HC Deb 08 June 1976 vol 912 cc1197-209
The Secretary of State for Trade (Mr. Edmund Dell)

With permission Mr. Speaker, I should like to make a statement on the recent UNCTAD conference.

The fourth United Nations Conference on Trade and Development met in Nairobi, Kenya, from 5th to 31st May.

The conference adopted resolutions by consensus on a number of matters including commodity policy, developing country debt, the transfer of technology and certain institutional issues. In addition, a resolution was adopted by majority vote on transnational corporations, and a resolution on the development of international mechanisms to facilitate resource development in developing countries, including the proposal to consider the establishment of an International Resources Bank, was rejected in a vote by a narrow margin.

The major achievement was that consensus was reached on a resolution on commodities, the central issue before the conference. The resolution provides for a programme of negotiation, within a defined timetable, on products which have been identified as of particular interest to the developing countries. I welcome this decision, which I sought in my opening statement for the United Kingdom at the outset of the conference. It will give concrete shape to proposals put forward in Kingston a year ago by my right hon. Friend the Member for Huyton (Sir H. Wilson).

The resolution also provides for preparatory meetings in relation to a common fund for buffer stock financing, to be followed by a negotiating conference, not later than March 1977, which will be open to all the members of UNCTAD. It is clearly right that this proposal should be studied further. The resolution recognises that there are differences of view on the objectives and modalities of a common fund, and, in common with a number of other developed countries, we have made it clear that our acceptance of the resolution is on the basis of that understanding.

I am glad to say that consensus was also reached on debt on the basis of a proposal which we had put forward in the course of negotiations. The resolution adopted by the conference confirms the willingness of the developed countries to consider quickly and constructively requests for help from any individual developing country finding itself in difficulties. It also provides for work to be done internationally in existing fora to establish from past and current experience what features might give flexible guidance for future operations.

We approached the conference with a full recognition of the serious problems which face the developing countries and of the contribution which the conference could make in seeking ways to alleviate those problems. Despite the differences of view which remained on certain points, I believe that the conference has made a substantial contribution towards that objective. For our part, we shall play a full and constructive rôle in the programme of international work which the conference has set in hand.

An account of all the issues dealt with by the conference will be published in a White Paper as soon as is practicable this summer. And I am placing in the Library the text of the various resolutions which were adopted by consensus or voted on, together with an explanatory statement made by my hon. Friend the Parliamentary Secretary to the Ministry of Overseas Development on the resolution on commodities.

Mr. Higgins

Is not this statement an attempt by the bland to lead the bland? Is the right hon. Gentleman aware that the general view of his performance at UNCTAD IV and, indeed, of the Government's attitude generally, is that it has been deplorable and has totally failed to give a lead in formulating an EEC position or in taking a generally constructive view on these issues? We understand that the right hon. Gentleman's predecessor was averse to taking any lead in Europe at all. Does he understand that in future we expect him to take a lead?

What precisely is the position concerning the common fund? Are we to understand that it is a mere commitment to study the idea further and no more than that?

In his statement, the right hon. Gentleman said that the decision on commodities will give concrete shape to proposals put forward in Kingston a year ago by his right hon. Friend the Member for Huyton (Mr. Wilson). Yet, when we look at the statement, is it not the case that it is saying no more than that there will be further talks and negotiations?

Does not the statement make it clear that the Government did not make any specific proposal concerning debt relief but merely stated the existing position—namely, that any creditor country will look at the position if a debtor country gets into difficulty? Here again, is there not a considerable lack of enthusiasm on the part of the Government for the real problems which we face as a result of UNCTAD? Will the right hon. Gentleman therefore ensure that the House has an opportunity to debate these matters? Following the end of UNCTAD IV, the Paris conference continues and the multilateral trade negotiations are continuing. Surely it is right that the House should have a chance of expressing its view so that we can urge the Government to take a more positive and less complacent line than has been made clear both this afternoon and at the conference.

Mr. Dell

The hon. Gentleman undermines his criticisms by failing to give the Opposition's view on the key issue at the conference—the common fund. If the hon. Gentleman had told us that the Opposition were in favour of the common fund, the rest of his criticisms might follow. But, as he has been unable to state the Opposition's view clearly on that point, his criticisms are meaningless. Everyone knows that the key issue at the conference was the common fund. We decided that we could not support the principle of the common fund on the basis of the present proposals. However, we indicated that we were prepared to discuss it and that, if our reservations could be dealt with, the common fund presented a possibility that we could enter into. But we have serious reservations about the common fund. Because of our reservations and because we thought it right to voice them honestly at the conference, there has been criticism of us. But that does not mean that we did not take a positive view on the issues before the conference.

On the contrary, on commodities, the proposal originally made at Kingston—that we should negotiate for an agreement on a case by case basis—is going forward under the resolution adopted by the conference within the timetable which I suggested in my opening speech at the conference.

On debt, the proposal made by the United Kingdom Government in the course of negotiations was in principle adopted by the conference. That represents an advance. There will be consideration of the development of the debt situation within the Trade and Development Board.

I think that the hon. Gentleman's criticisms show no appreciation of the positive attitude taken by the Government not only within UNCTAD but within a whole series of negotiations which have been going on alongside UNCTAD within the CIEC and within the IMF, which has adopted proposals, with our support and approval, of great assistance to the developing countries. We have played a positive rôle not only in UNCTAD but in other negotiations and developments which have been going ahead.

Mrs. Hart

I congratulate my right hon. Friend on managing at the last moment, with a slight change in the British position, to avoid the total breakdown of UNCTAD in Nairobi. Perhaps he will allow me to pay tribute to his right hon. Friend the Prime Minister for the positive rôle that he played in the last week of UNCTAD.

How did the British delegation vote on the Kissinger proposal for an International Resources Bank, which seemed to me to be unnecessary in view of other sources of international finance for private investment or to be a method of providing protection for multinational investment in developing countries?

Will the White Paper that my right hon. Friend is to publish state the various points of view that were put forward on the various issues at UNCTAD as well as the British position?

Finally, I have two very brief questions. First, will my right hon. Friend give a reassurance to the House that in agreeing to the common fund proposal, and to the negotiations that will proceed up to March of next year, the British Government really will take a positive and constructive approach?

Secondly, will my right hon. Friend see whether within the Cabinet the matter can be raised of providing for a full ministerial committee, so that the briefing instructions for conferences of this kind, which are vital to us, are prepared with full consideration by all the Ministers concerned?

Mr. Dell

I am very well aware of my right hon. Friend's intense interest in this matter. No one can say of my right hon. Friend that her views on the common fund are in any way in doubt, therefore I take her criticisms seriously. But I must say to her that among the reservations we have in respect of a common fund are reservations on the ground of development policy.

To deal with particular questions, we voted for the Kissinger proposal. We think that it is an interesting and possibly valuable proposal as a way of providing new investment for the production of commodities which may well be necessary. One of the things that are thought to have happened over recent years is a falling away of investment in commodity development, for political reasons.

My right hon. Friend asked whether various points of view in addition to that of the United Kingdom Government will be put in the White Paper. I shall certainly look at that point. Of course, a very large number of nations are present at UNCTAD. Therefore there might be some difficulty in satisfying my right hon. Friend.

My right hon. Friend asks us to take a really constructive view on the common fund. Of course, we shall enter constructively into the preparatory discussions on this matter to find out whether our reservations can be met. I give her a full assurance on that point.

Mr. Hooson

Will the Secretary of State not agree that the conference illustrated the very deep divisions on this subject, and that in practical terms what the conference failed to agree was much more important than what it agreed? What was the extent of the disagreement between our own country and our partners in the EEC on the basic approach to these problems?

Mr. Dell

The hon. and learned Gentleman is right. There were divisions on the common fund. But it seems to me that the positive aspect of the conference was the decision—which we supported and which I sought in my opening speech—to make concrete progress on individual commodities within a timetable. That, within the commodity field, seems to me to be the practical and valuable upshot of the conference.

It is known that within the European Community there was a range of views. I think that within the European Community only one country took a clearly favourable view of the common fund, and that was the Netherlands. The other member countries had different degrees of reservation about it. Perhaps we stated ours most clearly.

Mr. Hooley

Is my right hon. Friend aware that there was profound and widespread disappointment in the country at the Government's general approach to this conference? Is he further aware that the negative attitude on the common fund, on buffer stocks and on debt relief gave the impression that our negotiators were not taking a forward look on a matter which is of vital importance to the economic well-being of this country?

Will he give an assurance that in the ongoing negotiations—they will go on for many years—we shall adopt a more positive approach, and not tail along meekly behind the United States and Germany, which are notorious hardliners in these matters?

Mr. Dell

Perhaps I have said enough about the common fund. I disagree with my hon. Friend's suggestion that we took a negative view on buffer stocks. On the contrary, we said that where buffer stocks were necessary in the context of a commodity agreement—and that is by no means so in the case of all commodity agreements—we were quite clear that the financing would be available. We did not take a negative view on debt relief.

My hon. Friend says that the economic well-being of this country is tied up in this matter. I entirely accept that That is one reason why we should take a serious view of this question and go for practical steps. The whole emphasis of our approach to UNCTAD was to go for practical steps rather than, if I may say so, grandiose schemes. Such schemes can perhaps hold up the practical steps rather than forward them.

Our most positive approach in the area of commodities was the Kingston initiative of my right hon. Friend the Member for Huyton (Sir H. Wilson), but that was a specific proposal, and there was no commitment within that proposal to go along with the common fund. It was a useful proposal and it has in essence got into a very important part of the commodity resolution that was finally adopted.

Sir John Hall

Will the Minister not agree that the results achieved by the various UNCTAD conferences since they were first started have been extremely disappointing? Will he not also agree that there is a feeling that the British Government made very little constructive contribution to the last conference, and that, in common with some other countries, they were more interested in talking than in doing anything positive? Will he not agree that this is a very unfortunate impression to create?

Mr. Dell

Certainly it is an unfortunate impression if it is thought that this country made little constructive contribution, but I do not believe that to be the case, nor do I believe that the record of the UNCTAD conferences has been disappointing.

I remind the hon. Gentleman that the general scheme of preferences arose out of the UNCTAD conferences. One of the positive proposals that we made at this conference is that that scheme should be improved and developed. I hope that it will be, and that in the course of the multilateral trade negotiations, on which a resolution was passed at the conference, there will be further opportunities created for imports from developing countries. Therefore, I reject the view that the attitude of the British Government was not constructive. I believe that it was constructive, but it was also practical. We were seeking specific issues on which progress could be made.

Mr. Douglas-Mann

Will my right hon. Friend not agree that the general consensus of criticism of Her Majesty's Government's position is that, while there were some last-minute concessions, the basic position was one of pursuing short-term economic self-interest for this country?

Has my right hon. Friend considered the Cabinet Office paper "Future World Trends", and particularly paragraphs 13 and 14 in which it is stated that Although it should be theoretically possible to feed the world's growing population until the turn of the century, the enormous political, social and economic problems involved make it unlikely that this will be achieved.… Unless there are resource transfers on a scale many times greater than at present, the effective check to world population will be the Malthusian trilogy of war, famine and disease."? Does my right hon. Friend agree that in the interests of this country we should adopt a much more constructive approach than we have seen so far, and that this will be essential if we are to preserve a world in which our children can grow up?

Mr. Dell

My hon. Friend has underlined the importance, in respect of certain commodities, of commodity agreements. The Government have been going for that. We are a signatory of all the recent commodity agreements. We have made that constructive proposal.

I am afraid that it is true—I accept it, and it is obvious from the questions put to me—that the fact that we had reservations on the common fund has served to disguise a whole series of constructive steps which we took. On the other hand, in my judgment our reservations on the common fund are well founded. It is not the case that we are not prepared to discuss them. On the contrary, we are prepared to discuss them and we hope that they can be resolved. But these are serious reservations, and no one in the House should assume that because we have reservations on that proposal as a method of dealing with a commodity problem, we do not wish to deal with a commodity problem. On the contrary, we do, in accordance with the terms of the Kingston initiative, which indicated that the practical way to make progress was through individual commodity agreements.

Mr. Tim Renton

Surely, where the Secretary of State's argument falls down is that it was not necessary for the UNCTAD conference to take place for Britain to support single-commodity agreements. We have always been signatories to single-commodity agreements, as befits us as an importing nation. This was not a step forward at UNCTAD. Why did not the Secretary of State go to Nairobi with positive initiatives of his own, particularly on the question of a European investment fund, which has been discussed with the Commission regularly in the past month?

Mr. Dell

The hon. Gentleman knows what has been done under the Lomé Convention. There was no such European proposal. That is the reason why I could not go to Nairobi with such a proposal. In respect of commodities, what I think was a step forward at UNCTAD is that the conference adopted this resolution together with a timetable. That is an important development.

Mr. John Mendelson

Although the Opposition may have a bad case for criticising the Government about their attitude to the common fund, that of itself does not make the Government's attitude necessarily any better. Will my right hon. Friend say a little more why the Government had these grave reservations on the common fund? Is it not equally correct that, while Holland may have been the country in the Common Market that took a very positive view, there are other traditional friends of this country, among the Scandinavian countries, for instance, that also took a very positive attitude? Why did my right hon. Friend not co-operate more closely with them? What is his atti- tude to Commonwealth opinion about the position on the common fund? Is there not now an urgent need for a debate on these matters so that the Government's view may be properly probed?

Mr. Dell

To answer my hon. Friend fully about our reservations on the common fund would obviously take some time. I shall summarise our view. My hon. Friend says "Let us have a debate." I am perfectly happy to have a debate. That is a matter for my right hon. Friend the Leader of the House. To summarise Britain's attitude on this proposal, it is that it seems to us to be entirely unselective and the financial aspects of it are as yet obscure, although UNCTAD has made certain estimates in that field. I am aware that the Netherlands was not the only developed country to support the common fund. Norway supported it, too. However, I think that they were the only two countries that went to the conference with a clear view in support of the common fund.

I am also aware of the attitude within the Commonwealth. While in Nairobi I had the opportunity of some conversations within the Commonwealth. It should be realised that although one must accept in these discussions that the Group of 77 is united in support of the common fund, even within the Group of 77 and within the Commonwealth there are different degrees of enthusiasm for the common fund.

Several Hon. Members rose—

Mr. Speaker

I should like to request hon. Members to ask only one question, so that I may call every Member who wishes to put a question on this matter.

Mr. Blaker

Is it not important that when the further discussions to which the Secretary of State refers take place there should be a much more united attitude on the part of the Common Market countries than there was in Nairobi? Will he give an assurance that he will be bending his attention to that matter in the coming months?

Mr. Dell

I should be very glad to have a united view on this issue within the European Community, but there are differences of view. UNCTAD is a conference at which EEC member countries are separately represented. Therefore, it is not unnatural that different emphases are given even where there is a basically similar view. On the subject of the common fund, I think that most Community members take basically the same attitude. The Netherlands was clearly in favour. Denmark was somewhere in between. However, on that there was at any rate a large degree of basic unity, although again with different emphases.

Mr. James Johnson

In view of the continuing and continuous competition between Western democracies and the Eastern Communist States for, shall I say, the hearts and minds of the Third World, did it seem as fantastic to the Secretary of State as it seemed to myself to witness the Chinese attack upon the Soviet Union regarding their aid to the Third World, in which they were considered to be almost worse than we ourselves in our worst phases of the history of the nineteenth century? I happen to believe that the Chinese are doing a first-class job in Africa. Would my right hon. Friend care to comment on that matter?

Mr. Dell

I do not think that I have any useful comment on that question, except to say that I was pleased to see the Chinese delegate and the Russian delegate at the reception that I gave in Nairobi.

Mr. Crouch

Was any consideration given at the conference to consulting, in future, multinational companies about how they might contribute towards helping the developing world, instead of just criticising them, bearing in mind that of the world's 100 biggest economic units, multinational firms outnumber nations by 54 to 46?

Mr. Dell

Unfortunately, the discussion on multinational companies was very brief. It took place right at the end of the conference. It was hurried and, therefore, inconclusive, so I cannot say that there was any substantial discussion of this question.

Mr. Dalyell

Is the Secretary of State aware that much of the criticism that has been directed towards the British Government was simply not shared by Africans who attended the EEC-ACP Conference at Luxembourg and who had been at Nairobi? Having said that, may I ask my right hon. Friend to get hold of the public statements of M. Cheysson, the Budget Director, and Mr. Krohn, the Director-General, in which they criticised the way in which the European countries had simply not got together before the conference, and in which they made statements to the effect that the Africans did not know whether they were talking to the Nine as the Nine or to separate countries of Western Europe? Will my right hon. Friend reflect upon those statements?

Mr. Dell

I am glad to hear what my hon. Friend has found about the attitude of certain African countries. I shall certainly get hold of those statements. I think that I have a fair idea what M. Cheysson thinks about the EEC position at the UNCTAD conference. I should be very happy to achieve a greater degree of unity on this question within the European Community.

Mr. John H. Osborn

While supporting the views expressed by the hon. Member for West Lothian (Mr. Dalyell) about the ACP conference in Luxembourg last week, following UNCTAD, may I ask whether there was not an element of confrontation in Nairobi? To what extent was this due to the fact that the developing countries are recognising that their raw materials and commodities will be increasingly scarce and, therefore, that any agreement should be at high prices rather than at low prices?

Mr. Dell

There is inevitably something of an air of confrontation at UNCTAD conferences, because of the structure of the conferences. However, fortunately we were able to get over that in the end in the final resolutions. As I said, we have developed a sound basis for further progress. One of the practical difficulties in making commodity agreements is precisely that which the hon. Gentleman raises, that is, the range of prices within which they should operate. It is this sort of practical difficulty to which we have to address ourselves, and we must now try to make progress on that within the timetable that has been agreed.

Mr. Spearing

Is my right hon. Friend aware that the reasons that he gave for the support by the Government of the Kissinger bank initiative will not be found convincing by many of his supporters on the Government side of the House? When did the Government first hear of this proposal, and at what level was a decision taken to vote for it?

Mr. Dell

As my hon. Friend knows, Ministers take responsibility for decisions made by the British Government. I am sorry that he finds the reasons that I gave for interest in this proposal unconvincing. We have not said that we support it. [HON. MEMBERS: "Oh."] We have not had time to study it for long enough. What we have supported is the proposal that there should be further study. That is absolutely right, because it appears to address itself to what is an essential element in this problem, and that is producing more commodities to meet expanding demand. That will require additional investment and this may be one way of achieving that additional investment.

Mr. Pavitt

Will my right hon. Friend take into account the fact that although the persons and organisations in this country that have had a passionate concern about the Third World may not be the largest or most powerful, they are, nevertheless, extremely knowledgeable about these things, and it is with them that the Government's reputation at UNCTAD has sunk very low indeed? In the light of that, will my right hon. Friend yield to pressure from all quarters of the House that, having got past UNCTAD, he will now take the quickest steps to implement the actions required by the negotiations, because urgency is needed in order to raise public esteem above its present level?

Mr. Dell

I recognise that the Government's attitude on the common fund was not popular with the organisations to which my hon. Friend refers. However, that does not mean that the Government's reservations were ill-founded. I have given the House an assurance that we shall enter constructively into preparatory discussions, which have been laid down and required by the resolution upon commodities passed by the conference.