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Mr. Tom King : I refer the hon. Gentleman to the reply that I gave earlier to the hon. Member for Barnsley, West and Penistone (Mr. McKay).

Mr. Mullin : Now that it is alleged that our nuclear weapons are for use only as a last resort, are there any plans for doing away with our short-range nuclear weapons--I am talking about artillery and Lance--or am I being naive?

Mr. King : The hon. Gentleman would have done better to read the London declaration before he came to the House because it contains a specific proposal on nuclear artillery.

Mr. Wilkinson : Now that the NATO alliance has unambiguously extended the hand of friendship to the Warsaw pact and the Soviet Union, which leads it, will my right hon. Friend, in concert with the Foreign Secretary, see whether pressure can now be put on the Soviet Union to withdraw its remaining troops from Poland?

Mr. King : Certainly we wish to see the withdrawal of Soviet forces as soon as possible. My hon. Friend will know that Chancellor Kohl accepted that it will probably be three to four years before those troops can be withdrawn from East Germany. One should not underestimate the sheer logistical problems of withdrawal

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of the numbers involved, but we want it to happen as soon as possible. We should welcome the real progress that has been made.

Mr. John D. Taylor : Were the decisions taken at the NATO summit consistent with the decision taken yesterday in Moscow? If so, do the Government support the restriction on the size of German forces following a united Germany?

Mr. King : Not only were they consistent, but the very tone of the London summit was intended to make clear to the Soviet Union that a united Germany in NATO presented no threat to the Soviet Union. The success of that summit is borne out by yesterday's events, which have given President Gorbachev the confidence to proceed as he has, some might say courageously, to accept against the background of his domestic position the important step forward of a united Germany in NATO. The German proposals for the Bundeswehr and the Volksarmee were well anticipated and we have taken note of them.

Sir Bernard Braine : A propos my right hon. Friend's answer to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), does he agree that the real test of Soviet sincerity about the new relationship with the west would be its withdrawal from a country that suffered grievously from both Germans and Russians during the war and that has suffered grievously since? The withdrawal of Soviet troops from Poland would be a great step forward.

Mr. King : I understand my right hon. Friend's feelings and wish to see that withdrawal as soon as possible. We must recognise the most remarkable landmark that emerged yesterday. A few months ago, no one would have thought it possible for the Soviet Union to accept a united Germany in NATO. Three months ago it was almost unthinkable in Moscow and it has now been confirmed. We should welcome that.

Mr. O'Neill : Will the Secretary of State confirm that a statement about the Government's reaction to the NATO summit will be made before the House rises for the summer recess? Will the document "Options for Change" be available for debate, or will it simply be published before the end of the Session?

Mr. King : My right hon. Friend the Prime Minister commented on reaction to the summit in her statement to the House following the G7 summit at Houston. I cannot comment further today on a separate statement about "Options for Change".

Mr. Sayeed : If at the London summit the Government had made an immediate announcement to cut defence spendng by over a quarter, what would have been the effect?

Mr. King : That is a rather subtle question of which I would have liked more notice. The London summit showed the importance of the members of the NATO alliance working together. As I said, one factor that must have been important to President Gorbachev was that he was dealing with a united alliance and knew from talking to Chancellor Kohl that the Chancellor's views were consistent with those of the whole of the NATO alliance.

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Conventional Forces in Europe

10. Mr. Eastham : To ask the Secretary of State for Defence what decisions he has made about the role of the Army following a possible conventional forces in Europe agreement.

Mr. Archie Hamilton : No decisions have yet been taken regarding the future role of the Army, although we are examining the options for change in the light of changing international circumstances.

Mr. Eastham : In view of the dramatic discussions between East and West Germany and the ultimate withdrawal of Russian troops, does the Minister recognise that there is no longer any justification for the retention of 55,000 British troops in Germany? Can he assure us that the Government will not try to introduce some strategy under which those 55,000 troops will be deployed somewhere else in the world, in a continuation of the imperialism that we used to experience 100 years ago?

Mr. Hamilton : "Options for Change" recognises the dramatic alterations in the scene in Europe generally and especially in east-west relations. It will therefore deal with the size of the Rhine Army.

Dame Elaine Kellett-Bowman : Does my hon. Friend accept that whatever agreement may be reached on conventional forces, the Territorial Army must always be maintained as a back-up to the regular forces? Will he congratulate those who serve in the Territorial Army in my area on the opening last Thursday of the Alexandra barracks by Her Royal Highness Princess Alexandra? They will provide magnificent training opportunities for the Territorial Army of the future.

Mr. Hamilton : I am glad to hear what great support is being given to the Territorial Army in my hon. Friend's area. It is an invaluable and essential part of our commitment to reinforce NATO at a time of conflict.

Arms Conversion Agency

11. Mr. Henderson : To ask the Secretary of State for Defence whether he has received any representations to set up an arms conversion agency.

12. Mr. Fatchett : To ask the Secretary of State for Defence whether he has received any representations to set up an arms conversion agency.

The Minister of State for Defence Procurement (Mr. Alan Clark) : This question appears to have been widely syndicated on the Opposition Benches. It is found in three of the top dozen questions. Let us hope that hon. Members have adequately memorised their supplementaries.

The answer is that I have received various representations.

Mr. Henderson : Has the Minister had the temerity to contact the Department of Trade and Industry on the possibility of an arms conversion agency? If so, can he tell us about the nature of those talks and specifically whether he has received reports from the DTI on how manufacturing industry can obtain its share of the peace dividend?

Mr. Clark : That question has been asked no fewer than seven times, and answered by three Ministers, during the

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past six months. The question does not alter and nor does the answer. British industry is responsible for determining its product ranges, not the Government.

Mr. Fatchett : Does not the Minister's answer show clearly that the Government feel that they have no responsibility to the companies and workers which have supplied the British forces over the years? Is not the Minister happily washing his hands of companies such as Vickers in Leeds? Is not it time that the Government accepted some responsibility for those who have supplied Britain so well for so long?

Mr. Clark : I thought that the hon. Gentleman spoke from the Opposition Front Bench on some subject or other, and I had hoped that he would produce some enlightenment on the subject. All that he has done is produce the standard socialist formula--convene a committee of friends, throw some public money at the subject and then claim that something is being done about it. In fact, we have no details about the project. We do not know how it is to be constituted, whether it is to be funded from taxation revenue, or whether--as I understand it--it is to be funded by a surcharge on those in arms production. There are no details : it is simply a down-memory lane formula of socialism.

Mr. Hind : Does my hon. Friend agree that it is essential that we retain a military complex in our industry that is capable of turning out the necessary minimum weapons to guarantee our security? Is not military aviation such as that at British Aerospace at Walton essential to continue the defence of this country?

Mr. Clark : Of course, there are certain key capabilities that we shall retain at all times. We shall always continue to need a strong and vigorous defence sector in our manufacturing industry.

Mr. Viggers : Has my hon. Friend had the opportunity to read some of the articles commemorating Adam Smith? Did they refresh his natural inclination that if market forces do anything, it is crucial that the Government should not become involved in the issue? The very last thing that we should have is an arms conversion agency.

Mr. Clark : I entirely agree with the latter part of my hon. Friend's proposition, but I am not sure whether all Adam Smith's precepts are entirely applicable to the defence industries.

Options for Change"

13. Mr. Duffy : To ask the Secretary of State for Defence when he expects to publish the findings of the "Options for Change" inquiry.

Mr. Tom King : I appreciate the keen interest, particularly in the armed services themselves, in the progress of our work which is proceeding against the background of the changing international situation and similar studies among our allies. I advised the House on 18 June of the essential elements in our study of "Options for Change". I am not yet in a position to go further.

Mr. Duffy : Before publishing those findings, will the Secretary of State assure the House that he will have given due weight to a service dividend as well as a peace dividend?

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Mr. King : Yes, Sir. I have not used the word "findings" because we hope to come forward with proposals. I hope that there will be an opportunity for wider consultation. Obviously this is an important time for the armed services. We must take account of the interests of the armed services and all those who serve in them as well as those involved in defence generally.

Mr. Nicholas Bennett : What does my right hon. Friend think of the morality of those who want to spend the peace dividend but refuse the investment in nuclear weapons which makes that dividend possible?

Mr. King : I do not know whether my hon. Friend was referring to the Opposition. At this very moment, the Leader of the Opposition is trying to persuade people in Washington that the unilateralist views shared by many Opposition Members do not really exist.



Q1. Mrs. Margaret Ewing : To ask the Prime Minister if she will list her official engagements for Tuesday 17 July.

The Prime Minister (Mrs. Margaret Thatcher) : This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

Mrs. Ewing : Is the Prime Minister aware that when I read the memorandum from the Chequers seminar and saw the words "angst", "aggressiveness", "assertiveness" and "bullying"-- [Interruption.]

Mr. Speaker : Order. Will the hon. Lady proceed with her question please? [Interruption.] Order. These pauses take a lot of time.

Mrs. Ewing : --I believed that the Prime Minister was painting a self-portrait. Does she realise that, through her failure to sack the Secretary of State for Trade and Industry and her association with that memorandum and the attack on the German people, she is now tarred with the Ridley brush and is no more fit to lead than he was?

The Prime Minister : No, Mr. Speaker. At one time, I am accused of being isolated and of not consulting anyone ; at another time, I am accused of having consultations with those who have something interesting to say. People must make up their minds which they are criticising. The hon. Lady could have read the constructive result in a speech at the Koenigswinter conference some five days later. That constructive speech concerned all our relationships in the Community, particularly with Chancellor Kohl, who shows much more understanding of these matters than does the hon. Lady.

Mr. Wiggin : Given the now general acquiescence about the reunification of Germany, does my right hon. Friend agree that the first act of a newly reunified Germany should be the signing of a full and unqualified peace treaty with the former allies? Will she take steps to ensure that that happens?

The Prime Minister : After unification, I think that Germany and Poland will wish to sign a treaty confirming Poland's existing borders. That will be one of the most

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important international measures. I do not think that a unified Germany would wish to have a full peace treaty, for obvious reasons. We might have arrangements that lead to a peace settlement.

Mr. Hattersley : Is the Prime Minister aware that four of the six academic experts who attended her Chequers seminar on Germany have said that Mr. Charles Powell's minute of that meeting gave a slanted--that is, anti-German--account of the discussion? Does the Prime Minister agree?

The Prime Minister : No, Mr. Speaker.

Mr. Hattersley : The whole House, and people in many places and chanceries throughout the world, will be astonished that the Prime Minister has not taken this opportunity to repudiate the more offensive sections of the minute. Four of the experts at the seminar say that the minute was slanted against the Federal German Republic. Everyone in the world now believes that the Prime Minister's private secretary was reflecting not so much the opinions of the experts as the prejudices of the Prime Minister. Why does not she take this opportunity to refute them?

The Prime Minister : I am amazed that the deputy leader of the Labour party chooses his opportunity to question me to use it-- [Interruption.]

Mr. Speaker : Order.

The Prime Minister : --chooses to use his opportunity for questioning to attack a civil servant who cannot reply and who has served all Governments with equal integrity. His conclusion on that meeting was highly constructive, as was the meeting itself. There used to be more honour in the House than that.

Mr. Hattersley : The Prime Minister's reputation is far too tarnished for her to maintain this haughty stand any longer. Does not she understand that there is a problem with Anglo-German relations and that that problem is the Prime Minister? What we want--and, I believe, what the majority of people want--is an honest statement of the Prime Minister's opinion. Has she the courage to make such a statement to the House and to face cross-examination?

The Prime Minister : Perhaps the right hon. Gentleman will read the many speeches and consider the many actions in which we have been staunch allies of Germany in NATO and in which the Germans have been staunch allies of ours in NATO and in the EEC. Germany joined us in stationing cruise and Pershing at a critical time. We could not say that the Opposition supported that.

Sir Peter Blaker : Is my right hon. Friend aware that every other Government in the world regularly make assessments of the British character and of Britain's performance, and that they all admire and respect her quality of leadership much more than they respect the inane posturing of the Leader of the Opposition?

The Prime Minister : Had this country followed the policies of the Leader of the Opposition on defence, we should never have seen the remarkable changes that we are seeing now.

Q2. Mr. Andrew Smith : To ask the Prime Minister if she will list her official engagements for Tuesday 17 July.

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The Prime Minister : I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Smith : As the Prime Minister chose in the exchange of resignation letters to refer to

"the policies we both believe in so deeply",

does not she owe it to the House and the country--she was the person who mentioned the word "honour"--to say whether she repudiates the view that her former Secretary of State for Trade and Industry expressed in his resignation letter which was that the proposal by the European Commission for economic and monetary union in the Community would be a disaster? Does she repudiate him, or does she agree with him that it would be a disaster?

The Prime Minister : The policies on which the former Secretary of State and I agree are the policies that have transformed Britain from the state in which Labour left it and which it would recreate. The hon. Gentleman cannot have listened to what I said last week--that my right hon. Friend's views were not those of the British Government. I should have thought that the hon. Gentleman would have known that. On the resignation letter, my right hon. Friend condemned the move to a single currency. Does Labour now support that?

Mr. Paice : Will my right hon. Friend reflect on the policies that she has just mentioned which have brought eight years of successive economic growth, improvements in productivity and record levels of employment? Is not it her determination to pursue those policies which will ensure that the British economy is the best

counter-balance to any other economy in Europe?

The Prime Minister : Yes, Sir. Our policies have been very successful. We now have the fastest growth in manufacturing productivity in the G7. In the 1960s and 1970s we had the lowest growth in productivity in the G7. We now have the second largest growth of output in the EEC. In the 1960s and 1970s we had the lowest growth of output in the EEC. We now have the second fastest growth in business investment after Japan. I am delighted to have a chance to say how bad it was in Labour times and how good it is now.

Q3. Mr. Carr : To ask the Prime Minister if she will list her official engagements for Tuesday 17 July.

The Prime Minister : I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Carr : Given the announcement last Friday that the retail prices index has now reached 9.8 per cent., the continuing balance of payments deficit running at over £1 billion a month and the continuation of interest rates at 15 per cent., causing record numbers of bankruptcies, does the Prime Minister agree that the economy is in a mess and that the responsibility for it lies squarely with her and her Government?

The Prime Minister : I am amazed that the hon. Gentleman calls it a mess. We have the highest-ever standard of living, more people in work than ever and the highest standard of investment. In fact, 28 of the 50 top performing European companies are British.

Mrs. Currie : May I say to my right hon. Friend the Prime Minister-- [Interruption.] --

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Mr. Speaker : Order. This is the first opportunity that the hon. Lady has had to put a question and I ask her to do it.

Mrs. Currie : May I say that my right hon. Friend the Prime Minister is looking jolly nice today? Does she agree that is is a time of great celebration? As she has observed, it is the end of the cold war. Does she also agree that while we celebrate we should not be complacent about the peace?

The Prime Minister : I thank my hon. Friend and return her compliment. I said in November 1988 that we had reached the end of the cold war provided that Mr. Gorbachev went on as he has done. That was when I first said it, but others have come rather later.

Q4. Mr. Ted Garrett : To ask the Prime Minister if she will list her official engagements for Tuesday 17 July.

The Prime Minister : I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Garrett : Does the hon. Lady recognise that there are not only splits in her party, but different views in ours? Does she also recognise that they are legitimate differences? Stripped of the hysteria and counter- charges of the past few days, we have to think as a nation about the balance of power, especially in a free, open and democratic Europe. My generation--there are many hon. Members of my generation--should consider the part we played to return the balance of power. Our parents and grandparents did the same. The last three centuries have taught us lessons. Those who did not experience the

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1939-45 war or the post-war period should read the history of Europe over the past three centuries. Some of the pro- Europeans should also re-read their history.

The Prime Minister : I thank the hon. Gentleman for those words which I think he has truly spoken. I point out that I said--

Mr. Skinner : He should have been at the seminar. [Interruption.]

Mr. Speaker : Order. I am anxious to call as many hon. Members as possible.

The Prime Minister : May I point out--because I think that the hon. Gentleman will agree--that when I said in November 1988,

"The cold war is already at an end",

I went on with the words that were very much in keeping with his sentiments :

"Now, that does not mean to say a strong defence is at an end--far from it."

I think that the hon. Gentleman would firmly agree with that : we always have to keep up a strong defence to safeguard peace. I note what the hon. Gentleman said about learning from history. I was interested to see what Chancellor Kohl said at a press conference today. He said that he understood the concern--especially on the part of the British--whose entire national existence had been at stake in the fight against Hitler. He went on to say that he had not taken my right hon. Friend's comments amiss

"The man has been punished enough."

I think that the hon. Gentleman, Chancellor Kohl and I would very much agree on the wisdom of learning from history.

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