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  • Ian Stewart – 1986 Speech on the Exchange Rate Mechanism

    Below is the text of the speech made by Ian Stewart, the then Economic Secretary to the Treasury, in the House of Commons on 29 January 1986.

    The right hon. Member for Glasgow, Hillhead (Mr. Jenkins) has made, as is his custom, an elegant speech. He was a distinguished President of the European Commission. He has always been an eloquent advocate of the cause of Europeanism.

    It is important to put the question of our membership of the exchange rate mechanism of the European monetary system into its proper perspective. It is not a question of our being for or against the development of the European Community. The Government’s commitment to constructive membership of the European Community is beyond dispute. The fact that we have remained outside the exchange rate mechanism of the EMS casts no doubt on our European commitment. On the other side of the coin, it is right to point out, too, that, contrary to the assertions from time to time of some of those on the Opposition Benches, membership of the exchange rate mechanism would not lock us into some irrevocable commitment to full economic and monetary union. The truth is more complex, yet more prosaic. The ERM is a fixed, but adjustable, exchange rate system on Bretton Woods lines intended to promote greater economic convergence between its participants, particularly on inflation.

    The Government’s position on membership has been clear throughout. We would be ready to join the ERM as and when we judge the conditions are right for us to do so. ​ I recognise that the right hon. Member for Hillhead believes that those conditions are right today. That is his judgment. However, he will recognise that many factors affecting sterling need to be weighed carefully.

    The Government have to take account of the fact that, unlike all other ERM currencies except the deutschmark, sterling is a widely held and internationally traded currency. It is, furthermore, a currency subject to different and often opposite strains from those that affect the other currencies currently in the system. We have seen evidence of these conflicting pressures in exchange market movements in recent weeks. The House does not need me to explain that conditions in the exchange markets have been, even by their standards, remarkably turbulent of late.

    In recent weeks, the major influence on sterling has been the weakening of the oil price. To some extent, this is a problem of perception. Even before the latest movements in the market, oil accounted for only 5 per cent. or 6 per cent. of our national income and less than 8 per cent. of all our exports. It accounts for only 0·5 per cent. of all our employment and only 5 per cent. of capital investment, despite the massive capital investments required to develop the major fields in the North sea. Those who operate in the markets, as many commentators are increasingly coming to note, often have an exaggerated perception of the importance of oil to the United Kingdom. That is something with which we have to live. It came as no surprise that a fall in the price of oil on the scale we have seen in the past three or four weeks, when the price has fallen by around 30 per cent., should have had some impact on sterling. I would like to think that the markets have already begun to take a more balanced view, but these realities can take time to gain hold.

    The other major factor in the exchange markets recently has, of course, been the decline of the dollar and its differential impact on other currencies. Since the Plaza agreement, the yen has appreciated by nearly 19 per cent. against the dollar, the deutschmark by about 16 per cent. and sterling by 22·5 per cent.; so the decline in the value of the dollar has given rise to substantial adjustments between the exchange rates of other currencies.

    It is against this background that we must judge the question of membership of the exchange rate mechanism of the EMS. We must recognise in so doing that for sterling to join the ERM would bring about a significant change in the operation of the system itself. At present, the deutschmark plays a dominant and central role. The addition of sterling, another widely held and traded international currency, would undoubtedly introduce an element of bi-polarity into the system with which it has not yet had to cope. It may be that it could do so, but it is a question that must give us pause. We should note that the currencies of the other two major countries in the mechanism—the French franc and Italian lira—are both protected by a variety of exchange controls.

    I need hardly say to the House that we have no intention whatsoever of restoring the exchange controls which my right hon. and learned Friend the Foreign and Commonwealth Secretary removed in 1979 when he was Chancellor of the Exchequer. Such controls inevitably hinder the development of financial markets. Indeed, it is interesting to note, following a point made by the right hon. Member for Hillhead, that London is one of the ​ leaders in the ecu market even though the United Kingdom does not participate in the exchange rate mechanism of the EMS.

    The question for the United Kingdom is, therefore, in a number of respects rather different from that which other member states have faced. The common element, which is insufficiently understood by many alliance Members, is that for our European partners the exchange rate mechanism is not seen as a soft option to be adopted as an alibi. There is no disputing the view of our partners that the ERM can be a helpful and effective anti-inflationary discipline. Indeed, it has by and large worked successfully for those countries participating, particularly since 1983.

    The vital question is not so much membership itself as the resolve with which responsible financial policies are pursued. It is on this point that we must have doubts about the attitude of the right hon. Member for Hillhead and his party. They are very keen to join international organisations. They want us to join the exchange rate mechanism. Indeed, the hon. Member for Stockton, South (Mr. Wrigglesworth) was using language at Prime Minister’s Question Time yesterday that suggested they also wanted us to join OPEC.

    In spite of that apparent enthusiasm for the exchange rate mechanism, it is clear that they would not be joining it in the same spirit as our other European partners. The other European countries have submitted to the discipline it imposed, and had significant success in reducing their inflation rates. Yet the Social Democratic party has revealed that this is not its intention at all. Its autumn statement published last year — a rare example of precision by a party that usually likes to leave its intentions as vague as possible—explained how it would manage the economy. It showed that the Social Democratic party expected, if its policies were implemented, inflation to rise to 7·5 per cent. in 1987. That makes it clear that the Social Democratic party regards the ERM not as a discipline against inflation but as a cover for its own inflationary public spending plans. As such a cover, of course, it would not work.

    This Government may not have joined the exchange rate mechanism, but we have remained firmly committed to the principles of financial discipline which underlie it. We have chosen a different route to success against inflation, but one which has been equally effective. The average rate of inflation during this Parliament has been just over 5 per cent., which compares with an average of over 15 per cent. for the Labour Government of the 1970s. The prospect this year is for continued falls. We expect inflation to be below 4 per cent. in 1986.

    This inflation record has been accompanied by a remarkable turnround in our growth rate, especially when compared with that of our European partners. For a decade from 1973 to 1982 we were consistently at the bottom of the European growth league. In 1983 we grew faster than any of our major European partners, we would have done so again in 1984 were it not for Mr. Scargill’s strike, and every indication is that in 1985 we shall once again be the fastest growing major European nation.

    Mr. Douglas Hogg

    My hon. Friend has told us that the Government are not opposed in principle to joining the EMS and that we shall do so when the time is right. Will my hon. Friend tell us what the conjunction of circumstances will be which will suggest to him when the time is right?​

    Mr. Stewart

    I am not going to offer my hon. Friend or the House a check list of circumstances because, as we have seen in recent weeks and days, circumstances of many kinds can change unpredictably and at short notice. The balance of judgment has to be made in the conditions of the time.

    Sir Russell Johnston (Inverness, Nairn and Lochaber)

    The hon. Gentleman has said that we in the alliance have perhaps misunderstood certain consequences of joining the exchange rate mechanism. Can the hon. Gentleman say succinctly—he has not yet done so—what disadvantages would affect this country if we joined?

    Mr. Stewart

    Greater fluctuations in the market in relation to sterling, to which I have already alluded, do create difficulties in operating any financial or monetary system. That is a point to which the hon. Gentleman’s right hon. Friend the Member for Hillhead drew attention. One has to take these questions into account. There are arguments both ways on this matter and one must take a balanced judgment.

    The record of success which this Government have had, without being a member of the ERM amply demonstrates that it is commitment to sound finance and lower inflation which is the key to economic prosperity, rather than the fact of holding a club membership card in the exchange rate mechanism.

    The judgment the Government have to make in relation to the exchange rate mechanism is not, as I emphasised at the outset, one of being for or against Europe. Nor is it one of being for or against international co-operation on exchange rates. Our participation in the Plaza agreement along with other major European countries, as well as the United States and Japan, amply demonstrates such cooperation. It is rather whether, bearing in mind the practical problems, membership of the exchange rate mechanism would provide a more effective and safer means of achieving our economic objectives than the strategy the Government have followed for the last six years. Membership of the exchange rate mechanism is not a panacea, nor is it the only option. There are no magic guarantees that it would reduce inflation by itself. Membership would be successful only if monetary and fiscal policies were appropriately firm.

    Mr. Beaumont-Dark

    I agree with the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) that this is an interesting and important debate. We have talked about whether we should join the ERM or the EMS. However, one of the great problems that we face in this part of the western world is that interest rates are at such high levels — higher than any level in the history of western Europe. America should co-operate and should cease sucking in vast sums of money because it is unwilling to balance its books — there is a $200 billion deficit. Unless we get the co-operation of the United States, whether we join the EMS or any other system, we and Europe as a whole face problems never faced before. We are all pulled down because of the United States’ unwillingness to get its own books and ship in the right order.

    Mr. Stewart

    I do not think I should be drawn into a disquisition on the United States fiscal and monetary policy. I certainly accept the point that the large ​ imbalances in the domestic economy and trade account of the United States have created conditions which have caused turbulence to the rest of the world.

    The United States Administration addressed themselves to these problems more realistically in 1985—the Plaza meeting was evidence of that. The new attitude of Secretary Baker at the annual meeting of the World Bank and the International Monetary Fund shows that there has been an important shift in American perception of its domestic economy and the international implications of its policies. However, this does not remove the need for each country to deal with its own financial circumstances according to its own policies.

    Mr. John Browne (Winchester)

    My hon. Friend has just mentioned that the United States now has a more international perspective on these matters. Does my hon. Friend agree that the reason for this debate is that early in the 1970s the United States broke the gold exchange window and agreed with other western countries to move into an era of floating exchange rates? Membership of the EMS is not the critical issue but the restoration of fixed interest rates based on convertibility of at least one currency—

    Mr. Douglas Hogg

    It cannot be convertibility to gold.

    Mr. Browne

    It used to be the gold exchange standard. The EMS is founded on a floating base. If we choose a fixed exchange rate—which is much more important—it must be done with at least one currency that can be converted into gold at a price to be agreed. Can my hon. Friend persuade the Americans that this is an urgent problem? Would my hon. Friend urge this factor, given the Americans’ new international perspective?

    Mr. Stewart

    I am not sure that I follow my hon. Friend’s analysis and argument. However, the era of floating exchange rates was not a perverse decision taken out of the blue in the 1970s. It was the consequence of increasing instability between a number of major economies under which the old system, under any circumstances, could not be maintained. That is a different cause. Ten years or more later, we are still grappling with the consequences. The major changes in commodity prices —of which oil is the main one—were bound up with this.

    The Government have always said that they recognised the advantages that the exchange rate mechanism could offer in the way of providing a framework of financial discipline. It is not the only possible framework, as we have fully demonstrated, but, combined with the appropriate political commitment, it can indeed provide a method of reducing inflation. The considerations which I have discussed this afternoon suggest that, at present, sterling’s participation in the mechanism would not, on balance, be of benefit, although it is a question which is kept under continuous review.

  • Roy Jenkins – 1986 Speech on the Exchange Rate Mechanism

    Below is the text of the speech made by Roy Jenkins, the then SDP MP for Glasgow Hillhead, in the House of Commons on 29 January 1986.

    I beg to move,

    That this House urges the Government to bring the United Kingdom into the Exchange Rate Mechanism of the European Monetary System forthwith.
    The European monetary system, which this motion calls upon the Government to join forthwith, will be seven years old in a couple of months time. It was the most recent major initiative taken by the European Community and it was put into place remarkably quickly, partly because it did not involve a great series of interlocking individual decisions and therefore did not fall foul of any unanimity rules or even the need for a qualified majority.

    I tried to relaunch the idea of a monetary route forward in a speech in Florence in the autumn of 1977. The European Council after that, in December, showed polite interest, but to say that there was any great sense of urgency or serious intent at that stage would be an exaggeration. The whole thing changed dramatically in the late winter and early spring. For most of its life the EMS has had to contend with the dollar being too high. Paradoxically, that changed because of the temporarily collapsing dollar in the early months of 1978. I vividly remember the occasion when I went to Bonn and Helmut Schmidt told me that he had changed his mind and he thought it was essential to go forward straightaway. He believed that he could get it on board as soon as the French legislative elections, due that year, as this year, were out of the way. So it happened.

    The scheme was unveiled at the Copenhagen European Council that spring and was in place exactly a year later. I do not think there is serious doubt about its limited but substantial success for the participating countries. It has established the fact that it is a lasting entity, despite the fact that the buffeting waves of a violently fluctuating dollar, in particular, have been much greater than anybody expected when the scheme was being put into place. The EMS has survived well.

    There have been many changes of central rates affecting nearly all the currencies in varying degrees but they have been carried through remarkably speedily and smoothly. That is a dramatic contrast to the delayed and traumatic devaluation under the otherwise admirable Bretton Woods system. Those changes have gone through with remarkable speed. When the Foreign Secretary held the post of Chancellor of the Exchequer he presided over a number of meetings of the Economic Monetary Council which put them through. That is an extraordinary example of presiding from outside over a thing which was working extremely well internally.

    Some of the changes have not been such as to render the system nugatory. The Italians asked specially for a wider margin of 6 per cent. either way for the lira compared with the margin of 2·25 per cent. for the other participating currencies. When the Italian lira moved sharply last July, that was the first move for three years. The idea that there has been constant instability and change is certainly not true.

    The fairly recent International Monetary Fund study calculates that the EMS has taken about 30 per cent. off the fluctuations between the participating currencies that would have occurred otherwise. That has been extremely valuable, particularly in view of how much Europe has been plagued by currency fluctuations within the Community, especially in the mid-1970s. This is one of the things that set my mind moving in this direction in 1977. Europe had been doing well throughout the 1960s and the early 1970s compared with America or Japan, but in the mid-1970s it suddenly started to do much worse. I was convinced that one of the major reasons was that the 1960s and early 1970s were a time of relative currency stability in the world, whereas the late 1970s were a time of violent currency and exchange rate fluctuations. That was internal, in Europe—outwith Japan and the United States. There was a considerable effect, but it was external to those countries.

    In addition, there has been a remarkable recent development in the past couple of years in the private use of the ecu, paradoxically, perhaps, more than in the public use of the ecu. It is now a major borrowing and lending currency.
    Therefore, there is no question but that the system which, by our own choice, we are outside, is successful. I think that all the participants value it and other potential participants are eager to join it. For instance, Senor Gonzalez told me just before he came into the Community that he believed that he could bring forward by a year the date of Spanish adherence to the EMS, and he would regard that as very desirable from the point of view of full Spanish membership of the Community and influence within the Community. We might well take a little notice of that point.

    How was it that we did not join at the beginning? Three countries had doubts, although at slightly different stages. Italy and Ireland went away from the last European Council leaving serious doubts as to whether they would join. Then they took their courage in both hands and cam:, in. I am sure that neither of them has regretted that decision at all. Why not us? I heard the reasons given by two successive Governments. Indeed, they are engraved on my mind. I remember that in November 1978 I went to see the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), and he assured me that, in principle, he would like the Labour Government to bring Britain into full participation in the exchange rate mechanism. However, he added, “I am extremely worried at being locked in at too high a rate, which would inhibit our ability to deal with unemployment.” Almost exactly six months later I went to see the right hon. Lady who still presides over the Government, and she assured me that in principle she was extremely anxious for Britain to be a full participant, but, she said, “I am extremely worried about being locked in at too low a rate, which would inhibit our ability to deal with inflation.” So we did not join. As a matter of fact, all the participating countries had lower unemployment and lower inflation than we did in the two years that followed.

    Therefore, it is difficult to believe that such fears—no doubt legitimate—as well as an endemic offshore mentality were not at work in both those Governments. That worked still more strongly than the reasons given. It was careless and sad that we should have repeated for the third time the mistake of joining late. We did so with the European Coal and Steel Community in 1951 and the ​ European Community in 1957. If one is joining an organisation it is sensible, if possible, to be there at the beginning because one can influence the organisation’s shape. It is better to do that than to stand aside for the third time, never learning the lesson, and saying that the shape does not fit, when one has not been there to influence its creation.

    Mr. Douglas Hogg (Grantham)

    Will the right hon. Gentleman comment on the point that the volatility of sterling, because it is an oil currency, makes membership of the EMS more difficult for this country than for the non-oil economies?

    Mr. Jenkins

    That will make British membership more difficult for the European monetary system rather than for this country. In a way, we are lucky that it has been, and is still, willing to have a more volatile currency in full membership. We want to try to control the volatility of sterling as much as we can.

    In view of the fear of the right hon. Member for Cardiff, South and Penarth—[Interruption.]—what happened to sterling subsequently—(Interruption.]—

    Mr. Deputy Speaker (Mr. Ernest Armstrong)

    Order. If the hon. member for Bolsover (Mr. Skinner) wants to intervene in the debate, he should come into the Chamber.

    Mr. Jenkins

    Following the fear of the right hon. Member for Cardiff, South and Penarth that he would be locked in at too high a rate, what happened was that, with us outside the EMS, sterling appreciated beyond the wildest fears of anybody in 1978–79. Over two years it rose from $1·60 to $2·40. The result was that our competitive index worsened by 60 per cent., on the scale measured by the IMF. The result of that was the destruction of one fifth of our manufacturing industry and the associated increase in unemployment.

    Nobody should suggest that membership of the EMS would have obviated all that. However, I believe that it would have reduced it substantially. It is a great mistake to believe that any monetary scheme or monetary mechanism can or perhaps should resist the long-term swell of the currency ocean. It can substantially take the top off the waves, particularly when, as happens too often, exchange rates are reacting not to differing levels of inflation, not to differing rates of productivity growth, not to trade imbalances, but much more to changes of sentiments or capital flows. The monetary system can do a great deal to cut the top off such waves.

    That was very much the case in 1980. Everybody knew that rate could not be sustained. It was just a question of when it came down. If we had been in the EMS, the bubble would have been pricked much more quickly, and the damage to our industry and employment would have been much more limited. We would have avoided much of the ridiculous parabola in the sky of sterling going up from $1·60 to $2·40 and then coming down within 18 months back to $1·60, and, for a short period, down to $1·07.

    Mr. Nigel Spearing (Newham, South)

    I should like to take the right hon. Gentleman back to some of the possible disadvantages he mentioned in relation to my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan). Is it not a fact that the EMS is ​ much more than a smoothing insurance mechanism? Are there not potential disadvantages in a Government’s requirements in respect of a general economic policy to maintain parities? Is not the ruling mechanism—that of the central banks—likely to create difficulties for any member Government which they might not have if it were not a member of the system, bearing in mind particularly the strength of the Bundesbank and of the market?

    Mr. Jenkins

    I hear the hon. Gentleman and his colleagues, but I think that the hon. Gentleman has himself complained about how British economic policy has developed over the past seven years. He has complained that we have had by far the highest unemployment rate in years. I do not understand how his dedicated, dogmatic anti-Europeanism can lead him to say that he would rather have what has happened outside the EMS than operate on a co-operative basis. In my view, we would have been able to avoid a significant part of the sterling fluctuation. That would have given us a substantial and healthier base for our economy.

    I have been dealing in detail largely with the past. I shall now consider the position today. Although it would be better to enter the exchange rate mechanism at any time than never to enter it at all, there are obviously some times when it would be much better to enter. This is a very good time because there is a particular conjunction between the sterling-dollar rate and the sterling-deutschmark rate. Those are the two factors of primary importance at which people have been looking in seeking the most favourable juncture.

    Last February, 11 months ago, there was a good occasion. The right hon. Member for Guildford (Mr. Howell) noted that in his interesting publication, which I read carefully. That opportunity was allowed to slip away, but now there is another good occasion. The pound is approximately 3·33 deutschmarks, down from 3·75 a month ago — a devaluation of more than 11 per cent. against a major European currency.

    I believe that most of the decreases in oil prices may have occurred. The price was $30 a barrel in November. The price is moving, but let us assume that it settles down somewhere between $17 and $20 a barrel. We will have a very uncertain market, but at least the really substantial move has probably occurred.

    Sentiment in the oil markets is very uncertain, and the price is likely to fluctuate with every rumour about what Saudi Arabia is going to do, or about the date of the next OPEC meeting. The problem is how to tame the impact of the short-term changes in sentiment without hopelessly disrupting the domestic economy.

    Outside, interest rates are almost the Government’s only weapon. If we were fully in the EMS, support from our partners would provide an alternative means to manage short-term fluctuations. We would have a much better chance of living through a period of see-sawing expectations without disruptive alterations to either exchange or interest rates.

    Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

    I am following the right hon. Gentleman’s argument with great interest. He talked about interest rates and the damage that fluctuation of the pound has done to manufacturing industry. The right hon. Gentleman knows Birmingham almost as well as I do, so he realises the effects. Control of the EMS would not rest on good will, ​ which does not exist between central banks—only logic does. Because of what has happened to the pound as a result of the influence of the petrocurrency, and because of the present interest rates structure, would not interest rates be 2 to 3 per cent. higher now if we had been in the EMS? Would that not be more dangerous for us than the present system?

    Mr. Jenkins

    I think that interest rates would be lower if we were in the EMS. I would not say that interest rates would in all circumstances be lower in the EMS, but I would say at the present time in my view—one can only express one’s own view—interest rates would be lower, and the immediate prospect would be one of lower rather than higher interest rates.

    Mr. Tony Blair (Sedgefield)

    The motion says that we should forthwith join the exchange rate mechanism. Suppose we had joined in October or November last year and the best rate we could have achieved was 3·60 or perhaps 3·50 deutschmarks to the pound. Considering the pressure on the pound last week, is it not the case that we would have been raising interest rates?

    Mr. Jenkins

    I am saying that we are now at the best juncture we have reached for some time. There have been other good ones. I would not have joined last October. I would have joined last February—

    Mr. Dennis Skinner (Bolsover)

    The right hon. Gentleman said “at any time”.

    Mr. Jenkins

    I said it is better to get in, rather than never to get in. Over the past seven years we have become like lift dwellers in a department store. We have gone into the lift, and it has gone up and down past every floor. The attendant has called out, “Soft furnishings, hard furnishings, sports goods, toys” and we have said “No, we want none of those.” We always want to move on to the next floor. Lifts are very useful objects, but they are not suitable for permanent living. If one is always to say that there is never the perfect opportunity and thus try to get out before it is suitable, it would be more advantageous to get out on the floor that suits one, rather than on the floor that does not suit one. I would not stay in the lift indefinitely, and that is what the policy of the Government is about.

    Apart from the short-term fluctuating position, there is also the medium and long-term position, and without the oil price shocks of recent weeks we would anyway have been in for a rough landing as our oil surplus runs down. What I am saying is that our huge surplus of oil will certainly be given to Russia, and it seems to me that we greatly want the assistance, if we can have it, of our other European partners to try and make that landing smoother. Be in no doubt that having reserves 10 times ours, which are those that are at the disposal of the EMS, is a considerable benefit. We are lucky that they still want us in.

    Why do they? I think the reason bears upon another more general reason. They want us in more because of the importance of the City of London as a financial centre, rather than because of the importance of sterling as a currency. It is not nearly as important as the deutschmark.

    It is greatly in the interests of every trading country and every economy to make sense of the world monetary system. Be in no doubt, with the fluctuations that we have had recently — and I am in favour of changes in ​ currency rates which reflect realities in the performance of different economies—nobody is suggesting that we can or should resist the violent changes which make the free-floating rate the enemy of international trade, of international investment flows, and bring into being the grave danger of creating protectionist forces to a strong degree with currencies such as the dollar, which are forced up and kept at artificial lengths for some time. I do not think we can possibly put Bretton Woods back on its pedestal again, but we can create a tripod of greater stability, and if we are to do that, it manifestly has to be on the basis of the dollar, the yen, and the ecu as the currency of the European system.

    As long as Britain is outside the mechanism, the European leg of the tripod will be hobbled by the absence of the City of London more than by the absence of sterling. It is as though New York and Chicago were outside the dollar area. That is why Britain is still welcome in the exchange rate mechanism. It is also an additional reason why we should be in favour of entering it. Enlightened self-interest is our motive for getting some sense and stability back into the international monetary system.

    I am convinced that so long as Britain remains outside the ERM—outside the only major Community initiative in the past 10 years— and so long as she manifestly repeats the old habit of 1951 and 1957, we shall inevitably diminish our influence on other matters concerning the European Community. Spain noticed that fact as soon as she entered the EEC. She said, “We want to have full influence and we must be a fully participating member.” It is curious that somehow we cannot see that.

    On direct and indirect grounds, the case is strong. The moment is as good a one as we are likely to get. I urge the Chancellor to overcome what I fear has now become the Prime Minister’s prejudice and, in accordance with what is now a substantial balance of informed opinion, to get on with it.

  • Neil Kinnock – 1986 Speech on Westland

    Below is the text of the speech made by Neil Kinnock, the then Leader of the Opposition, in the House of Commons on 27 January 1986.

    For all of the people in the Westland company, the affairs of that company are obviously vital. For most of us outside the company, the affairs of the company have become increasingly important in recent months. But no one inside or outside the Westland company would have considered four weeks ago that this matter could become one of such current critical significance.

    As the Prime Minister said yesterday, it was a comparatively small thing. Now it is palpably a very big thing. It has grown in size because of the actions and the attitudes of the right hon. Lady and Members of her Administration. Of course, the Prime Minister says that it would never have assumed this proportion but for the fact that one member of the team was not playing like a member of the team. It is plainly true that we and the country would not have known what we know now but for the fact that the right hon. Member for Henley (Mr. Heseltine) kicked over the bucket of worms by resigning earlier this month. All the dishonesty, duplicity, conniving and manoeuvring would still have been taking place. We would not have known about it quite so quickly and quite so clearly.

    Evasions, manoeuvrings and deceits nurtured this comparatively small thing until it became a very big thing. It was turned from an issue into a crisis by the dishonesty of people in this Administration. That dishonesty infected the Government’s whole approach to the affairs of Westland plc. There was a basic duplicity of their public dispassion about the affairs of that company and their private partisanship in the bids that were being made for Heseltine—[Laughter.]—for Westland. I think that may be the last occasion on which Conservative Members of Parliament have cause to be amused in this debate. Clearly, they hold a cavalier attitude towards dishonesty, which may explain the attitude of many of them—

    Mr. Tony Marlow (Northampton, North)

    On a point of order, Mr. Speaker. Is it in order for the Leader of the Opposition to accuse hon. Members of this House of dishonesty?

    Mr. Speaker

    I think the Leader of the Opposition would wish to withdraw any allegation of dishonesty against Members of this House.

    Mr. Kinnock

    I only withdraw allegations if the cap does not fit—[Interruption.]

    Mr. Speaker

    Order. This is a debate in which the House is taking a great interest. I ask the House to keep it on a level which is in keeping with our conventions. I am sure that the Leader of the Opposition, at the beginning of his speech, would wish to get us off to a good start.

    Mr. Kinnock

    You have that guarantee, Mr. Speaker, and it will continue like that—

    Hon. Members

    Withdraw.

    ​Mr. Speaker

    Order. I would ask the right hon. Gentleman to withdraw any allegations of dishonesty.

    Mr. Kinnock

    I said that hon. Members opposite have a cavalier attitude towards dishonesty. [HON. MEMBERS: “Withdraw.”] On the point of order, Mr. Speaker. On the basis of the view that you take of affairs, I will certainly withdraw what I said earlier. I said that the Government’s attitude was one of public dispassion and private partisanship. There are also the standing charges that still exist about moved meetings and minutes that were incomplete, and now we have the differing versions still existing of the meeting between Sir Raymond Lygo and the then Secretary of State for Trade and Industry. We know enough of the truth about the connivings of 6 January to understand that the dishonesty has run right through this whole episode. [Interruption.]

    All dishonesty has to stop. We have had two dress rehearsals from the Prime Minister full of half-truths and concealments. Today the Prime Minister must come clean. That is not only my view; it is the view expressed throughout the country and expressed by the Home Secretary in the course of his interview yesterday. Today, the Prime Minister must answer the questions that she signally and significantly failed to answer six times last Thursday.

    First, when did the Prime Minister find out about the decision to leak, how it was to be done and who was to do it? Secondly, how can the Prime Minister explain her claim that she did not know what action was being taken? Thirdly, did the Prime Minister establish an inquiry in response to the justifiable outrage of two Law Officers who felt that their integrity was being abused and compromised—

    Mr. Churchill (Davyhulme) rose—

    Mr. Kinnock

    —or was there an additional reason for that? After seven days delay, did the Prime Minister establish an inquiry whose conclusions would not in the normal course of events be published, simply because she knew that demands for such an investigation would most certainly be made? Was that inquiry established for detection or was it established for deception? Was it set up to obscure the issues and to provide an excuse for silence? Was it set up by a Prime Minister who knew very well who had leaked, why they had leaked, when they leaked and what they did it for?

    The Prime Minister must give clear and truthful answers to all of these questions. She must make no mistake. Today the Prime Minister is on trial. [HON. MEMBERS: “Rubbish.”] The main testimony against the Prime Minister is provided by herself. It is provided by her own words to this House last Thursday, and testimony is further provided by the whole nature of her style of governing. How could it be that a Prime Minister who prides herself so earnestly on her involvement in detail; who prides herself so much on her knowledge of the minutiae of her Government; who has such a deep engagement historically in the Westland affair did not know of a supremely important decision, taken by those so very close to her, to manipulate events on 6 January?

    How can it be—

    Mr. Churchill

    I am much obliged to the right hon. Gentleman for giving way, but before he accuses others ​ of deceit, will he explain whether it was deceit that led him to falsify his age when he first put himself forward for political candidature or did he just forget how old he was?

    Hon. Members

    Oh, no.

    Mr. Kinnock

    I think that that may be the best that Conservative Members will be able to do in the course of this afternoon. That was certainly the last time that I inadvertently added a year to my age.

    On the testimony against the Prime Minister, provided by herself, we have to ask how it could be that seven days could pass before she recognised that the issue of the leak was so important that it warranted an inquiry. Who would expect us or the country to believe that 16 days could pass between the corrupt practice of that leak and the Prime Minister’s discovery of the details when the plotters were her closest confidants—her most frequent companions?

    Who would expect the House or the country to accept that in all that time the Prime Minister never asked her associates to venture even a guess about the identity of those involved in the leak? Who can expect us to believe that in all those endless hours of contact, through all those days of discussion and debate and questions, and statements in the House and in the even closer quarters of No. 10 Downing street, the Prime Minister was really blundering around in blissful ignorance of the actions of 2 January? Who would expect us to believe any of that?

    Well, obviously the Prime Minister expects us to believe that. It is clear that the Prime Minister expects the House, her party and her fellow citizens to suspend all normal standards of belief and to accept that it is strange but true.

    “Truth,” she said on television yesterday, “is often stranger than fiction.” When we heard that, as when we heard her last Thursday, many of us wondered whether the Prime Minister had lost the ability to tell the difference between truth and fiction.

    We want to know truthfully now exactly when the Prime Minister first knew of the decision to send the Solicitor-General’s letter. We want to know truthfully now exactly when she first knew of the decision to leak the Solicitor-General’s letter. We want to know now exactly when she first knew of the involvement of the then Secretary of State for Trade and Industry and her office in the conspiracy. When did she first know that he had given his authority, as she put it, and when they had given their cover, as she put it, to act in good faith—act in good faith by making a furtive phone call to the Press Association for the specific and carefully contrived purpose of discrediting another member of her Cabinet?

    We know that the right hon. Lady has not answered those questions. She has admitted that herself. Any statement, she said yesterday, is almost always a basis for further questions. That may be the understatement of the Prime Minister’s lifetime. [Interruption.] But all we have had so far are excuses for the omissions and evasions of last week—no apologies for not answering questions with meticulous accuracy; just attempted excuses. All we have had is the propaganda about “toughing it out”—a phrase, Mr. Speaker, which you will recall first entered the British vocabulary when it came out of Richard Nixon’s office.

    We are told that last Thursday the Prime Minister was sheltering the Secretary of State for Trade and Industry. The Home Secretary told Mr. Brian Walden yesterday—[Interruption.] They are going to hear it all, Mr. ​ Speaker—that he could feel the courage going through the Prime Minister when she made her statement, as the Home Secretary put it, “protecting Mr. Leon Brittan”. That excuse has palpably gone because the late Secretary of State for Trade and Industry has gone, although, interestingly, he went not without resistance. Even when the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) wanted to do the right honourable thing and resign, the Prime Minister tried to talk him out of it and even invited him to apply for the next vacancy for “high office”, as she put it.

    But what of the Prime Minister’s excuses for the omissions from last Thursday’s statement and questions? [Interruption.] The Prime Minister said that the majority of the inquiry report—[Interruption.] Even the deliberate efforts, that will be heard by the nation, by Conservative Members to interrupt the House and to prevent someone from getting a fair hearing, will not stop the truth being heard. [Interruption.]

    The Prime Minister said that the majority of the inquiry report was new to her. She said that, until the report was available, she did not have the full facts—what she called an “enormous number” of facts. As I listened to her then and to the Home Secretary yesterday, saying how much they wanted to be able to give the full facts, I began to think that it was the Government, not the Opposition, who had got the emergency debate today. [Interruption.]

    The protest that there were just too many facts to be absorbed does not carry any weight at all. Of course, it is handy to have the full details for the historians—the dates, the times, the places, the footnotes. But only one fact was absolutely essential for the Prime Minister; one fact really mattered, and that was the fact that the Secretary of State for Trade and Industry and her office had conceived, organised and executed the leak. That was the fact which mattered and it was the fact which the right hon. Lady was forced to admit last Thursday. It was also the fact—the single salient fact—that the right hon. Lady was denied for over a fortnight.

    Who were these people who decided to keep the right hon. Lady in the dark?

    Who were these merciless people who made the Prime Minister, in her innocent ignorance, go through the charade of the inquiry into the leak? [Interruption.]

    Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

    Do something about the giggling schoolgirls opposite.

    Mr. Speaker

    Order. I did not see anything going on.

    Mr. Kinnock

    Whatever anyone sees, the whole country will be able to hear what has been going on. Once again, Conservative Back Benchers have decided that, because they cannot take the truth, they will try to bury it. [Interruption.]

    We want to know who were the people who prevented the Prime Minister from being able to gain access to the single fact about the involvement of the Secretary of State for Trade and Industry and her office in the decision to leak. Who were the cynics who let the Prime Minister be in the dark for 16 days? Who let her come here to tell truths so partial, so incomplete, that they began to look like untruths and who let her come to make a whole speech in this House on 15 January without telling her that they ​ knew who had leaked, how they had leaked and why they had leaked? Who were these callous people who caused the Prime Minister so many problems over the weeks?

    Why, they were the Prime Minister’s own Secretary of State for Trade and Industry and, strangest of all, her own office—the Prime Minister’s very own office, her closest, most senior staff; her office which, in her own words, did not seek her agreement; her office, which, in her words,

    “considered—and they were right—that I should agree with my right hon. Friend the Secretary of State for Trade and Industry”.—[Official Report, 23 January 1986; Vol. 90, c. 450.]

    That begs the question. If her office did not tell the Prime Minister, why did her office not tell the Prime Minister? There can be only two reasons. It was either because they did not want to tell the Prime Minister or because they did not think that there was a need to tell the Prime Minister. If they did not want her to be involved, that could be for only one reason—the simple, straightforward reason that they were doing wrong, that they knew that they were doing wrong and that they did not want the Prime Minister to be contaminated by the guilt.

    Of course, it may be that they thought that the Prime Minister did not need to know about what was going on. They might have said to themselves, “There is no need to tell the Prime Minister. We know what her attitude is to Westland. We know her attitude to the turbulent Secretary of State for Defence. We know what her attitude is to his campaign and we know what her attitude would be to us using dirty tricks to defame and undermine the Secretary of State for Defence.”

    Were the people in the Prime Minister’s office actually right about that? Do they really know the Prime Minister? Either they do know the Prime Minister and they think of her as a woman who would stoop to conquer, no matter how low, or they are totally mistaken and she is not the woman that they think.

    From the Prime Minister’s statement last Thursday it appears that they do not know the Prime Minister. We have the Prime Minister’s own word for it. She told us that her office did know her well enough to guess accurately that she would agree to the attitude taken by the Secretary of State for Trade and Industry and that she did not and would not have consented, if she had been consulted, because she felt that there was a different way, a better way, to make the relevant details known.

    Despite their years of close proximity and despite the deep mutual trust that has to exist between the Prime Minister and her office, it appears that they did not know the Prime Minister at all. There they were taking important decisions in her name—[Interruption.]

    Hon. Members

    Order.

    Mr. Speaker

    Order. May I say to the House that backchat does no credit to the House.

    Hon. Members

    It is deliberate.

    Mr. Kinnock

    Either they knew the Prime Minister or they did not know the Prime Minister. She says that they knew her well enough to understand that she agreed with the Secretary of State for Trade and Industry, but that, had she been consulted, she would have told them that there was a different way and a better way that must be found to make the relevant facts known. ​ That is all despite those years of close proximity and all that close contact. Despite all of that, there they were, taking important decisions for the Prime Minister as she busied herself yards away in Downing street.

    They did not tell the Prime Minister, so we are told. All the time, they were outrageously miscalculating the Prime Minister’s attitude towards the correct method of putting matters into the public domain. Having made that miscalculation, they then apparently compounded the fault by allowing her to set up an inquiry into a leak which they themselves had perpetrated.

    They must have been wrong—practically wrong and terribly wrong; too wrong to enable them to endure in their present positions. At least that is what we would think. How can they continue to carry out the immense responsibilities and be the object of the Prime Minister’s trust when they could be so terribly wrong, so we are told, about her attitude towards the way in which that information should be released.

    If they are so wrong, why have they not gone? They have not gone, and they are not going. They are not going because the Prime Minister says that she has complete confidence in them. Why has she that confidence in them? Is it because the Prime Minister, who has the reputation for. being ruthless with those who fail her, has suddenly gone soft? It cannot be that. It must not be because of charity. Can it be because of complicity by the Prime Minister? Can it possibly be that the Prime Minister is not innocent but that she is implicated and involved?

    For the moment, we withhold our judgment while we wait for the Prime Minister to give her account. Last Thursday, in reply to my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees), the Prime Minister said that she hoped that we would have the decency to accept her version of events. We have the decency; what we lack is the gullibility to accept the Prime Minister’s version of events.

    We want the facts. We want them now. We want only the one version that will be believed—the truth, the whole truth and absolutely nothing but the truth. If the Prime Minister cannot tell that truth, she cannot stay. If she will not tell that truth, she must go.

  • Peter Morrison – 1986 Speech on the Tin Industry

    Below is the text of the speech made by Peter Morrison, the then Minister of State at the Department of Trade and Industry, in the House of Commons on 24 January 1986.

    I am glad that the hon. Member for Truro (Mr. Penhaligon) has had the opportunity to raise an incredibly important matter for Cornwall.

    I listened carefully to the hon. Gentleman’s detailed and well-informed account of the tin industry in Cornwall. He and my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) may be aware that I have been down two tin mines in Cornwall and I have visited Cornwall perhaps more times than any other part of the country since I became a Minister about five years ago.
    I am aware that unemployment in Cornwall is extremely high—about 19·5 per cent. I am aware also that Cornwall’s distance from market places could be described as an inhibiting factor. I believe that people in Cornwall feel that way. I think that it is fair to say—I do not say this in a patronising way—that the rest of the country misunderstands Cornwall’s position. To a certain extent, it is assumed that problems do not exist in Cornwall. When we go as tourists and holiday makers to the area, we are greeted with enormous hospitality and great generosity. The countryside is beautiful and the seaside is perhaps everyone’s dream. We do not see the true position.

    Most people would not expect unemployment in Cornwall to be 19·5 per cent., yet, in the big cities, the ​ unemployment levels are as follows: Manchester, a little less than 14·5 per cent.; Newcastle, 18·4 per cent.; Glasgow, 17·5 per cent.; and Bristol, 11·3 per cent. Even Ebbw Vale, where one would expect a much higher level of unemployment, has precisely the same unemployment level as Cornwall. I do not underestimate Cornwall’s problems. The problems are not sufficiently understood, and some people underestimate them.
    Of course I understand the position of those who work in Cornwall, especially at Geevor, South Croft) and Wheal Jane, and at the other small producers in the constituency of the hon. Member for Truro. The hon. Gentleman said that about 1,500 people work in the tin mines. About 4,500 people, including dependants, are directly affected. Many other people are indirectly employed and, not surprisingly, are worried about what is happening. They will read what has been said in the debate and dissect it carefully.

    It is still too early to judge the impact of recent developments on the commercial prospects for tin mining in Cornwall. The most important factor will be the price at which tin settles when the market reopens. Some fall in price is probable, indeed almost certain. The extent of that fall in the short term will depend on the outcome of the Government’s efforts to secure an acceptable settlement of the International Tin Council’s debts and a return to orderly trading. As it is unlikely that the International Tin Council will agree to resume buffer stock buying, it seems inevitable that in the longer teen supply and demand will have to balance—I was interested in what the hon. Member for Truro said about the tin mines of Cornwall in the market place in the longer term—and some of the world’s more expensive producers are likely to have to close as a result. It is against that background that prospects for Cornwall tin will have to be assessed.

    We have already said that we shall consider applications for grants for tin mining companies to help them reduce production costs. Since 1979, we have given grants of £3·5 million to continue projects, including exploration.

    Decisions on grants cannot be taken until we can be satisfied that any project receiving assistance from the taxpayer has reasonable prospects for a sound commercial future. I hope that the hon. Member for Truro and his constituents will understand that.

    The period of uncertainty has been lengthy, and that is bound to cause problems for some companies. That is one of the reasons why our priority is to restore orderly trading as soon as possible. That will be in the interests of everyone. That is taking longer than we had hoped, but, when 22 countries are involved, there are bound to be difficulties.

    The United Kingdom has made quite clear its readiness to meet its share of any commitments of the International Tin Council member countries and has called upon others to do likewise. Proposals aimed at finding an acceptable solution to the International Tin Council’s problems have been put forward, and we have made great efforts to resolve the crisis through diplomatic channels and will continue to do so. I can assure the hon. Gentleman that an inordinate amount of time has been spent in my Department dealing with this matter. The people involved are working nights and weekends.

  • David Penhaligon – 1986 Speech on the Tin Industry

    Below is the text of the speech made by David Penhaligon, the then Liberal MP for Truro, in the House of Commons on 24 January 1986.

    I wish to launch into what may not be the easiest of tasks. I want to achieve an application of the collective mind of the Department of Trade and Industry to the tin crisis, which affects my county and parts of London, instead of the other difficulty that has received a considerable amount of publicity this week.

    There are two collective problems, one of which caused the other. However, the solution to one of those problems does not necessarily mean that the other will be solved. The question that is constantly being raised in the House —I have raised it several times, and the hon. Member for St. Ives (Mr. Harris) has also raised it several times—is what will the Government do? I can tell the Minister that in Cornwall there is more interest in the Government’s reply to that matter than in the Westland saga.

    The saga begins in London at the London metal exchange. As is well known, the international tin agreement has collapsed and the market was closed towards the end of October 1985. Various rescue bids have been launched. During Question Time yesterday the Prime Minister expressed optimism about the possible conclusion of the latest rescue attempt. I must say that the Prime Minister’s optimism was greater than that expressed by the people who are involved on a day-to-day basis.

    The crisis has been going on for three months, and business is already leaving London. Some people believe that the saga could lead to the end of commodity dealing in London and the reneging on international debts by major financial powers. Whatever the outcome, it is certain that the price of tin will fall, and it is at that stage that Cornwall becomes involved.

    I am one of those in Cornwall who have long taken the view that hard-rock mining is on a pleasant growth pattern and is likely over the next decade, two decades or three decades to make an increasing contribution to the Cornish economy. I and others who share my view do not expect hard-rock mining to return to the levels of production of 140 or 150 years ago, but we have no doubt that hard-rock mining, given Cornwall’s mineral structure, can make a major contribution to the local economy.

    In the 1960s, the average production of tin was about 1,500 tonnes a year. In the 1970s the average was 3,000 tonnes. In 1984, it exceeded 5,000 tonnes for the first time this century. Tin is not the only metal that is mined. Cornwall produced 7,500 .tonnes of zinc, 750 tonnes of copper and 2·5 tonnes of silver in the past mining year. At October 1985 prices, the value of this output was about £50 million to the balance of payments.

    Against this background there were developments in the offing. The two mines in my constituency, Concorde and Cligga, obtained permission to begin production and they are now preparing to launch themselves into it.

    Mr. Robert Hicks (Cornwall, South-East)

    I should like to substantiate the argument that is being advanced by the hon. Gentleman. There are no non-ferrous mines in my constituency, but major prospecting is taking place and boreholes are being sunk at Redmoor near Callington. The ​ determination of the ultimate viability of the project, which it is estimated will produce 300 jobs, will be reflected by the overall price of tin on the world market. The hon. Gentleman is making an important point.

    Mr. Penhaligon

    I thank the hon. Gentleman for making that intervention, which reflects the general picture of growth. Only six months ago, reasonable men would have extrapolated growth. There are about 1,500 on the industry’s payroll, in Cornwall but it is an industry that does a good deal of subcontracting and the actual number employed by the industry, directly and indirectly, is considerably greater than 1,500. The industry claims—this has not been challenged—that it contributes about £23 million a year to the economy. That contribution is made mostly in west Cornwall. It is a worthwhile figure and one that should not be cast aside lightly.

    We are talking about an area that is in the midst of the country’s employment blackspot. In Falmouth, 26·7 per cent. of males of working age are unemployed. The figures for Penzance, Redruth, and Helston are 28·4 per cent., 23·8 per cent. and 25·4 per cent. respectively. A quarter of the male population in the area that is most affected is already unemployed. Thankfully, Truro comes in at fifth place in the unemployment league at about 15 per cent.

    The industry has been aware for some time that the cartel price at which tin was being traded could not be sustained ad infinitum. It was well aware that if the industry was to continue to prosper and grow, it would have to succeed in competing in a free market. It was under no illusions and it recognised that the price of tin in a free market would be less than that at which the commodity had recently been traded on the London market.

    The industry had been making vigorous preparations for the commencement of a free market. Even the most realistic among the mining personnel thought that the day was at least two years further on from today, but preparations were clearly being made made, and most obviously at the three really important mines, the Wheal Jane complex, South Crony and the mine in Penzance which is called Geevor. Geevor is a good illustration of the effort that is being made to enable the mines to modernise themselves and to compete in a free market. Money has already been invested in a new mill at Geevor, which will double its capacity to treat available ore. Half of the ore comes from the old Geevor mine. It is good quality ore, and well worth treating. The other half comes from the old rubbish dumps of years ago. The mine is investing an enormous amount so that it can run into the old Botallack and Lezant mines for further sources of good quality ore to allow the mill to work at full capacity with good material. If the improvement is completed, the mine will be able to compete in the free market.

    We have to deal with the present crisis and the mines are in the worst of all positions. They have lost the higher price that they were enjoying, but have enormous financial commitments. Large sums have already been spent on improving the mines. Unfortunately, although the money has been half spent, the efficiency gain has not been half felt. Indeed, no efficiency gains have been felt so far. If improvement work were terminated today, no improvements in efficiency would have been made.

    The simple question for the Minister is, “Will the Government help?” Will they help towards meeting development costs to improve the efficiency of mines so ​ that they can compete in a free market? If the will exists, there are half a dozen ways in which financial assistance could be given. The county, the miners and their families want to know whether the Government will help. Does the will exist? Will the Government help Cornwall at this tragic time?

    I am not pleading for a lame duck industry. The dominant employer in my constituency is English China Clays, which this year declared a profit of £74 million. I do not know what the Treasury takes from that profit, but I have a feeling that it is considerably more than zero.

    We are merely asking the Government to realise that mining is a high-risk industry and to act as an honest broker in the middle, sometimes assisting mines when they get into difficulties that are not necessarily long-term or terminal.

    On Wednesday next week, about 500 tin miners from my county will be lobbying Parliament. The Cornish anthem, “Shall Trelawny die?” includes the line

    “Here’s twenty thousand Cornish men will know the reason why!”

    There are not 20,000 Cornishmen coming to London on Wednesday, but a lot more than 20,000 in Cornwall want to know whether the Government will assist the Cornish tin industry and, if so, to what extent.

    If no assistance is forthcoming, at least some of the mines will undoubtedly close for all time. A couple may be held on standby for half a decade or so in the expectation that the tin price will rise again. If the Government refuse to assist at this crucial time, the growth that has taken place over the past couple of decades will stop and the production of Britain’s only significant mineral resource will cease. I cannot believe that that would be a logical or rational outcome. I look to the Government for an assurance that they are willing to assist the Cornish tin industry through the tragedy confronting it.

  • Neil Kinnock – 1986 Speech on Westland

    Below is the text of the speech made by Neil Kinnock, the then Leader of the Opposition, in the House of Commons on 23 January 1986.

    After persistent efforts, we have managed to pull a statement from the right hon. Lady. It had a detail produced not by frankness but by guilt—unerasable guilt. That stain will stay with the right hon. Lady for as long as she endures in politics. Her excuses are completely implausible. She cannot justify or excuse the conduct of her Government in any one respect.

    In this squalid story, we have been told that the leaking of the Solicitor-General’s letter was authorised —authorised by the right hon. Lady’s office and connived in by her office, all, says the Prime Minister, with her subsequent endorsement. We must ask the Prime Minister, especially given her personalised and centralised style of government, where she was on 6 January so that she could not be contacted on a matter as basic and essential as this. She has a duty to tell the House what she was doing when her office, as she says, was getting on with the business by itself.

    We have been told that the matter was authorised. What was actually authorised was a conspiracy by people in the Department of Trade and Industry and people from the right hon. Lady’s office to disclose certain parts of a letter written by a Law Officer to another member of the Cabinet about a matter of important public business. That was their way, we are told, of putting it into the public domain. That was the route chosen — not by open means, but by subterfuge and dishonest means.

    We have been told that there was an inquiry. Indeed, there have been answers in the House from Ministers, including the Prime Minister, saying that an earnest inquiry was being undertaken in the normal fashion. We have to ask: why was there an inquiry when everybody knew what had happened? Why was there an inquiry when everybody knew that there would be no prosecution because the dispensation had been given? The only precedent comparable with this act of contrived insincerity is the way in which Macbeth so fiercely looked around for Duncan’s murderers.

    We hear from the Prime Minister that an immunity was offered. Why was that the case when it was plain that there was to be no prosecution?

    We have heard a shabby story—an effort to defraud the public. The fact is that the Prime Minister, the Secretary of State for Trade and Industry and everyone else involved would have got away with it were it not for the fact that in this democracy ultimately the Prime Minister had to make a statement. They would have dealt with the former Member of the Cabinet, the Secretary of State for Defence, not by the means available to the Prime Minister, if she believed that he was acting contrary to the national interest—not by sacking him—but by trying dishonestly and covertly to subvert him. That is a profound dishonesty. For the Government to leak in order to inform and influence public opinion is normal. For a Government to leak in order to discredit anyone is shameful. For a Government to leak in order to subvert a member of that Government is the action of a Government who are rotten not just to the core but from the core, and they should go.

  • Margaret Thatcher – 1986 Statement on Westland

    Below is the text of the statement made by Margaret Thatcher, the then Prime Minister, in the House of Commons on 23 January 1986.

    With permission, Mr. Speaker, I wish to make a statement on the outcome of the inquiry into the disclosure of certain information in my hon. and learned Friend the Solicitor-General’s letter of 6 January.

    As the House knows, the chairman of Westland plc, Sir John Cuckney, wrote to me on 30 December 1985 asking whether Westland would no longer be considered a European company by the Government if a minority shareholding in the company were held by a major international group from a NATO country outside Europe.

    This question was of fundamental importance to the company in making its decision as to what course it was best to follow in the interests of the company and its employees. It was therefore essential to be sure that my reply should be in no way misleading to anyone who might rely upon it in making commercial judgments and decisions.

    The reply was accordingly considered among the Departments concerned, and the text of my letter of 1 January 1986 was agreed in detail by my right hon. and learned Friend the Secretary of State for Trade and Industry, my right hon. Friends the then Secretary of State for Defence and the Chief Secretary to the Treasury, and finally by my hon. and learned Friend the Solicitor-General.

    My letter was made public.

    Two days later, on 3 January, my right hon. Friend the then Secretary of State for Defence replied to a letter of the same date from Mr. Horne of Lloyds Merchant Bank asking him a number of questions, covering some of the same ground as my own reply to Sir John Cuckney. The texts of the letters became public that same day.

    My right hon. Friend’s reply was not cleared or even discussed with the relevant Cabinet colleagues. Moreover, although the reply was also material to the commercial judgments and decisions that would have to be made, my hon. and learned Friend the Solicitor-General was not invited to scrutinise the letter before it was issued.

    On the morning of 6 January, my hon. and learned Friend the Solicitor-General wrote to my right hon. Friend the then Secretary of State for Defence. He said—and I quote:

    “It is foreseeable that your letter will be relied upon by the Westland Board and its shareholders.

    Consistently with the advice I gave to the Prime Minister on 31 December, the Government in such circumstances is under a duty not to give information which is incomplete or inaccurate in any material particular.”

    The letter continued:

    “On the basis of the information contained in the documents to which I have referred, which I emphasise are all that I have seen, the sentence in your letter to Mr. Home does in my opinion contain material inaccuracies in the respects I have mentioned, and I therefore must advise that you should write again to Mr. Horne correcting the inaccuracies.”

    That is the end of the quotation.

    I have quoted extensively from the letter which, as hon. Members will know, was published a week ago. As I have already indicated, it was especially important in this situation for statements made on behalf of the Government, on which commercial judgments might be based, to be accurate and in no way misleading.

    That being so, it was a matter of duty that it should be made known publicly that there were thought to be ​ material inaccuracies which needed to be corrected in the letter of my right hon. Friend. the Member for Henley (Mr. Heseltine) of 3 January, which, as the House will recall, had already been made public. Moreover, it was urgent that it should become public knowledge before 4 pm that afternoon, 6 January, when Sir John Cuckney was due to hold a press conference to announce the Westland board’s recommendation to shareholders of a revised proposal from the United Technologies Corporation-Fiat consortium.

    These considerations were very much in the mind of my right hon. and learned Friend the Secretary of State for Trade and Industry when the copy of the Solicitor-General’s letter was brought to his attention at about 1.30 pm that afternoon of 6 January. He took the view that the fact that the Solicitor-General had written to the then Secretary of State for Defence, and the opinion he had expressed, should be brought into the public domain as soon as possible. He asked his officials to discuss with my office whether the disclosure should be made, and, if so, whether it should be made from 10 Downing street, as he said he would prefer.

    My right hon. and learned Friend made it clear that, subject to the agreement of my office, he was giving authority for the disclosure to be made from the Department of Trade and Industry, if it was not made from 10 Downing street. He expressed no view as to the form in which the disclosure should be made, though it was clear to all concerned that in the circumstances it was not possible to proceed by way of an agreed statement.

    My office were accordingly approached. They did not seek my agreement: they considered—and they were right — that I should agree with my right hon. and learned Friend the Secretary of State for Trade and Industry that the fact that the then Defence Secretary’s letter of 3 January was thought by the Solicitor-General to contain material inaccuracies which needed to be corrected should become public knowledge as soon as possible, and before Sir John Cuckney’s press conference. It was accepted that the Department of Trade and Industry should disclose that fact and that, in view of the urgency of the matter, the disclosure should be made by means of a telephone communication to the Press Association. [Interruption.] Had I been consulted, I should have said that a different way must be found of making the relevant facts known.

    The report finds, in the light of the evidence, that the Department of Trade and Industry acted in good faith in the knowledge that it had the authority of its Secretary of State and cover from my office for proceeding. An official of the Department accordingly told a representative of the Press Association of the letter by my hon. and learned Friend the Solicitor-General and material elements of what it said. The company was also informed. The information was on the Press Association tapes at 3.30 pm.

    My right hon. and learned Friend the Secretary of State for Trade and Industry was, in my judgment, right in thinking that it was important that the possible existence of material inaccuracies in the letter of 3 January by the then Secretary of State for Defence should become a matter of public knowledge, if possible before Sir John Cuckney’s press conference at 4 pm that day. In so far as what my office said to the Department of Trade and Industry was based on the belief that I should have taken that view, had I been consulted, it was right. ​ My right hon. and learned Friend the Attorney-General has authorised me to inform the House that, having considered the report by the head of the Civil Service, and on the material before him, he has decided after consultation with, and with the full agreement of, the Director of Public Prosecutions and senior Treasury counsel, that there is no justification for the institution of proceedings under the Official Secrets Act 1911 in respect of any of the persons concerned in this matter.

    In order that there should be no impediment to cooperation in the inquiry, my right hon. and learned Friend had authorised the head of the Civil Service to tell one of the officials concerned, whose testimony would be vital to the inquiry, that he had my right hon. and learned Friend’s authority to say that, provided that he received full co-operation in his inquiry, the official concerned would not be prosecuted in respect of anything said during the course of the inquiry.

    The head of the Civil Service did, indeed, receive full co-operation not only from that official but from all concerned. My right hon. and learned Friend tells me that he is satisfied that that in no way interfered with the course of justice: on the facts as disclosed in the inquiry there would have been no question of proceeding against the official concerned.

  • Norman Fowler – 1986 Statement on Stanley Royd Hospital

    Below is the text of the statement made by Norman Fowler, the then Secretary of State for Social Services, in the House of Commons on 21 January 1986.

    With permission, Mr. Speaker, I should like to make a statement on the Stanley Royd hospital inquiry report. I am this afternoon publishing the report of the committee of inquiry into the outbreak of food poisoning at Stanley Royd hospital, Wakefield.

    Stanley Royd is a large hospital in Wakefield for mentally ill and psychogeriatric patients. In a major outbreak of salmonella food poisoning which began on 26 August 1984, 355 patients and 106 members of staff were affected. Food poisoning caused, or contributed to, the deaths of 19 patients. At the time of the outbreak and subsequently, a number of allegations were made of errors in the control of infection, of poor standards of hygiene in the hospital kitchen and of other shortcomings.

    I announced in September 1984 that I was setting up a public inquiry into the outbreak under the chairmanship of Mr. John Hugill QC. The other members of the inquiry were Professor Rosalinde Hurley and Mr. Patrick Salmon. The committee heard oral evidence between February and May 1985. It submitted its report to me last month. I am most grateful to the chairman and members of the committee for all their work on this complex inquiry.

    The report gives a detailed account of the background to the outbreak and its course and of the actions taken by National Health Service staff.

    The committee concludes that the cause of the outbreak was salmonella which was probably brought into the kitchen in contaminated chickens, and that cold roast beef was the most likely vehicle of infection. The infection was able to multiply because the beef was not properly refrigerated. The committee found that a number of unhygienic and unsatisfactory practices had grown up in the hospital kitchen.

    The report pays tribute to the work of the junior doctors on duty during the early days of the outbreak and the care given by nursing staff on the wards. Those staff were working under very difficult conditions and their efforts were in the highest traditions of their professions.

    The committee makes criticisms on a number of matters. In particular, it comments on the failure to ensure satisfactory management of the kitchen at the hospital. It criticises medical and nursing management and in particular the failure to seek, or accept offers of, help from outside specialists, both in the investigation of the outbreak and in the treatment of the patients affected by it. The regional health authority and some officers at regional and district level are criticised for failing fully to inform themselves first-hand of the situation once the outbreak had occurred.

    Since the outbreak, Wakefield health authority has made a number of improvements in the kitchen and its management. I am now instructing it and the Yorkshire regional health authority to consider all the points raised by the report and to report to me urgently on the action they have taken and propose to take in response to them. That response must cover the position of those people whose conduct may have contributed to these tragic events, and the steps taken to ensure that such events do not recur.

    The report identifies serious failures of supervision and management. General managers have now been appointed by the Yorkshire regional health authority and Wakefield ​ health authority. As in all authorities, these managers carry clear and personal responsibility for securing effective action.

    A number of comments were made on the position at Stanley Royd prior to and during the inquiry. One of these concerned finance. On this the report says that it was not its

    “view that the question of financial restraints or constraints above the level of the region were relevant to any of the issues which we had to consider and, in taking this view, we are supported by the evidence given by witnesses from the Yorkshire regional health authority”.

    Another suggestion was that Crown premises like hospitals should be subject to the general food legislation. However, the report states that in the case of Stanley Royd the evidence did not support the need for the abolition of Crown immunity. The report says:

    “We find it impossible to recommend any change in the law on the vexed question of Crown immunity where the entirety of the evidence given to us by the professional environmental health officers was to the effect that the sanctions of the criminal law would not have been employed in respect of the kitchen at Stanley Royd, even if they had been available.”

    The Government will nevertheless continue the urgent review of Crown immunity for hospital kitchens, including the suggestion in the report that a “Crown notice” form of procedure should be initiated.

    The majority of the report’s formal recommendations are aimed at improving standards of hygiene in hospital kitchens and improving the investigation and control of any future outbreaks. The committee recognises that the departmental guidance on food hygiene in hospitals is basically sound and recommends that health authorities should be reminded of its terms. We had already done that before the report was received.

    In addition, I am urgently reviewing departmental guidance to health authorities on the steps that they must take to ensure proper food hygiene in hospitals and to ensure that environmental health officers are encouraged to visit, and that proper regard is paid to their recommendations. In doing so, I shall take full account of the Stanley Royd committee’s recommendations.

    I am referring the recommendations about the arrangements for the control of infection and the handling of outbreaks to the hospital infection working group. This group was set up last summer to advise me on the revision of departmental guidance on control of infection and I am asking it to give me the highest priority on contingency plans for dealing with outbreaks of infection—plans that will ensure that specialist help is brought in as soon as it is needed.

    There can be no doubt at all about the continuing need for proper provision of public health and community medicine advice within the management structure of the Health Service. The functions of the specialty of community medicine include not only the control of infectious diseases but the assessment of the needs of populations for health care, the planning and evaluation of health services and responsibility for prevention and health promotion.

    I have therefore decided that it would be right to establish an inquiry into the future development of the public health function, including the control of communicable diseases, and the specialty of community medicine in England.

    The inquiry will be a broad and fundamental examination of the role of public health doctors, including how such a role could best be fulfilled. The inquiry will be chaired by the Government’s Chief ​ Medical Officer, Dr. Donald Acheson, and I expect to receive its report before the end of the year. Details of membership will be finalised shortly. In the meantime, we shall take every step possible to prevent a recurrence of these tragic events.

  • Geoffrey Howe – 1986 Statement on Yemen

    Below is the text of the statement made by Geoffrey Howe, the then Foreign and Commonwealth Secretary, in the House of Commons on 21 January 1986.

    With permission, Mr. Speaker, I would like to make a statement on the action being taken to secure the safety of British subjects and others in the People’s Democratic Republic of Yemen.

    On 13 January fighting broke out in Aden. The ferocity of the fighting presented grave risks to the safety of British subjects. In those circumstances, and with the full agreement of Her Majesty the Queen, the royal yacht Britannia, which was just leaving the Red sea, was ordered to remain off Aden, and Her Majesty’s ships Newcastle and Jupiter, with the Royal Fleet Auxiliary Brambleleaf, were ordered to Aden at full steam in case they were needed for an evacuation.

    The situation in the country continued to deteriorate and the level of fighting approached that of a civil war. After close consultation with the Russians and French, both in Aden and in capitals, it was agreed that evacuation was necessary and that, as far as possible, our efforts should be co-ordinated. On 17 January, Soviet merchant vessels lifted off from Aden about 1,000 people, mostly their own nationals. On the same day, the royal yacht took off 450 people, 38 of them British—44 nationalities altogether. Eighty-one French nationals were then transferred to a French ship, and the rest of the evacuees were taken on Britannia to Djibouti. The royal yacht then returned to the area and on 19 January lifted off a further 209 people from an area 35 miles from the capital. Eighteen of these were British. These have since arrived in Djibouti, ‘after transferring to HMS Jupiter. I am now very pleased to be able to add that Britannia has this morning picked up a further 15 British nationals from Little Aden. Britannia is maintaining close contact with the vessels of the other nations involved, and remains offshore nearby to take on board further parties of British and other foreign nationals as soon as conditions permit.

    So far, no British subjects have been hurt. However, a number of British subjects still remain in south Yemen and we are continuing to work out with other Governments the best ways of evacuating these widely scattered communities.

    On the evening of 17 January, when the embassy and residence had been rendered uninhabitable, the ambassador, Mr. Arthur Marshall, decided that he should withdraw all members of the embassy. At the end of the evacuation, he accompanied those on board to Djibouti but then returned on Britannia to the area, where he will remain with a member of his staff while the evacuation continues. Another member of his staff is on board HMS Newcastle.

    The success of the evacuation so far would not have been possible without the help given by a number of Governments, and in particular the Governments of Djibouti, the USSR and France. This has been a remarkable demonstration of what can be achieved through close international co-operation, and I take this opportunity to thank them warmly for their assistance.

    I should like to express my gratitude to all the staff of the Ministry of Defence and of the Diplomatic Service, at home and abroad, who have been involved in this operation. I should particularly like to thank our honorary ​ consul in Djibouti, Mr. Christopher Reddington. I know too that the whole House will join me in praising the calmness and efficiency of our ambassador in Aden, his staff, and their families throughout this difficult period.

    Their example has been matched by the fortitude of the British evacuees, who helped to organise the evacuation of hundreds of other nationals and who set an example of disciplined behaviour throughout.

    This is the first time that the royal yacht has been involved in a operation of this sort. It has received magnificent support from HM ships Newcastle and Jupiter, and Royal Fleet Auxiliary Brambleleaf, with its Merchant Navy crew. I should like to pay tribute to Rear-Admiral John Garnier and all the officers and crew involved for the courage and professionalism that they have shown in carrying out the operation in conditions of danger and difficulty. We can all be proud of them.

    Mr. Donald Anderson (Swansea, East)

    We and the British people as a whole can be proud of this magnificent rescue. We rejoice that no British subjects have been injured or killed in spite of the ferocity of the fighting, and we join wholeheartedly with the Foreign Secretary in thanking and paying tribute to those of our people—the military, Admiral Garnier, the diplomatic staff, Mr. Marshall and those with him — who played and are playing such a wonderful part to ensure a successful outcome.

    The Foreign Secretary must be aware that the rescue amounts to probably the highest point of British-Soviet co-operation in a practical sphere since the end of the second world war. We hope that the spirit of good will will act as a precedent and will spill over into other fields of our bilateral relationships with the Soviet Union. However, the Soviet Union has learnt the cost, as have other peoples, including ourselves, the Israelis and the Americans, of unilateral intervention in a middle east country.

    I ask the Foreign Secretary, to report to the House in specific respects. Was the matter of the rescue raised in his discussions yesterday with Mr. Ryzhov, the Soviet Deputy Minister? On the best estimates available to him, how many Britons remain in South Yemen? Can he say how long it is expected that the royal yacht Britannia will remain close by and available for action? What is the Foreign Office reading of the position regarding who is in charge in South Yemen? Is it the Foreign Office view that the difference between the factions there is essentially on ideological lines, or is it more based on personal and tribal factors?

    Finally, are there any anxieties about the troubles in South Yemen spilling over into neighbouring territories, and possibly posing a threat to security in the region as a whole?

    Sir Geoffrey Howe

    I thank the hon. Gentleman for the kind way in which he has joined me in paying tribute to all those involved in the operation, and add my word of thanks to my hon. Friend the Minister of State for the Armed Forces for his support throughout.

    The hon. Gentleman is right to draw attention to the degree of co-operation between the United Kingdom and the Soviet Union on this occasion. One cannot presume from that high degree of co-operation that everything else will be handled in the same spirit, but I hope that it will not be the last occasion for improving relationships in this way. I was able to raise the matter with Mr. Ryzhov last ​ night, to thank him for the co-operation that had taken place, and to express the hope that it would continue in practical terms on the spot. It is worth reminding the House of what Admiral Garnier said this morning when he paid tribute to the fine atmosphere of international co-operation. He said that
    “the French, the Soviets and us are talking regularly, pooling our information, and everyone here is dedicated to the hope that we can get the remaining people off.”

    The hon. Gentleman asked precisely the questions which one would want to ask. It is not possible to be sure about the number of British subjects still left in the PDRY, but our inquiries suggest that the figure is likely to be about 40. Her Majesty has expressed her willingness for Britannia to remain for as long as there is a need for it to do so.

    It is not possible for me to offer any clear view on the outcome, because the situation is still very confusing, but it appears that the conflict arises from differences of a tribal kind rather than a political or ideological kind. So far, the problems have not spilt over into other neighbouring countries. If they did, it would naturally be a cause for concern. We are keeping in close touch with all those countries in the neighbourhood.

    Sir Antony Buck (Colchester, North)

    Does my right hon. and learned Friend agree that it is refreshing to find the whole House able to unite in congratulating all those involved in this splendid operation? Does he agree that it has proved the utility of the royal yacht not only as a hospital ship on this occasion but as a facility which is extremely useful for us to have? It has proved itself in many other ways not only from an ideological point of view but as a fitting facility for the head of a great Commonwealth country?

    Sir Geoffrey Howe

    I agree with my hon. and learned, Friend’s first comments and with his tribute to the value of the royal yacht, with its particular suitability for an occasion of this kind and its value in a much wider representational capacity.

    Dr. David Owen (Plymouth, Devonport)

    I congratulate all those concerned, particularly the Soviet and French Governments. Does the Foreign Secretary agree that this shows the value of being able to deploy the Royal Navy east of Suez? In view of the announcement of the 7 per cent. real terms cut in the defence budget, will the right hon. and learned Gentleman use his influence to ensure that the Royal Navy surface ships are not cut back and that their present minimal numbers are fully maintained?

    Sir Geoffrey Howe

    I can well understand the right hon. Gentleman’s interest in this aspect. It illustrates the value of having this kind of capability available in so far as it is compatible with the continuing and difficult task of judging the pattern of priorities on defence expenditure more generally.

    Dr. John G. Blackburn (Dudley, West)

    Will my right hon. and learned Friend take note of early-day motions 322 and 323 which refer to Britannia? Will he send a signal to the admiral conveying the sentiments expressed in those early-day motions and pay a warm and generous tribute to the skipper and crew of the Diamond Princess, a British registered cargo ship which is reported to have saved some 600 people in the past 24 hours?​

    Sir Geoffrey Howe

    I shall certainly be willing to pay tribute to any vessels or individuals for the part that they have played, once that is established. I certainly join in the sentiments to which my hon. Friend has drawn attention in early-day motions 322 and 323. They pay a deserved tribute to those concerned in this rescue. I shall see that that tribute and my hon. Friend’s sentiments are conveyed to the rear admiral and those with him.

    Mr. David Winnick (Walsall, North)

    I, too, associate myself with the splendid work that has been undertaken. Does the right hon. and learned Gentleman agree that the faction fighting in Yemen is a sharp warning to the Cabinet not to allow their disagreements to get out of hand?

    Sir Geoffrey Howe

    The hon. Gentleman can always be relied upon to make an inaccurate observation on almost any occasion.

    Mr. John Stokes (Halesowen and Stourbridge)

    Is my right hon. and learned Friend aware that the whole nation looks with great pride and gratitude on the achievements of the Royal Navy during the past few days? It notes once again the usefulness of the royal yacht, with its supporting small ships. It should be grateful to my right hon. and learned Friend the Foreign Secretary for the way in which he masterminded the whole business.

    Sir Geoffrey Howe

    I am even more than usually grateful to my hon. Friend for the generosity of his tribute. The actions and decisions of those on the spot deserve particular thanks on this occasion.

    Mr. Dennis Skinner (Bolsover)

    Is the right hon. and learned Gentleman aware that, as the rescue appears to have been a huge success, some of us are a bit curious about why the Prime Minister has not taken full advantage of it? Have arrangements been made to get her out there on the deck of Britannia with the television cameras?

    Perhaps the right hon. Lady could be seen shaking hands with the Soviets—perhaps a member of the KGB or even one of those who associate with the same group that has figured prominently in Jane’s Defence Weekly? What a wonderful picture would be painted!

    Sir Geoffrey Howe

    Only the hon. Gentleman would have used this occasion to illustrate his capacity to play the game of consequences in a profoundly inconsequential fashion.

    Mr. A. J. Beith (Berwick-upon-Tweed)

    Some of the preceding comments look a little odd beside the enormous relief felt by those who experienced the rescue in extremely dangerous circumstances. Was not great courage shown by those in the Diplomatic Service who assisted in getting the evacuees to the beaches and by those in the small boats who came from Britannia to take them off the beaches? Did not the BBC overseas service also play an important and necessary part in the rescue?

    Sir Geoffrey Howe

    I am grateful to the hon. Gentleman for returning our discussion to the proper note of seriousness and thankfulness. He was right to pay tribute to all those concerned and to the BBC world service, which has played an important communication role on this and other occasions.

    Mr. Harry Greenway (Ealing, North)

    Does my right hon. and learned Friend agree that Britannia’s versatility on this occasion is impressive and welcome to a wide section of our community, which wants Britannia to play ​ a wider role when the Queen does not require her? Does my right hon. and learned Friend have other roles in mind for HMS Britannia?

    Sir Geoffrey Howe

    It would not be for me to specify other roles. I certainly endorse my hon. Friend’s comments. Britannia is particularly suitable for this type of role, because she is a non-combatant vessel designed to handle a large number of people and well equipped with the necessary boats.

    Mr. Andrew Faulds (Warley, East)

    May I add my congratulations on the successful operation in evacuating so many people from this unhappy territory? Has the right hon. and learned Gentleman’s desk yet had a chance to analyse the likelihood of whether the Administration likely to take over in PDRY will continue to welcome the opening to the West that the previous Administration were adopting?

    Sir Geoffrey Howe

    I think that it is too early to speculate on the nature of the Administration that may take over or on any difference in its direction. As I said, the dispute appears to arise more from personal and tribal conflicts of a traditional kind than from ideological variations.

    Mr. Peter Bruinvels (Leicester, East)

    Will my right hon. and learned Friend join me in congratulating the state of Djibouti on the speedy help it has rendered not only to the royal yacht Britannia but to the other ships that came in to take off so many people? Will he congratulate those people in the Foreign and Commonwealth Office who so speedily commandeered the royal yacht? Will he expand on the relationship with the Soviet Union in this case, because obviously the co-operation was unusual?

    Sir Geoffrey Howe

    I do not think that my hon. Friend has exactly the right insight into the relationships between the Foreign Office and the royal yacht. I join with my hon. Friend in paying tribute to the Djibouti Government for their particularly helpful attitude in receiving and handling thousands of evacuees and assisting in their repatriation. We are particularly grateful to President Hassan Goulad Aptidon for his help. Contact on this matter has taken place sensibly and practically between the embassies on the spot and between Foreign Ministries at this end directed from Moscow and Paris. This is how one would have expected the operation to proceed. One hopes that it will afford an insight into the way in which matters will develop in other respects.

    Mr. John Wilkinson (Ruislip-Northwood)

    We are all rightly proud of the courage and efficiency of those involved in the evacuation. Is not the Soviet Union likely to benefit from what has transpired because Mr. Ismail was allowed to return to Yemen as a conscious policy act on its part? Although there may be some short-term turbulence, perhaps even bloody turbulence, the Soviet Union’s influence in that part of the world could be enhanced rather than diminished.

    Sir Geoffrey Howe

    My hon. Friend’s speculation may well be right. However, it would take a relatively optimistic Soviet adviser to perceive any clearly cheerful conclusion from the circumstances in which hundreds of Soviet citizens have been evacuated.

  • Nicholas Ridley – 1986 Statement on the Channel Tunnel

    Below is the text of the statement made by Nicholas Ridley, the then Secretary of State for Transport, in the House of Commons on 20 January 1986.

    With permission, Mr. Speaker, I should like to make a statement about the Channel fixed link.

    My right hon. Friend the Prime Minister and the President of France, meeting earlier today in Lille, announced the decision of the two Governments to take together the necessary steps to facilitate the construction of a fixed link across the Channel by the Channel Tunnel Group. Copies of the joint statement are being made available in the Vote Office.

    We will publish as soon as possible a White Paper that will give the full reasons for this decision. It will also chart the next steps to give effect to that decision, the treaty, the concession agreement and the legislation.

    The two Governments were faced with four proposals of outstanding quality which reflect great credit on the firms involved. It is remarkable that such keen competition could develop to provide and finance privately a project of this magnitude. The key factors that led the Government to select the Channel Tunnel Group were as follows.

    Eurobridge was eliminated largely on technical grounds. It is an imaginative and forward-looking proposal, but the technical risks make it too speculative for the two Governments to believe that it was likely to be financed and successfully completed.

    The choice between Channel Tunnel Group, Channel Expressway and EuroRoute was a more difficult one. They differ widely as to their technical characteristics, their impact on the environment, their effect upon shipping, and their vulnerability to terrorist attack—all factors in the decision. The invitation to promoters made it clear that any fixed link had to be financed, constructed and operated without support from public funds, and without Government guarantees against technical and commercial risks. It is thus for investors ultimately to determine whether a fixed link is built. The Governments had to try to select the scheme which offered the best prospects of attracting investors’ support.

    Both EuroRoute and Channel Expressway answer the popular desire to drive from one country to the other with the independence and freedom of a drive-through link, but both have large technical risks. CTG’s is a well-developed project, relying on well-proven technology and is both less risky and less expensive. It offers a fast and efficient rail shuttle service for road passengers and freight, with very frequent departures and no booking. It presents no problems to maritime traffic in the Channel, and is the least vulnerable to terrorist attack. Its environmental impact can be reduced to an acceptable level. The Government concluded that CTG was the best scheme to go forward to the market.

    The Government remain very much aware of the arguments that the public would like a drive-through link. In due course, the conditions may arise when a drive-through link would be viable. We have therefore secured an undertaking from the CTG that it will put forward by the year 2000 a proposal for a drive-through link to be undertaken as soon as its technical feasibility is assured, and economic circumstances and the growth of traffic allow it to be financed without undermining the return on ​ the original link. At a later stage, the Governments will be free to invite competitive bids for a further link coming into operation not before the year 2020.

    I expect the signature of the Anglo-French treaty to take place in February, and the concession agreement between the Governments and the Channel Tunnel Group to be concluded shortly thereafter. The legislation will then be introduced into this House as soon as possible. Construction could begin by summer 1987.

    Consultations in Kent have so far focused on the question of which scheme the Government should adopt. We must now concentrate upon making the chosen scheme as acceptable as possible. We will want to minimise the environmental impact, and to consider carefully the employment consequences of this development. We will be sympathetic if problems seem likely to arise in east Kent when the link opens some seven years from now.

    We must arrive at satisfactory arrangements with the promoters for the disposal of spoil and on other environmental matters, and we will ensure that the necessary road infrastructure is provided. The White Paper will deal with these questions.

    The Channel tunnel is a massive and difficult project. It will be a challenge to our engineers, our technicians and our financial institutions. Equally, I believe that it will be of great benefit to travellers and exporters alike in giving them cheaper, quicker and more reliable access to the continent of Europe.

    Mr. Robert Hughes (Aberdeen, North)

    In opting for the Channel Tunnel Group tender, the Government—against the instincts and prejudices of the Prime Minister—have chosen a fixed link which has the potential of matching Britain’s needs for an integrated transport policy. However, in rushing this decision through in such a tight time scale, the Secretary of State has broken his promise to Parliament on 9 December that he would publish a White Paper on the same day as the decision was announced. I suspect that this will not be the last of his broken promises.

    A number of questions must be answered. Exactly when will the White Paper be published? Will the Secretary of State fight in the Cabinet to get a debate in Government time before the treaty between Britain and France is signed? The right hon. Gentleman said that the White Paper would refer to the treaty and various other things. Will the right hon. Gentleman therefore answer this question precisely: will he fight in the Cabinet to get a debate in Government time?

    Will the right hon. Gentleman confirm that no obstacles will be placed in the way of those most affected by the scheme and that their views will be thoroughly canvassed by the Select Committee? What guarantees can the right hon. Gentleman provide that the British share of construction costs will be spent on British goods and that British labour will be employed on the project? As we know that the French are keen to gain the maximum advantage from this fixed link and to have the maximum investment in SNCF, will the right hon. Gentleman produce an investment plan in conjunction with British Rail so that BR can maximise the opportunities which the link may offer?

    Will the right hon. Gentleman do what he can to establish customs clearance facilities in major regional centres in order to encourage the carriage of long-haul freight by British Rail? Will he ensure that the terminal ​ points from which passengers may travel are spread throughout the regions? Will the right hon. Gentleman guarantee that any public expenditure on infrastructure will he new money and will not be taken out of existing budgets?

    Now that the Government have taken the decision, it is their duty to ensure that any benefits are evenly spread throughout the country. The Government have a responsibility to the nation as a whole.

    Mr. Ridley

    I was not clear whether the hon. Gentleman was in favour of the link. It is curious that we have had such a grudging response to this statement on the day when the Leader of the Opposition has made a speech—I saw the Tape as I came in—calling for a massive programme to reverse the decline in the British economy.

    I shall publish a White Paper giving a mass of the information which the hon. Member for Aberdeen, North (Mr. Hughes) has sought and which other hon. Members will seek. The decision was taken only a day or two ago, so it seems right that I should postpone publication until full details of the decision can be included in the White Paper. I hope that the details will be published within a week or two, or shortly thereafter.

    The question of a debate is, of course, one for my right hon. Friend the Leader of the House to consider.

    The hon. Gentleman asked me to ensure that objectors to the scheme would have an opportunity to put their views. I confirm that they will be able to present their case as petitioners before the Select Committee in this House and in another place, if the Select Committee is prepared to give them status. I shall encourage the Select Committee to be as wide as possible in accepting petitioners.

    I can tell the hon. Gentleman-he might even be pleased to hear this—that I believe that a good deal has been done between the British and the French railways, and between those railways and the promoters, which will result in large-scale orders for rolling stock. I am certain that all those who are concerned on the British side will do their utmost to provide as many jobs as they can on this side of the Channel.

    We hope to site national customs controls as far as possible next to each other at the entry to the link of each direction of travel so that there will not be duplication or stopping for through passengers, but there still have to be customs and immigration controls.

    As to public spending on infrastructure, there will be new money, in the sense that this is a new project. However, whether or not a new link is built, there will still be a need to expand the road system to the channel ports because of the great increase in traffic that is taking place.

    Mr. Geoffrey Rippon (Hexham)

    As one of my right hon. Friend’s predecessors as Secretary of State for Transport who brought similar proposals before the House more than a decade ago, I congratulate him and welcome his conversion to the project. I express my appreciation at the success of his negotiations and promise my wholehearted support to the scheme.

    Mr. Ridley

    I am grateful to my right hon. and learned Friend for those wise words. In mitigation of what he said about me, I should point out the small difference between his attempt to get his link constructed and mine, which is that on this occasion no taxpayers’ money will be involved.

    ​Mr. Stephen Ross (Isle of Wight)

    We welcome the decision that has been made today, and we are grateful for the fact that this project has been chosen and not one of the others.

    The right hon. Gentleman said of the chosen scheme: “Its environmental impact can be reduced to an acceptable level.” Does he agree that that can be done only if British Rail has adequate capital resources to make full use of the whole network, including the midlands, the north and Scotland? I realise that this is not in his hands, but will he try to persuade the Select Committee to hold hearings in Dover and Folkestone. This would be the right way forward, because people would be able to make their views heard.

    Mr. Ridley

    I am grateful to the hon. Gentleman for the support that he brings on behalf of the Liberal party for the decision that we have made to choose the Channel Tunnel Group. I am sure that that will be as welcome to Liberals throughout east Kent as it is to the Government. I congratulate him on his courageous support for what he knows to be right. Massive investment will be required by British Rail. A conventional-speed train system will need about £290 million, and a high-speed train system about £390 million, and there will be further investment in the shuttle rail equipment, which will be undertaken by the Channel Tunnel Group. Some large orders from the promoters and the railways are to come for this part of the project. It opens up great new opportunities for extending the railway system right from the north of our country into the farthest corners of Europe. I join the hon. Gentleman in hoping that the Select Committee on the hybrid Bill will be prepared to travel and hear evidence in the affected areas of Kent.

    Mr. Peter Rees (Dover)

    Will my right hon. Friend recognise that his statement will not allay the c’eep and legitimate concern in east Kent about the implications of a fixed link?

    Therefore, will he accept the need for close and continuing consultation with the local interests likely to be affected? Can he give the House any reassurance that there will be a proper and continuing role for the ferries and ports of Dover and Folkestone? Will he reassure the House that any extra economic activity generated by the fixed link will be retained in east Kent and not be drawn to north-west France?

    Mr. Ridley

    I should like to be as helpful as I can to my right hon. and learned Friend, who has done so much to represent to me the views and fears of his constituents—as has my hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) who, as we all know, cannot speak for himself.

    My hon. and learned Friend has made clear, as has my right hon. and learned Friend the Member for Dover (Mr. Rees), the views and fears of constituents on the south-east coast of Kent. As a result of their representations I have decided to set up a joint committee consisting of officials, local authority representatives of the area and the promoters. It will be chaired by my hon. Friend the Member for Hampshire, North-West (Mr. Mitchell), the Parliamentary Under-Secretary of State, and it will go into all the points of local concern and difficulty, in the hope of improving the impact of the scheme on both the environment and the economics of the affected areas.

    I cannot accurately forecast the effect on the ferries to which my right hon. and learned Friend referred. ​ However, I believe that there will be a continuing role for them, even after the link has been opened. Dover has some of the longer distance routes, as well as short sea routes. The growth in traffic is expected to be very great, and I am sure that the ferries will have a share of it. I am also certain that many people will prefer to choose one mode of transport rather than another.

    When it is opened, I believe that this huge new artery will carry an immense number of passengers as well as a vast amount of trade between the continent and this country and that it will act as a magnet for new economic development and investment. If the planning policies of the local councils are right, there will be great opportunities for additional development in the east Kent area.

    Mr. Donald Stewart (Western Isles)

    Is the right hon. Gentleman aware that some of us view this project as simply the biggest election bribe in history? It is clear that this decision has been arrived at without due consideration of its implications for Scotland and other parts of the United Kingdom and of its effect upon the merchant service. Will the right hon. Gentleman hold up this project until a commission has fully investigated all these aspects?

    Mr. Ridley

    The link will greatly benefit constituents throughout the country, including those in Scotland. If goods can be sent to the continent more quickly, more cheaply and without the risk of delay, and if people can travel to the continent more quickly, more cheaply and without the risk of delay, that will aid the competitiveness and trade of the whole country. These are not Government funds which could be spent in other directions. A great deal of this money will be international money. A great deal of this capital will go only to projects which are chosen internationally. It will not be possible to direct it elsewhere.

    Mr. David Howell (Guildford)

    Will my right hon. Friend accept that the Government have made by far the best and most sensible choice by choosing the Channel Tunnel Group’s scheme from among the other fixed link options? Will he also accept that this is the only scheme that ensures that a substantial amount of the growth in traffic will still go to the ferry operators? Will he say a word about the plans for streamlining the handling of customs and immigration, in particular the possibility of on-train customs handling, since this would represent an important asset for the project?

    Mr. Ridley

    I am very grateful to my right hon. Friend. I welcome his support because he, too, studied this matter in depth when he had my responsibilities. He is correct in saying that this choice means that the opportunities for continuing the ferry operations are great indeed, although it is difficult to be specific about the precise amount.

    My right hon. Friend asked about customs and immigration. We are working hard on this matter. My hon. Friend the Minister of State, Treasury is still hoping to find ways to improve this service. For many reasons, we shall need both customs and immigration. The reasons include the prevention of disease through plants and animals being carried through the link. Controls will therefore be needed.

    I am anxious that a special arrangement should not be provided for the through trains which use the link which ​ would be competitively disadvantageous for the ferries or for any other forms of transport. To concentrate both the French and the English controls at the point of departure in each direction will mean at least that passengers are stopped only once, and that control acts only once.

    Mr. Gordon A. T. Bagier (Sunderland, South)

    In making the decision to have a fixed link, I congratulate the right hon. Gentleman on following the guidance of the Select Committee on Transport. I only wish that he had done so on the occasion of the Bill dealing with buses.

    The courage of the Minister has been mentioned, so I congratulate him on taking the hazardous line of disagreeing with his right hon. Friend the Prime Minister on her reported preference for another scheme. Will the Minister give an undertaking that when the White Paper is published he will make strong representations to his right hon. Friend the Leader of the House to ensure that it is debated and that a decision is taken by the House before the treaty with France is signed?

    Mr. Ridley

    I am grateful to the hon. Gentleman. The report of the Select Committee on Transport was most helpful. I am pleased that we have been able to agree with it entirely. The hon. Gentleman did a quick and expert job, and the Government are grateful to him.

    This has been a rather frustrating time for the press, because its members have been unable to discover what has been happening. Some hon. Members may have seen misleading statements in the press, which, I am happy to say, are untrue. The Government are united in their choice, and we agree with the French as well.

    Debates are a matter for my right hon. Friend the Leader of the House, but there will be a Second Reading debate on the hybrid Bill.

    Sir Julian Ridsdale (Harwich)

    Is my right hon. Friend aware that his optimism about the future of the ferries is not shared by some of the ferry operators? Will he consider the matter carefully, to ensure that this decision has not sounded the death knell for the British merchant marine, which has served this country so well?

    Mr. Ridley

    Some ferry operators are more pessimistic than I have been this afternoon about the prospects. However, it will be seven or eight years before any link can be opened. During that time we expect a massive growth in traffic to the continent, which will result in extra business for the ferries. The extent of the business that they will retain is hard to predict, but I am not pessimistic about the prospects for my hon. Friend’s constituency.

    Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

    As the transport unions have been especially careful to offer positive co-operation, will the Secretary of State suggest to the chairman of the Channel Tunnel Group that it is unhelpful to give the impression that he would be prepared to use non-union labour on a fixed link?

    Mr. Ridley

    Far be it from me to make suggestions to the chairman of the Channel Tunnel Group after we have made our decision and accepted the final proposals as modified. However, there may be some disagreement about what the hon. Lady has said. The customers using the link will place great reliance upon the fact that it will not be subject to strikes and interruption. The hon. Lady’s question is a strange one. To ask to ensure the possibility of unionised activity and strikes is to sound a warning note of the true face of the Labour party.​

    Mr. David Crouch (Canterbury)

    Is my right hon. Friend aware of how bitter the opposition is in east Kent to the proposition? Is he further aware that, although I give the proposition my support on national grounds, I am sorry that I am unable to carry my constituents with me? Will my right hon. Friend offer my constituents and the environmental societies more than a hybrid Bill as a means of registering their complaints? Will he offer them consultation with officers in his Department, so that they will feel that they are being heard and that something is being done about their complaints?

    Mr. Ridley

    I am fully aware of the feelings in east Kent. My hon. Friend and I have visited the area and discussed the matter with local people. I share my hon. Friend’s view that there is still much apprehension. In response to this, we shall undertake a major consultative programme in the area and, in addition, my hon. Friend the Under-Secretary of State will chair a co-ordinating committee of the local authorities, the promoters and the Government as problems arise.

    The procedures of the hybrid Bill Committee will allow almost anyone who is affected to make representations, not just to the Committee in this House but to the Committee in another place. Those are full and proper arrangements for hearing local objections, and I confirm that the Government and the promoters will do what they can to adapt the scheme to local requirements.

    Mr. Bruce Millan (Glasgow, Govan)

    Is the Secretary of State aware that many of us are resolutely opposed to a Channel fixed link, whether this project or any other, for the reason which the right hon. Gentleman acknowledged in answer to a previous question, namely, that this will suck further economic activity into the south-east of England, which is the last place in Britain that needs such stimulus? This is just another project that will widen the north-south divide, and it will be bitterly opposed, especially in Scotland.

    Mr. Ridley

    My hon. Friends who represent Kent have expressed concern about the effect on Kent, although not in the sense that it will suck jobs from Scotland into Kent. I believe that the link will create some growth in jobs. The orders that will be placed for rolling stock and other manufactures will be of great benefit to the entire country. The fact that Scottish exports will be able to reach the continent more cheaply and more quickly should be recognised as a help to the competitiveness of the right hon. Gentleman’s constituents and, therefore, to their advantage.

    Sir Hector Monro (Dumfries)

    Will my right hon. Friend conduct careful consultations about conservation before producing a White Paper? Will he have discussions with the Nature Conservancy Council, which is the Government’s adviser, and which wishes to put strong points to him?

    Mr. Ridley

    We are always keen to take what action we can to assist in improving arrangements for conservation. My hon. Friend will know that geography dictates where the tunnel will come out and where the service area will have to be. It would be difficult to change that now.

    Mr. Roland Boyes (Houghton and Washington)

    Is the Secretary of State aware that I and the majority of my constituents completely oppose the building of the fixed ​ link? We live in an area of high unemployment, and we cannot understand why the Government can encourage the expenditure of billions of pounds on building a hole in the ground, instead of encouraging such expenditure on building structures above the ground. The construction of new schools, houses and hospitals would reduce unemployment in my area. This project will increase unemployment there.

    Mr. Ridley

    This is not Government cash which could be used to build schools, hospitals or other structures in the hon. Gentleman’s constituency. It is international capital, which will go to projects only where investors believe they can earn a reward. It is far better that that capital should be used to build a Channel link than to build factories on the continent, which might make the competitiveness of the hon. Gentleman’s constituents even worse. I repeat that a most useful benefit to the north of England and Scotland will be the fact that goods will be transported more cheaply to their markets. Transport is an important factor in industrial costs, and anything that we can do to reduce transport costs will help industry.

    Sir John Wells (Maidstone)

    Is my right hon. Friend aware of the great opportunities that will be created for new employment in Kent, despite fears of early local unemployment on the ferries and elsewhere? Will he encourage Kent county council and the district authorities to grant planning permission, so that Kent may grow, with great prospects for our people? In north Kent unemployment is as high as it is anywhere in the country.

    Mr. Ridley

    I agree with my hon. Friend that there is great potential for further development arising from the link. However, such development must depend on the planning policies pursued by district councils. I have been in close touch with the chairman of Kent county council, who came to Lille with me early this morning. We have throughout discussed the problems and opportunities which the link presents. I undertake to keep in close touch with the Kent local authorities to ensure that every opportunity is taken to help.

    Mr. John Cartwright (Woolwich)

    Given the considerable public interest in having a drive-through link in addition to the rail tunnel, does the Secretary of State accept that the year 2000 seems a long way off? What steps will he take to encourage the CTG to tackle the technical problems involved well before that deadline, and how firmly committed are the French Government to the concept of a drive-through link at a future date?

    Mr. Ridley

    Both Governments would have liked to see a drive-through link, but the problems are fairly formidable, in the sense of a 5 or 6-kilometre stretch near the French coast where the strata are difficult and unknown. It will be of great assistance to drive the bored tunnels of the CTG through those strata, whet more information about the possibility of a bigger tunnel for a drive-through link can be gathered. There was always doubt about the ventilation system proposed by Channel Expressway. With further advances in that technology, and with the greater geological information that we hope to obtain, it may be possible to drive a bigger tunnel through at a later stage. The CTG’s undertaking, which will be spelt out and put into the White Paper, makes it possible to do that fairly soon, or, in default of that, for a further invitation to be made to promoters so that a drive-through link would come into existence by the year 2,020.