotland. The proposed natural gas pipeline between Scotland and Northern Ireland is, I understand, one of several options for the future of the Northern Ireland gas industry, contained in the report of a recent study of that industry by the British Gas Corporation. I understand that my right hon. Friend the Secretary of State for Northern Ireland will shortly he considering this matter when consultations with various interested groups have been concluded.

Despite the dispersion of responsibility in this matter amongst different branches of the Government, are the Government aware of the keen interest that is felt in these projects in Northern Ireland, not least on the part of the trade unions, and of the benefit which both projects would confer in the long run upon consumers and production in Great Britain?

Yes, I am aware of that, but, as I stated in my reply, that responsibility rests with my right hon. Friends the Secretaries of State for Scotland and for Northern Ireland. I am, of course, aware of the interest.

On the similar subject of the exportation of electricity by transwater links of this type, can my hon. Friend tell the House whether there is any further progress in connecting the British grid with the French grid—

Order. That is a completely separate question. This is a Question concerning Northern Ireland.

In view of the vast public expenditure in helping Northern Ireland in its difficulties, and as part of the difficulty is the high charges for gas and electricity, will the Secretary of State consider sitting down with the other Ministers who have been mentioned and consider very carefully the suggestion implicit in the supplementary question asked by the right hon. Member for Down, South (Mr. Powell)?

If the hon. Gentleman is referring to the British Gas Corporation, that body has no responsibility in this matter. If he is talking about Cabinet discussions, lie will realise that they take place all the time. I said to the right hon. Member for Down, South (Mr. Powell) that we are aware of the position and of the anxieties and of the views being expressed by the bodies referred to by the right hon. Gentleman in his supplementary question.

Will the hon. Gentleman state whether his Department has had any negotiations with the similar Departments in Northern Ireland? If a natural gas link is not to be available in Northern Ireland, will he consider making coal available to Northern Ireland at the same price as it is available in the rest of the United Kingdom?

These are matters for my right hon. Friends the Secretaries of State for Scotland and for Northern Ireland. No such proposal as the hon. Gentleman mentioned has come before the Department of Energy.

Bearing in mind the reference already made to the desirability of these projects and to their very expensive nature, will my hon. Friend note and draw the attention of the Secretaries of State concerned to the fact that only a few weeks ago the two Members and their hon. Friends voted against increasing public expenditure?

I am sure that my right hon. Friends will be aware of this, but in specific answer to the question I must state that there is anxiety about this matter and I must take cognisance of that anxiety. Both my right hon. Friends are discussing the matter.

asked the Secretary of State for Energy when he intends next to meet the chairman of the Central Electricity Generating Board.

asked the Secretary of State for Energy when he intends next to meet the chairman of the British Gas Corporation.

asked the Secretary of State for Energy when he plans next to meet the chairman of the Central Electricity Generating Board.

asked the Secretary of State for Energy when he will next meet the chairman of the British Gas Corporation.

I meet the chairmen of all the fuel industries regularly as and when necessary.

When the right hon, Gentleman next meets the chairman, will he take the opportunity of discussing with him the situation following the Government's apparent interest in referring electricity prices to the Price Commission? Will he discuss with the chairman the possibility of getting lower electricity prices and resisting the temptation to argue for higher gas prices?

A statement has been made about electricity prices and gas prices for the current year. There is to be a freeze on gas prices until the end of the financial year of April 1979. The increase in electricity prices has already been announced. Reference of these industries to the Price Commission is a matter for my right hon. Friend the Secretary of State for Prices and Consumer Protection. I have no desire to see energy prices rise more than is necessary to allow the industries to meet their financial requirements.

When the Secretary of State meets the chairman of the British Gas Corporation, will he ask him to explain his pricing policy, since prices to domestic gas consumers are being held down whereas industrial consumers are having to pay sharply increased prices? Is it not therefore true that we are acting contrary to the way in which other industrialised nations are operating, and domestic consumer prices are being held down for political reasons?

If I may say so, the hon. Gentleman is completely wrong about this. In the first place, some of the early contracts which were signed by British Gas were highly favourable to industrial consumers in order to provide a long-term based domestic market to launch North Sea gas, and in any case some of these contracts were set at prices to take account of interruptible supply. The British Gas Corporation, which makes an annual report and will shortly do so, explains its policy to the public and to Parliament, and I do not believe that the hon. Gentleman's charges would stand up to one moment's examination.

When my right hon. Friend next meets the chairman of the CEGB, will he take up with him the question of the refurbishing of power stations? Is he aware that, now that the Government have taken justified steps to protect the industries supplying the new power stations, there is some concern among workers in the industry that power stations may be phased out far in advance of their full life?

I am concerned with the overall energy policy aspects of the CEGB and the other fuel industries. I must not—and I do not wish to—seek to influence their management decisions. Where I am concerned directly is with the fuel burn, and I am now studying possible strategies, one of which would involve the burning of our indigenous coal as a first priority, with imported energy coming as a residual. That is a matter for me, but on the individual details of the refurbishing of particular power stations I have, in effect, to be guided by some of the management knowledge of the industry itself.

Will the Secretary of State confirm that the main object of his interference in the price of gas is to give continuity of employment to the mining industry and the mining community generally because he believes that to be to the political advantage of the Labour Party?

Hon. Members should sort out the line which they will adopt. A moment ago I was told that I was keeping gas prices down deliberately for electoral purposes. Now I am told that I am inflating them to protect the miners. If only there were some clear line of thinking on energy policy coming from the Opposition, the whole nation would be profoundly grateful.

If, when my right hon. Friend meets these various chairmen, they happen to raise with him the burning topic—as suggested in the Press—of their own salaries, will he point out to them that the ordinary member of the public who will have to meet any increase which may be made either through increased prices or through increased taxation feels that a 70 per cent. increase on their already not inconsiderable salaries would be a bit too much to bear for both the public and most of my right hon. and hon. Friends?

I take what my hon. Friend says, but he will know that the salaries of nationalised industry board members, together with other categories of public servants, are handled not by the sponsoring Minister for each industry but under general arrangements arising under other recommendations.

asked the Secretary of State for Energy when he next expects to meet other EEC Energy Ministers; and if he will make a statement.

I expect to meet other EEC Energy Ministers at the next meeting of the Energy Council, the date for which has not been fixed.

What is the present British negotiating position with regard to the proposals for aid to encourage greater use of Community coal and to help deal with the problem of excess refining capacity? When he next meets his EEC colleagues, will the right hon. Gentleman adopt a more helpful attitude towards these issues than he did at the last meeting of the Energy Council?

The question is—helpful to whom? In the case of coal, the United Kingdom produces overwhelmingly the cheapest coal in Europe, and it is put of the objectives of EEC energy policy that there should be a greater dependence upon indigenous fuels in order to reduce dependence on imports. I have urged, and so has my hon. Friend the Member for Midlothian (Mr. Eadie), at Energy Council meetings the absurdity of putting at risk domestic Community coal production—if I may so put it—and continuing the importation of coal, the price and availability of which cannot be secure.

The United Kingdom has fewer refineries than has, say, France or Italy, which are not oil producers, and I take the view that, as a country moving soon to be the tenth largest oil producer in the world, we are entitled to expect that we should be able to refine our own oil and make use of it. I have made this absolutely clear. The proposals on refineries made by the Commission were quite unnecessary and unhelpful, and I do not believe that in pointing that out and stressing the need for a sensible coal policy I have done anything other than bring a note of realism into Community energy policy.

As it is now two years since the European Commission recommended great energy saving by the use of diesel power, will my right hon. Friend be able to tell of any progress at this meeting on the question of the development of a British diesel engine car or on the question of a fuel tax which means that diesel will be available at least at the same price as petrol?

As regards energy conservation, we are among the leading countries—if we are not the leading country—in the world in the effort which we have made, but I ask the House to consider this. If somebody has an idea on energy policy, it does not follow that it must be done by the Commission. Member States can do it. Some decisions are best pursued by local authorities. I have been trying to emphasise to my colleagues in Europe and to the Commission that it is one thing to say that we should approach the problem by developing new policies and it is another to say that we should agree to hand over growing areas of our policy for control by the Commission. They are quite separate issues. On conservation we are the leading country in Europe.

When the Secretary of State next goes to Brussels, will he make some comment upon the Commission's proposal to restrict credit assistance for the offshore oil supplying industry, and will he make quite clear that such proposals will be much resented across a wide spectrum of British political opinion?

I have done so already. Commissioner Vouel came to see me a year ago, and I saw him again in September, and discussions have taken place with Commission officials. There is no doubt whatever that the interest relief grants, which have given employment in Scotland, have come under attack by the Commission, and this is one of a number of areas where the Commission has been seeking to move into the planning of our energy policy. The British Government's view, as expressed by me, is to try to discuss problems but to take a robust line, and I am grateful for the hon. Gentleman's support.

asked the Secretary of State for Energy what recent estimate his Department has made of likely future demand for British coal in (a) United Kingdom power stations and (b) other EEC power stations.

The energy policy Green Paper forecast that coal will retain its major role in electricity generation at least until the end of the century. This is the policy of the Government. Imports of power station coal into the Community are at present about 26 million tonnes a year, of which some 22 million tonnes comes from third countries. This represents the market in which the National Coal Board may compete for a share.

Is not that second figure critical, since it is important for the future well-being of the British coal industry that we establish a share of this market overseas and avoid the peaks and troughs which we have had in the past? Will the Secretary of State take into account that, while we are negotiating a good position for our own coal industry, this entails some give and take on other issues where he is taking a different line? Essentially, we must get this market for our coal, but it entails negotiation, as has happened in other areas—particularly on oil as well.

I think that the hon. Gentleman is absolutely right in saying that as overwhelmingly the largest and cheapest coal producer in the Community, within existing Community energy policy guidelines, which I support, we ought to see an expanded market for British coal within the Community. However, to link with that, as we move towards self-sufficiency, the proposal that we should agree to the control of our refinery policy is quite another matter. That is what it is about, and the House should be under no illusion.

An attempt was made by the Commission to take control of our refinery policy, by guidelines for throughput and so on, which would have been very damaging to us in another area. I believe that the respect which I owe as now the senior member of the Energy Council of the Community is to advocate sensible policies and to oppose policies which are not sensible. That seems to be the only basis on which we can go forward.

Does my right hon. Friend accept that Britain could make an enormous contribution to EEC energy resources if the British electricity grid could be connected to the European grid? We should therefore be virtually exporting our coal by wire. What progress has been made on negotiations in this area?

I agree with what my hon. Friend has said. We have had discussions about the matter for some time. A statement will be made, but I cannot make it today. There has been a link under the Channel.

This reminds me of one point. I might make in general, that the amount of cooperation in Europe that now goes on outside the EEC, through bilateral arrangements of that kind, URENCO, or the other co-operative arrangements on energy, far exceeds the degree of work done within the Community itself. This example is a very good one, and I am grateful for my hon. Friend's support.

As coal still has little more than half the total bulk combustion market within the United Kingdom, is it not time the Government did more to use their influence to see whether coal could progressively take a larger share of the rest of the bulk combustion market now occupied by gas and oil respectively?

I agree entirely with the hon. Gentleman. He has been very logical and helpful in his presentation of his energy arguments. I think that he is absolutely right.

As the House knows, I am disinclined to see—indeed, I am opposed to—the building of more oil-fired stations in this country. In answer to another supplementary question a moment ago, I made the point that it was sensible to look at alternative strategies based upon the burning of indigenous coal that is dug as the base load, with nuclear power. I am having the economics of that examined.

The recently announced research and development programme, in which we talk about gas and coal, oil from coal and coal for petrochemicals, provides a secure base for our mining industry, which will be the foundation of this country's energy strength long after the gas and oil have run out. Nobody should be in any doubt. It is not merely a matter of electoral votes from the miners, as is suggested; it is the basis of our energy strength for the future. That is what the defence of the coal industry is about.

Is my right hon. Friend aware that the contribution of coal towards meeting the energy requirements for electricity generation was largely laid down by the European Coal and Steel Community some years ago? To what extent has he intervened in the decisions made since to improve the contribution of British coal to the electricity generation industry?

I have not been very successful—and neither have others, including the Commission, who have advocated this—on the expansion of the coalburn within the Community. I am very disappointed that I have not. But as regards our domestic policy, where the matter is within our own control, there seems to me a very powerful case—particularly if one has a large investment programme in the coal industry, as we have, at £4 billion—for being sure that one's policy caters for the utilisation of that coal as far as possible at the expense of imports, particularly imports of oil.

Is the Secretary of State aware that we find it impossible to dissociate in our minds the continuing reports of failure to agree on any proposals in the Energy Ministers' meetings from the total lack of good will felt towards him in Europe in these discussions? Do not the significant failure to agree on coal going into Community power stations and the rather serious reports of the CEGB corporate study and its disagreement on future coalburn pose serious concerns for the mining industry?

The hon. Gentleman espouses not only every complaint by an international oil company against British oil policy but every complaint by the Commission or other member States against British policy on oil and energy. There is a strong connection between the two, because if the Commission were to take control of our oil policy the main beneficiary would be the oil companies, as they would no longer be subject to the policy that we have pursued.

I think that the hon. Gentleman misunderstands the atmosphere and the mood in Brussels. Britain is the major energy producer of the Community, and is seen to be such. We have played a most active part in the Euratom loans, the coking coal arrangements and the JET programme in trying to develop an energy policy that meets the needs of the Community, but we have not on that basis thought it right to transfer responsibility for energy policy from the British Government, answerable to Parliament, to the Commission. That is the only issue between us.

asked the Secretary of State for Energy what representations he has received regarding coal imports in view of the large stocks of coal in the United Kingdom.

We have received representations from the National Coal Board, hon. Members and other sources.

I recognise that my hon. Friend is aware of the views of the National Union of Mineworkers. Will he have discussions with my right hon. Friend the Secretary of State, who was in the South Wales coalfield last week? My right hon. Friend heard miners who, although satisfied with many of the Government's attitudes, are still deeply disturbed that while large stocks of coal have been built up in this country we still have contracts under which we are importing coal. Cannot something be done to tackle that problem?

We are very much aware of the anxieties, not only in South Wales but all over the country, about the importation of coal. We have had a meeting with the bodies concerned. The emphasis was on coking coal. British Steel Corporation representatives were at the meeting, as were my right hon. Friends the Secretaries of State for Industry and for Energy. The decision was that after consultation they would report back. I assure my hon. Friend that we are very much aware of the point he has put.

In view of the Secretary of State's expressed preference for coal over other forms of energy, should he not take account of the serious possibility that the artificially high price of oil might fall as a consequence of the break-up of the OPEC cartel and that in future we might find cheap oil available? Should not he take account of that in his plans for future energy requirements?

I do not think that the House would be surprised if I said that I endorsed the remarks of my right hon. Friend about coal. The hon. Gentleman is falling into a very bad habit. We learned before the Israeli-Arab war what happens when the whole Western world is dependent for its energy supplies on outside countries which are to some extent politically unstable. What the hon. Gentleman is suggesting is that we make the errors we said in 1973–74 we would never make. It is no use pulling the blankets over one's head on this issue. Energy is necessary if a country wishes to become an industrial country, and it should preferably be indigenous energy.

asked the Secretary of State for Energy how many oil companies have submitted written comments to his Department in connection with the recent consultative document on the sixth round of North Sea licence applications.

asked the Secretary of State for Energy what representations he has so far received in connection with the consultative document on the sixth round of licensing.

I have not received any comments from individual companies on the consultative document about the next round of offshore licensing but a number of organisations have sent me their views. These are being considered and a further announcement will be made later.

I thank the Secretary of State for his answer. When does he think we shall come to the next stage, when applications are invited? Can he be more explicit on the criteria for financial backing for independent oil companies when they make their applications, going beyond the terms of the consultative document?

I appreciate the hon. Gentleman's interest. If there are genuine confusions in our document—and I do not believe that there are—I shall ensure that they are clarified as soon as possible, but I think that it would be wrong to make a mid-term comment on a consultative document. The House will need to wait until I have assessed the arguments, which I am doing very seriously. I shall be announcing our conclusions upon them, and the dates will flow from them.

Does the Secretary of State accept that one of the worries of many oil companies at the moment relates not directly to the sixth round but to the fact that licences are being granted between rounds to the British National Oil Corporation? Does he also accept that if there is too much intermediate licensing there will be a danger of inhibiting investment in the North Sea? Does he agree that although we have a lot of investment of our own it is essential that we have continuing investment from overseas investors too?

I have never doubted the latter point. Nor has there been any check, by a single day, on the flow of inward investment from the private oil companies, despite the policy we have introduced. The public sector has got only about 24 per cent. of the North Sea under the arrangements I have made. We started from a level which began with the previous Conservative Government's licensing round, which gave nothing to the public sector. To have less than a quarter of the North Sea in the public sector and then to find that every move is denounced as threatening the North Sea can only be read by me and others as indicating that the Conservative Party would rather that there was not a public sector involvement at all. If that is the basis upon which the Conservatives wish to put these issues to the public in due course, that is for them. In the light of the experience of countries in the Middle East and Latin America which were exploited by the oil companies without any regard for the interests of the people living there, I believe that there is a wide welcome for the Government's policy. I wish that the Conservative Party would support it.

asked the Secretary of State for Energy, in the light of the continuing shortage of anthra- cite coal in the United Kingdom, resulting in that kind of fuel being imported, how many tons have been imported in each of the past three years; and what actions he is taking to help the National Coal Board to produce more anthracite from the British coal mines.

Imports of anthracite for the past three years were:

	tonnes
1975	136,000
1976	142,000
1977	270,000

The National Coal Board is doing its best to increase production by all practicable means, including opencast, which provides about half the needs. A new anthracite mine at Betws in South Wales commenced production last month. It is designed to produce half a million tonnes per year at a high level of productivity and should obviate the need for anthracite imports.

Is my hon. Friend aware that the quality of imported anthracite is far inferior to that of home-produced anthracite? Will he do more to encourage the National Coal Board to stop importing anthracite by ensuring that the Board has the necessary finance to develop new mines where the anthracite is available?

We are aware of the complaints about the importation of anthracite, which have been made by many hon. Members. Anthracite is found only in South Wales. I have mentioned the new Betws mine in South Wales, which is the first new mine to be completed there for 10 years. When that is in full production, taking account of opencast and other deep-mine output, it will obviate the need for anthracite imports.

asked the Secretary of State for Energy if he will make a further statement on coal exports.

asked the Secretary of State for Energy what is the current level of exports of coal to the EEC countries.

Exports of coal during the first four months of 1978 were 656,000 tonnes, almost the whole of which went to EEC countries.

In view of the magnificent production effort by the miners, which means that we have an increased supply of coal for many years to come, and the disappointing attitude of some of our EEC partners towards our exports, does my hon. Friend agree that there is a need for an urgent programme aimed at refurbishing some of the older coal-generated power stations? Is there not a need to look at the possibility of developing new coal-fired stations in addition to the Drax B proposal?

My hon. Friend is correct to say that coal is a valuable indigenous asset in that we have been able to identify coal stocks sufficient for the next 300 years. I confirm that our coal is the cheapest within the EEC. We are aware of my hon. Friend's point of view—which has been put by others too—about the refurbishing of coal-fired power stations. However, we have had no such proposals put before us. I understand that the argument is continuing. I can appreciate why my hon. Friend raises this point. It is not just a question of doing the miners a favour. I understand that the plant manufacturing industry wants the work and, hence, the wages.

What is the point of encouraging the miners to produce more coal by way of incentive schemes if the markets for that coal are not available? Would we not be a good deal better off if we were represented at Brussels by an Energy Minister who, although he may not be the senior member of the Council, might be more sensible and less hostile towards the Common Market than the right hon. Gentleman?

The hon. Gentleman is right on the ball with his first point. There is no use investing in our own coal industry and having such a strong supply of indigenous energy for so many years, with such a skilled labour force, if we do not burn the coal. If the hon. Gentleman had listened to what my right hon. Friend has said, I believe that he would have had cause to amend some of his derogatory views. I do not believe that stationing a Minister in Brussels would solve the problem. My right hon. Friend has articulated the national interest of this country. He has put forward the British viewpoint and explained the contribution that we can make to the EEC. I believe that on reflection the hon. Gentleman will want to amend some of his remarks about my right hon. Friend.

rose—

Order. I shall call one more hon. Member from either side of the House and allow extra time at the end of Question Time for the Minister of Overseas Development.

Will my hon. Friend take steps to inform the British public of the fantastic success of the National Coal Board by way of its exports to China, in particular the multi-purpose arrangement, which will mean millions of pounds being contributed to our economic prosperity?

I am grateful to my hon. Friend for raising this matter. We are aware that the market for energy exports to that continent is substantial.

In view of the need to keep coal prices competitive, may I ask why the Secretary of State recently offered the National Union of Mineworkers the power of veto against pit closures? How would that help to keep coal competitive in our modern world?

I do not believe that that issue is related to the Question. The hon. Gentleman will recall that there was some confusion within the country and even within the mining community about who could take the decision about a pit closure. What my right hon. Friend suggested to the NUM was by way of being a participatory agreement so that it would have a share in the responsibility for pit closures. With that responsibility for pit closures there would be a share in the responsibility for deciding upon new investment.

asked the Minister of Overseas Development what steps her Department has taken to promote international agreement on debt relief for the poorest developing countries.

asked the Minister of Overseas Development what consideration her Department is now giving to questions of, first, the Common Fund and, secondly, relief of debt of the poorest developing countries.

I expect to announce within the next month how we intend to fulfil the commitment we reached internationally in Geneva last March to seek to adjust the terms of past aid loans, or take other equivalent measures, to benefit the poorest countries.

I think the United Kingdom made a valuable contribution to the promotion of international agreement at the Geneva UNCTAD conference, which I attended. Since then, we have co-operated in further work within OECD.

The Government's policy towards the Common Fund takes full account of my Department's views. Questions on this are a matter for my right hon. Friend the Secretary of State for Trade.

With regard to the writing-off of official overseas debt, may I ask whether the Minister has given serious consideration to the United Kingdom acting unilaterally if necessary in this matter, as Canada, Sweden and Holland have done? Does the right hon. Lady accept that she would be better employed directing her attention to these urgent questions than to the sort of subjects she raised in her recent speech in Rome when she talked about extending the concept of intervention and planning from the national to the international level, which is just useless?

The hon. Gentleman is not perhaps aware that I cover a great many points in a great many speeches. That was one speech which I regarded as being very effective. The hon. Gentleman will know that the action taken by Canada, Switzerland and Sweden has been taken as their contribution to the Conference for International Economic Co-operation Special Action to which we are contributing $115 million through IDA. There is no question of our not acting unilaterally on this matter. We wish that all developed countries would act in this way. We do not have to bear in mind precisely the way in which they are acting to make our decisions.

Will the right hon. Lady tell the House what she means when she says that discussions on the Common Fund are taking full account of her Department's views? Does she not agree that negotiations on this and other commitments made by Commonwealth Heads of Government, following the Paris North-South talks last June, have ground to a faltering halt?

No, I would not agree at all that they have ground to a faltering halt. When I say that my Department is fully involved in all these discussions, I mean—without revealing anything that I should not reveal—that several Departments are involved in discussions on this matter, although, of course, the Department of Trade is in the lead. There are indications—I think that my right hon. Friend the Secretary of State for Trade would agree—of grounds for optimism in believing that it may be possible to resolve some of the problems, or that at least we may be able to move further forward in the next two or three months on the basis of the discussions which are taking place.

Will my right hon. Friend take special note of the unusual and almost unique position of the Sudan in this connection? Is she aware that this is a nation of 18 million to 20 million people whose annual income per head is possibly $90, and yet 30 per cent. of any loans they get is earmarked to pay interest on the debt accumulated by the Sudan? Does my right hon. Friend agree that this is a stable society in North Africa?

I am sure that my hon. Friend will be glad to know that the position is quite clear. We regard this as an aid measure. We regard it as logical that those countries which have in the past received loans from us—and which therefore are due to repay both capital and interest—but which now receive grants from us could be entitled to retrospective adjustment of the terms. In any country, whether it is the Sudan or any other, what will matter is whether the country is now in receipt of grants from us and has been in receipt of loans in the past.

Will the right hon. Lady tell the House whether she has had international agreement to Item 39, Overseas Aid Class 11.8, in the Supply Estimates, which was a grant of £50,000 to the Trades Union Congress? Will she tell us what it was in aid of?

I think that a separate Question on that would be called for, if I may say so. There is quite a lot of information to be given to the House about it.

Will my right hon. Friend ensure that in any discussions internationally on debt relief or other aid matters to the poorest countries she is in the fullest possible consultation with the Japanese Government? Will she inform them that, while we welcome their recent decision to double official development assistance in three years rather than five, we hope that it will be on the lines that Mr. McNamara indicated in Tokyo? In particular, will she try to direct Japanese aid efforts to South Asia, where some of the poorest countries are situated?

I had the opportunity of discussions with the Foreign Minister of Japan when he was here about a month ago, and we discussed these matters in some substance and detail. I hope very much—and particularly in relation to the Summit Meeting in Bonn shortly—that we shall find that the Japanese are very ready to play a full part in the reinvigoration of the economies of the developing countries as a part of the contribution towards ending the world recession. This is absolutely crucial.

asked the Minister of Overseas Development to whom the offer of a resources survey, which would enable the Banabans to resume their occupation of Banaba or Ocean Island, was made; what reply she has received to the offer; and by whom the survey is to be carried out.

Our offer, whose objective would be to provide an assessment of the island's resources for habitation and development, was made to the Gilbert Islands' Government and the Rabi Council of Leaders. They have not yet replied. A decision on who should carry out the survey would be made after a preliminary appraisal.

I thank the hon. Gentleman for that information. Is he aware that what concerns those in this House who are ashamed of the shabby way in which the Banabans were treated in the past is the absence of any disposition to return their island to them or to provide them with the economic means of rehabilitating it after the exhaustion of the phosphates? Will he bear in mind that there is a new Government in the Gilberts and a new Council of Leaders of the Banabans, and that it behoves the British Government to take some initiative in this matter and not to wait for those people to act?

Obviously I know of the concern of the hon. Gentleman and of many other hon. Members about the position, but we have made the offer and it is because of the changes of Government and the change in the Rabi Council that some delay in response has been caused. But plainly it is impossible for the Government to respond until we have heard their reaction to our offer. That is why we are waiting for it now and look forward to receiving it as soon as possible.

asked the Minister of Overseas Development what specific proposals she has made for the rehabilitation of Banaba or Ocean Island at the end of phosphate mining.

No specific proposals for the rehabilitation of Banaba have been made.

Is my hon. Friend aware that, whatever other aspects of this matter may be in doubt, there is no doubt whatever of the absolute determination of the Banaban people to return to their traditional home, and that there is a moral, legal and economic obligation on Her Majesty's Government to facilitate that return in the light of the disgraceful way that these people have been treated over the past 50 years?

Clearly we know what my hon. Friend says, and that is why the proposal has been made. Once the proposal has been accepted by both parties to whom it has been communicated, we have it in mind to send out a representative of the Ministry of Overseas Development, together with a member of the staff of the University of the South Pacific in Fiji, so that they can make an appraisal to assist that very process to which my hon. Friend refers.

asked the Minister of Overseas Development whether she is satisfied that sufficient encouragement is being given to voluntary bodies which undertake development work overseas.

Yes, Sir. We give a great deal of encouragement. Our programme of support for the development activities overseas of the voluntary societies is increasing. I would like to see it increase still further.

In view of the Minister's answer, does she accept that one of the great values of the voluntary bodies is that they give the British public a degree of choice and influence over the way in which its money is spent overseas, and that equally these bodies have a particular capacity for identifying projects which really help the people in need in the developing countries? Therefore, can the Minister assure the House that there are no obstacles whatsoever in the way of the expansion of the voluntary bodies? Does she, in particular, propose to expand the joint funding scheme?

As I know the hon. Gentleman recognises, I introduced the joint funding scheme, and I am very enthusiastic about it. We have to be very careful, however, that we do not, in the joint funding scheme, interfere with the independence of the voluntary agencies. I am sure that he will accept that. Perhaps the best indication I can give him is that in the first year of the scheme we received 20 applications, and that last year we received 144. Expenditure has risen from £25,000 to £700,000. Indeed, of the total applications, 118 have been approved and, apart from some which are in the pipeline, only 26 have been rejected, purely on practical grounds. This indicates that we are fully seized of the desire to encourage them.

Has my right hon. Friend been able to make any progress with the vexed problem that faces Voluntary Service Overseas people when they come back and find inadequate employment opportunities? This problem has vexed many of us for a long time. Has my right hon. Friend been able to make any progress in securing, at this time of high unemployment, that when people give up a year or two or their lives, when they are young, to go overseas, they come back to full employment?

This is obviously a very difficult question, but most of the people involved in the joint funding schemes are not so much VSO volunteers as people employed by the voluntary agencies who tend to have a career working with them and for them. There is a slight difference there. But there are problems concerning the volunteers returning here. I wish that there could be more people going overseas during this period, because it is very valuable to them. It gives them further training and experience, and cannot but help everybody.

asked the Minister of Overseas Development whether it is the policy of Her Majesty's Government to attach political conditions to the granting of aid; and, if so, in what circumstances.

While aid allocation decisions necessarily take into account the state of our political relations with the country concerned, no political conditions are attached to aid granted.

Are not the Government in a complete muddle about this? How is it that aid has been cut off from Uganda and Chile, whereas it has not been cut off from Ethiopia and Cambodia, according to what the right hon. Lady told the House on 8th May? Does it simply depend on how far Left the regime is?

The hon. Gentleman has clearly failed to take note of the correction in Hansard, which was of some importance. It was that we do not have an aid programme to Cambodia and have not had an aid programme for some three years. It was a rather important correction in Hansard, as I am sure the hon. Gentleman will agree. We have a minimal programme for Ethiopia which is directed entirely towards completing a water supply project there. It has been very difficult to decide about that. In terms of human rights in all these various countries, one has to take some account of not punishing people twice. A rural water supply to some of the people in the countryside of Ethiopia did not seem to us to be a matter on which we should cut off aid and fail to complete a project to which we are committed. However, it is a very minimal one and we have no new proposals for aid in Ethiopia.

Will my right hon. Friend therefore resist the importation of political conditions into any renegotiated Lome Convention?

"Political conditions" is one way of expressing it, although I would not agree with that. What we are concerned about, and clearly what the whole House would be concerned about, is that we would not wish our taxpayers' money to be spent in Uganda, for example. Therefore, we have some claim to have a voice on this within the renegotiations of Lomé.

Is not there a very strong case for attaching just one political condition to the granting of aid, and that is that it is not made available in cases where there are known and gross violations of human rights?

This, of course, is the phrase which has become accepted and which certainly we accepted—that the gross violation of human rights should be a condition. How one expresses that in terms of aid policy and international discussion becomes a matter of case-by-case decision. Of course, it must be a case-by-case decision, and that is the policy which we tend to pursue.

Is my right hon. Friend aware that, when she goes to the Cabinet meetings to discuss increased aid for the poorer nations of the world, all her hon. Friends will give her their fullest support?

I am sure that they will. To be fair, a considerable number of Conservative Members might do so, although there might be some dissension within their party about the matter. What I am clear about is that our policy is "poorest countries and poorest people". The poorest people in some countries may merit our support even partly in order to induce the progress in economic and social development which will itself lead to an advancement in the securement of human rights.

The Minister still has not answered specifically the supplementary question put by my hon. Friend the Member for Blackpool, South (Mr. Maker). If it is right not to give aid to Chile or Uganda, how can it possibly be right to give official, bilateral taxpayers' money to the Ethiopian regime?

I think I have explained that, but I shall seek to explain it again. We have a minimal programme. It is for a rural water supply project. It was undertaken some time ago. It is in its last stages. We are entering into no new commitments, but on balance—and these must be questions which one decides on balance—we did not think it right to cut off the completion of that project.

On a point of order, Mr. Speaker. You will be aware that on Energy Questions today we reached only Question No. 11, and that only because two hon. Members with earlier Questions were missing. This meant that urgent and reasonably well placed Questions, such as my own—No. 17—on the need for a new winter fuel rebate scheme were not reached. Are you aware that we are now getting fewer Questions answered than at any time I can remember in my 33 years in the House? Therefore, I ask you to renew your pleas, both to those who ask Questions and to those who answer them, to keep them brisk and brief? Could you also ask Ministers to drop the habit of linking replies to Questions much further down on the Order Paper, as has been done three times this afternoon, thus making it hopeless for many of us to get a chance of having our Questions reached?

The right hon. Lady will know that 15 Questions were reached on energy, counting the doubling up of Questions which were answered. The trouble is that supplementary questions were as long as her point of order. That is the problem. Today, if I may say so, answers were also long, but not from the Minister for Overseas Development. We were earlier talking about energy matters and that Minister is not now present.

After the Foreign Secretary's statement and the tragic circumstances surrounding it, I think that the House will find it difficult to effect the change of mood which our debate on trade requires. As my hon. and learned Friend the Member for Beaconsfield (Mr. Bell) said a few moments ago, we have just been discussing a deeply emotional matter which causes the whole nation grave concern. To switch from the horrors of the Rhodesian incident to economics is no easy task, not least because I should like to discuss world trade issues in a fairly free-ranging manner.

I hope that the House will forgive me if I attempt to effect the transition in a gradual way. In order to do so, I have had to change the content of the early part of my speech because the House's mood will be rather different from what I originally anticipated.

By choosing the subject of trade for this debate, we are not in any way seeking to pillory the Secretary of State. We chose the subject because it is topical and of great importance to the nation. Yet it is virtually never discussed in Parliament as a separate issue. We are accustomed to frequent debates on foreign policy. Trade comprises the most important part of our foreign policy. But trade is in 1978 still a somewhat turgid, if not sordid, parliamentary subject, unsuitable for gentlemen and certainly for hon. Gentlemen in the House. I think that the Secretary of State would agree that that is the general attitude towards it.

Because of that, the Secretary of State has been able to pose among intellectuals outside the House as almost the creator of modern mercantilism—a type of messiah of modern mercantilism—criticising foreigners such as the Germans for inconsistencies and implying that only he mixes genuine free trade sentiments with political reality, as if political reality exists only in Birkenhead and that it does not worry Bonn or anyone else. In the process, it tends to be forgotten that half the Secretary of State's parliamentary colleagues and a fair proportion of the Cabinet are emotionally wedded to putting a ring fence around Great Britain, to creating a kind of fortress around Britain out of which I believe that they would successfully subjugate the British people.

The Prime Minister himself is threatening to pull up a drawbridge of the fortress unless every other country in the Western world inflates its economy as fast as we would wish to inflate our own, given, of course, that the Prime Minister shortly will be seeking re-election.

I hear—I think that there must be some truth in it, and no doubt the two members of the Cabinet who are present will confirm this—that, this time more than any other, there is a real determination to achieve something concrete at the summit, rather than a vacuous communique with no commitments, which would suit the personal inclinations and the political situation of the Prime Minister very well indeed.

As the multilateral trade negotiations come up to the 15th July deadline, what is increasingly demanded of the present Labour Government is a firm statement against the proliferation of State aids and subsidies which have come to represent perhaps the most bizarre array of devices for unfair competition among the Western nations.

A country such as Britain, which depends upon an open trading system almost more than any other country for the maintenance of jobs and for the prosperity of its people, is now considered to be—I make the comment objectively—perhaps the most protectionist-minded and to have the weakest Government in resisting pressures among all the Western allies. Perhaps, therefore, the Secretary of State will take the opportunity of telling us what the Government intend to say in these months leading up to the summit about the charges that are increasingly made against the Cabinet that we are the leaders of the world in the field of political subsidy and of devices—non-tariff barriers—to restrain the open trading system.

Having said that, I understand the political argument for import controls and for greater protection which are frequently advanced by Labour Members below the Gangway. I understand the political argument all too well. The hon. Member for Tottenham (Mr. Atkinson) is not present in the Chamber today, but I take one quotation from what he said recently:

"If the whole of the Socialist case is about planning the economy, how can we plan it in the absence of controls on our external trade?"—[Official Report, 3rd November 1975. Vol. 899, c. 10.]

Of course, the hon. Gentleman is right in his own terms. By that statement, he demonstrates his Marxist credentials admirably. A protected Britain would inevitably be a Socialist Britain, necessitating planning agreements, the central allocation of resources and a sort of Stakhanovite determination to increase investment at the expense of personal spending.

rose—

My rather rude gesture to my hon. Friend was made only because he leapt to his feet at a slightly embarrassing half-way point in my sentence.

As a matter of historical accuracy, perhaps I may say that this country has been protected in the past, and very successfully protected, in terms of Conservative Governments. I do not remember any Socialist Government doing it.

In the content of my speech, I shall be comparing the hon. Member for Tottenham, in his likeness, with Joseph Chamberlain. I shall be referring to the right hon. Member for Down, South (Mr. Powell) as being the modern reincarnation of Herbert Asquith. Certainly the arguments for and against free trade have not varied much. It is just the people who have changed. If my hon. Friend the Member for Plymouth, Sutton (Mr. Clark) wishes to align himself with the hon. Member for Tottenham and Joe Chamberlain and other famous characters in British Tory Party history, that is fine by me. I shall be coming on to the arguments for and against free trade in a moment. Perhaps I may continue with the political arguments before I get on to the party and economic arguments involved.

I think that controls upon our imports of the kind suggested by the Cambridge school—I shall go into some of its arguments shortly—would not only provide a growth in monopolies on both sides of industry but would be an invitation to endless lobbying, the peddling of contracts and the corruption of bureaucracy which has been evident in virtually every country that has pursued the course of import controls of the kind advocated by Labour Members.

I say to my hon. Friend the Member for Sutton that in the process the British housewife would pay much higher prices for her goods and would have much less choice from which to choose when she went to her supermarket. Her husband, if he had a job at all, would still be working in an ill-equipped large factory in heavy industry. In this perhaps one can say that she and her husband would come to share some of the pleasures of living and working in the Soviet Union, but it is not precisely what the British people want.

The tendencies to which I have referred in our country under Socialism today are there already; I say no more than that. They can be seen even without a wall of controls around our foreign trade. To justify those controls on political grounds, as I have been saying, I can understand. They would help to bring about a truly Socialist society. But to justify them on economic grounds seems to be a grave mistake, because the political arguments are not really arguable. I do not understand how an Englishman such as the hon. Member for Tottenham could really want the kind of political society which he is seeking for the British people, but it is an unarguable fact that he does, and it is so astonishing to me that there is nothing much that I can say in answer to it. However, when the hon. Member seeks to argue the case on economic grounds the point is arguable. That is what I shall attempt to do, briefly, in my speech.

Up at Cambridge there is some disagreement about whether we should describe the economic process, which according to Cambridge calls for import controls, as the de-industrialisation of Britain, or as what Lord Kaldor calls the pastoralisation of the British economy. I suppose that Lord Kaldor's description is a rather more romantic Hungarian one than that of Wynne Godley. But both of them, if they were to succeed in achieving their objectives—I say this without any demur—would reduce Britain to a Socialist slag-heap and would create just the type of political society that Labour Members below the Gangway want.

I see the Secretary of State essentially as a single blade of grass, rooted rather insecurely in the industrial slag-heap of Socialism. I admire his pertinacity. I admire him very much. Far be it from any of us to reduce his salary. He has been extremely effective, and of all among his colleagues I think that he is grossly underpaid.

I wish that I could say that of the right hon. Gentleman the Chancellor of the Duchy of Lancaster. He does not take any salary at all. Yet, in my view, he costs too much. He is an expensive hobby. Despite his personal charm—which I acknowledge, and which all of us in the House admire—in public life the Chancellor of the Duchy of Lancaster—I am glad to say that he will be winding up the debate—is an inflator, a compulsive debtor, and he is as capable of speaking for free trade, free enterprise and a free society today as he is of voting against all of them tomorrow. In that, I think that he is a true social democrat.

I come back to my hon. Friend the Member for Sutton. I come to the question of the arguments for and against free trade. As I have said, I do not think that they have much changed since 1900. I think that that was more or less the period to which my hon. Friend was referring. The only difference is that both sides now have computers—the Cambridge model on the one hand and the Oxford model on the other hand—and into these computers are programmed whatever assumptions are necessary in order to bring about the desired result. That is virtually the only change that has come into all the arguments.

I think, however, that the vocabulary and the jargon have changed and, most of all, there is now no attempt whatsoever at intellectual consistency. One might expect that the Tribune Group would be the leading castigators of the Multi-Fibre Arrangement. One might expect it to castigate the MFA as a trade conspiracy against the poor. If one looks at it in terms of the workers in Bangladesh, one realises that that is precisely what it is.

Many Labour Members, perhaps rightly, spend much of their time shouting about the poor conditions in which Tamils work in the tea estates in Sri Lanka. They spend much of their time, I think rightly, castigating, let us say, Consolidated Goldfields for exploiting black miners in Southern Africa and in Cornwall—which it is good at; I say that with the help of parliamentary privilege, which I should not do. Yet those same hon. Members find it possible for their hearts to bleed for the workers in Bradford and those in Bangladesh at precisely the same time.

Similarly, their hearts bleed for a newborn lamb produced by a New Zealand farmer on 10,000 acres at the same time as they bleed for the agricultural worker in Wales earning £43 a week and for the Welsh hill farmer. There is a grave inconsistency there.

It is not obvious to me why it should be sensible for the United Kingdom to become dependent on world gluts of food but not on world gluts of steel, shoes, ships and textiles. I do not believe in this country becoming dependent on surpluses of either, but it is inconsistent that the Labour Party wants us to be dependent on world surpluses of food but puts up its hands in absolute horror at the thought that we should erect barriers against world surpluses of shoes, ships, steel and textiles.

Some controls are advocated purely to isolate specific industries from foreign competition. In a way, the arguments here for the Multi-Fibre Arrangement are an extension of the traditional argument for protecting infant industries. In some cases the wish is to protect senile industries, but the economic arguments are fundamentally the same. The attempt in a way is to construct an argument for protecting the senile industries with precisely the same economic arguments as traditionally were used for protecting infant industries. The most prominent advocate of that view is Commissioner Davignon in Brussels.

On the other side—this is a more interesting argument to discuss—it is proposed, as part of a coherent strategy to increase output and employment in this country, that we should have general import controls. The argument for it is that by that method one could set up a system which would bring about adjustments in the balance of payments without creating the inflationary pressures which are caused by changes in the exchange rate.

But, whether one brings about a correction of the balance of payments by a depreciation of the currency or by import controls, a curb to domestic spending by lowering real wages is essential. It would have to happen in both cases. Any gain from a marginal change in the terms of trade would be lost by even the most modest retaliation or any lowered efficiency.

At least, if one is seeking this adjustment—that is what the Cambridge school is seeking—surely it is better to operate on the currency, because that not only benefits the import side of the equation but also makes exports more profitable. It is wrong economically to look at only one side of the equation—imports—and ignore currency adjustments, which help exports and bring the economy back into balance.

If we sought controls, where would they come? Presumably the controls—I am now talking of the Cambridge school's proposals, which have great support in the Parliamentary Labour Party—would not be put on imports of machinery. There has been a faster increase in imports of machinery in the last 10 years than of anything else. Machinery is what industry needs to compete with foreign goods. That is at the heart of the cry for greater productivity and more investment.

Presumably the controls would not apply to food, drink or tobacco, because, in spite of the common agricultural policy, imports of those goods have fallen sharply in the past 10 years as a proportion of total imports. Therefore, the only area available, as I understand it, is light finished goods and consumer goods.

On the figures, an improvement of about 5 per cent. of our gross domestic product—roughly what the Cambridge school is seeking—would require a tariff of about 250 per cent. on a wide range of light manufactured and consumer goods. The figures of the Cambridge school, as I believe other economists have conclusively shown, are completely unacceptable.

If one rejects the concept of import controls, which we do, in favour of an open trading system, where can we look for our markets? The options are narrowing day by day, and, unless the summit can reverse that downward slide to protectionism, where shall we find our markets? Now, 27 per cent. of our gross national product, of all we produce, is exported. The figure for Japan is 8 per cent. and for America 12 per cent. Where shall we find the markets for those goods in a world of increasing protectionism?

I am sure that the foundation of our trade policy must lie within the EEC. In 1978 it provides us with an almost unique area—namely, a reliable free trade area in an increasingly protectionist world. We are dealing here with a large trading bloc, representing one-fifth of world trade. It is large enough for us to develop our technology, it is rich enough for us to sell our goods up-market and it is large enough again for us to test our competitiveness within it and develop the industrial and commercial specialisation without which we could never compete in the wider world.

So, whether hon. Members are for or against the Common Market for political reasons—I understand the arguments both ways—nevertheless, for the benefit of the nation's prosperity, whatever one's view of the political aspects, I cannot understand how anyone can wish to see trade barriers between Great Britain and the EEC. That is one sure open market for our goods in the world today.

We are in deficit with the EEC.

Of course we are. We have been in deficit with virtually every country. As our general trading deficit reduces, so our trading deficit with the EEC reduces. The critics of our trade performance with the EEC should ask themselves where they think we shall sell those goods—27 per cent. of our GNP—if trade barriers are erected in the Community. I hope that hon. Members will answer that question.

Within the Community, our policy towards the United States and Japan should be based on reciprocity—on the mutual and balanced elimination of tariffs and non-tariff barriers. Here the outcome of the Tokyo Round is vital, and in this respect our Government have a major sacrifice to make by abandoning their commitment to the array of subsidies which they have erected. The Tokyo Round will not succeed and the summit will come out with another vacuous statement unless the British Government are able to show that they, too, are prepared to make their sacrifices.

I believe that our voice within the EEC must support, of course, the strongest negotiating stance towards the United States and Japan, but it should also be a voice for liberalisation, particularly in agricultural products, in State monopoly and in industrial subsidy. It is in these latter areas that the British have under the Labour Government been world leaders.

The hon. Gentleman said that we should show courage and abandon subsidies. Will he be precise and say which subsidies a Conservative Government would abandon?

I am happy to be precise, but all I have time to do is to give one example. Less than six months ago the Government provided 110 per cent. credit and massive subsidies for the export of ships to Poland. I give just that one example. That is an industrial subsidy that the Conservative Government would never have given.

I come now to the LDCs.