asked the Secretary of State for Trade and Industry what assessment he has made of the implications for the possibility of securing the early privatisation of Land Rover of its recent achievement of a £50 million contract to supply the Australian Army with military vehicles.

We are delighted that Land Rover has won this contract. Plans for the company's future remain as outlined in my right hon. Friend's statement of 24 April.

I thank my hon. Friend for that reply. Will he be so kind as to take this opportunity to congratulate Land Rover on the excellent order that it has secured? Does my hon. Friend agree that, under the excellent chairmanship of Mr. Graham Day, and after a period of consolidation—which might take a little time—there are prospects for privatisation by offer to British shareholders?

I shall certainly pass on my hon. Friend's message of congratulation to Land Rover and also convey to Mr. Graham Day my hon. Friend's feelings about the future of the Rover group under his leadership. I listened carefully to what my hon. Friend said about future prospects. The present position remains as stated by my right hon. Friend earlier this year.

Will the Minister tell us the present position on Leyland Bus?

The straight answer to that is no, I cannot. The matter is being considered by the Rover group and we have yet to receive a recommendation.

If my hon. Friend wishes to look for success in private industry and the value that that could have for BL, he has only to look at the rowing boats on the Thames taking part in the parliamentary regatta today. Is he aware that although the ITN boat crashed hard into a bridge, it did not split and there was no damage to boat or occupants? The Knights of the Shires boat almost—

Order. That is very ingenious, but the question relates to British Leyland.

On the principle of privatization—

No. I think that the hon. Gentleman has had a good try.

Would it not be more intelligent to allow BL to get on with its work, to stop all this talk about privatisation and to allow the company to concentrate on being a very good British company doing wonders for the British work force and for British industry?

Of course, the hon. Gentleman would take that point of view. He is aware that since Jaguar returned to the private sector it has done outstandingly well.

While considering how best to secure investment in the British motor car industry, will my hon. Friend tell the House how convinced he is that General Motors will seek to invest money in the United Kingdom rather than in the rest of Europe?

As my hon. Friend will appreciate, General Motors has a long history, going back 50 years, of significant investment in this country, and we are very grateful for that. I hope that it will continue to make its European investment based in the United Kingdom.

Following the Minister's response to my hon. Friend the Member for Preston (Mr. Thorne), will he say when a decision will be made about the future of Leyland Bus? If on an evaluation of the bids it is clear that it is in the public interest that Leyland Bus stays in the public sector, will the Minister confirm that the Government will keep that option open as they did in the case of Land Rover?

I regret that I am unable to say precisely when the decisions will be taken. The right hon. and learned Gentleman will understand that there are complicated matters to be considered, and they should be considered properly. The form is that the board of the Rover group makes a recommendation to the Department and the Department considers the recommendation. I hope that the delay will he put to an end as soon as possible. I appreciate that that delay has had a debilitating effect on all those involved. The straightforward answer to the second point is yes. We shall look at the question in the context in which the right hon. and learned Gentleman put it.

asked the Secretary of State for Trade and Industry if he is satisfied with the operation of the voluntary code of practice of the retail furniture industry.

The furniture industry code is one of some 20 codes of practice in various sectors which are endorsed by the Director General of Fair Trading for the benefit of consumers. The Office of Fair Trading is discussing with the National Association of Retail Furnishers, the trade association principally concerned, certain aspects of the code with a view to making it more effective.

Is my hon. and learned Friend aware that the scheme, which has been of so much benefit to consumers, is in danger of having to be wound up because the cost has had to be borne entirely by the National Association of Retail Furnishers? Will my hon. and learned Friend use his charm and powers of persuasion to encourage the furniture and bedding manufacturers to honour their financial obligations to support the scheme, as was envisaged when it was originally set up?

The consumer also contributes to the cost of the scheme. I understand the concern that gives rise to my hon. Friend's question. I shall invite the Director General to consult the trade associations concerned to see whether an acceptable solution can be achieved.

Linked with the code of practice, is the hon. and learned Gentleman satisfied with the flammability test on materials used in the retail trade?

The hon. Gentleman will be aware that recently I made an announcement about the flammability test, which I am satisfied will lead to substantially enhanced standards regarding the flammability of furniture.

Bearing in mind that the greatest public concern is the safety issue and the risk of fire, and since that is essentially an element within the control of the manufacturers, will the hon. and learned Gentleman make it clear to the manufacturers, when he meets the trade associations, that all hon. Members expect them to make a proper contribution to the costs of the scheme?

As I said earlier, that is a matter for the Director General. I shall draw the attention of the Director General to the remarks that have been made.

asked the Secretary of State for Trade and Industry how many, and at what total value, grants have been made to existing and new businesses in Cleveland in each of the past 12 years.

Over £470 million in regional assistance grants has been paid by this Department to businesses in Cleveland in the past 12 years. I have arranged for the figures for each scheme of assistance for each year to be published in the Official Report.

I am grateful to my hon. Friend. It seems to show that all Governments have put money into Cleveland, but Cleveland continues to have the highest unemployment. Does that not reflect on the Socialist subculture in that region, which denies so much to the entrepreneur who would go there and set up businesses?

I congratulate my hon. Friend on his vigorous defence of the interests of Langbaurgh and the residents of Cleveland. That may have something to do with the fact that six Ministers, including two Secretaries of State, will have visited the region between 14 July and 5 August. Having made 15 visits myself over the past 48 hours to different organisations in the region, I can say that there is a clearer appreciation among all parties there that the enterprise spirit will be the basis for future jobs and that, in conjuction with the public sector, private enterprise can flourish.

I congratulate the hon. Gentleman on visiting Cleveland at long last this week, despite the fact that it has taken since before Christmas for him to do so. What were his impressions on industrial development there as a result of the knowledge he gained from his visit to the polytechnic's design department?

As the hon. Gentleman knows, some controversy surrounds that department. Having visited it yesterday, I must say that I was impressed by the capability of the staff and students and by the determination of that department, in conjunction with the business studies section, to mount an exercise on behalf of local companies to ascertain whether they can source new products into the region. That seems to be at the heart of what we are all trying to achieve for Middlesbrough and for the Cleveland area generally. I am aware of the hon. Gentleman's representations on another matter. 1 have been in contact with my hon. Friend the Under-Secretary of State for Education and Science—the hon. Member for Buckingham (Mr. Walden)—about it.

Is my hon. Friend aware of the call by a former Member for Cleveland—my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan)— for a regional development agency to be set up in the north of England? Is he aware of the response to early-day motion 1030 in my name calling for such a regional development agency for the north-west?

As my hon. Friend will know, whether we are talking of the north-west or of the north-east, that is a matter for my right hon. Friend the Secretary of State for the Environment to consider in terms of lead policy decisions at the Department of the Environment. We shall have to await the outcome of his considerations. For the time being, I hope that my hon. Friend will agree that it would not be wise to comment on a number of conjectural points made in recent days.

Have any jobs or job opportunities arisen from this belated spate of visits by Ministers? Did any of those Ministers during their visits to the north reveal that the Government are relenting and are willing to return to the north the £180 million that they will steal from its regional funding over the next five-year period?

That was a travesty of the true position. I repeat: to put £470 million into one economic sub-region the size of Cleveland is a very dramatic spend. I hope that the right hon. Gentleman will be a little more responsible in supporting the efforts of any party in any sector of the economy to ascertain how to achieve a better job creation rate for the money spent and to ascertain how that links with what the private sector would wish to do in partnership with public sector expenditure, for example on the rehabilitation of land. A number of the issues which we discussed, not just as part of an alleged "recent" attention to this area, were specifically targeted on the creation of jobs from three sources—inward investment, the birth of new businesses and the expansion of jobs among existing employers.

asked the Secretary of State for Trade and Industry if, pursuant to the answer of 18 June, Official Report, column 1020, he will make a statement on the seminar chaired by the Minister for Information Technology on the morning of 24 January.

The seminar to which my hon. Friend referred was one Iola series involving the research and development directors of technology-based companies. It was attended also by my hon. Friend the Parliamentary Under-Secretary of State for Education and Science and by representatives of financial institutions and of the Government.

Does the right hon. Gentleman recollect that 24 January was the morning when his predecessor consulted Sir Brian Hayes and other distinguished civil servants about Westland? What has happened to the doctrine of ministerial responsibility? What would Rab Butler, whose parliamentary private secretary the right hon. Gentleman was, have said about politicians who, when they get into a jam, start blaming civil servants for what they themselves have set in motion, authorising inquiries into so-called leaks knowing full well where the responsibility and initiative for the problem rested in the first place?

I do not think that the hon. Gentleman will expect me to comment on what he alleges in his question, which relates to a seminar chaired by my hon. Friend the Minister for Information Technology. It has nothing to do with the points that the hon. Gentleman has in mind. As the hon. Gentleman was kind enough to refer to Rab Butler, I assure him that Rab Butler always told me to answer the question on the Order Paper and not some fictitious one that came up later.

That is a good answer.

asked the Secretary of State for Trade and Industry if he will make a statement on the current state of negotiations on the multi-fibre arrangement.

asked the Secretary of State for Trade and Industry if he will make a statement on the current state of negotiations on the multi-fibre arrangement.

The European Commission is conducting the negotiations on renewal of the MFA on behalf of the Community in accordance with the mandate approved by the Council of Ministers on 11 March. I am confident that a protocol of extension of the MFA will be negotiated by the end of July, when the present arrangement expires. In parallel, the Community has reached provisional agreement with a number of supplier countries on the renewal of bilateral agreements. My hon. Friend the Minister for Trade is keeping in close touch with the industry and other interested parties as the negotiations progress.

Has the Minister been receiving the same sorts of letters as I have from concerned employers, who point out that the end of July is fast approaching, that there are well substantiated rumours that Britain continues to weaken our position with regard to the MFA, and that there is a threat to the fragile recovery of the textile industry and to the investment that has been going on and, as a consequence, to many hundreds, if not thousands, of jobs in the industry? If there is no truth in those rumours, will the Minister make that plain, and, if there is, will he do something about it before the end of July?

I am pleased to have the opportunity to make it very plain to the hon. Gentleman that there is no weakening of our position. The current position on the mandate is the position that we wish to see delivered as being in the best interests of the United Kingdom industry. My hon. Friend the Minister for Trade and his officials, particularly the officials where daily contact is concerned, keep in constant touch with the position in the industry, particularly when we are monitoring things such as the sensitive products, where there is the greatest or changing threat. Therefore, I think that I can reassure the hon. Gentleman that, on almost a day-to-day basis, we are alive to the interests of our employers. Even allowing for the fact that, there is some limited further liberalisation of trading generally in those products, we feel that we have managed to produce a situation that recognises all the various interests.

Despite the fawning subservience of the Prime Minister to President Reagan and all things American—perhaps, indeed, because of it—is not the prospect that as America will have a much tougher regime against textile imports, British textile firms will face increased competition from imports diverted from America? What contingency plans do the Government have to deal with that challenge, or will the Government sit back as they have done over the past six years and see 500 textile workers' jobs a week disappear? What will the Government do really to help an industry that has done a great deal to help this country's economy?

I hope that the hon. Gentleman will agree that it would not serve British interests to air publicly our evaluation of the efficacy or otherwise, or the strengths and weaknesses, of the Americans' recently negotiated position in bilaterals. With regard to the Americn situation, if changing circumstances permit a reappraisal of the way in which we pursue our bilaterals under the general protocol, that is something that we shall have to bear in mind. My understanding is that recent American bilateral agreements have been complex. It has been difficult to generalise about their effects, but, taken overall, they should not, in our view, cause us to reconsider our position at this stage.

During the renegotiation of this seriously protectionist measure, which is against Government policy as I understand it, has my hon. Friend been able to make any progress in phasing out the MFA over the next three years, so that our industry may know that it is coming to an end and be able to make itself more efficient, in order to compete and expand in the real world rather than the protectionist world?

There is no doubt that three or four years ago the British textile industry had a very hard pounding, but there is equally no doubt that it has decided to come out fighting. The situation is not as gloomy as some Opposition Members would have us believe. With regard to the overall question of protection, we have said that there must be a continuation of the MFA, but under new terms. We have particularly said that, in the case of countries that indulge in one-way trading practices, for example, it would not be wise for us unilaterally to disarm. I cannot go along completely with my hon. Friend in the purist approach. I understand the philosophical basis of his argument, and I take his point.

Is my hon. Friend aware that in my constituency the trade was horrified to learn that the alliance wished to dismantle the MFA altogether? Is he aware that any such action would cost thousands of jobs in Leicester?

I believe that you, Mr. Deputy Speaker, curtailed the use of a waterborne metaphor by an hon. Member earlier, but I can only say that in my view the alliance is well and truly in the drink on this. No doubt in the north-west in particular a number of local and general election campaigns will be dominated by the thoughts of some alliance spokesmen in the House.

Despite the talk of protectionism, is the Minister aware that the MFA has been virtually the only protection for our textile industry in recent years and that the entire industry throughout the United Kingdom looks to the Government for ultimate support in preserving the arrangement so that the industry can fulfil its potential in terms of export orders.

I believe that the textile industry is now a highly professional, well-managed industry and that the skills of the work force are being properly used. If current attitudes continue, I see no reason why those companies that have not done so should not begin to increase their market share. The MFA is not a crude form of protectionism. It must also recognise the interests of consumers who, it could be argued, in some sectors have been paying higher prices than necessary for certain textile goods. That is why, as I have said, MFA policy is a matter of balancing interests. We believe that we have got the balance about right.

The Minister will no doubt have received many representations and requests from the clothing industry for a strong multi-fibre arrangement. Will he ignore the Liberal call for a weak or non-existent MFA? Will he also tell the Liberals how many jobs would be lost in the clothing industry if the arrangement were abandoned? In the negotiations, will he take account of the recent increase in clothing imports?

I take the hon. Gentleman's latter point on board. He is correct to point out that the industry is still a huge employer, with hundreds of thousands of employees. In my view, it is extremely dangerous to tinker with the future of those people, but it is for the alliance to decide whether it wishes to withdraw the policy that it has proposed.

Is the Minister aware of the report by City Analysts de Zoete and Bevan? It states:

"There seems to be no evidence therefore that MFA distorts, helps or hinders the progress of UK clothing imports … If the reason for MFA is protection it seems to us to be doing a pretty poor job and is probably irrelevant".

Does the Minister not agree with that analysis?

This is clearly a serious development and the public have a right to know what the sinister de Zoete and Bevan faction is doing within the Liberal party.

Does my hon. Friend agree that the MFA is a considerable European success as a defensive mechanism against unfair competition and that there could be more avenues for co-operation to defend the European market against unfair competition, including Japanese motor cars?

One of the themes of the MFA and the Community stance to it is that we should be more helpful to countries which are free and fair traders and less helpful to one-way traders. Similarly, we should try to skew whatever room to manoeuvre he have in liberalisation towards the poorer countries. I believe that that is a correctly balanced approach.

As these crucial negotiations from our point of view are entirely in EEC hands, what assurances can the Government give the House and the industry that there will be no further weakening in the EEC negotiating mandate, which already falls far short of what is required to protect jobs in this vita] British industry? Will the hon. Gentleman repudiate clearly and directly not only the siren voices of the Liberals but those of Conservative Back Benchers, and make it clear that he is ready to take further steps to ensure that the negotiating mandate is not further weakened?

I said earlier that the British position is four square behind the current structure of the mandate, and we see no reason to amend that from now on. That is the best signal that the House can send to the Commission and the Council of Ministers.

asked the Secretary of State for Trade and Industry what representations he has received on the subject of discriminatory discounts.

Since I January 1986 my right hon. Friend has received four representations on the subject of discriminatory discounts.

Will the Minister accept that small businesses are not impressed by the lack of Government action or by the Binder Hamlyn report? If the Minister is not prepared to take legislative action to try to protect small businesses against discriminatory discounts, will he at least consider introducing a code of practice by which large businesses should operate when dealing with small businesses in this sector?

Both the Monopolies and Mergers Commission report in 1981 and the Office of Fair Trading report in 1985 came to the conclusion that the benefit of these discounts was passed on to the consumer. Both the House and the housewives of Newcastle-under-Lyme will note that the contribution of the Liberal party on this issue is to press for measures that will lead to higher prices of goods in the shops.

Does my hon. and learned Friend agree that one aspect of discriminatory discounts is the tax structure operated by the Japanese, which gives preference to American whisky over the superior Scottish product? Will he do all that he can to convey to his Japanese counterparts the real and increasing concern in the House about that blatant discrimination, and not shrink from taking any further robust steps that may be necessary in response?

I raised this matter when I was in Japan a few months ago, and my hon. Friend the Minister for Trade has raised it strongly with the Japanese.

Are not the Minister, his colleagues, his Department and the Office of Fair Trading well aware both of the substantial scale and the inherently unfair nature of the discounts that apply in the retail trade? Has this not been the principal reason for the rapid change in that trade, and is it not the case that, although a substantial number of jobs may appear to be created when a supermarket is established, there are no net gains, as many small businesses go out of business or dramatically contract?

No, this is by no means the only factor responsible for these changes. A number of other factors are at work. The Government must have regard to the interests of the consumer, and as long as the consumer benefits, as these reports have found, from lower prices as a result of the discounts being passed on, any Government would have to pause and think long and hard before taking any measure that would work to the detriment of the consumer.

Is not the question from the hon. Member for Gordon (Mr. Bruce) yet another example of the Liberals trying to have it both ways? Does he not spend his time telling the House that Aberdeen is the most expensive city in Scotland and that prices there arc intolerable, while at the same time asking the Government to take measures that will result in higher prices for housewives in Aberdeen?

I agree with every word that my hon. Friend has said. Every hon. Member is aware of the extent to which the Liberal party tries to face both ways on every conceivable issue in every constituency.

asked the Secretary of State for Trade and Industry what current talks are being held regarding the future of BL.

The chairman of the Rover group has stated publicly that he is exploring the possibilities for collaborative and other arrangements with other manufacturers.

Are the Government involved in these talks, or likely to be so? If they are involved, what is the likely agenda?

In general terms, the answer is that the Government are not involved in the talks except. as I indicated in reply to an earlier question, in relation to the sale of Leyland Bus, which will be coming up shortly, when obviously the Government will be involved with the Rover group and its recommendations.

Is it not a fact that we now have in the Rover range a super car of world class and that all hon. Members on both sides of the House should back it, as I am sure we will do? Will my hon. Friend take into account the fact that the Select Committee on Trade and Industry has recommended many times that BL, or Rover, or whatever its name is, is an entity of British enterprise that we must all support?

I agree entirely with what my hon. Friend has said about the new Rover 800. It is a maginificent car and certainly a very nice car to travel in as a passenger. As to his remarks on the Select Committee's recommendation about the Rover group, the members of the Select Committee and I discussed the matter at length three weeks ago when I appeared before the Committee. We have varying points of view but I thought that it was an interesting and important discussion.

Does the Minister reject the proposition that Department of Trade and Industry officials are manoeuvring the bids for Leyland Bus in favour of Lairds? May I have an assurance that Department officials are not being pressed unduly by the chief executive of the Laird group?

In answer to the second question, the hon. Gentleman can have that assurance. As to his first question, I hope that he has sufficient respect for my right hon. Friend and me to know that we make up our own minds.

With regard to talks with the motor industry, can my hon. Friend say when he or a member of his Department last had talks with General Motors, and what those talks were about?

As I have stated to the House, I met Mr. Stempel of General Motors some months ago. Since then, neither my right hon. Friend nor I have met General Motors.

In regard to Leyland Bus, can the Minister tell us whether the Leyland board has reached a decision and whether he or the Secretary of State will make a statement to the House before the recess?

I do not know whether the hon. Gentleman was in the House earlier when I was responding to similar questions. It may be helpful to the hon. Gentleman to tell him that I said that we had received no recommendation from the Rover group about the sale of Leyland Bus. I and my right hon. Friend have always said that we will keep the House informed about relevant developments.

As the Government often allege that they believe in trade union rights and workers being able to make an input into their industry, and as there was a meeting recently of the work force at which it was overwhelmingly against any idea of privatisation and in particular the sale of Leyland Bus, what credence can be given to the Government's oft-spoken words in favour of allowing workers to have their rights? What rights are the workers in British Leyland to have?

The hon. Gentleman may or may not be aware that I have met delegations from Leyland Bus and that I have visited factories in Lancashire and in Cumbria. The very points that the hon. Gentleman made have been put to me fairly and distinctly. Of course we listened to those points but we are in the business of selling the company if the right bid at the right price arises.

May I remind the Minister yet again of the wise words of Lord Stockton about selling off the family silver? Has the Minister made any assessment of the financial implications for the whole of the BL organisation because of the uncertainty about its future? Would it not be wise for the Government at this stage to decide to fight the next general election on their own record rather than attempting to buy the result by the sale of public assets and massive tax cuts stemming from those sales?

I have no doubt at all that the next general election, so far as the Government are concerned, will be fought and won on the Government's record, part of which is a very successful privatisation policy.

In the course of such talks as there may be, will my hon. Friend bear in mind that the best interests and the best future for the individual subsidiaries of the Rover group may be very different and may also lie over distinct time scales?

Yes, of course I shall bear that in mind, and it is something that we shall always have at the front as opposed to at the back of our mind when we come to take the relevant decisions after recommendations have been received from the board.

Does the Minister appreciate the deep worry and concern of the workers in Leyland Bus who have seen the orders decimated by the Government's transport policy and who now face the prospect, if the Laird group takes over, of a very small bus producer taking over Britain's largest bus producer? Does it make any sense to encourage the Laird group simply to acquire a market share? Is not the sensible thing to do to keep Leyland bus in the public sector and support it strongly, in readiness for the upturn in bus sales that will come in Britain and throughout the world?

The right hon. and learned Gentleman is making, very forcefully, the very points that the shop stewards made to me when I visited Leyland. I am aware, as the right hon. and learned Gentleman is aware, that there is over-capacity in the bus market. I am also aware—and I think that the shop stewards agreed with me when we discussed it—that the potential in two, three or four years' time is there, because of the changing nature of the bus fleets.

asked the Secretary of State for Trade and Industry how many projects involving United Kingdom companies have now been approved under the EUREKA initiative.

A total of 33 projects involving British firms have now been approved under the EUREKA initiative. Twenty-eight of these were among the 62 announced at the third EUREKA ministerial conference held in London on 30 June. The remaining five are projects announced at the second ministerial conference in Hanover on 6 November 1985.

I thank my hon. Friend for his reply. It appears that the initiative to put a commercial face on research is working. First, what is the value of these projects to British companies? Secondly, what steps are being taken by my hon. Friend or by his Department to make sure that projects which would have gone ahead anyway are not being funded through the EUREKA scheme?

The total value of the projects that were announced on 30 June was £1,400 million. The value of those projects which involve the United Kingdom is over £730 million. Many of the projects are in the definition phase. The exact British share is difficult to assess at present, but an average of 25 per cent. is likely. As for my hon. Friend's question about whether these projects would have been supported anyway, he will be aware that a significant number of them require no public sector funding. They are levered forward because the companies are attracted by the market-opening opportunities, or the collaborative venture opportunities, or the exchange of information opportunities, but, where companies approach the Government for support, the additionality criteria will, of course, meet my hon. Friend's question.

Will the Minister please explain that the Department is now committed to meeting the required levels of Government support for industry under ESPRIT and EUREKA, and that he is committed to maintaining national programmes at a very full level to enable us to participate in those programmes? At the same time, the support for innovation budget had been reduced. Flow much money is foreseen as being available for Government support for EUREKA, and where will it come from?

The prime objective of EUREKA is not to lever forward public sector-funded initiatives. They are market-driven initiatives. The hon. Gentleman asks how much money will be made available. It is precisely because our support for innovation programme is demand-led on a case-by-case basis against viable projects that I cannot give him an answer to his question.

asked the Secretary of State for Trade and Industry what recent representations he has received on the effectiveness of the consumer protection provisions in the Estate Agents Act 1979; and if he will make a statement.

I have received no such representations. The Act provides important safeguards for the consumer, but I shall continue to keep a close watch on the effectiveness of the Act and the Director General of Fair Trading will continue to exercise his powers to ban or warn estate agents where he considers this appropriate.

Is my hon. and learned Friend aware that there are some estage agents who are still practising after they have been convicted of offences of dishonesty and are subject to a suspended sentence of imprisonment? Will he consider introducing legislation to place a duty on a court to report any such conviction to the Director General of Fair Trading, in order to give greater protection to the public against these tricksters?

Yes, Mr. Speaker. I am very grateful to my hon. and learned Friend for drawing this matter to my attention. The Act provides for a court to bring relevant convictions to the attention of the Director General at its discretion, but I shall certainly want to consider whether there is a case for amending the Act so as to place the courts under a statutory duty to inform the Director General of these matters.

asked the Secretary of State for Trade and Industry if he will make a statement on the current state of the steel industry.

I welcome the profits recently announced by the British Steel Corporation, together with signs of growing profitability in the private sector. The industry still faces major challenges, but the progress made in recent years is most encouraging.

Can we assume that no closures are likely in the steel industry in the near future and that any major closures are simply not on the stocks at all?

I am surprised that the hon. Gentleman did not congratulate the British Steel Corporation on its outstanding success. The corporation will have to continue to run a competitive industry. How that arises will be a matter for the corporation, but its success to date has been outstanding. Jobs within the British Steel Corporation today are far more secure than they were six years ago.

Does my hon. Friend agree that the performance of the British Steel Corporation has been remarkable? The £76 million profit which has just been announced is the first bottom line profit since 1974–75. Output is now at 14 million tonnes, which is a significant increase. That is the first increase in output for four years. United Kingdom steel consumption has risen by 2 per cent., British Steel Corporation's exports have risen by 4 per cent. and the overall productivity of the corporation is now such that 1 tonne of liquid steel is produced with 6·3 man-hours as opposed to seven man-hours last year. When the Labour party was in office, the figure was 14 man hours. With the ending of state steel aids, is not the position of the British Steel Corporation the strongest that it has ever been in the lifetime of the Government?

I agree with everything that my hon. Friend has said. I only wish that the Opposition could bring themselves to congratulate the management and unions in the British Steel Corporation.

The Minister will no doubt be aware that no later than yesterday 310 men were made redundant at the Clydesdale Tubeworks in my constituency, and there could be further redundancies in those works. There is 22 per cent. unemployment in that area. Does the Minister agree that if the Government had used their muscle with the British Steel Corporation in relation to the extraction of gas these jobs could have been saved, as could many other jobs that have been lost? Will the Minister do something about this before there is a catastrophe?

I assure the hon. Gentleman that the corporation took what was an unpleasant decision only after the most careful consideration. I also assure him, in relation to job security in the corporation and n the industry as a whole, that the industry and the corporation must be run on the most competitive basis, or orders, and more jobs, will be lost.

Does my hon. Friend agree that the excellent results that have just been announced are, we hope, the product of the difficult process of renationalisation following the overmanning and overproduction in the industry? Will he tell us what he thinks is happening in the Community, where it is fair to say that our European partners have been somewhat laggardly in following our example?

I do not think that my hon. Friend is being entirely fair, as much rationalisation has been carried out throughout the European steel industry. As he is aware, further negotiation and discussion will take place in the autumn about aids and quotas. I assure my hon. Friend that I shall keep a close eye on that ball.

Following the ending of state aids to steel throughout the European Community, what steps will the Minister take to ensure that the British steel industry, in the public and private sectors, does not continue in its present disadvantageous position, because of the indirect subsidies to steel in other European countries?

As I said a moment ago, I agree entirely with what the hon. Gentleman is saying. All aid should be transparent and all steel-making capacity should be on an equal footing. I shall be doing everything that I can within the Council of Ministers to ensure that that is the case.

Does the Minister understand that his talk about security of employment in the steel industry will have a hollow ring for the 310 workers to whom my hon. Friend the Member for Motherwell, North (Mr. Hamilton) referred, a substantial number of whom live in my constituency? The hon. Gentleman will recollect that it is only a matter of months since an even larger number of redundancies were announced in the context of a survival plan for Scottish Steel and Tubes division. Is it not now painfully clear that the failure to acquire orders in the North sea oil and gas fields arises to a large extent from the Government's decision not to proceed with the gas gathering pipeline system several years ago? If that were in place there would now he orders for our steel industry.

I appreciate what the right hon. and learned Gentleman says about his constituents and those of the hon. Member for Motherwell, North (Mr. Hamilton). The decision was not pleasant to make, but, as I have said, it was made after the most careful consideration. It is important to realise, as I am sure the right hon. and learned Gentleman appreciates, that unless the corporation is run efficiently it will lose more orders and, therefore, more jobs.

Will the Minister acknowledge that if an oil price of under $9 a barrel is sustained that will have serious implications for further development of the North sea and for steel orders, and that the threatened loss of jobs will be about 10,000 in Scotland, roughly equivalent to what a gas gathering system might have provided? If the Minister is not prepared to come forward with an initiative in that area—we have already lost the Sleipner contract — will he recognise that his Department and the Department of Energy must, as a matter of urgency, find some way of sustaining development projects in the North sea?

The hon. Gentleman is apparently arguing for a cartel of oil prices, which may be rather more difficult to achieve than he thinks. The most important thing for steel is that we should have the most efficient company in the shape of BSC, which we have, and that will enable us to get markets, which will ensure jobs.

asked the Secretary of State for Trade and Industry when he next intends to meet the National Economic Development Council to discuss levels of investment in manufacturing industry; and if he will make a statement.

I propose to attend the next meeting of the National Economic Development Council on 23 September. At this and subsequent meetings I expect matters relevant to improving the United Kingdom's industrial performance to he discussed.

Is the Minister aware that job prospects in mining communities such as my own, which have been devastated by the savage pit closure programme, are now reaching crisis point? Is he further aware that there is an urgent need for further investment to supplement the investment of British Coal (Enterprise) Ltd. in those areas? What will he do about that, or is it simply the case that where there are few Conservative votes there will be no investment?

No, I do not accept that. I shall certainly draw the attention of my right hon. Friend the Secretary of State for Energy to his point about British Coal (Enterprise) Ltd., which has done a good job. However, the hon. Gentleman asked me about the levels of investment in manufacturing industry, I am sure he will be pleased to know that manufacturing investment is up 6 per cent. and that non-oil industrial investment has risen to a record level.

Does the Minister agree that the policies being pursued by the Government have been nothing short of a disaster for industry and jobs? Is he aware that the planning officer of Liverpool has recently reported that by the end of the century, at the present rate of deindustrialisation and loss of jobs, not one person will be employed in that city? How will that fit on his agenda, and what remedies will he support at the NEDC meeting?

I do not accept what the hon. Gentleman says about the prospects for the future, nor do I accept what he says about the past few years. Britain now has stable growth, low inflation, high manufacturing output, high productivity, high manufacturing investment and high manufacturing exports. [HON. MEMBERS: "High employment."]

Does my right hon. Friend agree that numerous countries have sent advisers to the United Kingdom to seek advice about how we have harnessed private investment through the privatisation programme? Will he remind the NEDC that the policy of renationalisation, threatened by the Labour party if it should get into power, whether it is called social ownership or not, will reduce the amount of private investment in industry, particularly in those industries that have been privatised?

I entirely agree with my hon. Friend. The Labour party's policy of state theft, which it calls by some other name, will indeed have that effect. I shall take what opportunities I can in the NEDC, and possibly elsewhere, to make that point.

When the Secretary of State boasts about his minute 6 per cent. increase in manufacturing investment, will he confirm that, even with that 6 per cent. increase, manufacturing investment is still virtually 20 per cent. below what it was when he came to office, still lower than at the time of the three-day week and only at the level of 1960? Is he aware that, as a result of the collapse of manufacturing investment under the Government and their failure to sustain the level of investment at the level that they inherited in 1979, we have lost £10·6 billion in manufacturing investment?

The right hon. Gentleman persistently refuses to recognise that, since the worst trough of the slump in 1981, output has risen by 11 per cent., investment has risen by 19 per cent. and productivity has increased 23 per cent. As my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) said, the economic policies that are.being followed are being watched all round the world and many people are trying to emulate them.

asked the Secretary of State for Trade and Industry what representations he has received about the current state of the shipbuilding industry; and if he will make a statement.

My right hon. Friend and I have received a number of delegations and much correspondence about the shipbuilding industry in recent months.

The Minister will be well aware of anxiety about naval shipbuilding capacity in Britain, but is he aware that there are no major projects for merchant shipbuilding ahead for next year? What will the Government do about that lack of work? Are they content to see this once great maritime nation become bereft of any merchant shipbuilding capacity and dependent for its supplies of such vessels on countries overseas?

The hon. Gentleman will know that my right hon Friend accepted the proposals that British Shipbuilders put to us for a reduction in capacity. My right hon. Friend said at the time that there will be sufficient capacity for the orders that we hope to get. I assure the hon. Gentleman that every effort is being made to secure such orders.

Does my hon. Friend agree that, although he has had representations from a wide range of people in the Cleveland area, especially about the closure of Smith's dock, it is a little difficult to explain to them how a shipbuilding yard in Tasmania is successfully tendering for the Isle of Wight ferry?

I am well aware of the delegations that I have received, and my hon. Friend has been in touch ceaselessly about the future of Smith's dock. I appreciate the difficulties in which he and those who work there find themselves. Difficult decisions have to be made when one has over-capacity.

Is the Minister aware that, in May this year, Japanese shipyards received orders for 40 cargo ships foreign to Japan, representing 295,000 gross registered tonnes, which is 50,000 tonnes more than British Shipbuilders says will be required in a whole year for it to stop all the proposed closures and redundancies? If Japan can get that many overseas orders in one month, which was a bad month for them, how on earth is it that the Government cannot enable British Shipbuilders to get the same amount in one year?

I can neither confirm nor deny the hon. Gentleman's figures about Japanese shipyards. He will appreciate — he has been to see me as part of a delegation —that every effort is being made. Every effort will continue to be made.

Will my hon. Friend tell the true story about the evolution of shipbuilding throughout the world? We have been outclassed, outworked, underpriced, unprepared to deliver ships on time, we have had deplorable labour relations and the trade union movement has been out of control. Will my hon. Friend make it clear once and for all that these chickens are now coming home to roost?

As I have persistently said, British Shipbuilders will get orders only if, as my hon. Friend the Member for Southampton, Test (Mr. Hill) forcefully points out, it is competitive. That is very necessary. It is fair to add that whether one is talking about the Japanese or European shipyards or anywhere else, there is surplus capacity of ships and shipbuilding.

I am astonished that a local Member would sell out his own shipyard and workers in the way in which the hon. Member for Southampton, Test (Mr. Hill) just did. May I ask the Minister whether he realises that there is now deep gloom in the Swan Hunter yard and Vosper Thornycroft as a result of the placing of a recent frigate order? Does he realise that that means that one of those yards is likely to close? As for the level of protection that one of the yards is receiving, we can guess which one it might be. Can the Minister tell us what plans he has to help those yards, since clearly one local Member has no intention of doing so?

If the right hon. Gentleman were to inquire at Swan Hunter, he would quickly discover that it has a close relationship with my Department and myself. That relationship inevitably means that the sort of communication that it wants with the Government is properly put.

Later—

On a point of order, Mr. Speaker. You will remember that only a few minutes ago the right hon. Member for Swansea, West (Mr. Williams), speaking on behalf of the Opposition, made a slanderous attack on me by suggesting that I was speaking against the shipbuilding industry of Southampton. I want to put the record straight. There is no shipbuilding industry in my constituency, although the industry is ably supported by my hon. Friend the Member for Eastleigh (Sir D. Price) —

Order. We frequently hear things in this House that we do not like and with which we disagree. I cannot allow the hon. Gentleman to have a second opportunity to answer the point.

rose—

Order. I cannot allow the hon. Gentleman to continue. He will have to find other ways to put his case.

asked the Secretary of State for Trade and Industry if he plans any further design education initiatives in the higher education sector and in the schools.

In collaboration with the Department of Education and Science and other interested bodies, the Department continues to support a wide range of design initiatives at all levels of education. In particular, I am examining proposals for the development of business training for designers, extension of the young designers into industry scheme and support for design and primary education, implementing the recent consultative report.

I thank my hon. Friend for that reply. Is he satisfied that schools and other educational institutions are paying enough attention to the needs of industry? Is he equally satisfied that industry is taking enough interest in what is going on in schools and educational institutions?

My hon. Friend is absolutely right in his analysis. There has been criticism in the past that design departments should introduce more business discipline into the design curriculum and that business men, especially on business management courses, should understand more about why design has not been used as an effective force in reconquering markets that have been lost to British companies. My hon. Friend has it right, and we reflect those views in our education policy.

The Minister referred to the initiatives being taken to make up for some of the deficiencies. Is it not a fact that industry already recognises many shortages of skills for various parts of industry? Does that not clearly fall at the feet of the Government, who, only three or four year ago, decided to do away with the industrial training boards, thereby creating many deficiencies? Is it not time that there was a rethink with a view to reintroducing proper industrial training?

It is precisely because the Department of Trade and Industry recognises the representations from the engineering industry and the information technology industry in particular, that our skill shortage committee produced a whole raft of policies for reducing the skill shortage, especially in engineering and technology. Some of the other matters raised by the hon. Gentleman are for my right hon. and noble Friend the Secretary of State for Employment. No doubt those views will be communicated to him.

I have selected the amendment in the name of the Prime Minister. So far, no fewer than 16 right hon. and hon. Members have expressed their interest in this important debate. No fewer than five of them are Privy Councillors. I appeal for brief contributions.

I beg to move,

That this House, recognising the danger to the Commonwealth if Her Majesty's Government continues its policy of trying to prevent the imposition of strict sanctions against apartheid, calls on Her Majesty's Government to support the adoption of effective economic measures against the South African Government, as recommended by the Eminent Persons Group, in order to exert strong pressure and thereby promote the ending of apartheid, which is essential to preventing a bloodbath in South Africa with all the misery and political, social and economic chaos which would accompany it.

We are now in the final stages of a drama, the implications of which for Britain, South Africa and indeed the Commonwealth seem to be spreading almost every day. It is the last act of that drama, an act that began less than three years ago in New Delhi when the Prime Minister joined the other Commonwealth Heads of Government in setting the objective of what she apparently then hoped would be a common policy for the whole of the Commonwealth. The objective was defined as the

"eradication of apartheid and the establishment of majority rule on the basis of free and fair exercise of universal adult suffrage by all the people in a united and non-fragmented South Africa."

I fear that the Prime Minister has sometimes forgotten those words in some of her recent statements about the objectives of negotiations.

All the members of the last Commonwealth summit in the autumn agreed that sanctions should be adopted to help to achieve that objective, but the Prime Minister's veto led to the setting up of the Eminent Persons Group to report within six months and, failing a satisfactory report, sanctions would be considered at the next summit, which is now under two weeks away.

It is just over a month since the House agreed unanimously a Government amendment to an Opposition motion, calling on Her Majesty's Government

"to work actively … for effective measures which will help achieve a peaceful solution in South Africa".

In winding up the debate, the Minister of State said that

"the measures taken must be effective. They may not be limited to economic measures … There is no point in introducing measures unless they have a significant effect on the South African Government."—[Official Report, 17 June 1986; Vol. 99, c. 980–90.]

It was that statement by the Minister of State that led the Opposition not to oppose the Government amendment.

Since then the European Community has held a summit conference at The Hague at which the Prime Minister herself endorsed a statement that a national dialogue with authentic leaders of the black population was essential to halt a further escalation of violence, and that such a dialogue required the unconditional release of Nelson Mandela and other political prisoners and the lifting of the ban on the African National Congress and other political parties. The same summit meeting asked the Foreign Secretary as the Presidency Foreign Minister to visit South Africa to establish those conditions.

Meanwhile, the Community would consult on further measures that might be needed, covering, in particular, a ban on new investments, the import of coal, iron, steel and gold coins from South Africa. However, the moment that that conference was over, the Prime Minister followed the precedent that she set at the Nassau meeting by rubbishing its conclusions. The chairman of the summit, the Dutch Prime Minister, Mr. Lubbers, told the press immediately after it closed that all the members of the summit had agreed to impose that list of sanctions as a minimum if the Foreign Secretary's mission failed. But the Prime Minister immediately said that that was not true; there was no commitment whatever by any of the Ministers to impose that list of sanctions. She stuck to her story, although Mr. Lubbers, as chairman, was confirmed in his account by the Danish Prime Minister and, indeed, by President Mitterrand. Moreover, it was confirmed in the House a little over a week ago by the Prime Minister's own Secretary of State for Energy, who told us in an answer to a question asked by my hon. Friend the Member for Wentworth (Mr. Hardy):

"The action on South African coal has been agreed by the European Community".

The right hon. Gentleman also told my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse):

"the European leaders have agreed upon an approach to South Africa which after three months would include action on a number of materials, including coal. That is the right approach"—

an echo, I suppose, of some propaganda by his party in the past—

"and I hope that it will have some influence on negotiations in the coming months."—[Official Report, 7 July 1986; Vol. 101, c. 3–7.]

Some hope. The Prime Minister sent the Foreign Secretary on his mission, to quote the hon. Member for Christchurch (Mr. Adley),

"up the creek without a paddle and then brought home without a canoe."

Many of us on both sides of the House will think that, though colourful, that was an accurate description of the fate to which the right hon. Lady condemned her Foreign Secretary.

We all know that the Foreign Secretary never wanted to go at all. He had an altercation with the Prime Minister on the matter as he was entering the aircraft on the way to The Hague. According to one of the newspapers that overheard, she told him, "If that's the way you feel, perhaps you had better not come at all." But he went.

Will the right hon. Gentleman give way?

The Foreign Secretary finally agreed to be the fall guy for the Prime Minister's policies.

Will the right hon. Gentleman give way?

No, I shall not give way.

What all of us in the Opposition want to know is that if the Prime Minister was really determined on that mission of appeasement, why did she not follow the precedent set by her predecessor, Neville Chamberlain, and go herself? The South Africans themselves have said that if anyone was likely to influence their position, it would be the Prime Minister, whose common sense and sterling qualities they have recently praised in lavish terms.

As it was, the right hon. Lady sent the Foreign Secretary. Almost from the moment when his aircraft left the tarmac at Heathrow, she drove nail after nail into the coffin of his mission with an astonishing series of interviews, which, I heard this morning on the "Today" programme, were described yesterday by the leading Singapore newspaper as a series of provocative statements that seemed designed to destroy the Commonwealth games. If that were their purpose, they certainly seem to have had some success.

I doubt whether any Foreign Secretary in British history has been deliberately exposed by his own Prime Minister to such a series of humiliating snubs from so many Governments. First, we had the casual refusal of President Botha to see the Foreign Secretary at the beginning of his mission. Then we had the refusal of all the leading blacks in South Africa, from Bishop Tutu to Nelson Mandela, to see him when he went there. We had the refusal of the African National Congress to meet him in Lusaka and then a series of humiliating rebuffs from Commonwealth Prime Ministers in Zambia and Zimbabwe. Indeed, I think that he will agree that the only comfort that he had on that ill-starred mission was the offer of prawns by the Marxist leader of Mozambique.

Since then the Conservative Prime Minister of Canada, Mr. Mulroney, has given the Prime Minister herself a piece of his mind and told her that if she will not join the rest of the Commonwealth in sanctions Canada will act unilaterally. The Prime Minister of Australia has given her the same message. The fact is that she has not now one single friend left in the Commonwealth and scarcely one left in the European Community, either. The only friend that she has made by her astonishing behaviour in the past few weeks is the President of the apartheid regime in South Africa. No doubt the praise that she received from him was responsible for her nostalgic regret that South Africa was not still in the Commonwealth.

All that, however, was water off a duck's back to the Prime Minister, who told the world, "If I am right and everyone else is wrong, what does it matter?" It matters a great deal to all of us. She has already wrecked the Commonwealth games and we regret that as much as anyone. Far more serious, however, she now risks wrecking the Commonwealth itself and creating a constitutional crisis of major dimensions involving the Palace itself. Events have reached such a stage that newspapers reported today that several of her senior Cabinet colleagues had been warning the press in the past 24 hours about such a constitutional crisis.

Meanwhile, the Prime Minister's arguments have become wilder and wilder. At first, she stuck to the Foreign Office line, arguing against comprehensive sanctions. More recently, however, she has been arguing against any kind of action which might have any effect on the South African Government. She has proved an assiduous acolyte of the Botha charm school in recent weeks. She has accused Bishop Tutu, Archbishop Hurley and the Synod of the Church of England of immorality. She has wept crocodile tears at the potential suffering of blacks in South Africa, but there has not been a murmur of complaint from her about their actual suffering in the past 30 years. Having met some of the church people in South Africa who have made great sacrifices in the fight against apartheid, including a young Catholic priest who has been tear-gassed eight times in the past few months conducting black funerals, I believe that the Prime Minister should apologise in the House for her disgraceful and totally unmerited accusation of immorality.

We have seen the Prime Minister's eyes brim with compassion at the prospect of unemployment in the United Kingdom arising out of sanctions against South Africa, but we now hear that at most 20,000 jobs might be lost if mandatory comprehensive sanctions were introduced immediately. Yet through her own policies the Prime Minister has created 2 million unemployed in this country in the past few years without batting an eyelid. Her display of compassion has deceived no one. As Foreign Minister Botha has said, her policy is determined not by political or moral considerations but by commercial consideration—no doubt a reference to the fact that nearly half the Conservative party's funds, or more than £1 billion, is contributed by firms with operations or estate in South Africa. [Interruption.] I am sorry—£1 million.

The Prime Minister's worry about the impact of sanctions on the British economy is misplaced. It has been argued with unassailable logic by the Eminent Persons Group—a group which included Lord Barber, who has a major financial stake in South Africa and great knowledge of South Africa through his position as chairman of the Standard Chartered Bank—that unless the outside world imposes sanctions there is no chance of the dialogue without which apartheid cannot be brought to an end and without which there will be an inexorable slide into a bloodbath worse than anything since the second world war, to quote Lord Barber himself, in which all Britain's commercial interests as well as all her political influence would be lost. No one has argued that point more strongly than the Conservative ex-Prime Minister of Australia, Mr. Malcolm Fraser, whom no one could accuse of not being a hard-headed Conservative.

The point made by the Eminent Persons Group, which has also been made time and again within and outside the House, is that sanctions are not an alternative to negotiation but the only means of promoting the conditions in which a meaningful dialogue can take place. Nothing, however, can dent the Prime Minister's unassailable complacency and the inspissated ignorance from which it springs. The other day she told the House that the United Kingdom was doing more than any other country in sanctions against South Africa, but my right hon. Friend the Member for Islwyn (Mr. Kinnock) listed in a letter to her 16 countries which were doing more. Yesterday, the Prime Minister told my hon. Friend the Member for Barking (Ms. Richardson) that many Commonwealth leaders opposed sanctions as she did, but she could not name even one. She is even rewriting history, quoting Wilberforce of all people in her support the other day for his success in stopping the slave trade. Wilberforce's opponents in the Chamber — the West Indians in Westminster, as they called themselves—used exactly the arguments that the Prime Minister is now using, claiming that the ending of slavery would damage Britain's commercial interests and would be bad for the slaves themselves. In fact, slavery was finally stopped by a naval blockade. The Prime Minister may care to reflect on that precedent.

In her recent series of interviews, the Prime Minister referred time and again to the Rhodesian settlement as a settlement by negotiation which she would wish to follow in relation to South Africa.

rose—

I will give way in a moment.

The Rhodesian settlement took place only because the Prime Minister reversed the policy on which she was elected, and she did so under pressure from the Commonwealth at a conference attended by the Queen against the Prime Minister's firm advice. The Prime Minister may care to reflect on that analogy. She advised Her Majesty not to attend the Lusaka conference on Rhodesia, but the Queen subsequently issued a statement saying that she had noted the advice but regarded her duty to the Commonwealth as taking precedence over accepting the advice of the Prime Minister.

rose—

On that occasion, the Prime Minister continued to apply sanctions as a basis for a settlement. The other factor in producing a settlement was a large scale guerrilla war in which at least 12,000 people lost their lives in the preceding 12 months. As we know—those who do not may care to read an interesting book by Mr. Miles Hudson, then adviser to the Conservative Government—the major influence in getting the Prime Minister to reverse her position was Lord Carrington. Let us hope that his successor will follow his example and have equal success in getting the Prime Minister to reverse her position.

There are some signs of movement. Contrary to what the Prime Minister told the House only last week, the right hon. Member for Old Bexley and Sidcup (Mr. Heath) has made a speech saying that the Government should take active measures to restrain South African trade which could culminate, if necessary, in a trade blockade. If he catches your eye, Mr. Speaker, he may make further remarks along these lines this afternoon.

The right hon. and learned Member for Richmond, Yorks (Mr, Brittan), who, until the Foreign Secretary, was the Prime Minister's most eminent fall guy, made an interesting speech last week. He said—and I hope that his colleagues on the Conservative Benches will ponder his words—that if the Foreign Secretary

"is to stand the remotest chance of success he must go armed with the necessary authority. Whatever their disadvantages, international coercive measures, whether formally labelled as sanctions or not, are one of the few weapons in our arsenal against the citadel of apartheid beyond mere persuasion … The world must know of our readiness to have recourse to stronger measures against the Pretoria regime in the event of the failure of Sir Geoffrey's mission. Without that knowledge, the mission will not be just, as is inevitable, formidably difficult, but utterly hopeless."

This is a growing feeling among all in this country and outside who watch the Foreign Secretary's lamentable journey.

What does the right hon. Gentleman think should take place? Does he want to impose a blockade o r South Africa, and, if so—

That is the point to which I am coming.

If he is coming to it, will the right hon. Gentleman spell out what repercussions that would have on the economy, and particularly on the black people of South Africa?

I was unwise to give way, because this is precisely the series of points to which I am coming.

The question left is what sort of sanctions are most likely to be, to use the Prime Minister's word, effective — not signs and gestures, the latest phrase that the Prime Minister has produced as a surrogate for sanctions. When she discussed in an interview with Mr. Hugo Young the possibility of signs or signals and gestures, she made it clear that they are not effective, and she is right. I believed before my visit to South Africa—and I said this in the House a month ago—that a gradual escalation of sanctions by stages is the best way to approach the problem. However, since my visit I have changed my mind. I found that every person to whom I spoke in the black community, both inside and outside South Africa, and those business men in the white community — a small minority, some of whom I met in Lusaka and Johannesburg—believe that sanctions are necessary, and that by far the best would be comprehensive mandatory sanctions because they would bring the matter to a head faster. It is no good the hon. Member for Luton, North (Mr. Carlisle), the West Indian on the Government Back Benches, wagging his head—

West Indian?

I am talking about the West Indians who supported slavery and used the same argument as the hon. Member for Luton, North, which is that to abolish slavery would damage British commercial interests and the interests of the black slaves.

The people with whom I talked, the black leaders, the church people, the members of the United Democratic Front, trade unions, members of the ANC, members of the Zambian Government, all thought that comprehensive mandatory sanctions would be best because they are quickest and sharpest.

The Commonwealth Secretary made a speech yesterday that I hope that all hon. Members will take the opportunity to read, because sneering at the Commonwealth will not save us from a constitutional crisis if the Prime Minister destroys the Commonwealth. The Commonwealth Secretary argued—and there is a good deal in this—that there is a case for something less than comprehensive sanctions. They can be kept as a deterrent against South Africa retaliating on the front-line states againt something less than comprehensive sanctions. I see that the hon. Member for Hertford and Stortford (Mr. Wells) sees merit in that. I am glad that this measure commends itself to at least some Conservative Members.

If we do not go all out for comprehensive mandatory sanctions, which would require the acquiescence of the United States Administration and the Security Council as well of the British Govenment, Mr. Malcolm Fraser is 1,000 times right when he argues, as he did in yesterday's international Herald Tribune, that

"The purpose of sanctions would not be to destroy the South African economy. They would need to be constructed in such a way as to give the economy and the white population in particular a real body blow. It is not a question of turning the screw gently and steadily, it is a question of a hard blow".

He is right and all those who have come to accept the case for sanctions, with whom I have discussed the matter inside South and southern Africa, take the same view. It would be better to concentrate on banning key South African exports because that is a very much more simple problem than restraining all South African imports. Without the currency earned by exports, the South African Government's capacity to import is severely constrained. That would include measures on gold, diamonds and minerals.

The Prime Minister has argued that to do anything on gold would help the Soviet Union. That would be true of a ban on gold exports from South Africa, although such a ban might be evaded to some extent by smuggling, not least from the middle east. If the Governments of the Western world took seriously their often stated desire to de-monetarise gold, the easiest way to achieve this objective would be for the countries with large gold stocks to start selling them off so as to depress the price of gold. This would be beneficial to the monetary system in the Western world, and would hurt South Africa and, incidentally, the Soviet Union.

A ban on all investment is desirable, but it would have little effect beyond what will happen anyway. I have not met anyone recently who is prepared to put a penny of new money into South Africa if he can help it. Most of the big multinationals in South Africa have already begun withdrawing or have withdrawn. For example, some are selling off their machinery abroad. That has happened in several cases. There is a steady drain of trained professional people with marketing skills. I am sure that the Chancellor will be unhappy to hear that, of 160 auditors in South Africa a year ago, 60 will have left by the end of the year. The trickle of whites who left Zimbabwe after independence are returning, because they see the prospects as being far more hopeful than staying in South Africa.

I agree that whatever package of measures is finally adopted must be the subject of collective action of a large number of states, one hopes through the United Nations. I hope that the Prime Minister was being serious when she told Mr. Malcolm Rutherford of the Financial Times in an interesting interview published about a week ago that she would some day go to the United Nations for mandatory collective sanctions, although not comprehensive sanctions.

Whatever package is chosen must be strict and swift. It is no good the Prime Minister thinking that she can put off decisions now beyond the Commonwealth conference, as she told one interviewer during the bizarre burst of reflection to which she treated us 10 days ago. To seek delay now would mean that decisions would come too late and at stake now is not just the fate of the suffering millions in South Africa but the fate of those in the frontline states who are under constant attack and threat from the apartheid regime. At stake is the Commonwealth and the British constitution. I appeal to hon. Members on both sides of the House who value those things to apply all possible pressure to the Prime Minister before it is too late. I ask the House to approve the motion.

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

`reasserts its commitment to the Commonwealth and the goal of peaceful change in South Africa through negotiation; does not believe that general economic sanctions would help to secure that objective; notes that the Government is committed by the Nassau Accord and the Declaration by the European Council at The Hague on 27th June 1986 to consultations with the Commonwealth, the Community and other allies on further measures which might be needed; and welcomes the efforts of the Secretary of State for Foreign and Commonwealth Affairs in his capacity as President of the Twelve to establish conditions in which negotiations can take place.'.

As so often on these occasions, it would not be fruitful for me to try to follow the hyperbolic and fanciful course charted by the right hon. Member for Leeds, East (Mr. Healey). He has roamed far and wide in his reminiscences about my right hon. Friend the Prime Minister, with whom he seems to be continually and astonishingly fascinated to the point of hyperbole. He found himself drawn into anecdotage of every kind, finally embarking upon the proposition that we were committed to £1 billion from South African funds. [Interruption.] We recollect his days of mathematical accuracy.

I am concerned to discuss what contribution Britain, as a member of the Commonwealth, of the summit Seven and of the European Community, can make to the prospects of peace, prosperity and freedom for the 32 million people of South Africa. We in Europe should approach the subject carefully because European history is not free of racial conflict. We have no right to strike a self-righteous pose on the subject. European history has taught the world tragic lessons about the evil of discrimination against human beings on grounds of creed or race. So it would be a step forward in our discussion of South Africa if we were to approach that desperately difficult problem with a little less emphasis on our own self-righteousness and a great deal more emphasis on the practical objectives that we should pursue.

If Europe understands this, as it does, and if it understands, as it does, the full strength of the case against apartheid, so too does the Commonwealth. I quote:

"United in our desire to rid the world of the evils of racism and racial prejudice, we proclaim our faith in the inherent dignity and worth of the human person … We reject as inhuman and intolerable all policies designed to perpetuate apartheid, racial segregation, or other policies based on theories that racial groups are or may be inherently superior of inferior."

Those words come from the Lusaka Commonwealth declaration which, far beyond the myths peddled by the right hon. Gentleman, my right hon. Friend helped to frame in 1979 as the foundation for the success of the Government that she leads in securing the independent freedom of Zimbabwe. That is the reality of the position of the Government of my right hon. Friend. Those words are the very foundation of this Government's policy towards South Africa.

It is unacceptable to us that the rights of minorities should be suppressed by majorities, whatever their colour. That is why Britain has so often, and even today, provided a refuge for men and women who face oppression at home —from Africa as well as from other continents. By the same token, we cannot accept that the rights of the black and coloured majority in South Africa should be subordinated to those of the white minority in the name of Christianity, civilisation and Western values. It must be said that it is not Christian, not civilised and certainly not in the interests of the West that such a system should survive.

So, too, it must be said that explicit recognition by the South African Government leaders that apartheid must end is an important step in the right direction. We have had just such explicit recognition from the President of the South African Government himself.

What the world now wishes to see—and there should be no difference between both sides of the House on this — is a decisive movement towards a system that will command the approval and consent of all the people of South Africa. [Interruption.] Some hon. Members may be dismayed to hear me asserting these truths, but we hold these views to be most important. We understand something else as well. We understand, and it is right that we should, the fears of some South Africans which act as a constraint on change. We say that those fears are more likely to be fulfilled if grave decisions are not taken to bring about change rapidly enough.

It must be recognised that the decisions that have to be taken will require great bravery. For that reason, we approach the matter with sympathy and understanding. That is why the European Council meeting at The Hague last month underlined the urgent need, not for violence, but to promote dialogue in South Africa and to achieve peaceful change. The European Council fully recognised the importance of the work done by the Commonwealth Eminent Persons Group to promote the same objective. That group came into existence not because of the obduracy or intransigence of my hon. Friend but because my right hon. Friend, with other Commonwealth leaders, was able to reach a common position upon the desirability of such a group. It should be acknowledged that that group has been a unique creation which only the Commonwealth could have created. Its work was of enormous importance.

It was because the European leaders had the desire to renew the momentum of the work of that group that they asked me, as President of the Council of Ministers, to undertake a fresh mission on behalf of the 12 European nations. The European Council set precise objectives for that mission. Its objectives were the unconditional release of Nelson Mandela and other political prisoners and the unbanning of the ANC, the PAC and other political parties. I do not underestimate the difficulty of that task but I have no doubt that it is right that this further effort should be made.

That is why last week, as the first part of my mission, I was glad to consult President Kaunda, President Machel and Prime Minister Mugabe. I had full, effective consideration of all the issues with those Heads of Government. This morning, I also consulted President Masire of Botswana. It ill becomes the right hon. Gentleman to talk about rebuffs and exchanges of that kind. I have undertaken the mission with the authority of the European Community. Those missions have been of great value and I am most grateful to the Heads of Government whom I have met.

I am not arguing against the Foreign Secretary's mission although I do not think it will meet with success. Suppose that he does everything humanly possible to argue the case with the full backing of the Twelve, but at the end South Africa says that it is not prepared to do anything about getting rid of apartheid, what do he and his Government intend to do?

If the hon. Gentleman can contain himself in patience, he will hear the answer in due course.

Let me tell the House the first of the five important propositions that I put to each of the leaders that 1 met. First, apartheid must give way to a non-racial, fully representative society. Secondly, it would be wrong not to acknowledge that change in South Africa has taken place, but there must be more change and it must take place more quickly. Thirdly, negotiation still remains the best and quickest means of bringing apartheid to an end. Violence will prolong the process of change and prolong misery. The right setting for dialogue and change should be the suspension of violence on all sides.

Fourthly, I made the point that comprehensive mandatory sanctions would not, as some people like to believe, bring down the South African Government. It is not on the verge of collapse. Finally, for all those reasons, we must continue to identify and exploit every chance and opportunity for dialogue.

Three things emerged from those discussions. First, there was complete— I repeat the word "complete"—agreement about objectives. Secondly, there were significant but understandable differences about the means, including differences between the four leaders whom I met. Thirdly—and this is important—there was a greater readiness to accept the sincerity of the mission that I am undertaking.

I was also able to remind the three leaders of some of the practical and positive actions that we are taking to help to surmount specific difficulties in southern Africa. For the front-line states, these include measures to improve rail and road transport to the outside world and to enhance protection of those links by training for their armed forces, and for the black people of South Africa, the European code of conduct for employers, recently revised, and educational programmes for black South Africans and black trade unions. At The Hague we announced our intention to enhance this programme by £15 million over the next five years.

In the context of The Hague agreement to consult other industrialised countries, a point to which I have already referred, I shall be going to Washington tomorrow for talks with Secretary Shultz and Vice-President Bush. I shall be consulting, as seems to me to be entirely sensible. to see how wide is the common view about the future cooperation. A senior official from my office has already visited Canberra and Tokyo on my behalf, and, as the House knows, my right hon. Friend the Prime Minister has consulted the Prime Minister of Canada.

Next week I shall go again to southern Africa. I expect to see President Botha at the beginning and at the end of this visit and Mr. Pik Botha, the Foreign Affairs Minister, soon after my arrival. The key to progress in South Africa is self-evidently the position of the South African Government.

I shall use those meetings to explore the intentions of the South African Government to take measures to further the dismantling of of apartheid, to urge on them the need to act rapidly and decisively in this direction, if further tragedy is to be averted, and in particular, and most urgently of all, to press on them the need to release Mandela and other political detainees and to unban the African National Congress and other political parties as an essential prerequisite for any dialogue at all.

When my right hon. and learned Friend sees President Botha, will he be careful not to impose on the President and the Government of South Africa an absolute timetable of measures that my right hon. and learned Friend expects to be taken? Particularly in relation to the National Party Congress which is to be held in South Africa in early August, will he ensure that he does not ask the South African Government to impose conditions that they will be unable to deliver until they have consulted their own party and their own people?

I shall be presenting the points that I have just described to the South African Government in the context of the definition of my mission arising from The Hague European Council. These discussions will take place against the background of important international meetings that are to be held following my visit. While I am in South Africa I shall seek to meet a wide range of people of all colours, representing all opinions throughout South Africa.

I recognise, of course, that so far there has been reluctance on the part of some South African leaders to meet me in the context of my mission, but, whether or not they agree with our approach, I cannot believe that it is wise for them to withhold their advice at this stage from the mission that I am undertaking. I hope that, on reflection, they will be able to accept the sincerity of the mission that I am undertaking on behalf of the European Community.

The House should recall that this Government, more than any previous British Government, have implemented fully and conscientiously, together with our Commonwealth and European partners, a whole series of measures that are designed to make clear our view of the imperative need to bring apartheid to an end. These measures affect the economic, sporting and cultural relations between this country and South Africa. They have been listed to the House by my right hon. Friend the Prime Minister and they have this common feature: they have been calculated not to threaten, not to destroy, but to encourage and promote the change, about the need for which we are all agreed.

I wish to leave the House in no doubt about where we stand on the question of possible further measures to achieve that objective. Commonwealth Heads of Government at Nassau agreed that in the absence of adequate progress they would consider the adoption of further measures. At The Hague last month, the European Council committed the Community to enter into consultations with the other industrialised countries in the succeeding three months on further measures which might be needed. As my right hon. Friend said at the subsequent press conference:

"All agree that further measures are not excluded."

As my right hon. Friend the Prime Minister also told the House on 1 July, certain contingency plans that were outlined in The Hague communique are being made. She went on:

"We are not negotiating from weakness. We are negotiating in a way which we believe will have the best chance of success." — [Official Report, 1 July 1986; Vol. 100, c. 822.]

It is precisely in the same fashion that I am conducting the mission that has been entrusted to me.

Will the right hon. and learned Gentleman clear up a point which I know created consternation when news of the European Community decision reached Africa, because I happened to be in Lusaka? The Prime Minister suggested that it would be a good thing if the Commonwealth summit took no decisions whatsoever on sanctions. Is the right hon. and learned Gentleman now suggesting that this matter should be left over for a further few months until there can be a meeting of the European Community, or is he prepared to fulfil the obligation which the Prime Minister accepted at the Nassau meeting to consider and take decisions on possible further measures at the Commonwealth summit in a fortnight's time? If not, I warn him that he is in for very, very serious trouble indeed.

I have no doubt that at the Commonwealth meeting at the beginning of August and at subsequent Community meetings the commitments we made in each of those respective places to consider further measures will be undertaken. Consideration will be given to them.

However, it is important to understand each of the points that the right hon. Gentleman challenged. There was, and there is, no concept of automaticity about any further measures. There was no misunderstanding about this at The Hague meeting.

At The Hague there was misunderstanding.

No. Let me tell the House what the Dutch Foreign Minister told the Dutch Parliament on 2 July. There is no doubt about it. He said that not all countries had committed themselves to the package of measures set out in the declaration of 27 June and that there was therefore no automatic obligation on the Community to take further European Community measures in three months' time. That is the position. It was agreed that each of us would consider measures when the time came for consideration, after the three-month process. It was also agreed that no country would rule out any of those measures and that consideration would take place. That is the position.

The right hon. and learned Gentleman will be aware that the Dutch chairman of the summit conference, Prime Minister Lubbers, met the press immediately after the conference was over. I have the video tape of his interview. He said that it was agreed by the Heads of Government that measures would be taken if the Foreign Secretary's mission failed. That was endorsed by the Danish Prime Minister, although President Mitterrand said that it was a gentlemen's agreement. Whether that was intended to exclude the right hon. Lady I am not sure. But there is no question that the impression of at least the chairman and other members at that meeting was that a commitment was made, whether formal or informal. Is that the case?

I am trying to set the right hon. Gentleman's mind at rest, and I shall try to do so again. Let me return to the words of the communiquée. It was agreed that in the next three months

"the Community will enter into consultations with the other industrialised countries on further measures which might be needed."

They were identified. It was agreed that in that consideration no country would rule out any of those measures but that the consideration would be honourably and fairly undertaken. It is true that different comments were made about that at subsequent press conferences on that day. It was as a result of that that the Dutch Foreign Minister was asked to clarify the position as his Government saw it, and it was in those circumstances that he said what I have just read out: that not all countries had committed themselves to the package of measures set out in the declaration.

He was talking about your Government.

If the hon. Gentleman wants to have the position clarified, he must listen to the clarification given by the Dutch Foreign Minister, as Chairman of the European Council. The Dutch Foreign Minister went on to say:

"There was, therefore, no automatic obligation on the Community to take further European Community measures in three months' time."