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Westland Group. What is the view of the right hon. Member for Tweeddale, Ettrick and Lauderdale and his right hon. Friend the leader of the Liberal party when it comes to selling helicopters to Malaysia ? He is perfectly happy to sell helicopters to Canada. Gracious me, the right hon. Member for Yeovil (Mr. Ashdown) was shoved off to Canada to speak to his Liberal Democrat friends to save the Westland deal. Of course he did not do it. He did not save it. Then he denied it, but he did not do it. What is the view of the right hon. Member for Yeovil about the selling of helicopters to Malaysia ? That is the question to which the people of Yeovil would like to know the answer.

I will tell the House why the people of Yeovil would like to know that. Members of the Liberal party are champions of the defence cause in the constituencies--champions of the defence cause in my constituency--but in Westminster they are champions of the World Development Movement. The Liberal party, as it always does, tries to do one thing in the constituencies and another thing in Parliament. Let me just say to the right hon. Member for Tweeddale, Ettrick and Lauderdale that if, in a few months' time, some of the workers of Westland walk out of the gates on a Friday evening, not with their wage packets but with their P45s in their pockets, they will know where the blame lies.

Mr. Simon Hughes (Southwark and Bermondsey) : The Minister knows well the answer that my colleagues would give to that question, which is that it is perfectly proper to seek business overseas, including in defence -related industries, if one is clear about what one is doing, not underhand and not tying it to other secret deals. The Minister has not answered the question that my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) asked, which is how this weekend the Foreign Secretary admitted that there had been an entanglement between, on the one hand, defence contracts and, on the other hand, aid, while for the past five years in this place and the other place, Ministers have said that there was no link at all. That is the question which he has not answered.

Mr. Needham : I do not think that the hon. Member for Southwark and Bermondsey (Mr. Hughes) was here for much of the debate when those issues were mentioned. I can say one thing to the hon. Gentleman : it is perfectly true to say that the Liberal party is never clear about anything.

The third point that I wanted to make, which leads on from the remarks that I have just made about the Liberal party, arms and ATP, relates to the issue that the hon. Member for Inverness, Nairn and Lochaber mentioned at the end of his comments, when he showed us that heading from The Independent on Sunday dated 13 February. The article is headed :

"Clique makes millions from aid."

I should like to read it to the hon. Gentleman so that we cannot make any mistake about it :

"A handful of leading building and engineering companies with close links to the Government and the Conservative Party have been the main beneficiaries of Britain's industrial overseas aid programme, picking up nearly half of the £1.4 bn dispensed since 1978... The companies with an inside track on aid are led by Balfour Beatty, the joint contractor on the Pergau dam project in Malaysia. Its parent company, BICC, has since 1980 given £90,000 to Arms for Industry, British United Industrialists and the Economic League--all right-wing groups closely allied to the Tory party.

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Over the same period, Balfour Beatty received 21 per cent--nearly £300m--of the Overseas Development Administration's Aid and Trade Provision."

Well, £90,000 over 14 years to three small pressure groups ? That works out at £2,000 per year in return for £300 million-worth of business. My goodness--that is value for money.

Perhaps the chairman of the Conservative party should go down to Transport house, speak to Bill Morris and tell him that if he were to cut the millions that he now gives to the Labour party and instead give £2,000 a year to the Fabian Society, the Institute for Public Policy Research and the Labour Co-ordinating Committee, he would lose no influence. He could give the money instead, as one hon. Member said, to John Monks to fund his new Trades Union Congress search for influence. What a ridiculous argument. What a ludicrous argument. The best thing that the hon. Member for Inverness, Nairn and Lochaber can do is to quote from The Independent on Sunday of two weeks ago about £90,000. What an insult to the Overseas Development Administration officials who are responsible for the way in which the budget is administered. The correspondent involved, Mr. Blackhurst, wisely went to Kuala Lumpur last week to see what effect his article was having. He filed a story this Sunday which stated :

"British companies in Malaysia will be starved of business and forced to close their operations down in the years ahead." Well done Mr. Blackhurst.

Mr. Tom Clarke : The Minister talked of the insult to ODA officials. Does not he recall that the principal accounting officer at the ODA, Sir Timothy Lankester, said that the proposal was not economically viable and was an abuse of overseas aid ? Will he therefore explain how £56 million of British taxpayers' money can abused in that way ? How can that be justified ?

Mr. Needham : I shall come to that argument. The hon. Member has advanced that argument about five times and he repeated himself in his speech.

Mr. Blackhurst may have learnt his lesson, but the editor of The Sunday Times has not. On Sunday, as the editor sat on David Frost's sofa drinking his freshly squeezed orange juice, he said : "I mean, just remember in the 1930s in this country, newspapers did not tell the truth about Nazi Germany because we were told not to upset nice Mr. Hitler".

The one sure way to obtain an order is to compare your client with Adolf Hitler. The editor of The Sunday Times continued : "So, I think we've just got to be careful on this and the fact is that in building this dam in Malaysia a quarter of a billion pounds worth of British taxpayers' money was used as a sweetener to then get the arms deal for 1.3 billion."

The hon. Member for Monklands, West made an effort to make the best of a bad show and referred to a letter from Lord Younger in June 1988. That letter formed no part of the arrangements thereafter between the British Government and Malaysia. That is not the point, however. My right hon. Friend the Minister of State showed that only 1.2 per cent. of the aid budget will go on the Pergau dam in any single year.

The editor of The Sunday Times continued :

"Now, there is a legitimate matter of British taxpayers interest in this. Was this the proper use of money, especially when all the technical advice from our own officials said this dam was useless". Even the hon. Member for Monklands, West did not go so far as to say that the dam was useless. There is nothing

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more patronising or arrogant than for Opposition Members to suggest that the Malaysian Government and people are so foolish that they have no idea what they need and want. The hon. Gentleman said, "Ah, but we could have got a combined cycle gas-fired power station if we had not done this." But that is not the case, because, as my hon. Friends have said, the Malaysian Government would not have accepted such a power station. As one of my hon. Friends said, they would not have accepted it because they wanted to build the dam in a part of the country with little development, and because combined cycle gas-fired turbines would have involved more imports of goods and materials, whereas the building of a dam involves much more local labour and local content.

If we do not want the business, it is no good then saying, "If they had done what Sir Tim Lankester said, we could have determined that the Indonesians would give us what we want". As my right hon. Friend the Minister of State said, that is neo-colonialism of the worst sort.

The editor of The Sunday Times said not only that the dam was useless, but that it would

"produce electricity for only two hours a day."

That would make it the biggest lavatory bowl in the world : it would flush for two hours and take 22 to fill up. That is a ludicrous comment on the workings of hydro-electricity. As my right hon. Friend the Minister said, the dam was designed for peak load at peak hours. The editor continued :

"it would actually increase the price of electricity to ordinary Malaysians".

How could it do that when it was powered by water and the British Government were providing the aid for it ? He went on to say : "Why in our overseas defence ... budget are we giving aid to Malaysia ? I mean, the budget's meant to be for the poorest countries in the world. Malaysia's one of the booming tiger economies of the Pacific basin."

The income per head in Malaysia in 1988 was $1,780 a year. That was well within any limit on aid to developing countries. It is one eighth of the income per head that this country enjoys. Are the hon. Member for Monklands, West and the editor of the The Sunday Times saying assistance to Malaysia was provided when it did not deserve aid ? Every other country in the world was supporting Malaysia.

Sir David Steel : The Minister does not have much time, so if he wants to reply to the editor of The Sunday Times he should send him a letter and reply to the debate in the House.

Mr. Needham : My reading of the newspapers and the reports from Malaysia suggests that the comments and reports of the editor of The Sunday Times , backed up by the right hon. Gentleman and Opposition Members, have led to the break-off of relations with Malaysia, threatened our relations with Indonesia and Thailand and could put a vast number of jobs and industries in this country at long-term risk.

I had always accepted that we had to compete with the Germans, French, Italians and Japanese. I had not realised that we would at the same time have to deal with the distortions of some sections of the press, the hypocrisy of the Liberal party and the patronising neo-colonialism of the Labour party. The Conservative party is the only party in this country that represents the interests of our trade and industry and British jobs in British factories. I ask the House to reject the motion.

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Mr. Simon Hughes rose in his place and claimed to move , That the Question be now put.

Question , That the Question be now put, put and agreed to. Question put accordingly , That the original words stand part of the Question :

The House divided : Ayes 159, Noes 305.

Division No. 149] [7.17 pm

AYES

Ainsworth, Robert (Cov'try NE)

Allen, Graham

Alton, David

Barnes, Harry

Barron, Kevin

Battle, John

Bayley, Hugh

Beith, Rt Hon A. J.

Betts, Clive

Boyes, Roland

Bradley, Keith

Brown, N. (N'c'tle upon Tyne E)

Bruce, Malcolm (Gordon)

Byers, Stephen

Caborn, Richard

Callaghan, Jim

Campbell, Mrs Anne (C'bridge)

Campbell, Menzies (Fife NE)

Campbell, Ronnie (Blyth V)

Canavan, Dennis

Carlile, Alexander (Montgomry)

Chisholm, Malcolm

Clapham, Michael

Clark, Dr David (South Shields)

Clarke, Eric (Midlothian)

Clarke, Tom (Monklands W)

Coffey, Ann

Connarty, Michael

Corbyn, Jeremy

Corston, Ms Jean

Cox, Tom

Cryer, Bob

Cummings, John

Cunliffe, Lawrence

Cunningham, Jim (Covy SE)

Dafis, Cynog

Dalyell, Tam

Darling, Alistair

Davidson, Ian

Davis, Terry (B'ham, H'dge H'l)

Dixon, Don

Dowd, Jim

Dunwoody, Mrs Gwyneth

Eagle, Ms Angela

Enright, Derek

Etherington, Bill

Evans, John (St Helens N)

Ewing, Mrs Margaret

Fatchett, Derek

Flynn, Paul

Foster, Rt Hon Derek

Foster, Don (Bath)

Galloway, George

Gapes, Mike

Garrett, John

George, Bruce

Gerrard, Neil

Godman, Dr Norman A.

Godsiff, Roger

Golding, Mrs Llin

Gordon, Mildred

Graham, Thomas

Griffiths, Nigel (Edinburgh S)

Griffiths, Win (Bridgend)

Gunnell, John

Hall, Mike

Hanson, David

Hardy, Peter

Harman, Ms Harriet

Harvey, Nick

Hattersley, Rt Hon Roy

Heppell, John

Hinchliffe, David

Hoey, Kate

Hogg, Norman (Cumbernauld)

Home Robertson, John

Hood, Jimmy

Hoon, Geoffrey

Howarth, George (Knowsley N)

Howells, Dr. Kim (Pontypridd)

Hoyle, Doug

Hughes, Kevin (Doncaster N)

Hutton, John

Illsley, Eric

Jackson, Helen (Shef'ld, H)

Jamieson, David

Johnston, Sir Russell

Jones, Ieuan Wyn (Ynys Mo n)

Jones, Lynne (B'ham S O)

Jones, Nigel (Cheltenham)

Keen, Alan

Kennedy, Charles (Ross,C&S)

Kennedy, Jane (Lpool Brdgn)

Kilfoyle, Peter

Lewis, Terry

Llwyd, Elfyn

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