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Tunis (Ministerial Visit)

3.31 pm

Mr. Gerald Kaufman (Manchester, Gorton) ( by private notice ) : To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the visit of his Minister of State to Tunis.

The Minister of State, Foreign and Commonwealth Office (Mr. William Waldegrave) : I visited Tunis from 12 to 16 January for meetings witTunisian leaders and to chair a meeting of the heads of British missions in the region. While there I met the PLO Chairman, Mr. Yasser Arafat. This meeting followed the statement made in London on 9 December by Mr. Bassam Abu Sharif, a senior PLO adviser, and the commitments made by Mr. Arafat in Geneva on 14 December. Both these met our long-standing conditions for further ministerial contact with the PLO.

Mr. Kaufman : Does the hon. Gentleman agree that the continued death toll in the Israeli occupied territories, including daily shootings of Palestinian children and teenagers as well as the deaths of Israeli Jews, is unacceptable and must be stopped? Will he agree not only with me but with the senior Israeli army officer and with the Israeli Minister of Defence, Yitzak Rabin, whom I met during my visit to Israel from which I returned earlier this month, that the Palestinian intifada, now in its fourteenth month, can be brought to an end only by a political solution? That remains true even with the harsher measures announced today by the Israelis. They may kill more Palestinians ; they will not kill the intifada.

Will the hon. Gentleman agree further that Yasser Arafat's statements in Geneva last month have made a political solution available? Did Chairman Arafat say to him last week in Tunis, as he certainly did to me, that at an international conference the Palestine Liberation Organisation would be ready to compromise in order to reach a negotiated settlement and that the PLO would be ready to consider participating in a joint Arab delegation to such a conference? Will he therefore reaffirm that an international conference under the auspices of the five permanent members of the Security Council is by far the best mechanism for solving this tragic problem of providing both security for Israel and justice for the Palestinians?

It is inevitable that sooner or later Israel will speak to the Palestine Liberation Organisation. The Israeli Government should see sense. They should be willing to test the good faith of the PLO. They should choose peace by negotiation. They should agree to talk now. It is time to end the spilling of blood in the Holy Land.

Mr. Waldegrave : It is seldom, I think, that I have faced a series of propositions put by the right hon. Member to which I can answer yes with such confidence. The truth is that we believe British Government policy remains the same. It remains as the right hon. Gentleman has just stated it, that we believe that there should be a political solution, and we also believe that conditions now are propitious for steps towards such a solution. It is easy to understand why the Israeli people have deep anxieties. Our belief is that the steps taken by the PLO should, in the words of the noble Lord Rothschild, now be tested by searching negotiations.

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Mr. Michael Latham (Rutland and Melton) : I wholly endorse my hon. Friend's last remark.

For the avoidance of doubt, following my hon. Friend's worthwhile meeting with Mr. Arafat, will he confirm that it is not British policy to support without any question the setting up of an independent Palestinian state on the West Bank or Gaza?

Mr. Waldegrave : I can give my hon. Friend the assurance that he seeks. It remains our belief that some kind of confederative state with Jordan is the right outcome and, as the right hon. Member for Manchester, Gorton (Mr. Kaufman) said, one of the positive steps that has been taken by Mr. Arafat, affirmed in the clearest terms to me, is to say that that is not an option for the PLO ; it is the objective of the PLO.

Sir Russell Johnston (Inverness, Nairn and Lochaber) : First, is the Minister aware that hon. Members on both sides of the House would congratulate him on the way in which he conducted the meeting? Secondly, was it his clear impression that Mr. Arafat was willing to have negotiations on the firm basis that the reality and the security of the state of Israel would be recognised? Thirdly, did he have any talks about the difficult question of Jerusalem?

Mr. Waldegrave : I am grateful to the hon. Gentleman for what he has just said and for the terms of his question to my right hon. Friend the Prime Minister earlier. The PLO is stating--this is what should now be tested--that it has made an historic shift from a one-state solution to a two-state solution, which assumes that there will be a home for Israel behind secure boundaries and that, in confederation with Jordan, there should be territory in which the Palestinians live. That, surely, is a great step forward. It would not be right at this stage to start to explore the issues that we can all see should be negotiated between the principal parties at the conference for which we are all working.

Sir Peter Blaker (Blackpool, South) : Is my hon. Friend aware that Conservative Members will join with the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) in congratulating my hon. Friend on the efforts that he is making to ensure peace between Israel and the Arab countries? Has not the time now come for the friends of Israel to make it clear that the world will also expect Israel to explore the possibilities of peace, otherwise a great opportunity may be missed?

Mr. Waldegrave : The seriousness with which the House and many people in Britain take these issues is due to the fact that there are so many genuine friends of Israel in the House who fear for the long-term security of that nation and its people if the right steps are not taken. In that I would strongly associate myself with what my right hon. Friend said. Surely in the long term Israel can exist, as all Israeli leaders past and present know, only if she has secure borders that are agreed with her neighbours.

Mr. Greville Janner (Leicester, West) : On the day after a savage letter bomb intended for Israel's ambassador in London was intercepted, does the Minister not see that this issue is highly sensitive? Does he appreciate that he is more likely to succeed in what we all want, which is bringing people to a negotiating table, through private

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persuasion rather than by publicly lecturing and tactlessly attacking Israel's democratically elected leaders while sitting beside the man who, until recently, was responsible for a series of savage terrorist attacks on Israel's people?

Mr. Waldegrave : I lectured no one and the Government are second to none in their opposition to all forms of terrorism. Let me try once again to leave with the House and the hon. and learned Gentleman the message that I was trying to get across. Let me use words which come from a book which the majority of hon. Members share with the majority of people in Israel-- the book of Ecclesiastes--which says that there is

"A time to kill, and a time to heal a time of war, and a time of peace."

We believe that there is just now a concatenation of events which might lead to peace.

Sir Geoffrey Finsberg (Hampstead and Highgate) : Will my hon. Friend accept that what he has been saying is utter common sense and that it is time that the Government of Israel sat down, under these new conditions, to see whether there is as much in it as most of us hope? Does he agree that the recent initiative of the Council of Europe to try to bring together the disparate nations in the middle east may be worth pursuing?

Mr. Waldegrave : I agree. Although I reaffirm that the central part in these matters must lie with the United States, Europe--and Britain within Europe--has an important role. We welcome also the steps that will be taken by the troika of the past presidency, the present presidency and the next presidency of the European Comunity at the end of January, which will be helpful.

Mr. Ernie Ross (Dundee, West) : I congratulate the Minister on his successful discussions with the Palestine Liberation Organisation, which followed the discussions I and my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) had with that organisation. The Minister should feel confident that he speaks for not only both sides of the House when he is speaking to the PLO and in subsequent statements, but for the overwhelming majority of people in this country, who believe that if one is to be a proper friend one must tell the truth. The Palestinians want peace, and they want to sit down with the only people with whom peace is possible- -the Israelis. It is the responsibility of any sensible politician to make that clear on each and every occasion possible.

Mr. Waldegrave : Both in the terms of what the hon. Gentleman has said and in the terms and content of what the right hon. Member for Gorton said, we are surely sending a message from the House that there is a basis of all-party support for our approach. The hon. Gentleman is right in a further matter. We would not bother to speak in such terms--I hope that everybody will realise that they come from the heart--unless we cared about the future of Israel.

Sir Dennis Walters (Westbury) : Does my hon. Friend accept that his meeting with Mr. Arafat has been greatly welcomed and that his perfectly sensible and accurate comments about the Israeli Prime Minister should not be allowed to obscure the reality, which is that the PLO has now accepted resolutions 242 and 338 and agreed to renounce any form of violence? What is Israel's response? Does Israel accept the resolutions, and is it prepared to talk about peace and a two-state solution?

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Mr. Waldegrave : My hon. Friend is right. It is because the PLO has met the long-standing tests that the British Government have laid down for ministerial contact that I met Mr. Arafat. The British Government have been among those who have been most careful, and often difficult in the eyes of some Arabs, about contact with the PLO. We hope, therefore, that our friends in Israel will note that and note that we are unlikely to have taken that step unless we had considered it carefully. We hope that Israel will take that as some reassurance that it too should take further steps.

Mr. David Winnick (Walsall, North) : Is it not clear that if Israel refuses to negotiate in any circumstances, two results will flow from that? One is that Israel will become increasingly isolated even from its friends in western Europe. The second is that it will be a victory for those in the Arab world who decisively reject what the PLO has decided to do. It will be the Gaddafis of this world who will be victorious. Is it also not the case that what the Minister said was right? There is no need for us to be critical of the Minister. I speak as one who has not wavered for a moment since 1948 in my support for the right of Israel to exist, although I have certainly never supported many of its policies. I supported Israel in the war of independence in 1948, and I supported, in the House, Israel's actions in 1967.

Mr. Waldegrave : There have been occasions in the past when I have agreed with the hon. Gentleman's first sentence or two, but I have never before had a question from him with which I could agree throughout.

Mr. Tony Marlow (Northampton, North) : Have the Government qualified their support for Palestinian self-determination by saying that they accept it only if it is in confederation with Jordan? This surely is a decision that the Palestinians must be allowed to make. Many people will be very interested in my hon. Friend's answer.

Mr. Waldegrave : It is not a matter of our accepting or not accepting a solution. Mr. Arafat himself made it clear to me--and, I think, to the right hon. Member for Gorton--that that is the objective of the PLO. It seems to us a very sensible objective, and we support it.

Mr. Harry Cohen (Leyton) : I congratulate the Minister on his fruitful visit, and my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), who also had a succesful visit. I accept that Mr. Arafat's statements at Algiers and Geneva represent a step forward. While urging Israel to come to the negotiating table, however, will the Minister also urge it not to push ahead with proposed new settlements in the occupied lands as that proposal is immensely provocative and would be a backward step in terms of achieving peace?

Mr. Waldegrave : I am grateful to the hon. Gentleman for the first part of his question. On his latter point, there is indeed a problem. I understand that the new Government in Israel have proposed greatly to slow down the creation of new settlements. That is welcome in itself, but I suppose that every new settlement produces an additional problem ultimately for the negotiations that we hope will come about in the end.

Mr. Ivan Lawrence (Burton) : Is my hon. Friend aware that everyone applauds his good intentions and the good sense of what he has had to say today? Is he also aware that

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it is a very odd kind of diplomacy in which the honest broker begins by humiliating and offending one of the parties to the dispute? Will he please be more careful in future?

Mr. Waldegrave : I certainly did not intend to humiliate anybody. The state of Israel and its leaders are powerful and confident. As I said earlier to the hon. and learned Member for Leicester, West (Mr. Janner), the great gift of statesmanship is surely to know when to lay down arms and move to peace.

Mr. Stuart Bell (Middlesbrough) : As one who has recently been in Israel, will the Minister confirm that the question of secure borders is a question of life and death for Israel and that there must therefore be some reluctance on the Israelis' part to deal with the PLO? Does not the Minister agree that 1.2 million Israelis nevertheless voted at the last election for discussions about the future of the west bank? Does he further agree that, now that we have been discussing Palestine in the House for about 60 years, only an even-handed approach to both parties can have any constructive effect in the middle east?

Mr. Waldegrave : I strongly agree with what the hon. Gentleman has said. Even-handedness is the objective of our policy. I hope that I shall be visiting Israel shortly and no doubt I shall say things to the Israelis that may be unpalatable to some on the Arab side. There are sensitivities on both sides, but we should not be so careful to avoid offending everyone's sensibilities that we say nothing.

Mr. Andrew MacKay (Berkshire, East) : Is my hon. Friend aware that many of us who have been associated with, and indeed are officers of, the Conservative Friends of Israel strongly endorse his meeting with Mr. Arafat in Tripoli last week and look forward to the Israeli Government shortly finding themselves able to explore negotiations directly with the PLO?

Mr. Waldegrave : The support of my hon. Friend is particularly valuable as his work on this issue is well known. I believe that he is right about what is needed and that the job of those who wish Israel well is to help to map out strategies that can lead ultimately to the conference which we all support.

Mr. Rupert Allason (Torbay) : Is my hon. Friend aware that, in the wake of the Lockerbie air disaster, Yasser Arafat allegedly offered to supply information and assistance to help the American authorities to track down the terrorists responsible? Can he assure the House that that was one of the topics that he took up with the Chairman of the PLO when he met him?

Mr. Waldegrave : Yes. I thanked Mr. Arafat for what he had said, which was welcome in this country, and said that if any help could be given it would help to still those who doubted his sincerity. That must be true, although I am in no position to know whether he can give any help.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak) : Does my hon. Friend accept that it is widely to be welcomed that there is a spirit in the House that Israel and the Arab nations need to talk about the future of the middle east? Does he recall the wise words 20 years ago of

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Mr. George Brown, the then Foreign Secretary, who said, "The Arabs can afford to lose more than one war ; Israel cannot afford to lose one"? Does my hon. Friend agree that if we are to have peaceful talks, the nation of Israel, which shines as a beacon of people who have been oppressed throughout the ages, should say, "Whatever talks take place, we must have more than paper promises that we shall be allowed to exist"?

Mr. Waldegrave : I wholly agree with the sentiments quoted by my hon. Friend, which emphasise two points. The first is the importance of achieving a peaceful settlement from Israel's point of view, and the second is the fact that we should test and work with those in the Palestinian movement and in the Arab states who are talking the language of diplomacy, not the language of terrorism. My hon. Friend is quite right : more than words will ultimately be needed, and Israel must ultimately have secure frontiers that are agreed and guaranteed.

Mr. Peter Shore (Bethnal Green and Stepney) : If Mr. Arafat has agreed to a confederal solution with Jordan, which is a welcome and important step, does that mean that the PLO is abandoning its previous insistence that the capital of a new PLO-based or PLO-agreed state would have to be Jerusalem?

Mr. Waldegrave : In answer to the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston), I said that I did not think that it was right in that meeting to ask the PLO--any more than I would ask the Israelis--to put its position on the central issues that will need to be negotiated at the peace conference on the table in too much detail. The issue to which the right hon. Member for Bethnal Green and Stepney (Mr. Shore) has referred will clearly be one of the most thorny issues facing that peace conference. It would not be fair to the negotiating teams that we hope to see emerging on both sides to press them now to lay all their cards on the table.

Mr. Ian Taylor (Esher) : My hon. Friend is absolutely right to take the lead in this matter, given the difficulties that the United States has traditionally had in coming out clearly. Will my hon. Friend confirm that he has the support of the 11 other members of the European Community for his initiative? When he goes to Israel, will he continue to remind the Israelis that the foundation of the state of Israel was not without violence and that we must therefore try to look at Mr. Arafat in the terms that he is now putting forward?

Mr. Waldegrave : I agree with my hon. Friend. Members of the European Community are taking parallel positions on this issue, and the troika will meet Mr. Arafat later this month. In response to the latter part of my hon. Friend's comments, yes, we are saying that the PLO seems to be saying that it wants to lay aside the gun, so surely we must test whether that is sincere. If it is, nothing could be more important.

Mr. Richard Alexander (Newark) : May I commend my hon. Friend for pointing out that those with a history of terrorism should not stress too much the terrorist aspects of their opponents? Would it not help the peace process considerably if both sides could sit around the table without attempting to hang perjorative labels around each other's necks?

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Mr. Waldegrave : The hon. Member for Inverness, Nairn and Lochaber saw most clearly what I was trying to say in my comments on the past--that in the history of the world it is unusual for people to have the courage to lay aside their weapons, and that when they do we should pay tribute to them. The PLO says that that is what it is now doing, so surely we should test its sincerity to see whether what it is saying is true. We believe that it is, but I quite understand that the Israelis will not take my word for it, and that is why we need real negotiations.

Mr. Simon Burns (Chelmsford) : I welcome my hon. Friend's trip to Tunis this weekend. Does he accept that opportunities must be given to the PLO so that it can prove that it has transformed itself from a belief in the use of violence to a belief in the use of peace? Will he convince the Israeli Government that any intransigence on their part that might forestall the beginning of the peace process, which would have been unheard of five years ago, will gravely damage the prospects of peace in the middle east and severely damage Israel's reputation with its numerous friends who wish it well?

Mr. Waldegrave : Of course, it was part of my objective--as I believe it was part of the objective of the right hon. Member for Gorton-- in meeting Mr. Arafat to urge on him the importance of the maintenance of this moderate and clear position and to explain to him the need for some patience, because these matters will not be settled in a few weeks. Equally, it is important that the message should go from all Israel's friends that what it does can have a crucial impact on Arab and Palestinian opinion--for example, in relation to the Lebanon.

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BREL (1988) Ltd.

The Minister for Public Transport (Mr. Michael Portillo) : With permission, Mr. Speaker, I shall make a statement concerning BREL (1988) Ltd., formerly known as British Rail Engineering Ltd. As the House knows, the Railways Board has selected a consortium of the management and employees of BREL, Trafalgar House plc and Asea Brown Boveri Ltd. as preferred bidder for the purchase of its engineering subsidiary BREL (1988) Ltd. The board's choice follows a competitive tender for the business. Bids were received from two groups.

The board and its advisers, Lazard Brothers, have undertaken extensive negotiations with both bidders over the past three months. The board's evaluation of their final offers showed that the bid from the consortium was the more attractive in financial terms, and that it also offered clear financial advantages over the option of the board retaining ownership of BREL. The board has also secured fair arrangements for the BREL staff, who will be transferring to the new owners, including provisions for pension rights and concessionary travel facilities.

The Government have taken independent advice from Lloyds merchant bank. We are satisfied that the board has followed normal commercial procedures in reaching its decision and has fully tested the market for potential purchasers.

At this stage, there are no grounds on which the Government wish to interfere with the board's commercial judgment. Subject to the final terms of the sale and purchase contract being satisfactory to the Government, we would expect to give consent to the sale in due course. Final clearance is also subject to approval by the European Commission and to the decision which my right hon. Friend the Secretary of State for Trade and Industry will take once he receives advice from the Director-General of Fair Trading. Subject to those points, I would hope that the sale could be completed as soon as possible.

BREL has been through a period of major change, reflecting the new investment being made in modern rolling stock and the reduction in repair work which follows from this. BREL has made good progress towards a modern, competitive railway engineering business. The people who work at BREL have played a major part.

The time is now right for BREL to move on into the private sector. BREL will now have more opportunities to diversify and compete for new business. The company should derive technological and commercial benefits, and access to the advanced engineering techniques of a world leading manufacturer.

As my right hon. Friend the Secretary of State said in November 1987, when he announced the decision to offer BREL for sale, privatisation will be good for the railway, good for the railway supply industry and good for BREL itself. I hope that the House will join me in wishing the company and its work force every success for the future.

Mr. Peter Snape (West Bromwich, East) : Does the Minister accept that almost 20,000 jobs have been lost in British Rail Engineering Ltd. in the past five years and that the work force has been reduced by approximately 75 per cent., that the company has been systematically run down and starved of orders, that the state has picked up the financial bill necessary to achieve such a massive reduction and now the private sector is to gain all the assets?

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Does the Minister accept that four railway Bills are due to come before the House in the current Parliament ; that great interest has been expressed in many of our cities in developing light railways as the people-movers of the future ; and that at a time when people are increasingly looking to the railways to help solve the problems of traffic congestion and overcrowding, the Government continue to contract our capacity for railway building and to sell off what is left? What guarantee do we have that the new company will be able to cope with the orders that are likely to emerge in the next few years?

The Minister referred to the deal being "attractive in financial terms" and he talked about the "final terms of the sale". What do those two phrases mean? Has a price been agreed or has it not? If so, what is it? Is that a final statement about the future of BREL or just an interim one? What happens if someone else, whether GEC or a third party, makes a better offer? When does the Minister expect the sale to be finally completed?

Does the Minister accept that his statement today could lead, within two or three years, to the end of all railway engineering in this country? How can that be good for anyone other than our industrial competitors? How will that help us to meet the transport needs of the 1990s? What effect will it have on our balance of payments problem? Does it mean that the Chancellor of the Exchequer will castigate us all for overspending and hike up mortgage rates once again in an attempt to remedy our balance of payments problem? We reject the idea that privatisation will be good for the railway industry or for BREL. On the contrary-- [Interruption.] Conservative Members may think that this is funny, but the Labour party does not. [Interruption.] The hon. Member for Dover (Mr. Shaw) would not know a railway if he fell on the tracks. We believe that, once again, the Government have made a major costly error that in time the railway industry and the nation will reject.

Mr. Portillo : I am sorry that the hon. Gentleman could not be a bit more fulsome in his welcome for the announcement.

The hon. Gentleman began by saying that many jobs have been lost. I recognise that, and it is a serious matter. We are now trying to address the question of how the company can have a future. I hope that he will join me in trying to find the best solution. The hon. Gentleman said that the company has been starved of orders, but its order book is at present worth £400 million and it was awarded a new order only last Wednesday, which I announced then. Recently, it has been gaining about 70 per cent. of the orders which it has been offered by British Rail.

The hon. Gentleman wanted to know what was the sense of the sale. The best thing that I can do is to refer to the managing director of BREL, who said that there would be considerable

"management continuity during a very important phase of the company's development.

I think the other factor is the technical strength of the technology package which ABB is going to bring with it. We also have sound financial backing and good marketing opportunities."

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This sale represents an injection of major technology into BREL. Now there is the opportunity for BREL to join a European consortium and bid for orders not only in this country but elsewhere. The hon. Gentleman asked me whether this was an interim statement. I am not prepared to reveal to him the price--[ Hon. Members :-- "Why?"]--because it is a commercially confidential matter. I assure the hon. Gentleman that the price was superior to the other bid, but negotiations will continue.

I do not believe that there should be any bid from any other person now because I regard the bidding as closed. If for any reason the negotiations could not be completed satisfactorily, it would be a different matter.

The problem in which the hon. Gentleman finds himself, which I appreciate, is that it is difficult for him to welcome a privatisation. I believe that, in his heart of hearts, he recognises that the news that I have given today is good news for BREL. I believe that he should welcome, as the trade unions have welcomed, the fact that the bidder has been successful.

Mrs. Edwina Currie (Derbyshire, South) : My hon. Friend should ignore the twitterings of Labour Members, who, in the words of one of their hon. Friends, could not run a whelk stall.

My hon. Friend's statement will be extremely welcome in Derby, where we already have a magnificent example of a privatised engineering company that has gone on to beat the world. Does my hon. Friend agree that the consortium could do a Rolls-Royce job on BREL and that its future will be far sweeter in the private sector than it ever would have been with British Rail?

Mr. Portillo : I am most grateful to my hon. Friend, who is right to say that the statement will be broadly welcomed in Derby. My hon. Friend recognises, as I do, that it is a combination of BREL with the expertise of Asea Brown Boveri--which sees scope for extensive co-operation with BREL in product development marketing and production technology--that gives the group tremendous strength for the future.

Mrs. Margaret Beckett (Derby, South) : Is the Minister aware that the work force in Derby and throughout BREL remains opposed to its privatisation? It shows how little the hon. Member for Derbyshire, South (Mrs. Currie) has to do with the work force that she is unaware of that opposition. Is the Minister further aware that the work force certainly hopes that his announcement signals a period not only of stability but prosperity, since, in the past few years, BREL has substantially suffered as a result of the Government's policies? Does the Minister intend to take cognisance of the fact that the work force strongly believes--as it made clear to him only last week--that its past loyalty to British Rail is not being recognised in the terms of sale and agreement between the buy-out team and British Rail? It remains of the view that the new company could start at a disadvantage because of that.

Mr. Portillo : I was grateful to the hon. Lady, to her hon. Friends and to my hon. Friends who accompanied the delegation who came to see me last week. That was a useful opportunity for me to hear the concerns of the work force.

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As I said on that occasion, the fact that the workers are taking with them their present contracts is a substantial guarantee to them of the terms and conditions under which they have worked and of the fact that those terms and conditions will continue. That relates to such things as terms of redundancy, travel conditions and pensions-- subject to any negotiations that may take place with the new management.

The hon. Member for Derby, South (Mrs. Beckett) said that the sale is opposed in Derby. I am surprised she said that, because, on television in reply to the question

"would BREL operating as a private company actually stand a better chance?",

the hon. Lady replied :

"Unfortunately, in the climate of this Government that may even be so".

Mr. Greg Knight (Derby, North) : Is my hon. Friend aware that his excellent decision will be greeted with pleasure and enthusiasm by the majority of my constituents, who believe that his choice is in the best interests of the Derby works? His decision will be welcomed by those up and down the country who want to see BREL succeed in private hands and be capable of grasping all future opportunities. Is my hon. Friend aware, however, that there is some confusion among the work force about the two matters he mentioned in his statement? Therefore, will he reiterate the fact that, at the point of sale and under the terms of sale, existing pension rights will be maintained on no less favourable terms and that travel concessions, which currently exist on British Rail, will continue?

Mr. Portillo : I am most grateful to my hon. Friend. I thought that I would hear another opinion from the city of Derby having heard the comments of the hon. Member for Derby, South.

The new owner has given the undertaking that the overall package for the compulsory pension scheme will be no less favourable than at present and that travel concessions are to be continued as now, subject only to renegotiation that may occur.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : Is the Minister aware that, since he is handing over a large package of assets to a private company, the work force wants much better guarantees than his bland assurances that the moment that BREL is sold, the work force will be able to maintain its existing terms? That is not the case. The Minister will be aware that, in Crewe, about £7 million of taxpayers' money has gone into new machinery. If, in two years' time, we have paid for that machinery in terms of jobs, asset-stripping and the deliberate running down of BREL, I hope that there will be an urgent investigation of the Government's responsibility, given they have no commitment to the railway industry or to the future of manufacturing.

Mr. Portillo : I am surprised at the hon. Lady's remarks because we are dealing with a reputable consortium that has come in to buy the company. It is 60 per cent. in British ownership, 20 per cent. held by the management and 40 per cent. by Trafalgar House. The other 40 per cent. of the consortium is represented by one of the world's leading electrical manufacturers. There is little doubt of that grouping's commitment to BREL's future. ABB can offer BREL the most tremendous opportunities. Trafalgar House is also heavily involved in the transport business

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now and is preparing to put in bids for the Manchester light railway, the Channel tunnel link, and has also made a proposal to Olympia and York for the railway from Waterloo to Docklands. I believe that there is every sign of the consortium's strongest commitment to the company.

Mr. Conal Gregory (York) : My hon. Friend will be assured that the vast majority of the work force in York will be delighted by today's news and I am sure that its delight is shared by the majority of the work force in Crewe and at the two sites in Derby. It is a further step towards denationalisation. There will be some regret, however, that it has taken so long to get to this stage.

Like my hon. Friend the Member for Derby, North (Mr. Knight), I have already received representations about concessionary travel and pension rights. I hope my hon. Friend the Minister will devote particular attention to those matters in the coming weeks. May I ask for my hon. Friend's assurance--if he in turn has had it from the consortium--about employment in York and how far it will depend on the Swiss-based subsidiary? Has he received assurances that, within weeks of finalising this, Trafalgar House will not sell part of its equity to the Swiss, thereby ensuring that more than 50 per cent. of the company falls to a non-EEC engineering company?

Mr. Portillo : On pension rights, perhaps I can reassure my hon. Friend and others by saying that a part of the surplus in the British Rail pension fund is intended to be transferred to the new owners, subject to the approval of the trustees of the BR pension fund. As I said in answer to the last question, there are now such strong signs of Trafalgar House's commitment to transport that I hope that that provides reassurance. Again, I refer to remarks made by Mr. Holdstock, the managing director of BREL, as quoted in the Financial Times of last Saturday :

"The link with Trafalgar House will strengthen Brel's project management, which might be important in the growing market for turnkey contracts to develop light rail systems."

Mr. Michael J. Martin (Glasgow, Springburn) : I represent a community in which 10,000 people were once employed in railway engineering. Three years ago the Government reduced the work force of 3,000 to 300. The work force got to work and created the BREL maintenance depot, the only one left in Scotland.

The Minister must know that we in Scotland have had a painful experience, with so-called reputable companies coming in, taking over and sacking the work force--and it is just as painful to be sacked by a reputable employer as by a disreputable one. Surely the Minister owes it to the work force in my and other constituencies to keep a hand in this company to ensure that the asset-strippers do not move in, as they moved in three years ago in my constituency.

Mr. Portillo : If, when he talks about asset-stripping, the hon. Gentleman is concerned about property sales, I reiterate all the points I have made before about what appears to me to be the strong commitment of all the people involved in this bid. The hon. Gentleman himself makes the point that nationalisation is no guarantee of jobs. Not just in BREL, but in a whole series of different companies, nationalisation has offered no guarantee of employment. The hon. Gentleman and his hon. Friends

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know that the changing market for repair and maintenance of railway wagons and locomotives lies behind the loss of jobs. We are trying to find--and I believe we have found--a way of providing a secure future for BREL.

Mr. Patrick McLoughlin (Derbyshire, West) : I welcome my hon. Friend's statement, which is good news for the people of Derby. When he met the unions last week, they expressed two main

concerns--pensions and concessionary travel, as my hon. Friends have said. I believe that his statement goes a long way towards sorting out some of the problems and fears described in that initial meeting last week. Bearing in mind that the negotiations are still taking place, when does my hon. Friend expect the sale to be completed?

Mr. Portillo : In answer to my hon. Friend's last point, I hope that it will be a matter of weeks. It is for the European Commission to satisfy itself on the financial arrangements ; for my right hon. and noble Friend the Secreary of State for Trade and Industry to take advice from the Office of Fair Trading ; and for all the parties to bring the negotiations to a speedy resolution.

I recall my hon. Friend's contributions in previous statements. I am sure that he will be pleased that it is the intention of the new grouping to establish an employee share ownership plan, which I know is an especial concern of his.

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