To ask the Secretary of State for Defence if he has made an assessment of how many jobs are dependent upon the nuclear defence industry.

Our very broad estimate is about 40,000.

What proportion of those 40,000 jobs does my hon. Friend expect would be placed in jeopardy if the Green party's defence policies were ever implemented?

In that very unlikely event, all those jobs would be lost as well as a great number of others in the defence industry throughout the country.

Does my hon. Friend agree that much more important than the number of jobs involved is the fact that the peace of the world and the future of our country are dependent on the nuclear defence industry?

I very much agree with my hon. Friend. The nuclear deterrent has proved its worth in the years of peace that we have enjoyed in Europe. I hope that we will continue to enjoy those years of peace because of our continued possession of an effective deterrent.

To ask the Secretary of State for Defence when he next intends to discuss the modernisation of short-range nuclear weapons with members of the Nuclear Planning Group.

My right hon. Friend will next meet his colleagues in the Nuclear Planning Group in the autumn, when they will discuss a range of matters concerning nuclear issues.

Does my hon. Friend agree that the Soviet Union modernised its tactical nuclear weapons in the 1980s—this decade—and that NATO, by trying to redress that imbalance, is not turning its back on peace but simply ensuring peace by having parity in such weapons in Europe?

That is correct. There is enormous numerical superiority in the Soviet systems, and they have been modernised all the way along. If we are to maintain the flexible response of the mix of nuclear and conventional weapons for our deterrence, it is important that these weapons are kept up to date.

The justification for short-range nuclear weapons has been the gross imbalance in conventional forces in favour of the Warsaw pact. If President Bush's initiative is sucessful, to the extent that conventional arms reductions have been achieved or are substantially under way by 1992, is not the reality that there will be no willingness in the United States to develop a follow-on to Lance and even less willingness in the Federal Republic of Germany to have it deployed there?

The reality is that flexible response is an essential part of Alliance policy. Even with reductions in conventional weapons, I think that we will keep to that policy. That was confirmed at the recent summit.

Does my hon. Friend agree that the reasons for modernisation are precisely the same as those that actuated the Labour party to modernise our nuclear deterrent by the introduction of Chevaline? The only difference is that the Labour party did it without telling anybody and we do it openly.

That is absolutely right. That was a period when the Labour party took a more responsible attitude towards defence. It is a great pity that the Labour party's new review has not taken us forward one jot.

Does the Minister of State agree that one reason advanced—usually the main one—for the existence of short-range nuclear forces is the disparity between the conventional forces of the Warsaw pact and NATO? If the CFE—conventional forces in Europe—talks reduce those forces to parity and then below, what justification will there be to retain short-range nuclear forces?

As the hon. Gentleman well knows, the justification for flexible response is that the enemy should not at any time contemplate attack because of the series of responses that might result. That is the whole basis of NATO policy. It was confirmed recently at the summit, and Labour Members are the only people who are out of step on this matter.

To ask the Secretary of State for Defence if he will make a statement on the latest stage reached in the contracts appraisal for the radar and receiver equipment planned for the EFA development.

To ask the Secretary of State for Defence what progress has been made in respect of the radar system for the European fighter aircraft.

Bids have been received from two consortia for the development contract for the EFA radar. These are currently being actively considered by the four nations participating in the EFA programme, and a final decision will be made as soon as possible.

I thank my hon. Friend for that answer. He will understand that I obviously support the GEC-Marconi combination—

Why?

Because it is partly in my constituency. It is therefore understandable.

I appreciate what my hon. Friend says about delay. The decision is taking longer than I would have liked. My hon. Friend will appreciate that the choice is difficult. It involves a key element in a very important project. It is most important that all matters, including important technical and cost and contractual aspects, are fully covered and agreed by the four participating nations.

My hon. Friend may be aware that the delays on the radar decision have given rise to some reports from West Germany that the whole nature of the EFA project may be reconsidered. Can he assure the many thousands of aircraft workers in my constituency, whose futures are tied up in this project, that the Government are 100 per cent. committed to it, and will do all that they can to maintain the commitment of the other partner nations to its early conclusion?

I assure my hon. Friend that we and all the other participating nations are committed to the project. In 1986, all four nations signed a general memorandum of understanding, and a further memorandum on the development of the aircraft was signed as recently as November last year. That demonstrates the participating nations' commitment to the project.

The Minister's answer that a decision will be made as soon as possible, but not as soon as he would like, does not comfort us at all. He said on 10 November 1987 that he expected a decision to be made in "early spring next year"—early 1988. It is now summer 1989. What has happened? Is this yet another example of the Government's mismanagement of the procurement industry? Will we now have another highly sophisticated, extremely expensive aeroplane flying round with cement in its nose?

The hon. Gentleman has a vivid imagination when it comes to identifying what he regards as mistaken procurement decisions. I hope that he understands the importance of EFA radar and the complexity of very high-performance radar. As I said, the decision has taken longer than I hoped, but he will agree that it is very important that we take the right decision in the right way.

Will my hon. Friend remind our German partners that unless a decision is reached, preferably unanimously, as soon as possible, the export potential of this aeroplane could be greatly prejudiced? It is in their long-term commercial and operational interests to fall into line with the Italian, Spanish and British partners on the project.

All the participating nations will be conscious of the points that my hon. Friend rightly makes. This important aircraft has export potential, although that is a long way down the line. The most important thing is to reach the right decision on the radar and to continue the project in the right way.

To ask the Secretary of State for Defence what are the current agreements and what recent changes have been made to them, between his Department and Malaysia about arms sales.

The current arrangements are between Her Majesty's Government and the Government of Malaysia and are encompassed in a memorandum of understanding concerning defence equipment procurement and related services and a memorandum of understanding and a sales agreement relating to the sale of six ex-Royal Navy wasp helicopters and associated equipment. There have been no changes to any of those documents since they were signed.

Is the Minister aware that I had to have the mental gymnastic ability of Houdini to find out from his Department, the Prime Minister and the Overseas Development Administration whether aid was ever discussed in the context of arms sales? That was always denied, yet on Friday 7 July I received a reply saying that Her Majesty's Government had written to the Malaysian Finance Minister on 28 June saying that it would be unacceptable to link aid with arms. If they were never linked, why was it necessary to write such a letter? Why were all my questions given such evasive replies by various Departments? Why will not the Minister now publish all the correspondence relating to those deals?

My recollection is that Mr. Houdini was an escape artiste. The hon. Lady may be trying to escape from her own imaginings about linkage. The explanation is merely that the Malaysian Government suggested that aid be considered and it was made clear to them that that was not acceptable. That has been made clear to the hon. Lady and to the House in the answers that she has received.

Does my hon. Friend accept that Her Majesty's Government deserve the congratulations not only of the House but of the country on having secured a contract that promises to guarantee jobs at home and to enhance Britain's standing and influence in an important part of the world? I hope that my hon. Friend will not listen to the miserable carping of Opposition Members which serves only to destroy our defence industries, not to build them up as he has done?

I am grateful to my hon. Friend for his comments. It is not unexpected that Commonwealth countries such as Malaysia should be recipients of aid and, I am happy to say, that they should purchase defence equipment from the United Kingdom. As my hon. Friend says, defence exports provide many jobs—more than 100,000—throughout Britain. The attitude of the Opposition and the hon. Member for Eccles (Miss Lestor) would threaten all those jobs.

To ask the Secretary of State for Defence, when the Hydrographer's department will be able to promulgate notices to mariners (a) electronically and (b) direct on Navtex; when shipping forecasts will be broadcast direct by Bracknell on Navtex; and how much British Telecom charges for operating the Navtex frequency.

The Hydrographer currently broadcasts information, which may subsequently be included in the printed Admiralty notice to mariners, on Navtex. Neither the Meteorological Office nor the Hydrographer has any plans at present to make Navtex broadcasts direct from Bracknell or Taunton respectively. Weather forecasts from the Meteorological Office are passed to British Telecom International for inclusion in Navtex broadcasts.

Is my hon. Friend aware of the considerable commercial potential of electronically available notices to mariners? Is it not extraordinary that, having passed information to British Telecom the Hydrographer's department then has to receive the Navtex signal to make sure that the information has been properly broadcast? In this day and age could not arrangements be made for the Hydrographer's department to broadcast the information direct?

We have considered my hon. Friend's suggestion. It would be technically feasible to make such broadcasts direct, but it would not be more efficient or cost effective than the current arrangements whereby British Telecom is paid for promulgating those broadcasts, which are extremely valuable to mariners.

Does the Minister agree that one ship that might take advantage of the notices promulgated by the Hydrographer's department would be HMS Southampton when it has been repaired? When does he intend to announce the contract for repairing HMS Southampton?

I congratulate the hon. Gentleman on his ingenuity, but I have to tell him that Her Majesty's warships do not use Navtex.

To ask the Secretary of State for Defence what is his assessment of the implications for British defence policy of the current number of countries accepting the principle and practice of nuclear non-proliferation.

As one of the depository powers of the nuclear non-proliferation treaty, the United Kingdom is actively committed to preventing the spread of nuclear weapons and welcomes the growing number of accessions to the treaty. This is entirely consistent with British defence policy.

As 140 countries support the non-proliferation treaty, and as the Minister says that the Government actively oppose the spread of nuclear weapons, will he explain why the Government are not reacting positively to the initiatives of the Soviet Union? Do they really believe in the non-proliferation treaty? Is he aware that the Government's attitude makes life difficult for Pakistan and other Asian countries which are equally opposed to the spread of nuclear weapons, because it undermines their position?

The hon. Gentleman is letting off those nations that want to have nuclear weapons and refuse to sign the non-proliferation treaty. As he knows, when the treaty was drawn up, it recognised two categories of states —nuclear weapon states and non-nuclear weapon states. We were in the first category.

My hon. Friend will have read the full text of Mr. Mikhail Gorbachev's speech in Strasbourg last Thursday in which he made particular mention of further concessions. Will he give us some information about how his Department will make progress on that? Are we being bamboozled by one of the biggest propaganda exercises that the world has ever known?

My hon. Friend is right to suggest that we must beware pre-emptive disarmament among our allies. It is right to respond to the initiatives of President Gorbachev, but we must realise that he is taking them and making gestures from a position of enormous numerical superiority, so he can afford to do so.

As the Government now argue that short-range nuclear weapons will still be needed in Europe even if the present conventional imbalance is negotiated away, on the ground that only nuclear weapons can deter a conventional attack, how can they object to existing non-nuclear states following the logic of his argument and seeking to obtain nuclear weapons?

The spread of nuclear weapons throughout the world is an extremely unhealthy development, and if the hon. Gentleman does not see that, I despair of him.

To refer back to the remarks of the hon. Member for Liverpool, Walton (Mr. Heifer), is it not disturbing that when complex East-West negotiations are continuing so many Opposition Members either wittingly or unwittingly appear to be auxiliaries to the Soviet negotiating position? Does that not demonstrate that Britain's defences will never be secure in their hands?

Yes, but I do not think that anything has changed. Some Opposition Members have seemed to speak up for the Soviet Union on every possible occasion for as long as I have been in the House.

On a point of order, Mr. Speaker. The Minister suggested that some of us speak up for the Soviet Union on every possible occasion. I object to that. My record in this House of opposing the Soviet Union when it went into Afghanistan and on other occasions is second to none. I do not want him or any other hon. Member to lie about us.

Everyone recognises the hon. Gentleman's position as a highly honourable Member of the House.

To ask the Secretary of State for Defence what is his estimate of the United States stockpile of chemical and biological weapons (a) currently and (b) over the next five years.

It would be inappropriate for me to comment in detail on the defence capabilities of an ally. However, the United States is a party to the 1972 biological weapons convention. This prohibits the development, production and stockpiling of biological weapons.

Is it not the case that the Union of Soviet Socialist Republics has stated exactly what its stockpile is and that the United States of America is threatening to increase its stockpile of chemical weapons?

For a long time the Soviet Union would not say how big its stockpile was, and it was only the other day that it came out with the figure of 50,000 tonnes, which does not tie in with any of our estimates. We estimate that the stockpile is several times larger than that, but it is difficult for us to say with any exactitude, because a complex calculation is involved.

An earlier supplementary question referred to Mr. Gorbachev's speech last week to the Council of Europe about chemical weapons. Is it not more important than ever that the Soviet Union's words should be matched by deeds?

Absolutely—and we are watching with interest to see whether the Soviets adhere to their commitment to get rid of their existing stocks of chemical weapons. There is not much sign of it at present.

Has not the United States planned a large increase in its stock of binary chemical weapons? Is there a danger that other countries will say, "If the United States can do it, we can do it, too"? It is the proliferation argument all over again. Should not the Minister advise those countries to go for a global chemical weapons ban?

The hon. Gentleman is right, and that is exactly what we are doing: we are going for a global chemical weapons ban, which is what we all want to see. We must remember, however, that the United States went into the manufacture of binary chemical weapons because the Soviet Union refused to stop manufacturing chemical weapons. It continued to manufacture them throughout those 18 years and built up vast stocks, and eventually the United States felt that it could not stand by any longer.

Will my hon. Friend confirm that the Soviet Union's stocks of chemical weapons are much larger than those of the West? The Soviet Union has 14 factories, compared with just one in America. Will he also confirm that the Soviet Union continues to refuse to allow an inspection by the West of its facility at Shikhany, notwithstanding the agreement that it made with us?

My hon. Friend is right. The Soviet stocks are very large and, as I said earlier, the Soviets admitted only recently to having any stocks of chemical weapons at all. It was very disappointing that they were unable to show us a large plant at Shikhany which we were sure was involved in the manufacture of chemical weapons; they said that it was a purely commercial organisation with no defence interest. That gives us some idea of their lack of straightforwardness on the issue.

There is no doubt that the Americans are spending billions of dollars on chemical weapons and delivery systems. Nevertheless, President Bush is on record as saying that he wants to be remembered for ridding the world of chemical weapons; 75 senators have signed a note saying that they want the President to increase his efforts to cut world stockpiles; and last week a senior military man at NATO told me, as well as my hon. Friend the Member for Clackmannan (Mr. O'Neill) and other hon. Friends—we were discussing flexible response—that although nuclear weapons might be used first, in no circumstances would chemical weapons be used first.

I am afraid that I do not quite understand the purpose of that question. Is the suggestion that my right hon. Friend said that we were prepared to use chemical weapons first? I do not see how that would be possible, as we have none.

To ask the Secretary of State for Defence what representations he has received asking him to reconsider his attitude to the third zero.

My right hon. Friend has received a number of representations from individuals and organisations regarding the role of short-range nuclear weapons in Europe. I am sure that the British people support the Alliance's recent rejection of the third zero.

Has the Government's view changed? The Prime Minister told us that she could do business with Mr. Gorbachev, but it seems that today the Conservative party is rubbishing all the disarmament proposals that people all over the world are welcoming. In particular, surely the Minister knows that the people of Europe and the people of Britain are excited by the prospect of getting rid of short-range nuclear weapons in Europe—East and West. We all want disarmament; it is in all our interests. Why are the British Government standing in the way of progress which would benefit all the people of the world?

We are certainly not rubbishing the Soviet Union's initiatives. We welcome everything that is taking place at the moment. We are involved, within the Alliance, in serious negotiations to reduce strategic, conventional and chemical weapons, and we are hopeful that there will be a fruitful result. However, we must be careful to maintain our guard during the negotiations and not to put ourselves at a renewed disadvantage compared with the Soviet Union.

Does my hon. Friend agree that it would be nonsense if our aircraft did not have a stand-off capability when the Soviets already posses one? So long as they have their stand-off capability, surely we should have such a capability.

I agree absolutely. That is very important. We should always be able to match the Soviet capability and have systems as up to date as theirs. It is also important that we should adhere to the resolutions passed at the recent summit and ensure that we keep flexible response as part of NATO's strategy.

Does the Minister agree with the statement by President Bush last week, prior to his departure for Warsaw, that he is still confident that a conventional deal can be struck within the next six to nine months and that, following that, short-range nuclear forces should become the subject of discussion with a view to their removal, at least in part? Do the Government share President Bush's optimism or do they wish to act as the dogs in the manger and hold back the process?

There is no question of our being dogs in the manger. There are a great number of complicated negotiations to go through. Six to nine months is an ambitious programme, but I am not saying that it cannot be achieved.

To ask the Secretary of State for Defence what recent representations he has received on the retention of Britain's independent nuclear deterrent.

My right hon. Friend has received a number of representations from individuals. The British electorate has consistently endorsed NATO's policy of deterrence based on a mix of nuclear and conventional weapons and the maintenance of an independent British strategic deterrent.

If my hon. Friend receives any representations from members of the Labour party who are also members of the Campaign for Nuclear Disarmament, will he tell them and their leader that it is both illogical and ridiculous to maintain that they can be members of CND and yet support the British nuclear deterrent?

My hon. Friend is right. Belief in unilateral disarmament is clearly written into the rules of CND. Members of CND believe that we should get rid of our deterrent as soon as possible. That cannot be combined with belief in a British deterrent.

Has the Minister honestly read the speech of President Gorbachev to the Council of Europe in Strasbourg last week? If and when he does, he must surely come to the conclusion that the real warmonger in Europe is the Prime Minister.

It is extraordinary for any hon. Member to make a remark like that when the Soviet Union has a totally undemocratic system in which scant regard is paid to individual rights. When one considers the disparities in terms of the armed forces on both sides, there is no doubt in my mind as to who is in a better position to fight a war.

Does my hon. Friend agree that the British independent deterrent is necessary not just in relation to the Warsaw pact countries but in relation to those areas of the world where non-proliferation is not a term that is used, including countries such as Iran and Libya? Would it not be the height of folly to abandon our ability to deter attacks and assaults from such countries?

I could not agree more. There is a great risk that if we had a Labour Government we would get rid of our own independent deterrent, our nuclear weapons, and find ourselves being blackmailed by other countries that had such weapons.

To ask the Secretary of State for Defence what progress has been made by his Department in monitoring the number of jobs involved in contracts placed under the AWACS offset agreement.

The offset obligation between Boeing and the Ministry of Defence is financial and is measured in terms of the value and quality of contracts placed with the United Kingdom industry. However, we are now setting in hand monitoring of employment created by contracts declared in future reports. I am glad to confirm that the level of agreed contracts won by United Kingdom companies has now reached a total value of some $624 million. This is well on the way to the $1·5 billion which Boeing is contracted to spend in the United Kingdom.

When the Government cancelled the Nimrod contract and bought AWACS from Boeing, did not Boeing promise 4,500 jobs in the first year in the United Kingdom, increasing to 8,000 jobs? Has the Minister any evidence that those jobs will be provided?

I think that the allegation to which the hon. Gentleman refers is based on advertisements which Boeing placed in the national press before the contract was awarded. The memorandum of understanding is based on financial achievements. Bearing in mind that quality is also involved, those financial achievements will create jobs throughout the United Kingdom. I hope that the hon. Gentleman will welcome the fact that we have already achieved some 40 per cent. by value of the target, although only some 32 per cent. of the time for the entire programme to be fulfilled has elapsed. That is a great achievement and very satisfactory for British industry.

Does my hon. Friend agree that the announcement that he has just made vindicates the decision to buy Boeing AWACS, which was one of the most difficult decisions that the Ministry of Defence has ever had to make? Does he agree that offset deals could not be achieved in any purchase of overseas equipment by the Ministry of Defence if it followed the Labour party policy of stringently limiting the scale of arms sales by Britain and thereby undermining the effectiveness of DESO, the Defence Export Services Organisation, which has been partly responsible for the offset deal?

My hon. Friend is quite right. There is no doubt that the policies set out by the Labour party stringently to limit defence exports would certainly be damaging to the British defence industry and would make the achievement of offset agreements that much more difficult. I remind the House that all the contracts involve high technology and high-quality goods and therefore are particularly valuable to industry.

If anyone is destroying the British defence industry it is the Minister with his incompetence and mismanagement. On 18 December 1986 the Secretary of State for Defence said:

"Boeing is publicly committed to placing high-technology work with British companies and … job losses resulting from the cancellation of Nimrod would be equalled if not exceeded by job gains".—[Official Report, 18 December 1986; Vol. 107, c. 1353.]

The hon. Gentleman apparently spends more time reading old copies of Hansard than more up-to-date reports. If he studies the Select Committee report he will find that we are getting high-technology, good-quality awards in respect of the offset agreement. That is written into the agreement. We have already achieved some $624 million. I should have hoped that the hon. Gentleman would have the grace to recognise that reaching 40 per cent. of the target in 32 per cent. of the time was a worthwhile achievement, rather than trying to rubbish the performance of the British defence industry.

Is my hon. Friend aware that although British companies with particular expertise came forward very promptly for the AWACS contract, nevertheless Boeing had to go searching the highways and byways of British industry to find other companies to take part in the contract? Does my hon. Friend agree that it is a measure of the success of the transaction that so many British companies have taken part in it?

It is a measure of success that the benefits of the offset deal are very widely spread throughout British industry, particularly the electronics and engineering industries. One of the follow-on benefits that is not covered in the agreement is that many of the firms with contracts in the offset agreement have obtained further contracts not within the offset agreement but much to the benefit of the companies and the work force.

To ask the Secretary of State for Defence what representations he has received about the under-utilisation of armed services hospitals.

The utilisation of service hospitals was considered by the Select Committee on Public Accounts in its ninth report of the 1987–88 session. The Government replied in a Treasury minute in February 1989, Cm. 323. The Committee's 21st report of the 1988–89 Session, which also deals with service hospitals, was published on 22 June. It contains further observations which are now being considered.

Will the Minister confirm that the Select Committee on Public Accounts criticised Halton, Wroughton and Haslar military hospitals for failing to agree to treat more National Health Service patients? Why is the Ministry of Defence still dragging its feet on the issue? Will the Minister act immediately to ensure that all military hospitals take more NHS patients instead of leaving so many empty beds?

It may not be appreciated that the service hospitals already take 250,000 NHS patients. The scope for more is limited only by the willingness of local and regional health authorities to accept more contracts. I can report that since the consideration by the Select Committee on Public Accounts, RAF Wroughton has negotiated a contract with the Mid-Glamorgan and Crewe health authorities to take patients of theirs.

Have any expressions of interest in becoming self-governing trusts been received from armed services hospitals?

That is, perhaps, pointing the way to the future. Who knows? I may be answering a question on that at a future Question Time.

To ask the Secretary of State for Defence if he will make a statement about the defence implications of reductions in (a) conventional forces and (b) short-range nuclear forces.

The greatest threat to stability and security in Europe remains the huge superiority that the Soviet Union and its Warsaw pact allies have in many types of conventional armaments. All the NATO allies are agreed that the elimination of those disparities in conventional forces is our highest arms control priority. The allies have recently confirmed that for the foreseeable future, there will continue to be a requirement for land, sea and air-based nuclear systems, including ground-based missiles, in Europe. Security and stability of Europe would be greatly enhanced if the Soviet Union were to eliminate its huge superiority in short-range nuclear missiles.

Does the Minister agree that it would make sense to have a lower level of arms all round? That being so, why can we not have simultaneous action on conventional and short-range nuclear forces? Is it not somewhat unreasonable for Britain to insist that we can have no deal which involves any cut in our forces in Germany or which puts British aircraft with nuclear capability on the negotiating table?

The reality is that NATO has already reduced its short-range systems by 35 per cent. since 1979, but, like all unilateral gestures, it has not got us very far.

Does my hon. Friend recall the words of only two months ago that the purpose of retaining the deterrent is not to use it or even threaten to use it, as enunciated by the hon. Member for Dagenham (Mr. Gould) on 8 May? What sort of policy would that be for a Government who were attempting to have a nuclear deterrent?

My hon. Friend is right. A deterrent does not count as a deterrent unless there is a preparedness to use it. That is why I believe that the country will see through the Leader of the Opposition and will realise that the deterrent would not be worth keeping if he were in power.

To ask the Secretary of State for Defence if he will make a statement on his latest discussions with the Spanish military authorities.

My right hon. Friend the Secretary of State paid a most successful and interesting official visit to Spain on 19 and 20 June. He had wide-ranging and useful discussions with his Spanish colleague, Senor Serra, on Alliance and bilateral matters, and visited the naval base at Rota. The Ministers reaffirmed their desire that the close bilateral relationship which has grown up between the British and Spanish armed forces in recent years should continue to be developed.

Have Ministers any reason to disbelieve the Spanish authorities when they claim that the IRA team in Gibraltar had six members and not three?

I do not think that that was anything to do with the Spanish authorities. A statement was made by Inspector Rayo to Inspector Correa of the Gibraltar coroner's office on 8 August. It was signed by Rayo and witnessed by Correa. On 9 August, Rayo submitted a signed carbon copy of the statement to the Malaga judge and attested his signature. Correa attested his signature before the Malaga judge on 22 August. The copy plus attestations was passed to the British embassy in Madrid. That copy was not sworn and, therefore, of no greater validity. We must emphasise that there is only one statement, but there were two copies.

To ask the Secretary of State for Defence whether he has any plans to consult the Trades Union Congress or any individual trade union when reviewing Britain's policy.

No, Sir.

Will my hon. Friend give the House an unequivocal assurance that, when he next reviews policy, he will bear in mind—and, indeed, make it the only consideration—the defence needs of Britain? Will he confirm that the Government will not place the freedom of the country at risk by pursuing a policy of negotiating over beer and sandwiches with trade union leaders whose idea of democracy appears to be based on the principle of one man, one million votes?

I do not think that the trade unions have anything to say about our defence policy. We shall certainly not take into account what the Transport and General Workers Union says, which is extremely dangerous and threatens the survival of this country.

Would it not be useful if, in future, the Minister at least discussed with the TUC issues such as the selling of the royal ordnance factories, given that three factories were sold off at terrific loss to the taxpayer and hundreds of engineering jobs were lost as a result?

The hon. Gentleman says that the royal ordnance factories were sold off at great cost to the taxpayer. In fact, they were sold to the highest bidder. I do not know how else one can sell things.

To ask the Prime Minister if she will list her official engagements for Tuesday 11 July.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today, including one with the Prime Minister of Canada, Mr. Mulroney.

Will my right hon. Friend join me in welcoming the agreement negotiated by the Minister for Overseas Development with the Brazilian Government under which we are to provide technical and scientific aid to Brazil to help it to preserve its rain forests? Will not this be a triumph—[Interruption.]

Order.

Yes, Sir. The agreement that my right hon. Friend the Minister for Overseas Development signed is the first of its kind with Brazil to seek to preserve the tropical rain forest—the largest block of tropical rain forest in the world. It involves research projects in conjunction with us—with the Royal Geographical Society—on the sustainable development of the forest and on climatic change. As The Times said,

"It was a triumph for—

Order.

As The Times said,

"It was a triumph for quiet diplomacy of the sort that will be needed … to protect the world environment."

Is the Prime Minister aware that she was absolutely right to say last December that energy efficiency is crucial in combating the greenhouse effect? So why, according to the Government's own figures, has expenditure on energy efficiency been cut by 15 per cent. since 1987 and is to be cut in half again by 1991? Is not that the record of a Government who talk green but act dirty?

No, Sir. The part of the energy efficiency budget that is being cut was the part heavily devoted to advertising. In fact, the energy efficiency record of this country is excellent. We use less energy now to produce 25 per cent. more goods than was the case in 1973. It is a very good record on energy efficiency.

If the Prime Minister is proud of her record and is seriously concerned about energy efficiency, which she says is crucial, will she overrule her Secretary of State for Energy and accept the Lords amendment to the Electricity Bill which had all-party support and which will penalise suppliers if they fail to give proper attention to energy efficiency?

No, Sir. They will give proper attention to energy efficiency—and so will consumers, most of whom wish to use energy efficiently to keep down their bills. That is a very important incentive to energy efficiency.

Can the Prime Minister tell us in straightforward terms, and within the terms of the Electricity Bill, how she knows that private suppliers will take care of energy efficiency?

Usually when we privatise things, they have to be run very much more efficiently. [Interruption.] For example, when I first came to the Dispatch Box British Steel required £1 billion per year subsidy from the taxpayer. Now it is making £500 million per year profit. That is an excellent example of the greater efficiency of privatisation.

To ask the Prime Minister if she will list her official engagements for Tuesday 11 July.

I refer my hon. Friend to the reply that I gave some moments ago.

When my right hon. Friend visits France in the next few days for the European economic summit, will she urge her colleagues to continue the sustained and steady policies that have produced growth for all countries in the Community? Will she further urge the summit to support her Government's policies, which are tackling the problems of the global environment?

Yes. I believe that it was the experience of the economic summit—particularly during its second cycle, which has just been completed—that sound economic policies have produced faster growth than we have ever had before, a higher standard of living, and a better standard of social services. We shall be looking very much at the economics of better environment. We notice that it is the countries which are more prosperous and have more growth that now have the resources to devote to better environmental conditions, unlike some of the Third world and some eastern European countries. We shall be paying great attention to that factor.

If the Government's policy on the environment is so good, how is it that the latest figures show that Britain's production of the primary greenhouse gas, carbon dioxide, is increasing at twice the world average rate? How will the Prime Minister explain that at the Paris summit next week while opposing further measures for energy conservation?

I think that the right hon. Gentleman must be referring to some figures that were compounded by the Oakridge laboratory in 1986. Our published figures do not agree with its comparison between 1986 and 1987. However, as the right hon. Gentleman has asked me about the fundamental carbon dioxide gas, from the figures published from the Oakridge laboratory, which we have not yet seen in detail, the Daily Telegraph gave these figures:

"Per capita figures from the Oakridge laboratory for the production of fossil fuels in tonnes of carbon per man or woman"—

"United States five tonnes of carbon dioxide for each person, Czechoslovakia 4·2, Bulgaria 3·6, Soviet Union 3·6, West Germany 3·06, United Kingdom 2·9."

To ask the Prime Minister if she will list her official engagements for Tuesday 11 July.

I refer my hon. Friend to the reply that I gave some moments ago.

Is my right hon. Friend aware that if Pakistan were readmitted to the Commonwealth it would be warmly welcomed throughout the country, not least in my constituency of Croydon, North-West, where many constituents are from a Pakistani background?

Yes, I believe that it will come about at the next Commonwealth conference, and it will be very warmly welcomed. I am glad that we are among the first to suggest and to approve that Pakistan return to the Commonwealth. Of course, it could not be done without the co-operation of India, through Mr. Rajiv Gandhi. We had a successful visit here last week by the Prime Minister of Pakistan, Benazir Bhutto. We were very pleased that we were able to help her with some aid for rural development and extra help for the Afghan refugees, which brings our help for the Afghan refugees up to £15 million in the past 18 months.

Now that the Government have rolled over to the brewers, will the Prime Minister advise the British Medical Association how much it should invest in the Tory party before the views of the doctors will be listened to?

I should have thought that an Opposition party with massive investment from the trade unions was not well equipped to ask that question. With regard to the decisions of my right hon. and noble Friend the Secretary of State for Trade and Industry, within two years all brewers with more than 2,000 pubs will have to have untied 50 per cent. of the number in excess of 2,000. That will add 11,000 free houses, which is equivalent to serving some 3 million customers a year. As the House knows, tenants will be able to purchase, free of ties, soft drinks, non-alcoholic ciders, wines and spirits. In addition, many of the other recommendations of the Monopolies and Mergers Commission were implemented in full.

To ask the Prime Minister if she will list her official engagements for Tuesday 11 July.

I refer my hon. Friend to the reply that I gave some moments ago.

When my right hon. Friend crosses the England channel to visit Paris later this week, will she recall that last year we celebrated the tercentenary of our own glorious revolution which, as revolutions go, was virtually bloodless—certainly much less so than the reign of terror being celebrated in Paris?

I hope that in 1993 I shall be able to go across by the Channel tunnel as Prime Minister—[Interruption.] Yes, we managed our revolutions much more quietly in this country in 1688 and 1689 when Parliament took over the authority for the country from the monarch. Our revolutions have certainly been quieter. Our revolution during the past 10 years—a revolution of high living standards and high social services—has also been managed quietly and very well.

The Prime Minister will be aware of the intense speculation in Wales about the future of the Welsh Development Agency. Will she assure the House that the Government have no intention whatever of privatising the Welsh Development Agency either as a whole or in part?

The Welsh Development Agency will continue the most excellent work that it has carried out under both Secretaries of State for Wales in this Conservative Government. It will continue to attract a fantastic amount of inward investment to Wales under the Tory Government.

Does my right hon. Friend accept that if there is one thing worse than the mindless arrogance of unions which bully the public before they negotiate with management, it is the supine indifference of Opposition Members to the damage done by strikes—[Interruption.]

Order. The hon. Gentleman knows better than that. He must ask a question within the Prime Minister's responsibility.

Does my right hon. Friend agree that if there is one worse danger than that, it is the danger of inflationary pay demands which threaten competitiveness and put jobs at risk?

Let us hope that the negotiations now taking place will result in a successful conclusion so that British Rail can work fully again, serving both the public and freight, and justify the great investment that this country has put into the railways, especially in the past two or three years, including the great investment in electrification. We have now the greatest investment since changing from steam to the modern railway.

To ask the Prime Minister if she will list her official engagements for Tuesday 11 July.

I refer the hon. Gentleman to the reply that I gave some moments ago.

Given the welcome reduction in tension between East and West, and the reduction in regional conflict, does the Prime Minister agree that the potential for arms sales has reduced in the world? What initiatives is she taking to encourage British industry involved in the arms trade to find peaceful alternative products?

Of course we welcome the reduction in tension between East and West—we were among the first to do so—but that does not mean that the reductions in arms now being negotiated will come about quickly. For several years the Soviet Union will have a great superiority over us in conventional, nuclear and chemical weapons. The only safe course for all who believe in freedom and justice is to ensure that we, with NATO, have a proper and full defence.

Will my right hon. Friend take time this afternoon to condemn the fact that physically and mentally handicapped people are being deprived of essential services as an inevitable result of the callous withdrawal of labour by the National and Local Government Officers Association?

Yes, I most certainly condemn it. I noticed that it was reported this morning that some nurseries and other services might not be running today. Once again, that is the fault of some people of the extreme Left wing in the trade unions who never think of serving the public or of their duty to the public. I am happy to say, however, that many people in NALGO went to work as usual to carry out their duties in the best possible way and in the best possible traditions of local government.

rose—

I apologise for not being able to call the hon. Member for Burnley (Mr. Pike)—I will seek to make it up to him.

I beg to move, That the clause be read a Second time.

I have examined the new clause with considerable care. As the Financial Secretary has stated, it represents a small loosening of the fairly tight provisions of clause 99, which passed its Standing Committee stage with flying colours.

The cost of the change is likely to be negligible. Both the new system introduced here and in clause 99 will produce approximately the same yield as the old system, but the timing of receipts might be different in individual cases.

I beg to move, That the clause be read a Second time.

"what proportion of the actual numbers of all purchases of premium bonds are currently made under the value of £100." —[Official Report, 26 May 1989; Vol. 153, c. 808.]

"Sales of less than £100 represent only 12 per cent. of the total value of purchases."—[Official Report, 5 May 1989; Vol. 152, c. 255.]

The hon. Gentleman keeps on talking about savings and investment in the context of premium bonds. Does he really regard premium bonds as an investment, given that whether one receives a return is a total lottery, and the smaller the holding, the more of a lottery they become?

I shall come to that point in a moment. It is the only argument that the Government have hitherto advanced for this measure, and the simple answer to it is that a premium bond holding is undoubtedly a form of saving and as such it counts in the overall savings profile of the economy. Of course it is not a guaranteed investment. It is a form of saving that involves taking a chance, not an assumption of guaranteed return, but it is saving none the less and we need to promote saving rather than over-consumption.

"My main concern is the new rules for premium bond purchases which gave hope to the worse off or small investor like myself of maybe some day winning a few thousand, not necessarily the jackpot, but this is now being turned into a club for the rich, or the elite."

"The only reason for doing this obviously is to penalise the poorer members of our society who cannot hope to buy bonds when they are such a price. My husband and I are from the so called `Thatcherite' generation for whom things are now meant to be so good. We will not be able to buy one of your bonds from 1st July."

I apologise to the hon. Gentleman for not having been here for the whole of his speech. I accept that there is some point in what he has said. However, does he not also believe that the change to £100 may turn a small saver into a larger saver? Those who might have been previously intending to invest, say, £30 in premium bonds will find that they must and, therefore, do invest £100 in premium bonds.