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Column 996Can you tell us what is likely to happen on a point of order on Friday as to the suspension of the rule to permit any form of business of which we have heard?
Mr. Spearing : Further to that point of order, Mr. Deputy Speaker. Is it not within the knowledge of the House that some change in the arrangements for Friday is now within the official knowledge of the House? In accordance with your ruling, which I would not challenge for one moment, is it not possible to question the Leader of the House on that matter? It has been the custom to do so under other circumstances, and no doubt that custom will return. Will the Leader of the House be able to enlighten us on this matter arising out of a point of order on business for Friday? Many people who will want to come to the business that he has advertised will want to know at what time and until when that business is likely to be taken.
Mr. Deputy Speaker : I believe that the hon. Gentleman is forgetting that I assume that there will be a business statement tomorrow in the normal way. The House will have an opportunity to question the Leader of the House then. Surely that is the practical solution to what the hon. Gentleman has suggested.
Mr. Wallace : Further to that point of order, Mr. Deputy Speaker. I accept fully the ruling that you have just given. If I understand it correctly, you said that, in moving the adjournment of the previous debate, the Leader of the House imparted information, in a supporting speech, regarding a change in the business. Is it a matter of order in this House for the business of the week to be changed in that way, or is a statement required?
That the draft Merchant Shipping Act 1988 (Amendment) Order 1989, which was laid before this House on 17 October, be approved.
Mr. D. N. Campbell-Savours (Workington) : On a point of order, Mr. Deputy Speaker. I am sorry to delay the House, but I want to raise an important issue. I was sitting in the Tea Room and I watched the shadow Leader of the House sprint to the Chamber--
Mr. Frank Dobson (Holborn and St. Pancras) indicated dissent.
Mr. Campbell-Savours : No, Frank, that is correct, the word is sprint. My hon. Friend sprinted to the Chamber because he had no knowledge of what was happening in here as he had not been given notice.
Mr. McLoughlin : The order gives effect to an interim order of the president of the European Court of Justice made on 10 October 1989. The interim order by the court requires the United Kingdom to suspend, until judgment in the main proceedings, the application of the British nationality requirements for registration of certain fishing vessels set out in section 14(1), (2) and (7) of the Merchant Shipping Act 1988. The affected fishing vessels are those that were fishing under the British flag up to 31 March 1989 with a licence granted under the Sea Fish (Conservation) Act 1967.
The court order is in restricted terms. It requires the United Kingdom to suspend the application of the British nationality requirement as a condition for the registration of fishing vessels as British fishing vessels to the extent that, at present, the owners, charterers, managers and operators of such vessels must either be British nationals, or in the case of a company, have at least 75 per cent. of its shares legally and beneficially owned by British nationals and at least 75 per cent. of its directors as British nationals.
The benefit of the court order is restricted to nationals of the European Community. It does not affect the requirement that such persons must be resident and domiciled in the United Kingdom. Morevoer, it does not affect the requirement that the vessels should be managed and their operations directed and controlled from within the United Kingdom. We do not know how many additional fishing vessels will now become eligible for registration on the United Kingdom fishing vessel register. That will depend on how many have been ineligible for registration by reason only of the nationality requirements that are changed by the order.
It might help if I fill in some of the background here. Part II of the Merchant Shipping Act 1988 introduced a new register of British fishing vessels. The main intention of this register was to restrict sea fishing rights so that the
Column 998fishing quotas granted to the United Kingdom under the common fisheries policy benefited the genuine United Kingdom fishing fleet and the British communities dependent upon fishing. There were at the time a large number of fishing vessels that were fishing against the United Kingdom quotas, operating largely out of Spanish ports, and which had only a nominal British connection.
The fishing vessel register came into full effect on 1 April 1989, but vessels could transfer to it from old registers on or after 1 December 1988. Since then the overwhelming proportion of the United Kingdom fishing fleet, numbering over 10,000 vessels, has been registered in circumstances where my right hon. Friend the Secretary of State has been satisfied that they comply with the requirements of the Act. One hundred and twenty one have been refused registration primarily because they have not been able to demonstrate that beneficial ownership is British or that the vessels are managed, directed and controlled from the United Kingdom.
In the meantime, the European Commission on 10 August 1989 instituted an action under article 169 of the EEC treaty alleging that the United Kingdom had, in its imposition of the nationality requirement in sections 13 and 14 of the 1988 Act, failed to fulfil its obligations under the EEC treaty. The United Kingdom is defending these proceedings.
The Commission also brought an application for interim measures under article 186 of the treaty asking the court
"to order the United Kingdom to suspend, as regards nationals of the other Member States, the nationality requirements enshrined in sections 13 and 14 of the Merchant Shipping Act".
Judgment in respect of that application was delivered on 10 October and the order concerns that judgment alone. My hon. and learned Friend the Solicitor-General robustly argued the case for the United Kingdom on the grounds that, among other things, interim relief ought not be ordered where the Commission's case on the incompatibility of the nationality conditions with Community law was weak. In particular, he argued that a state has the right and duty under international law to prevent the abuse of its flag and to lay down the conditions for registration of ships that will fly its flag. He further submitted that the nationality requirements at issue were both consistent with international law and necessary to uphold the system of national quotas under the common fisheries policy, which are based on nationality.
The House will remember that the common fisheries policy was negotiated in minute detail by Ministers from each member state in a whole series of monthly meetings in Brussels when this system was set up in 1982-83. However, the court accepted the Commission's view that there was a prima facie case against the United Kingdom on the nationality issue and also that in the meantime certain "quota hoppers", particularly Spanish vessels that had hitherto fished against United Kingdom quotas, were suffering loss. The court, therefore, made its interim order to limit the loss of these fishermen pending the outcome of the main action--provided that they were able to satisfy the other conditions for registration to which I have already referred.
Mr. Jonathan Aitken (Thanet, South) : At this point in his interesting narrative, perhaps my hon. Friend could clarify one point. Is it correct that, immediately prior to the passage of the Merchant Shipping Act 1988, the
Column 999United Kingdom Government showed the text of the Act to the European Commission and were given clearance for it as being compatible with European law at that time? If that is correct, how on earth have these curious legal actions now come about?
Mr. McLoughlin : I should point out the difference between the Commission and the European Court, which is what we are discussing tonight. [Interruption.] However, these points will be covered by my hon. and learned Friend the Solicitor-General who will seek to catch your eye, Madam Deputy Speaker, at the end of the debate. The United Kingdom is obliged to give effect to the European Court order, which is why this order is before the House for approval. I said earlier, it is not certain what precise effects the relaxation of the nationality requirement will have. It may be very little since, as was recognised by the Commission itself, no more than a few fishing vessels are considered likely to be able to meet the other requirements which remain in force.
Several Hon. Members rose --
Mr. McLoughlin : I would rather not give way now, for the simple reason that a number of hon. Members want to speak in the debate, and there will be time later for my hon. and learned Friend to reply to the debate.
I refer to the requirements for residence and domicile in the United Kingdom and the direction and control of operations from the United Kingdom, which will still need to be satisfied.
Mr. William Cash (Stafford) rose --
Mr. McLoughlin : It is of course possible that certain Community nationals might decide to take up residence in the United Kingdom, but this would require positive action, which would include setting up their permanent home here.
Mr. James Wallace (Orkney and Shetland) rose --
Madam Deputy Speaker (Miss Betty Boothroyd) : Order. It seems to me that the Minister has said that he is not prepared to give way at this stage. Hon. Members should not persist when that has been made clear.
Mr. McLoughlin : It would continue to be necessary in all cases to establish that beneficial ownership, management and direction and control of vessels rests within the United Kingdom. It would not be enough merely to have token representation in this country--
The Government's objective remains to take all proper steps to ensure that the benefits of the United Kingdom quota under the common fisheries policy accrue to the genuine United Kingdom fishing fleet--but, of course, all such steps must be in accordance with EC law. Since the European Court of Justice has required, on an interim basis, that that portion of the 1988 Act concerning the nationality requirements for registration be suspended pending full argument and the final decision in this case, I ask the House to approve the order.
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Dr. Norman A. Godman (Greenock and Port Glasgow) : I offer my congratulations to the Minister on his new portfolio. I also offer him my condolences on having to perform the unwelcome role of ministerial messenger boy for the European Court of Justice and the Commission.
The order plainly shows that even the most recently enacted legislation in this Parliament is subject to a superior and more powerful court than any in the United Kingdom. The matter raises profound constitutional implications for Parliament and the people employed in the fishing industry.
This is not the first time that the Government and Parliament have been pulled into line by the European supreme court in Luxembourg. The Government were obliged to change section 37 of the Social Security Act 1975 because of an order from the court. It was amended in section 37 of the Social Security Act 1986. Similarly, the Government had to accept a ruling from the court concerning imports of long-life milk from France and other member states.
I am sure that the Minister will correct me if I am wrong in saying that no member state has sought to reject a ruling from the court. Am I right in thinking that this is the first time that Parliament and the Government have been instructed to amend a recent Act of Parliament by way of an interim injunction issued by the president of the court sitting on his own for half a day? When the injunction was announced a fortnight ago, the EC Fisheries Commissioner, Senor Manuel Marin, claimed--I suspect gleefully-- that this was the first time in the history of the Community that the Court of Justice had revoked an application of a national law as a result of an interim injunction. This is a very serious matter for Parliament and fishing. I am sure that the hon. Member for St. Ives (Mr. Harris) agrees. Why have the Government responded with such astonishing alacrity? In all cases concerning substantive judgments made by this supreme court, the Governments concerned, including this one, have taken several months at the very least to amend the offending national legislation or regulations. Why the unseemly haste? I suppose that the Minister will cite the urgency of this matter and say that Spanish fishing interests are experiencing severe financial difficulties. I have news for the Minister. Many of our fishing interests are experiencing financial nightmares, from the south-west of England to the north-east coast of Scotland and the west coast of Scotland.
Can the Solicitor-General, who is to wind up this disgracefully short debate, confirm that six other member states discriminate according to nationality? I believe that I am right in saying that France, Belgium, the Federal Republic of Germany, Spain--not surprisingly--Denmark and the Irish Republic discriminate according to nationality, and reserve to their national fleet the quotas that are allocated to each country each year by the Council of Ministers. If that is the case, why has the United Kingdom been singled out ahead of these other
Column 1001transgressors? We are having to amend an Act of Parliament which came into force only in January this year.
I have considerable sympathy for the legitimate points of order that were raised on this matter this afternoon by the hon. Members for Southend, East (Mr. Taylor) and for Aldridge-Brownhills (Mr. Shepherd) and by my right hon. Friend the Member for Swansea, West (Mr. Williams). The hon. Member for Southend, East raised an important point when he argued that the matter is sub judice given that other cases concerning nationality are due to be heard in the near future.
If this supreme court is conjoined with our courts, why do we have to accede with such alacrity to an interim injunction? It is disgraceful that we are debating this issue at such a late hour and for just 90 minutes.
I said earlier that this is a most important matter for our fishing industry. I remind the House of the comments made by the right hon. Member for Southend, West (Mr. Channon) when he was Secretary of State for Transport and speaking on Second Reading of the Merchant Shipping Bill. He said :
"Part II deals with the very serious problem of foreign-owned fishing vessels registering in the United Kingdom in order to fish against our EC quotas. This is, I know, a matter of concern to hon. Members who represent fishing constituencies. These are stringent requirements, but we believe they are essential if British fishing quotas are to be preserved for British fishermen. They have been carefully drawn up in consultation with the fishermen's organisations and widely welcomed by them."--[ Official Report, 28 January 1988 ; Vol. 126, c. 510.]
My right hon. and hon. Friends and I wholeheartedly supported the Bill. There was no Division on Second or Third Reading.
The Minister said that this interim injunction does not affect the requirement that such persons must be resident and domiciled in the United Kingdom. Will the Minister explain those words? Does it mean that if I were Jose Romero, a Spanish fisherman, I would simply have to announce my intention to live here?-- [Interruption.] I agree that I do not look very Spanish. Are there to be reciprocal arrangements whereby British fishermen can fish against, for example, the Spanish quota?
The Minister said that there are now about 10,000 fishing vessels on the register. He also said that he is not sure how many additional vessels may now become eligible for registration. Is it the Minister's intention to appoint a team of inspectors to assess the eligibility of applications for registration? Does the Minister agree that the injunction confounds the system of national quotas? Does he agree that the system of national quotas, based upon nationality, is the keystone of the common fisheries policy?
My fear is that the injunction may encourage other fishing interests in Spain and elsewhere to set up home in the United Kingdom. I also believe that the interim judgment will arouse considerable concern in the fishing industry that the Spanish fishing interests may lay siege to the common fisheries policy in terms of access to grounds and quotas. The brutal truth is that there are too many fishermen chasing too few fish in European Community
Column 1002waters and elsewhere. With section 14 of the Merchant Shipping Act 1988 the Government understandably sought to restrict access to United Kingdom quotas. That endeavour has been demolished by the interim order.
The European Commission has told Her Majesty's Government, by way of the multiannual guidance programme, that the United Kingdom fishing fleet has to be reduced by over 22 per cent. by the end of 1991. In other words, fishing capacity must more closely match the demands to conserve the various stocks.
The judgment flies in the face of the sensible management of our fisheries stocks. It makes the need for a decommissioning scheme much more urgent. I know that the Ministers concerned are somewhat reluctant to introduce such a scheme because they were humiliated by Humberside trawler owners during the period of the previous scheme. Despite that continuing embarrassment, Ministers should agree to such a scheme and other conservation measures in order to protect fishing communities throughout the United Kingdom. The people in those communities, from Cornwall to Shetland, deserve nothing less. The Government, the European Court of Justice and the European Commission have failed those decent and honourable citizens of ours.
Mr. Jonathan Aitken (Thanet, South) : This is a pretty miserable nocturnal parliamentary occasion. Perhaps the only agreeable aspect for Conservative Members is that we are able to give a warm welcome to our hon. Friend the Minister on his debut at the Dispatch Box. We wish him well in his responsibilities. I wish that he had been able to deal with an easier subject and that he had had an easier debut. I felt that he was in the role of Postman Pat delivering an unpleasant letter to the EEC. He was bustling on his round as if he had in his sack an unpleasant smelling piece of merchandise that he did not want to examine too closely.
I have said that this is a miserable occasion and I agree with most of what was said by the hon. Member for Greenock and Port Glasgow (Dr. Godman). To anyone who cares about our Parliament, its historic sovereignty and, above all, its continuing ability to make laws for the protection of our citizens in the fishing industry or elsewhere, the wretched little order marks a humiliating and important defeat because it is an historic surrender of some constitutional importance.
This is not one of the usual common-or-garden irritating European directives which harmonise lawnmowers, make us put identical health warnings on cigarette packets or adjust our clocks in summertime when we do not want them adjusted. This is far more constitutionally profound. I shall try to take the House to the high ground of principle so that we can see the great issue that matters to any nation state and that is so woundingly being corrupted and compromised by the request that the Government have put to the House.
We need hardly remind ourselves when we debate fishing that we are a maritime nation and an island people. Throughout our history we have been surrounded by the sea and from time immemorial we have looked to our Parliament to protect our territorial waters from incursion, to safeguard our fishing grounds and staunchly to defend the livelihoods of all those who, in the beautiful words of Archbishop Cranmer,
Column 1003"Go down to the sea in ships and occupy their business in great waters."
There is nothing anti-European in such a stance. After all, since its inception the EC fisheries policy has always been based on the principle that nation states have national quotas. EC shipping law allows any member state to lay down national conditions for the registration of ships and the flying of flags. That is a basic point of EC law and national law.
It was in pursuance of the principle of nationality in fishing matters that the House passed the important Merchant Shipping Act 1988. Section 14 of that Act was of pivotal importance because it inserted what is no more than a normal safeguard that a British registered fishing vessel should be British owned. That means either owned by Britons or by a company which can be shown to be predominantly in the ownership of British shareholders. That is what is meant by "qualified person" or "qualified company" in that section of the Act.
That section was put forward to avoid a familiar form of cheating in international corporation activity, the erection of a brass plate behind which shareholders who are not British nationals can hide. The former Secretary of State for Transport, my right hon. Friend the Member for Southend, West (Mr. Channon), got it absolutely right when on Second Reading of the Merchant Shipping Bill he said : "These are stringent requirements, but we believe they are essential if British fishing quotas are to be preserved for British fishermen."--[ Official Report, 28 January 1988 ; Vol. 126, c. 510.] We expect no less from a British Secretary of State and a British Parliament.
If the House cannot protect our fishing grounds and our fishermen, what can we do? I am glad to hear that my hon. Friend the Member for Thurrock (Mr. Janman) has been diligently researching the Division lists and has found that every member of the Government Front Bench tonight voted loyally for section 14 to be implemented. My hon. Friend the Member for St. Ives (Mr. Harris), who occupies such a prominent position in the great hall of fame of Euro enthusiasts, having been Parliamentary Private Secretary to the former Foreign Secretary, went out on a limb and eloquently supported section 14. He attacked the wicked Spanish companies behind their brass plates when he said :
"The harm that they have caused to our fishing interests is considerable. At long last we have the legislation for which I ... have been fighting for many years."--[ Official Report, 28 January 1988 ; Vol. 126, c. 532.]
He may have fought for it for many years but we shall shortly lose it. My hon. Friend's words will take some eating. In about 40 minutes we shall not have the legislation for which he fought. One little puff of Euro wind and it will be gone. The legislation for which my hon. Friend fought for so long and about which the Government went into battle will be lost.
I do not know how my hon. and learned Friend the Solicitor-General, on whose shoulders so much rests, will explain all this, but, knowing him, I expect that we shall hear an eloquent appeal to honour the rule of law. I can hear the sonorous phrases that he will shortly roll off.
Column 1004What law? The European Court of Justice has been hopping about on this issue like the worst type of kangaroo. It reminds me of that famous passage in "Alice's Adventures in Wonderland" which says "Sentence first, verdict afterwards."
All the precedents show that a European court always first decides in such cases on the issue of principle as to whether legislation by a member state is or is not compatible with Community legislation. All the signs were that it was compatible. We went, cap in hand, clutching our forelocks, to the European Commission in the first place and asked, "Is our legislation, the Merchant Shipping Act 1988, all right?" and we were told that it was all right. We were allowed to pass the Act, and the next minute it was litigating against us in court. That is not the action of good friend or partner. If the people in the Commission can bless us one minute and bring litigation against us the next, they cannot be very nice.
I cannot understand why the normal procedures were not followed by the extraordinary Euro-court, why a considered judgment on the compatibility issue was not handed down, and why that was not argued carefully. Then, if it demonstrated that national laws had to be suspended, because three wise judges had handed down judgments that everyone had to look at, at least we could see the clear legal basis for the decision.
"so long as this order remains in force"
"have effect as if".
We may be dealing with a provision that gives the impression that it is suspending when it is amending, which is different.
The court shows breath-taking arrogance. It clearly has no idea how much these issues matter to fishermen, fishing communities, or ports--one of which I represent. In a journal called the Eurofish Report, I read a curious paragraph headed, "Two little words". That makes it sound like a nursery rhyme. It says :
"The Court president's ruling demands simply that the UK now removes the two words British citizen' from that Section 14(7) definition of what is a qualified person' and qualified company' as it applies It therefore acknowledged the Commission argument that such use of British citizen' in this context constitued direct discrimination' in flagrant breach of Article 40(3) of the Treaty of Rome."
I find that breath-taking. Delete "British citizen" and insert "foreign owner", and the whole basis on which our fishing legislation and our national legislation in key strategic sectors has been based is cheerfully swept away on the basis of one judge giving an interim judgment.
My hon. Friend the Under-Secretary did his best to take on this legal brief and explain all the legal arguments deployed in favour of killing off this injunction, but he is no lawyer, and he should have added in brackets at the end of every sentence, "And we lost." The Government have had so much practice in fighting injunctions in the courts of the world ever since the Peter Wright industry got going that one would have thought that they could stop one
Column 1005judge in a Euro-court putting down a change of our law that sweeps away the great principles not just of our legislation but of international law.
The moment when the Roman empire was known to be in total collapse and disarray was when three little words no longer had any importance or any impact, and the power of the Roman Senate and the Roman emperors no longer carried any weight. Those three words were, "Civis Romanu, sum". Here, we are deleting "British citizen" from an Act. This is a sad night for parliamentary democracy and sovereignty, and I shall vote against the order.
Mr. James Wallace (Orkney and Shetland) : I begin by congratulating the Minister on what I understand is his maiden speech at the Government Dispatch Box. When he refused to allow me to intervene and I persisted in challenging him, I have no doubt that he recognised that those of us who represent coastal constituencies--in some instances rather landlocked ones, but perhaps that is not his fault--reflect the passion that has been generated by the order. That is especially true of those of us who represent fishing constituencies.
It is clear from the previous contributions to the debate that there is widespread agreement about the importance of the Merchant Shipping Act 1988, a measure which received support from both sides of the House when it came before us for consideration. I believe that the support for it was such that it was enacted without a Division. It is a fact that it enjoyed all-party support, and we are all aware of the abuse which it was intended it should tackle. Spanish vessels were coming on to the British register. Alternatively, British vessels were being acquired and beneficially owned by people with substantial Spanish interests. In that way the Spanish fishing industry was getting round the restrictions that were placed on its fleet when Spain became a member of the European Community. That did immense damage to our fishing industry in all parts of the United Kingdom. As the hon. Member for Greenock and Port Glasgow (Dr. Godman) said, the industry was damaged from Cornwall to Shetland. The Spanish have been able to fish our quotas and add tonnage to our total fishing capacity, thus placing great difficulties in the way of the industry. Our tonnage has to be reduced to meet the targets that are set under the multi-annual guidance programme. I do not think that there is any doubt about the abuse that we have been trying to tackle.
We could claim, and we did, that there was jusification for our approach given the heavy emphasis that has been placed on nationality. The quota system for fisheries is based on nationality, which is an exception to the general approach of a Communitywide application of rules. That provided a justification for the arguments that we advanced.
It appears that the British proposals were submitted to the Commission and that the nod was given. In that context it is surprising that the Commission is taking the British Government to court. It would be reasonable, even at this stage, to put the ball into the Commission's court and say, "The Community has agreed. There is a Community agreement that quotas should be divided on a
Column 1006national basis. You are aware of the problem that we are highlighting. For these quotas to be effective, it is only right that national fishing fleets catch the national quota. How do you, the Commission, suggest that we should respond to the abuse which everyone recognises?".
If the Government had not used up so much good will and political capital in fighting specious battles on issues such as the print size of the warnings on cigarette packets, they might have had a stock of credit and might have been able to advance the argument that I have outlined. They have frittered away good will in responding to so many diverse issues, and when a real national issue arises they find that they have precious little to fall back on. In this instance it is the fishing industry that will suffer.
What effect will the passing of the order have on the number of boats that might be able to come on to the register? The Minister has said that he does not know, but submissions have been made to the European Court by the Solicitor-General and others. They made it clear that the United Kingdom contended that the interim measures would be ineffectual. As I understand it, that meant that the measures would have no effect. The Minister is saying tonight something that is materially different from what the
Solicitor-General submitted to the European Court. He seems to be saying that the measures could have some effect, but he does not know how much. We are entitled to have the guesstimate that his Department has made. We should be told what steps the Department is taking to try to quantify the effects in the weeks that lie ahead.
I congratulate the hon. Member for Greenock and Port Glasgow on his pointed and eloquent comments on the speed with which the Government have reacted to the interim measures, bearing in mind the time that they often take to respond to full decisions of the court. The valid argument of the hon. Member for Stafford (Mr. Cash) is that it appears that the court is asking us to suspend the relevant provision of the 1988 Act whereas the effect of the order, as I read it, would be to repeal it. As I understand section 2(2) of the European Communities Act 1972, the power given by Order in Council is to implement decisions of the Community institutions. Therefore, it is not necessary to repeal. It would be possible to suspend. Perhaps the Minister will explain why the chosen course is to repeal. The Government have been speedy in tabling this order, but why have they not tried to devise some other provision that would achieve the same effect as that wished for through the use of the words "British citizen"? Section 14(3) of the 1988 Act gives the Secretary of State power, by regulations, to specify further requirements that must be satisfied if a fishing vessel is to be eligible for registration as a British fishing vessel. It states that it must appear
"to the Secretary of State to be appropriate for securing that such a vessel has a genuine and substantial connection with the United Kingdom."
What further consideration have Government Departments given to bringing forward further orders to try to achieve the same end, but which would also be acceptable to the Community? As the hon. Member for Greenock and Port Glasgow said, how do other countries get away with it?
I was impressed when I read the speech of the hon. Member for St. Ives (Mr. Harris) on Second Reading of the 1988 Bill. He said : "How will the Minister or his officials determine that the provision is applied and obeyed. I would thoroughly endorse what my hon. Friend the Member for Eastleigh (Sir