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Mr. Gill: My hon. Friend poses a challenging question, and I shall do my best to answer him in a moment.

Mr. Deputy Speaker: Order. When the hon. Gentleman does answer, I hope that he will relate it to the Gracious Speech.

Mr. Gill: My remarks are in relation to that part of the Gracious Speech which refers to the European Communities (Finance) Bill, which is to be considered by the House a week on Monday.

My hon. Friend the Member for Wolverhampton, South-West made an incisive and challenging speech. I know, as he knows, that many of the challenges which he laid down in that speech will never be answered, not least because there are no answers which the Government can honestly provide to some of the questions he asked.

That, I am afraid, has been a feature of our debates on Europe. My hon. Friend and others have made the arguments and we have won the arguments, but unfortunately we have too often lost the vote. My hon.

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Friend and I would be only too pleased to have a vigorous and lively debate, and then conclude that debate by voting on whether the arguments which we advanced were compelling and whether the House accepted them, but that is not to be. We will not decide the matter on the balance or the strengths of the arguments deployed by the likes of my hon. Friend. The argument will be decided by a vote of confidence put forward by the Government, and I regret that very much.

My hon. Friend asked in his intervention how war would be prevented by spending £500,000 on investigating how better to cure hams. My answer is that that £500,000 has been diverted to the university of the West of England for the HAMS project at the expense of the defence budget. I am pleased to see my right hon. and learned Friend the Secretary of State for Defence on the Treasury Bench. He has had the doubtful distinction of having to tell the House about regiments having to be disbanded, about aircraft of the Royal Air Force having to be grounded and about the acceleration of the programme for the disposal of ships.

That is the reality. We are prepared to spend a lot of money for no tangible return, but we are expected to buy the vital defence insurance policy that our country needs to maintain with a smaller and smaller premium each year. I agree with my hon. Friend that that is absurd.

Will all the partners ever be equal in the great endeavour that we are trying to create in Europe? I put it to the House that it is highly unlikely that the partnership will ever be an equal one. There may 12, 16 or even 20 partners, but there will always be a pecking order and inequality among the partners. The reality, whether we care to accept it or not, will be that the country to dominate in the Community will be that which has the biggest stick or the deepest pocket. On present performance, that country, sadly, will not be the United Kingdom. That is why we saw the recent humiliation of our own Commissioner, Sir Leon Brittan, who wanted a high-profile office, but who was severely disappointed because the Germans decided that they would rather give that office to their friends and neighbours, the Dutch.

That decision was quite understandable. The Dutch want to keep on the right side of the Germans, not least because they do a lot of business with Germany, which is the immediate neighbour of their small country. The Dutch consider that the potential that their economy has to offer will be far greater if they keep within the slipstream of the German economy than if they stay outside of it. Therefore, Germany looked after the Dutch and did not look after Britain, thus disappointing Sir Leon.

I worry when I see my country going around almost cap in hand to the Commission and the Council of Ministers to get whatever crumbs it can from their tables. That brings me back to the intervention of my hon. Friend the Member for Wolverhampton, South-West. I agree with him that this country could stand on its own if it wanted to. It is resourceful, inventive and industrious. We have always looked to the world, where we have created so much of our wealth and made so much of our history. We ignore that at our peril.

8.2 pm

Mr. Ernie Ross (Dundee, West): If the hon. Member for Ludlow (Mr. Gill) does not mind, I will leave Europe for other colleagues to discuss. I am sure that my hon.

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Friend the Member for Ilford, South (Mr. Gapes) will correct the misconceptions that the hon. Gentleman put forward, should he catch your eye, Mr. Deputy Speaker.

The area that concerns me most is the middle east. The Gracious Speech referred to the Government's continued support for the middle east peace process. Everyone involved in that process is to be congratulated on the success achieved so far. I say "so far", but we have already not only had the initial Madrid conference and the active participation of the Norwegians behind the scenes to bring the Palestinians and the Israelis-- they always have been the core of the middle eastern problem--together, but the successful declaration of principles and the signing of an initial peace deal between the Israelis and the Palestinians a year ago in September, on the lawn of the White House.

Since that declaration, we have had further declarations of principles in Cairo and in Washington. It is now time to review the middle east peace process to see exactly where it has reached. Success has been achieved, but on some issues there has been no meeting of minds and on others apparent success has proved false on the ground.

The most recent agreement between Israel and Jordan is welcome. If the Israelis were able to participate in this debate, they would be the first to admit that it was the easiest peace agreement for their country to sign. It involved no major difficulties concerning land, borders or refugees, but nevertheless it is a welcome agreement. We wish everyone who participated in it good will and we hope to play our part in maintaining the agreement.

The outstanding countries with which the Israeli Government must have direct, bilateral agreements are Syria and Lebanon. Anyone who understands the middle east will appreciate that an agreement with Lebanon is unlikely unless and until there is an agreement between Israel and Syria. Judging from the statements made by people on both sides, there appears to be little between Israel and Syria, but no peace deal has been signed. It is worth hon. Members considering why that is so, because the principles involved are similar to those that govern events in other areas that have been discussed today. President Assad of Syria has made it quite clear that he would offer Israel full peace for full withdrawal. The Israeli Government responded by saying that the depth of the peace would be equal to the depth of the withdrawal. It seems that the two sides are saying the same thing, but there is still a gulf between them. As yet, no hands have been shaken and no accord has been signed. I have sought to discover from both sides the difficulties that lie behind the failure to reach an agreement.

It seems that one of the major problems facing a possible Syrian-Israeli peace agreement is the role of Saddam Hussein and Iraq. Part of the depth of the peace being equal to the depth of the withdrawal relates to the desire of the Israeli Government not only to have a peace deal through which people will meet, but one which leads to a substantial reduction in Syrian military personnel and military equipment. Equally, although Syria wants a peace deal with Israel and wants the Golan Heights back, it is concerned about what Israel may want in return. The Syrians know that when the Israelis talk about the depth of the peace being equal to the depth of the withdrawal, they mean the size of the forces that Syria will need to maintain within its borders.

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One need only look at the role of Saddam Hussein in Iraq to understand Syria's problem. Although Saddam Hussein suffered defeats during the Gulf war, he was still able to threaten Kuwait recently. That led to the United Kingdom, the United States and others having to assemble their military forces in Kuwait quickly. That was aimed at deterring Saddam Hussein from taking further action because that would have resulted in action on our part in response, or, if he had not withdrawn, perhaps before he made any further moves. That gives some idea of the Syrians' concerns about the activities of the war machine that Saddam Hussein still maintains.

Those hon. Members who argue that the sanctions against Iraq should be eased have not taken on board the fact that not only does Saddam Hussein need to meet all the requirements of UN Security Council resolutions and decisions, but he has to make it clear that, despite the huge military forces with which, despite defeats, he is still able to threaten another Arab state, he is willing to enter into dialogue about the future use of his military forces. If we can concentrate on that issue, it might help the Syrians and Israelis to get together and make real peace in that area.

Like the hon. Member for Bexleyheath (Mr. Townsend), I wish to discuss the role of the middle east peace process in relation to the Israeli-Palestine question. Clearly, everyone is happy to see progress towards resolving the bitter conflict in the middle east. But there comes a time when we must step back and consider what has been achieved so far and whether the process has met all the aims and aspirations that both sides and the world community intended and hoped from it.

The promising and necessary economic revival has yet to start in Gaza. The "economic dividend" of peace and human rights has yet to be demonstrated to the Palestinian Gazans. There have certainly been no human rights dividends. Israel continues to expand its settlements in and around Jerusalem and the west bank. It maintains settlements in Gaza, continues to imprison and torture Palestinians, and still carries out summary executions on the streets of the west bank. Those actions and delays at every stage do little to build confidence. The latest delay is on the calling of elections for a Palestine national authority.

Those who visit the west bank and Gaza see a sapping of the Palestine population's morale. They witness a weariness and a draining away of optimism. We have a responsibility to rebuild optimism and show the people concerned that the peace process is important to the Palestinians.

In this debate tonight, we can make it clear that, as high contracting parties to the fourth Geneva convention, we stand foursquare behind our obligations on human rights and international law. The last time the Security Council voted on that subject was on Security Council resolution No. 904, tabled in response to the Hebron massacre. At that time, the United States abstained on the paragraph that referred to the applicability of the fourth Geneva convention and the need to consider measures of international protection throughout the territories occupied by Israel.

It is now reported that the United States is actively pursuing a programme of action, supported by Israel at the General Assembly, in an effort to eliminate contentious resolutions. It is not rational to imagine that undermining an international legal consensus by seeking to remove all

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mention of those rights from a forum where they should be mentioned under the terms of the UN charter would build confidence in the peace process. Nor does it build confidence when the impression is given that the states that are meant to guarantee those rights, which includes Britain, will step quietly aside and allow them to be overridden, leaving only the balance of power--the old "might is right" rule instead of the rule of law and international principle--to decide matters between the Palestinians and Israelis. It does not build confidence when the impression is given that, ultimately, the peace process in which the Palestinians are now asked to place their trust holds no guarantees that they will realise rights which the international community has for so long and so firmly affirmed. That is why I am anxious for a reassurance from the Government that Britain, along with its European partners, will continue to uphold the applicability of the fourth Geneva convention to the occupied territories and that Britain will, neither by implication nor omission, give the impression that we are withdrawing support from that long-held position. As everyone in the House knows, if we did so the Palestinians' ability to negotiate successfully in pursuit of their self- determination would be critically undermined.

The BBC World Service broadcast, "Monitor", on 16 November translated a report from the Voice of Palestine radio in Jericho, which said:

"In accordance with the agreement that was reached during the Palestinian- Israeli higher liaison committee meeting in Cairo at the end of last month, 400 international observers will be deployed in the Gaza Strip in the next few days."

Those international observers are a direct result of Security Council resolution No. 904. They are supposed to monitor the activities of the Palestinians and Israelis in the period leading up to the elections in Gaza, Jericho and the west bank. The agreement was signed by Dr. Nabil Sha'th, Minister of Planning and International Co-operation, and Shimon Peres, the Israel Minister of Foreign Affairs. The report continued:

"the international protection force in the Gaza Strip will be responsible for monitoring the situation and submitting reports to the parties on any violations by the Israeli or Palestinian sides. This force will also work to enhance dialogue in the region." At the last Foreign Affairs Question Time, I specifically asked whether the Foreign and Commonwealth Office would consider carefully European Union participation in any temporary international presence in the west bank and Gaza, if those elections took place. The Palestinians and the international community could only be disappointed in the outcome of the temporary international presence in Hebron, which ended up being protected by the Palestinian people rather than monitoring the Israelis' activities. It became a standing joke that, whenever trouble started, the Palestinians' main job was to protect the temporary international presence.

Although the Israelis and Palestinians have agreed on the presence of those 400 international observers, no discussion has yet taken place with the European Union on our participation, although some members of the European Union are liable to take part. Although a formal invitation has not yet arrived, I hope that an emergency middle east working group will be set up within the European Union so that we can seek to input into those discussions a European Union commitment to support an

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effective operational mandate for the temporary international presence, including reporting and applying the standards of international humanitarian and human rights law. I hope that the Foreign Office is prepared to take that on board.

I shall not say too much more on the middle east peace process except that it is at a delicate and critical stage. The Minister of State said that he wanted the elections to be successful and take place as quickly as possible. So do the Palestinians, and it is important that the elections take place quickly, if only to give democratic legitimacy to the Palestinian authority on the west bank and in Gaza and Jericho. I hope that the Palestinian elections will take place in an atmosphere that conforms to what we would expect in normal parliamentary elections. People from all parts of the Palestinian community should be allowed to promote their ideas, argue for their manifestos, whatever those might be, and be allowed free movement during the elections. I hope that the elections themselves are successful.

I shall now refer to one or two matters that were mentioned by my hon. and right hon. Friends, and comment on some of the proposals that were made by other hon. Members.

Several right hon. and hon. Members on both sides of the House referred to Indonesia. It is important that we continue to make it clear that, in spite of international condemnation, the Indonesians continue brutally to occupy East Timor. In spite of all the assurances that we have had, everyone else, including Amnesty International, seems to believe that the British Government have got it wrong--the Indonesian authorities are using the British-made Hawk aircraft in attacks against the Timorese people.

It is important that we make it clear to the Government, and to hon. Members who are obviously worried about the impact that the sale of defence equipment might have on their constituents, that we need to separate the legitimate right of a Government to arm themselves to protect themselves, and our right to sell them those arms to be used for the legitimate protection of that country and its borders, from the use of that equipment- -if we sell it to them--by that Government against people who are unable to defend themselves, and who are arguing only for self-determination, which was taken away from them by the Indonesians without any discussion with the international community.

If the hon. Member for Ayr (Mr. Gallie) is about to jump up to defend his constituents, may I say to him that I would prefer the workers in Ayr to sell more Jetstream 41 aircraft, and he will certainly have my support in campaigning for, and pushing, that good aircraft as a means of helping people to communicate and move around their countries, rather than the use of equipment that can bring death and destruction to innocent people in different parts of the world.

I shall briefly discuss another country that I mentioned in the previous foreign affairs debate--Cuba. I pay a compliment to the Government. During the United Nations General Assembly's discussion of the US economic embargo, to which the UN General Assembly recently affirmed its opposition, a United Kingdom Minister was due to go to Cuba. We all know the pressure that was put on the Government for that visit not to go ahead, and it is to the credit of the Foreign Secretary, his colleagues and the President of the Board of Trade that

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that visit went ahead. By all accounts, it was successful, and it is to be hoped that trade will come to this country as a result. I am worried about the determination of the United States to maintain the embargo against Cuba. It is just plain daft. It is time for the Americans to bury the Bay of Pigs and the missile crisis, which are in the past, and to understand that there is increasing evidence of internal change in Cuba. There is movement towards an internal market and private ownership. There is increased trade with Europe and the far east. The discovery of oil is leading to exploration contracts with Canada. Tourism is increasing. We should say to the Americans that they should accept that it is time to let Cuba into the real world and that all those things are in the past, and that, if we think that they are wrong, we are more likely to convince the Cubans that they should change policies by trade, tourism and cultural exchanges. The United States should at least consider opening up the democratic processes in Cuba. I know that you are anxious to make progress, Mr. Deputy Speaker, but I wish to make one last comment, about Turkey. It is important. I know that one of my hon. Friends would have mentioned Turkey, had he managed to catch your eye, but it would be wrong if we did not mention Turkey tonight. The hon. Member for Ludlow (Mr. Gill) referred to the role of Turkey in Cyprus; Turkey continues to cause serious alarm elsewhere in the region.

The arrest and trial of leading political figures from Turkish Kurdistan accused of treason and sponsoring acts of terrorism has done little to improve Turkey's image in the world. Undoubtedly, there is a genuine campaign of terror by separatist Kurds in southern Turkey. However, the response of the Government in imprisoning democratically elected representatives seeking to defend minority rights in Parliament can only create increased tension in the region and international criticism by human rights campaigners.

We should make it clear tonight that we are not prepared to have any form of relationship with a country that is prepared to lock up democratically elected members of Parliament who are simply arguing for the minority rights that they were elected to Parliament to support.

8.25 pm

Dr. Charles Goodson-Wickes (Wimbledon): I shall follow some of the arguments made by the hon. Member for Dundee, West (Mr. Ross) in my remarks, which will broadly concentrate on those parts of the Gracious Speech that refer to foreign affairs matters.

I doubt that anyone in the House could have expected to witness three remarkable events in the past five years; first, the collapse of the Berlin wall and the Soviet empire, secondly, the disintegration of apartheid followed by democratic elections in South Africa; and, thirdly, major progress in the middle east peace process. What a remarkable trio of events.

The previous situations represented much misery in the aftermath of the second world war, and I hope that they can give us hope, notwithstanding tragic regions of instability around the world. I welcome, in the Gracious Speech, recognition of the need for the United Nations to enhance its peacekeeping and preventative diplomacy capabilities, but it is difficult

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to envisage that happening in the absence of a proper military command structure--the North Atlantic Treaty Organisation has often had to do the United Nations' work for it--and in the context of member nations who do not see fit to pay their dues to the UN. I suggest to the House that the best celebration of the 50th anniversary of the United Nations would be for the member nations to take a more positive attitude in those matters, which is a theme that I shall develop on other occasions.

South Africa is a country that I know well, and have visited often. I have lived and worked in hospitals there, and I applaud the courage and personal standing of two remarkable men who made peace possible in that region. President Mandela has received well-deserved praise for an extraordinary life. Perhaps former President de Klerk has not received the recognition that he deserves. I know the verkrampte Afrikaner population well, and know how difficult it was for him to deliver the return of civilisation to South Africa.

I hope that history will also record the United Kingdom Government's role in influencing change in the years when the Republic was outside the Commonwealth, often in the face of British companies leaving South Africa-- I think to their moral shame, because I believe that many of those British companies were a force for good in the region, but they decided that it was a sinking ship and they had better leave it pretty quickly.

During those years, the continuing presence of the Union Flag on the South African flag symbolised this country's continuing moral obligations to that country. I believe that there were several distinguished British diplomats, and I hope that it is not improper to name Sir Robin Renwick as one of those who played an important part in bringing about change for good.

I now turn to Hong Kong. Obviously, the Government have done much to protect the people in that territory until 1997. There has been reference in the debate to a boom at a rate that it is difficult to comprehend in this part of the world. Any loss of confidence could still prejudice that.

I have always doubted the wisdom of tweaking the tail of the Chinese tiger in the interim period as it must be for the ultimate good, both of Hong Kong and China, especially in the era that will follow the death of Mr. Deng, for the two countries to work together. It is all very well to bring about moves to entrench and expand democracy in Hong Kong, but that is all too often misinterpreted by China. I hope that my right hon. Friend the Minister of State and his colleagues will ensure that such misunderstandings do not get out of all proportion in future relationships between Hong Kong and China. The middle east has been well served by statesmanship after decades of strife. It is hardly surprising that this country should harbour reservations about the past activities of Begin and Arafat. As with Rabin and Sadat in their different eras, peace has finally prevailed. Once again the United Kingdom Government have played their part. To echo the remarks of the hon. Member for Dundee, West (Mr. Ross), I am sure that everyone in the House hopes that Syria will soon come to the table. We know the sensitivity surrounding the Golan Heights. I have an uneasy feeling that it will need American forces to police that area during any transitional peace settlement. It would be much more appropriate if United Nation forces fulfilled that role.

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Having welcomed the overdue lifting of the arms embargo on Israel, I lead on to the subject of Indonesia, which has caused a fair amount of friction in the Chamber today. I recognise the moral, legal and practical issues involved in the subject of arms sales. My right hon. Friend the Foreign Secretary touched on that issue earlier today. While it is obviously ludicrous to sell arms to one's enemies, it must be sensible to sell arms to well-established democratic allies and to neutral powers with a genuinely sound democratic and human rights record. There will always be grey areas and I think that Indonesia fits into that category. I should like to declare my interest: I visited that country for three weeks during the summer recess. I was sponsored by the Indonesian Government, but had the blessing of the Foreign and Commonwealth Office.

Indonesia is a strange country. It is not widely known that it is the largest Muslim country in the world. It practises marked religious tolerance and there is virtually no fundamentalist Muslim feeling in the country. It is also the fifth-largest country in the world, with a wider east-west span than the United States. The economy is booming and the standard of living rising in that exciting region of the world, whose influence is ever-increasing.

I accept that I am beginning to sound like an apologist for Indonesia but I shall now say that its human rights record leaves much to be desired--

Mr. Ernie Ross: Hear, hear.

Dr. Goodson-Wickes: I hear someone saying "Hear, hear"--it comes ill from the Opposition to criticise in that way when we have established today that the last Labour Government sold Hawk aircraft to the Indonesian Government barely three years after the annexation of East Timor. I have no idea whether there were signs on the sides of the aircraft stating that they were to be used everywhere except East Timor. The Opposition should think clearly and examine their consciences before criticising the Government 16 years later. There seems to be a clear recognition, from President Suharto downwards, that mistakes have been made in the past, and positive efforts are being made to improve matters. That impression was reinforced by interviews that we held with numerous non-governmental organisations, the National Commission on Human Rights and outside organisations including the International Red Cross. The delegation accepted the invitation on the condition that it would visit East Timor and would be able to talk freely to representatives of various interests in that territory. Having listened to some of the comments of Opposition Members today, I wonder whether we are talking about the same place.

The island has the most extraordinary history. It was colonised at its western end by the Dutch and at its eastern end by the Portuguese, who were there for four and a half centuries. I have no wish to be offensive about our oldest allies, the Portuguese, but I have some knowledge of their other colonies. I have been to Angola and Mozambique. The precipitate departure of Portugal from those two colonies did not result in a happy outcome. I have been to Angola during the civil war and have seen the hostilities. We have heard today that, once again, the so-called peace treaty has broken down.

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At the vaguest hint of civil disturbance in East Timor in 1974, the Portuguese governor could not be seen for dust--he got into his boat and departed. Some 20 years later the Portuguese are apparently lecturing the world on a moral issue and saying that they have a role to play. It seems that they failed their colony at the time when they were most needed. Who is getting all the blame? Indonesia. It is the most extraordinary chain of events.

The journalist Bernard Levin wrote what was perhaps one of the most vitriolic and unbalanced articles that I have ever read in The Times newspaper. It led me to the conclusion that Mr. Bernard Levin never moves from his axis between London W1 and Bayreuth to listen to Wagner. I do not believe that he has ever been anywhere near Indonesia in his life and he has certainly been nowhere near East Timor.

When one wanders round East Timor it is extraordinary to see that, after four and a half centuries of colonisation, there is no evidence of anything left behind by the Portuguese. At least in Angola and Mozambique there was some sort of infrastructure and education system, but in East Timor the Portuguese left a literacy rate of 8 per cent. and no infrastructure-- electricity did not arrive until 1962. It is clearly a poor territory.

One hon. Member today questioned whether we should give aid to Indonesia now. If there is any place in Indonesia that needs aid, it is East Timor. Other territories in Indonesia are jealous of the funds being pushed into East Timor to lift it out of poverty--a good and legitimate use of our aid if we ensure that we have the influence to direct it to those parts where it is most needed.

The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) said that the military governor of East Timor had justified what had happened at Dili. The right hon. Gentleman quoted an article by Amnesty International. With respect to the right hon. Gentleman, I think that he is out of date as the general who is commanding there is, I think, General Adang, who makes no effort to defend what happened at that incident. He said that he had disciplined his troops and was looking to the future while bearing in mind the mistakes of the past.

I will not dwell on this subject any more, except to say that whatever he may have said subsequently in newspapers, Bishop Belo told me that he supported special status for the territory and that he was delighted that human rights were improving, that there was more investment and that education had improved markedly. I should like to end on a slightly more general point. We have heard from the Opposition today outbursts of moral purity about arms sales, so I took the trouble to look at the Labour Government's record. We have already discussed the sale in 1978 of Hawk aircraft to Indonesia. I remind the House that the Labour Government that year also authorised the export of Sea Dart SAM and Blowpipe missiles to Argentina when it was under a military Government widely accused of human rights abuses. Where are the great moral standards there? In 1979 the Labour Government sold tanks to Iran, regardless of what they may have thought about the Iranian regime.

With the benefit of hindsight one can always sound pompous, but at the time one has to make a judgment, bearing in mind the interests of the defence industries in places such as Ayr and my constituency, in which Racal and many other distinguished defence companies are located. They do a marvellous exporting job for this country.

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I welcome my right hon. Friend's typically robust, sensible policies as set out in the Gracious Speech. They will ensure that this country continues to be a force for peace in the world. 8.41 pm

Mr. Neil Gerrard (Walthamstow): I shall confine my remarks to the middle east peace process, to which several hon. Members have already referred. I very much agreed with what was said by my hon. Friend the Member for Dundee, West (Mr. Ross) and by the hon. Member for Bexleyheath (Mr. Townsend). I look forward to hearing what the Minister has to say about the middle east.

I want to discuss Gaza, Jericho, the occupied territories, and the need for our Government and other European Governments to take a more positive line on a number of matters. I refer first to the elections to the Palestinian authority. The Government have said that they want free and fair elections to be called--no one could disagree with that--but what is meant by free and fair elections? It is not just a question of who will be elected and how; it is also a question of what body is to be elected. The problem is that the Israelis say they want a single, small council with both executive and legislative power. The PLO has made it clear that it wants a division: a larger legislative council exercising some oversight of the Executive. If we are interested in promoting democracy and pluralism, we should be sending a clear message to the Israelis, to the effect that we believe there should be a split--a legislative body which has oversight of the Executive. We should couple that with a message about the need for redeployment of the Israeli forces in the west bank so that the elections can take place.

The other major issue is the financial aid that has been promised and supplied by Britain and other European countries. The money is rightly being channelled to the Palestinian National Authority, but it is obvious that it is still getting through slowly. There were reports yesterday that, of the £450 million promised for this year, only £140 million is likely to get through by the end of the year. Such delays are often explained by demands that there should be accountability and transparency when the aid money is spent. No one would argue against the need for accountability and transparency; clearly aid should be used for the purposes it was intended for. But how far are the demands being made reasonable, and how quickly is it reasonable to expect them to be met?

I was interested to read in The Guardian yesterday the remarks of a senior official of the Israeli Foreign Ministry, Uri Savir, who said that donors should drop their insistence on the creation of a Palestinian tax system and finance immediate projects to clean up the area--referring here to Gaza --and create work. He made the point that if that was not done there was a danger of an erosion of the peace process.

Besides the delays in the money coming through, there are all sorts of other financial pressures. There is chronic unemployment in Gaza, for instance. It is hard to see how Israel believes that that will be alleviated by imposing restrictions on workers from Gaza going to work in Israel. The Israelis have taken the decision to import foreign labour from Thailand in place of workers from Gaza. That hardly sits comfortably with declarations of their desire for economic growth. And without such growth the peace process will certainly be damaged.

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A further difficulty is the withdrawal of European and other funds from the non-governmental organisations that have hitherto provided many of the services in the area. Because of the history of the past 27 years of occupation, many key services such as education and health--and agricultural development--have depended on NGOs. About 60 per cent. of primary health care and 50 per cent. of secondary and tertiary health care has depended on NGOs; and they have provided 100 per cent. of pre-school programmes, not to mention a significant number of schools. These are important services, important not only for themselves but for the signals that they send about the values of a society. The NGOs have also been concerned with human rights and many other grass roots organisations in which local people have been involved during the occupation.

There will be enormous difficulties for any Palestinian authority that attempts, quickly and easily, to take over responsibility for all these services. Money will be the biggest problem, given that there is no structure into which to fit such services, and there will not be much time to develop the necessary structure. Moreover, some of the services that the NGOs provide will not necessarily be seen as a focus for Government activity--services for women, human rights organisations and so on.

I believe that restricting and impeding the activities of some of these NGOs could have a detrimental effect on the population. There is evidence that funding is being withdrawn because of the promise of European Union and other money to the PNA. A recent example drawn to my attention concerns the Union of Palestinian Medical Relief Committees. In 1994, 8 million ecu originally destined for NGOs was diverted by the EU to the funding of the Palestinian police. The relief committees were told not to apply directly to the EU--there would be no money forthcoming this year or next. As a result, three health clinics that they run have already been shut and five more are under threat of closure. The clinics are often sited in some of the most disadvantaged and inaccessible areas. The Early Childhood Resource Centre based in Jerusalem is another organisation that has had to cut services. A day care centre in Hebron has closed and 20 per cent. of the staff have gone. It seems that international organisations are interested in funding infrastructures and building institutions, but not so interested in providing operating costs. They also make it clear that NGOs are low on the priority list. I am not arguing that support for the PNA is not essential: it is, and it is important to build the structures and institutions of government and authority and to make them function. Money to the PNA should not be reduced: quite the contrary, because two things are happening simultaneously. On the surface, responsibility is being transferred to the Palestinian authority and at the same time there are cuts in services such as health and education. Although one is not the cause of the other, they will become associated in people's minds.

In opening the debate on the Gracious Speech, the Prime Minister said that the benefits of peace that people in Northern Ireland are now witnessing would be a powerful disincentive to renewed violence. That comment could apply equally to the middle east peace process. People must see benefits, and if a vacuum is allowed to develop those who step in will be the people who want the peace process to fail.

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There is a delicate line to tread and it is not for us to dictate to the Palestinian authority what its policies should be. Perhaps the functions of some NGOs should be taken over, or perhaps some of them will cease to have a useful role. No one argues that there should not be change, but we should be careful not to lose the dynamism, flexibility and creativity that have been developed through some of the NGOs during the years of occupation. Funds through the ODA or the European Union should not be cut before considering the effects and without helping the PNA to assume its responsibilities. Extra money should go to the PNA and it should not be money that has been taken from other organisations.

We support the Palestinian authorities and want them to develop, take on functions, assume responsibilities and determine service delivery and policies. But we must also acknowledge and be prepared to support the independent role of Palestinian human rights groups and Palestinian NGOs. It is not good enough to hand over responsibility on paper to the Palestinian authority, to demand pluralism, accountability and transparency from it and to hold back the means to achieve those ends. If we do not provide the PNA with the means to develop we shall contribute to the foundering of the peace process.

8.52 pm

Mr. Phil Gallie (Ayr): One of the benefits of being called late is that one has had a chance to hear expert contributions by other hon. Members. At the start of the debate I missed a large part of my right hon. Friend's speech. However, I was fortunate enough to hear his positive and authoritative comments on Northern Ireland and Bosnia. Northern Ireland has been mentioned in the debate and in the media. I have been disappointed by the use of the word ceasefire. I understood that the Downing street agreement sought the abandonment of the bomb and the bullet by terrorists in Northern Ireland. We should not talk to terrorists merely on the basis of a ceasefire, but only if they are totally committed to political dialogue and negotiation on the future of Northern Ireland.

I missed my right hon. Friend's comments on overseas aid and in particular his remarks about Malaysia. This year I was fortunate enough to visit Malaysia with members of the Commonwealth Parliamentary Association. I had last been there some 30 years ago and there has been tremendous development since that time. The changes in Malaysia are almost beyond the comprehension of people who visited that country many years ago.

In recent times the issue of the Pergau dam has come to the fore. It seems that The Sunday Times picked up an old issue and began to replay an old story. Sadly, Opposition Members latched on to it, putting political interests ahead of the national interest. In our discussions in Malaysia we met the Prime Minister, the Foreign Secretary and many others and there was deep resentment about the comments in Britain about the Pergau dam.

When countries such as Malaysia become independent and develop we must allow them to get on with their business in their own way. The Malaysian economy has developed at a rate of some 78 per cent. gross over the past seven or eight years and the country is moving away from third-world status towards developed-world status.

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That is to be admired, and it must be what overseas aid budgets are about--to allow third-world countries to develop.

Mr. Eric Martlew (Carlisle): From what the hon. Gentleman says Malaysia has reached such a state of economic development that it does not need aid from this country. Many poor countries should get that aid.

Mr. Gallie: When I went to Malaysia 30 years ago it was certainly a poor country, but over the years it has received assistance and is developing. Perhaps it is now moving out of development status because of its own efforts and the way that it has used overseas aid to help its people and make changes. The time will come when it will be appropriate to cut the aid, but that time was not when the Pergau dam was suggested.

Malaysia recognised that it needed power and that it certainly needed the dam. I recall discussing this matter with the hon. Member for Clydebank and Milngavie (Mr. Worthington), who suggested that Malaysia needed gas turbines. That is an expensive way to provide power. Water power is provided by a renewable resource and it can be projected into the future at low cost. It is the kind of power that countries such as Malaysia need to lift them into developed-world status. I fully approve of the assistance that was given for that project, although by saying that I may be unfashionable.

There is another prospective project in that area, the Bacun project in Sarawak. It is similar to the Pergau project and is high-tech. It will be a 700 or 800-mile undersea cable between Sarawak and mainland Malaysia, and the project will be financed by private capital and will not require overseas aid. It will be to the credit of the Malaysians if they can take that project forward. Some hon. Members spoke about interference in Kenya through educational involvement. The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) suggested that we should pre-empt happenings in other countries. We cannot encourage the expansion of democracy and freedom in other countries and then pre-empt them and sit on top of them. That was a surprising development in today's debate.

When we discuss overseas aid projects and speak of lack of concern, perhaps we should have some concern for the jobs in Britain that could be affected by overseas aid. I draw the attention of the House to recent developments in my constituency where the hon. Members for Carrick, Cumnock and Doon Valley (Mr. Foulkes), for Cunninghame, North (Mr. Wilson), for Cunninghame, South (Mr. Donohoe), for Kilmarnock and Loudoun (Mr. McKelvey) and I expressed concern to the Foreign Office about the way in which the feedback of overseas aid to Brazil was against the interests of those in my constituency through state assistance to the Brazilian aircraft industry.

When Ministers operate our overseas aid programmes, they should have regard to jobs and benefits for our industries at home while considering the needs of those countries that we wish to develop. Turning to wider issues in the Gracious Speech, little has been said today about defence. I welcome the top priority given to national security which has been demonstrated amply over 15 years despite the pressures that my right hon. and learned Friend now has in his budget. Unlike previous Secretaries of State for Defence

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in recent times, it has to be recognised that financial limitations are being applied to defence issues. That has been demonstrated in the excellent paper "Front Line First", where reality has been applied to ensure that our defence systems meet future needs. I was delighted to hear in the Gracious Speech that the United Kingdom is still intent on maintaining its nuclear deterrent. Whatever we do in this country, nuclear weapons cannot be uninvented. We can, however, stop further development and proliferation and that was an important commitment in the Gracious Speech.

The United Kingdom nuclear deterrent and the resolve shown by previous Conservative Governments and the Government of the USA brought about the fall of the Berlin wall and the collapse of repressive socialist systems in eastern Europe. The nuclear deterrent maintained peace between the major powers for almost 30 years, so we should be grateful that that element was built into the Queen's Speech.

I am delighted that the Labour party appears to be signing on to the principles of retaining our nuclear deterrent, but I look to its party conference and the problems that the new Labour party leader had with the grass roots of the party in dealing with the issue. Had that happened at a Tory party conference and had my right hon. Friend the Prime Minister been threatened and lost votes in conference, the media would have had a field day and would have totally written him off. We had no such problems and I am sure that our Prime Minister will be here for many elections to come, fighting the good fight. I turn to the Scottish dimension and the situation at Rosyth, where I was pleased to come together on a cross-party basis with hon. Members who wished the Government to retain past commitments to Rosyth dockyard. In part we lost that argument, but we had strange bedfellows in that we lined up with people from nuclear-free authorities who were fighting to contain nuclear submarines at Rosyth. But we won a commitment to Rosyth dockyard continuing surface fleet maintenance. As we look to the coming Session of Parliament, I believe that when the Government consider the defence programme, they will stick to their pledges on that issue and I welcome that. When we look at "Front Line First", we must also consider services, support and procurement. I have to register some concern at the GEC bid for VSEL. If the Government were to allow GEC to take over VSEL as well as owning Yarrow, they would be putting all their eggs in one basket in respect of warship construction.

There is a suggestion that GEC could put up separate tenders for each of the yards, but I do not believe that any company with ownership of two yards such as these would do so in a competitive way. On that basis, such a move would undermine the Government's commitment to ensuring competition in all aspects of its business and allowing market forces to operate in the defence industry while ensuring that there are options for delivery of such important items as warships from UK yards.

There is a difference between the warship and the aircraft industries. With warships, we rightly have a tendency to buy British. That is both wise and necessary. Therefore, it is important to have more than one warship construction yard in the United Kingdom. There are other aspects of Britain's future defence requirements, and I think especially of the future large aircraft and the current thinking on the provision of

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transport aircraft for the military. I accept that the Hercules has done a good job over the past 25 years, but it was designed 30 or 40 years ago and a revamped version would not be the right aircraft to go forward into the next century.

There are other options. I would like to find an aircraft that increases volume both in capacity and weight and which offers greater fuel efficiency and flying range. That is what I would expect of an aircraft going into the year 2000. The European industry should have the opportunity to provide the future large aircraft for the RAF and other military forces throughout the world.

We must not turn our back on giving our aerospace industry the chance to compete. That will help to provide future Ministers with the opportunity to find deals that fit both our budgetary and military requirements. The hon. Member for Dundee, West (Mr. Ross) said that his preference would be for an aircraft such as the Jetstream 41 to be sold worldwide. I agree with him, but remind him that the investment in that aircraft has come from the success of British Aerospace's defence programme. We cannot ignore that fact. Jetstream 41 has been greatly successful. At the beginning of this week Jetstream at Prestwick won an order from America for 60 aircraft. That is worth a quarter of a billion pounds. It shows great commitment from the management and work force. It recognises the assistance of the Foreign Office and the Department of Trade and Industry in ensuring that other countries do not use unfair subsidies against British industry. It also recognises some of the assistance given by the DTI and the Scottish Office in support of Jetstream during recent years.

Another opportunity for my constituency provided by "Front Line First" is the involvement of the private industry in training pilots for the RAF. The flying college at Prestwick can now bid for that business. It is also intent on picking up business from South Africa. Following the successful visit of my right hon. Friend the Prime Minister to that country, it was suggested that Britain should use its knowledge and experience to benefit the emerging sectors of society in South Africa. I can see no better way of using our expertise in our flying colleges than to train coloured pilots who were not given such training in South Africa in the past. Like my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes), I, too, welcome the changes in South Africa. We must be grateful to the Government who, during recent years, have turned their back on imposing on South Africa sanctions which would have been particularly damaging to its emerging nation status now.

I should like to believe that the Government's common-sense, realistic and practical policies in foreign affairs and defence matters which are demonstrated in the Gracious Speech will be continued well into the future.

9.10 pm

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