U.N.C.T.A.D. AND TRADE WITH UNDER-DEVELOPED COUNTRIES

HL Deb 19 April 1972 vol 330 cc104-80

4.39 p.m.

Debate resumed.

LORD RITCHIE-CALDER

My Lords, I hope that your Lordships and my noble friend Lady White will forgive me if I have to leave before the end of the debate. I do so because of circumstances. I assure your Lordships that I shall speak very briefly. I must also take this opportunity to welcome and congratulate the noble Earl, Lord Limerick, on his first appearance as Minister. I wish I could be enthusiastic about his speech, but I feel that, rather like the perfunctory appearance of Mr. Michael Noble at Santiago, what he had to say was not very reassuring to those of us who share as I share, if I may say so, with the developing countries a grave misgiving and distrust of what are the intentions of Britain and other developed countries in this respect. It was in fact for me the turning over of dull embers of the torches that I thought we were carrying in this country, and a torch which, incidentally, was carried by Mr. Edward Heath when he made what to many of us was an extremely important and significant and hopeful statement at the very first UNCTAD meeting. Therefore. I propose very briefly to confine myself to what I feel are the things which must he recognised, but not in the sort of "hereinafter" or "heretofore" discussions we have been having, or the private accountancy or legalistic arguments, but the basic question of what in fact is involved in the UNCTAD Conference.

This is the first UNCTAD Conference of the Second Development Decade. The first two were rather pathetic commentaries on the failure of the First Development Decade, and the elements of the failure of the First Development Decade are still present in what we are now looking at in the Second Development Decade. As one who wants desperately to see the success of the Second Development Decade, I feel profound misgivings about what may not evolve from the Santiago Conference. For twenty-five years I have been associated. in one degree or another, with aid and development, and looking at the problems actually and literally on the ground, and not only dealing in statistics but being able to put names and faces to those statistics and being concerned about the people whom we talk about nowadays in extremely abstract terms in these connections.

There is nothing very much different to-day in our approach, I regret to say, from what has been manifested over the years. We have been experimenting and building Nissen huts on out-of-date structures including, I may say, the monetary system. We have been trying by every kind of expediency and improvisation—even within the United Nations—to find answers which cannot be found simply by making modifications. We tried, as a result of Bretton Woods, to find the answers for this in a very complex structure which was the I.M.F. and the World Bank. We tried to find it through conventional banking through the World Bank, and it has not worked and it will not work. We have tried it by setting up technical assistance. We have tried it through setting up the United Nations Development Programme, and through what I call "the softhearted side of the World Bank", which is the "A.I.D.". All the time we are simply playing around with forces which, in fact, it may not be true to say will make or break this conference, but, by golly!, we are getting very near the deadline for the break.

The situations now being fostered and engendered, and the distrust and genuine hatred which is being engendered in the Third World because of the shocking experience of this whole business of trade and aid, cannot go on much longer without serious consequences. We have an example—I am glad my noble friend Lady White touched on this subject and dealt with it—in the question of the debt burden. Something like £30,000 million is now involved in the debt burden. Five-ninths of the money borrowed nowadays is borrowed to pay the interest on the debt charges on the money they have already borrowed. That is what I call "feeding the tapeworm". You can always get rid of a tapeworm if you starve and diet. If you borrow, then you feed the tapeworm.

The one ridiculous situation we have in the present world situation is the fact that you are credit worthy if you do not borrow money; beyond that, you are almost looking for charity. The fact remains that matters cannot go on in this way. At this moment, as President Allende of Chile pointed out to the Conference itself, the charges and the interest which are now having to be met by the developing countries amount to three or four times the amount of money which is actually going in. It is the invalid whose blood is being transfused to the healthy, instead of the other way round. We are going on perpetuating this abuse in circumstances which will respond only to great imagination—which is entirely lacking in our approach to this problem.

I have never argued that trade and aid are contradictory; trade and aid are complementary. Aid is in very many cases a pre-condition to trade; in fact you cannot get the rewards of trade unless you have consolidated your potentialities through, if you like, aid and so on. The idea is that somehow the manifest thing that we are ignoring can be avoided—and that is that Government funding of aid must always take priority. There is no reason, and there cannot be any justification, for pretending (and I am surprised that anyone should pretend) that private funding is any substitute for direct Government assistance. Indeed, I would argue for grants in aid and non-interest paying loans. There cannot be (to use a term which has now become dignified in the discussions we have in the United Nations, and so on), the "infrastructure" which will produce development through private investment unless there is first of all the consolidation of Government aid—and that is multilateral aid.

I do not propose to go any further, because I feel very strongly about this whole subject. We see things being deliberately ignored and rather brushed under the carpet and, as we have heard this afternoon, being treated, if I may say so, with almost the kind of flippancy with which Michael. Noble went to Santiago, made his brief appearance, and then came home. That is not the way to run the worlds' railways.

4.46 p.m.

THE LORD BISHOP OF SOUTHWARK

My Lords, it is with enthusiasm yet with diffidence, and, alas! with a degree of cynicism, that one takes part in this debate. Enthusiasm because how can one but be enthusiastic in view of the nature of the subject? Anything that is going to bring a fuller life to the less privileged one naturally wants to support. Yet diffidence because what can one add to this debate unless one has specialised knowledge? There are those who are qualified to take part in this debate and have already done so, and we look to them to guide us as we seek to come to wise decisions. But alas! with a degree of cynicism, for how many times have we discussed this or allied subjects during the past ten years? One was tempted when drafting a speech for this afternoon to produce the speech one made eight or nine years ago, and also to have read the speeches of others of your Lordships sitting in this House to-day and quoting your speeches and wondering if you recognised them, because so many of the things that were said all those years ago have already again been said this afternoon, and one fears will be said in ten years' time. So much has been said, and so little has been achieved.

If one goes on a journey from America to England and then on to the Middle East and then to the Far East, one realises what it is to descend from affluence to poverty. Perhaps the most jarring thing of all is when one has been overfed in a plane and so much is left over, and one is unable to pass it to those at the gateways who would be only too grateful to have what we had on the flight, which is perhaps more than they have had in a week. As we look back upon the happenings during the past ten years, we find that there are still over 300 million children suffering from malnutrition and who are retarded, physically and mentally. We find that between a quarter and a third of the men in the underdeveloped world are unemployed and unable to earn a living for their families. It is estimated that in the next ten years 126 million people will be looking for jobs, while the developing countries' share of world trade has fallen from more than a quarter in 1953 to less than a fifth in 1967. Is there anything that we can do?—certainly, I suppose, nothing that is likely to influence the happenings of the Santiago meeting now. But perhaps what we say and seek to do in this country may have a bearing on policies that are to be devised in the enlarged European Community on its relationship with less developed countries and regions.

As I see it, the problem should be tackled along two lines, the biological and the economic. By the "biological", I mean the eugenics, taking into account the growth of population. With our present resources. we are able to maintain a population of so many millions. If we go beyond that point our resources become inadequate. I realise that the position is made worse by the way we distribute these resources, but that matter arises under the economic arguments to which I shall come in a moment. The point I want to make now is the need for every country in the world to consider population statistics. We must use wise family planning to maintain the numbers that our economic resources can cope with. This means a really massive effort, greater than has been made before, in all countries to educate people about family planning.

We must help parents to recognise that having children who are to grow up hungry, illiterate, physically retarded and mentally deficient is unfair to them and damaging to the community. This will become more and more of a problem as we achieve death control, which we are doing so rapidly, by which I mean that people are living so much longer and those at the other end of the scale have to be maintained in a way which was not true previously. So in all our conferences about the feeding of the world let us remember that the control of the world's population is an essential factor in the situation which needs the very closest examination.

Turning from that, and the need to further the understanding of birth control, I pass to economics. Even though we may have a population that is commensurate with our resources, we have to think about the distribution of these resources, which cannot be left to blind chance and privilege. We have to seek a policy of fair shares, not just for ethical reasons but for purely selfish reasons, because if we cannot solve this problem we are likely in due course to suffer as much as anybody. Whether we like it or not, the fact is that if we do not share one another's burdens we shall ultimately be left with a burden which is too heavy for any of us to bear; a burden which may ultimately lead to our self-destruction. As I see it, there are three things we can do. First, we must re-think our monetary measures; secondly, we must re-think our attitude towards trade between the better-off countries and the less well-off countries; and, thirdly, we must re-think the methods which govern the programme of aid given by the developed countries to the developing countries.

On monetary measures, is it inevitable that in seeking to solve the world's monetary crisis the representatives of the developed nations are in sole control? Is it inevitable that the decisions concerning the International Monetary Fund should be made by the Group of Ten; that is, by the Chancellors, or their deputies, of these ten major Powers? Surely two considerations are of importance: first, tat the developing countries should be represented when decisions affecting currency and credit are made; and, secondly, that the developed countries should hear in mind the needs of developing countries when those decisions are made.

From monetary measures I quickly pass to trade. The trend has been troublesome to developing countries, partly due to the instability of prices for primary products and their "first stage" derivations, and partly due to tariff barriers against their manufactured products. The second UNCTAD Conference concentrated on these matters and some steps have been taken to stabilise primary commodity prices and to give preference to manufactured goods. The two proposals to meet this situation are supplementary financing, which compensates developing nations for any shortfall in the export earnings of particular commodities—for example, cocoa, sugar and vegetable oils—and compensatory financing; that is, filling the gap between export earnings and import costs. In both cases, the compensation would be by means of grants. The World Sugar Agreement is an example of a commodity agreement.

Of course, allowing Indian textiles, for example, into the United Kingdom duty-free would undermine Lancashire's textile trade and require that it be phased out and new employment opportunities provided. Is this the price the United Kingdom should pay for a measure of Indian prosperity? Similarly, should beet sugar growing in Europe be reduced by stages in the economic interests of countries producing cane sugar as their main exportable crop? These are problems which wiser men than I will have to solve, but they are problems which must be faced.

From trade I come to aid. Aid has become a matter of contention on a number of grounds. As we have heard so frequently, and again this afternoon, the developing countries have become involved in servicing high-interest loans and they declare that aid is largely swallowed up in these payments. It has been said that it is as if we were advancing them cheques with which to buy their own coffins. On the other hand, developed countries are naturally concerned with what happens to the aid which they give, and they sometimes fear that it is being used for purposes that are incompatible with the ideals of Western democracy. That is a fear which cannot easily be set aside. While there is no doubt that the volume of aid should be increased substantially, and that commercial investment should cease to be regarded as aid—and I am very glad that that point was made earlier this afternoon—there is a strong case for relating aid more closely to trade, and for giving aid in the form of credit.

I now come to my last point, that if we are to achieve more than has been achieved in the past there must be a massive attempt to educate the public. It is so easy to criticise a Government, be it this one or the last one, for not doing more. I remember what happened years ago, when the first Labour Government was in power and Sir Stafford Cripps was a member of it. Some countries—I think India in particular—had a terribly serious famine and there had been suggestions, from the Churches and elsewhere, that we ought to have bread rationing, in addition to being rationed in other ways, in order to help people who were almost starving. Sir Stafford told me that the Government felt that that would be the last straw. He said that the Government might very well fall if it imposed bread rationing, because the people of this country would not take it.

There is a lack of education, a lack of understanding. It is so easy just to blame Governments, but neither this Government nor the last Government—nor, indeed, any other Government—could do this unless there were a large measure of popular support. And the trade unions: this is certainly one thing that one would hope the trade unions would seek to foster, alongside the employers' organisations. In the schools, the churches—wherever men's minds are influenced and decisions are made—this point should be brought to the minds of people, to help them understand the problems that are affecting the countries which are underdeveloped and where people are in real need. It is so easy, my Lords, to dismiss these things as just unrealistic Utopianism, or vague Christian idealism. History shows us very often that we reject at our own peril the teachings of Christ; that when we turn our eyes away from the needs of others we bring a judgment upon ourselves which may indeed be a judgment allied to disaster.

5.1 p.m.

LORD HAWKE

My Lords, I think the right reverend Prelate puts his finger on the right factor when he talks about the population problem. Of course we have stopped the Africans killing each other and we have stopped tropical diseases killing Africans and Asians alike, and that has really created the bulk of this particular problem. I am very glad that my noble friend Lord Limerick, as an experienced banker, is now going to be in charge of this operation; and being new to the job, I hope that he will be much more receptive to the beautiful ideas that I shall give him than his pre decessors on that Bench. I agreed with a great deal of what the noble Baroness who opened the debate said, until she got rather emotional about, I think, a misconceived advertisement designed to entice people to put capital into Nigeria.

In previous debates on this subject I have fervently put forward the idea that the proper way to give this aid was through the provision of special drawing rights, especially for the underdeveloped countries. Whether this was original thought at the time I just cannot remember; but at that time it could possibly be described as an inflationary suggestion, because there was fairly full employment in all the manufacturing industries, and world trade was comparatively booming. To-day the position is very different. There is spare capacity, there is a mild slump going on; and it is not surprising that this idea is now being widely advocated in UNCTAD circles—and I hope that our Government will really back it. I fully appreciate the difficulty and the invidious task of distributing these S.D.R.s to particular people, but quite frankly I do not think it matters a great deal if some people get a little more than they deserve; it is better than nothing. I do not think the idea ought to be scotched purely on the argument of there being difficulty in the way of a fair distribution. So much for general aid.

When we turn to particular aid, I am again going to flog an old hobby-horse of mine. I think there has grown up in Whitehall a generation which is comparatively ignorant of the financial history of the development of South America. One hundred years ago, South America was in very much the same state as many of the developing countries in Africa are in now, and lessons are to be drawn. Loans were poured into them. Portions of those loans stuck in the palms of politicians, even though in those days I do not think no-name accounts in Swiss banks existed. But generally interest, and certainly principal, could not be repaid except from the product of further loans; and the shakier the borrower the higher the interest and the more certainty of default—and that situation applies precisely to-day. We are lending money—we have lent money and we continue to do so—on a completely unrealistic basis, with not the slightest prospect of repayment. I have said so before, but we are still going on doing it. I read in the Press that we are lending India the money to buy a fertiliser factory. Of course we ought to provide the fertiliser factory, but we have got to give it to them. What is the good of putting through a paper loan which they will never be able to repay? We should give it to them for nothing.

I prefer the concept of lease-lend. During the war we had this wonderful principle that everything bought in dollars was put on one side of the book under lease-lend, and everything the Americans wanted from us in sterling we put on the other side of the book in sterling. Needless to say, the dollar side was immensely stronger than the sterling side, but at any rate it meant that we were providing something in return. I do not know whether those accounts are closed, but it is possible that, if we did the same thing to-day, if an emergency ever arose when India, for instance, could render us great service for which we could not afford to pay, we could refer to the lease-lend account and ask for reciprocal aid. That seems to me much more sensible than having purely fictitious loans. I personally like what I read to be the Israeli principle. They confine aid to specific contractual projects and to expert assistance. I see no reason why we should not use these aid projects to provide employment and fill up space in any of our manufacturing industry, where such space is to be found. Over the last year we could very well have placed orders for things like power stations, sea water distillation plants, railway material and so on, which would have been most valuable to the North and Clydeside. It would have helped our employment problem and, at the same time, done a good turn to the countries to whom we gave the things we made—and all should have been on lease-lend terms.

Some advocates of aid get very emotional. We hear from time to time that unless the gap between the rich and the poor countries is narrowed or closed, dire consequences will result to the richer countries. Quite frankly, my Lords, I just do not believe that. There will always be a wide gap between the technically efficient and well equipped and the others; and, of course, the progress of "the others" in narrowing the gap will depend a tremendous amount on the effectiveness, the efficiency and the honesty of the Government machinery in the recipient countries. But, of course, anything we can do to narrow the gap is very advantageous both to the richer and to the poorer. I think we are wrong always to assume that the people in the poorer countries are grossly unhappy. After all, the bullock carts and the camels do not work to rule, and there are compensations in sitting in a nice climate chatting and watching your women do the hoeing, which is the task of the female sex in many countries in the world. I think that we who live in these colder climates have much more of a potential for unhappiness in the case of poverty than those who live in the warmer places.

But politics is the art of the possible, and one thing I can assure the right reverend Prelate is that no country in Europe is willing to see the complete extinction of its textile trade in order to provide extra work for Indian looms. Not only would it be politically impossible, and I think grossly unfair, but strategically it would be extremely unwise to be entirely dependent on overseas for imports of any cloth. And that, of course, applies to other things as well. I believe personally that the pulling up of these people can very largely be done by trading among themselves. After all, in South America there is a very big trade in manufactured goods between Brazil, the Argentine and Chile, and in all these countries. I think they have preferential tariffs, and so on. It is not necessary for all their goods to come to Europe. There is another point: while I am all in favour of commodity agreements, I do not think we can expect to force people to pay very high prices for raw material commodities. If we did, the Russians would promptly step in with vastly increased exports. I do not think it would be our friends who would necessarily get the market.

Nevertheless, I think there is more scope for these. I cannot see why something cannot be done about copper. A fortnight ago I was kindly shown round the Cyprus Mining Corporation copper mine, and they freely admitted that producing copper for £420 or £430 a ton was not very palatable. Nor should it be: the price should be around £600 a ton. And copper is a commodity that is produced in a great many of the poorer countries of the world. One thing that I think my noble friend Lord Limerick might have a look at is the very large taxes imposed in European countries on certain tropical products. Many years ago, I put down a Question on this subject and the noble Earl, Lord Dundee, answered. I cannot remember the exact figures given, but in some of these European countries cocoa and coffee are subjected to tremendous local taxes, and as the inhabitants are remarkably fond of drinking those things one cannot help believing that if these taxes were modified there would be a considerable increase in consumption. I believe I am right in saying that coffee is the second largest commodity going into world consumption.

My Lords, I think it is a mistake to suppose that one can narrow the gap by levelling down. I know that various Church leaders are rather fond of adopting that attitude, but I believe that the adoption of a levelling-down process would end by our taking far less imports than we do at the moment. I believe that the more prosperous we are the more we shall take from these countries. If we could make the Russians prosperous, just think what a difference it would make to the fruit markets of the world if the Russians could afford to import oranges and bananas.

When one turns to technical aid, we think of it in terms of agriculture, education, defence, medicine, and perhaps even banking, and we take them all for granted. My noble friend has mentioned insurance, which had never occurred to me. It is certainly a very important point. But one of the most important factors in the spread of medium-sized businesses in the developing countries is the provision of some form of stock exchange whereby the person who invests money in a business can get it out again if he wants to do so. It is very difficult to do that until some sort of a stock exchange is set up, and there are middle-class capitalists who are prepared to invest in light industry. To sum up, my Lords, I believe that the right line is Special Drawing Rights, lease-lend and outright gifts, plus technical aid. But I deplore being emotional about the gap because I do not believe that anything more than a slight narrowing is likely or possible, and this can be achieved only by the great efforts of the poorer countries themselves, in co-operation with us.

5.15 p.m.

LORD WALSTON

My Lords, I am delighted that my noble friend Lady White has given us a chance to discuss this subject. I congratulate her on the way she introduced it, but I hope that she will not think me unduly cynical if I say that I do not have, and never have had, any great hopes from UNCTAD. It is, of course, highly desirable that all the countries of the world, the developed and the developing, should get together from time to time and discuss their problems. It is also highly desirable—possibly even more desirable—that the Governments of each country, and particularly because we live here the Government of our own country, should give very serious thought to these matters from time to time. I would hope that they would be doing so all the time, but it is valuable to have a particular conference on which to focus one's thoughts. I share my noble friend's misgivings that the amount of thought given at the highest level has been, and always has been, not only with the present Government in office but when the Labour Party was in office, too, far too little, and that the importance of aid and development has never been properly realised.

It is true, as she said, that at the first UNCTAD the then President of the Board of Trade, a Cabinet Minister, went and represented this country; that at the 'second UNCTAD also the President of the Board of Trade, a senior Cabinet Minister, went and represented this country; whereas to-day, unfortunately, there is no Cabinet Minister representing us, and indeed at this present time no Minister whatsoever. That, I think, is most unfortunate and I strongly support all that my noble friend said about this matter.

Having said that, do not let us be under any illusions about this particular conference. The third UNCTAD, the same as the second and the first UNCTAD, is not presided over by some deity who fills the hungry with good things and sends the rich empty away; it is presided over, or rather is attended by, a group of people representing selfish Governments who themselves represent selfish people. That is a fact that we cannot gainsay. It is unfortunate that that is so, but that is the way these things work.

I am sorry that the right reverend Prelate is not in his place because I was going to take up one point that he made. As I say, it is true that most of the time Governments and people are selfish, but the example he was about to mention he did not follow through completely, because when Sir Stafford Cripps was a member of the Government and the question of bread rationing arose, the important thing was that the Government of this country, representing the people of this country, were not selfish and in spite of great political difficulties and unpopularity, rationed bread in order to help those whose need was greater than our own. That is an example we must never forget and an example we must strive to emulate in all our dealings with the problems of the poor countries.

It is true, as the right reverend Prelate has said, that the rise in population is one of the reasons why this problem has occurred and is facing us with so much urgency to-day. I hope that we shall not pin our faith on solving it by simply restricting population. Surely it is not beyond the powers of a world which is as technologically developed as ours and a world a very large part of which professes belief in the Christian ethic, to produce enough and to distribute it equitably enough for the poorest people of the world to have a 'rather better life—even though it means, as it must mean, that the richer people of the world do not have, relatively, such a good life.

It is possible to do this nationally. So far we have not done it internationally; but the progress that has been made here over the last 100 years in redressing the balance between the rich and the poor of our own country is not such that we can sit back and say that we have done the job and that there is no more to be done—though the mighty to some extent have been pulled down from their seats and the humble, if not the meek, to some extent have been exalted. That has been done by a combination of unselfishness, of zealous reform, of Governments that are prepared to give the lead instead of following in a country which with persuasion and with leadership is prepared to follow these ideals. However slowly they may follow them and however small the steps may be in that direction, I believe that the example of what has been achieved in this and in other countries over the last 100 years should give us some encouragement when we come to talk about the problem as it exists between different countries.

I am not going to talk about special drawing rights or any of those problems. I cannot help feeling that there is too much time wasted (not just spent, but wasted) on going into all sorts of abstruse technicalities instead of facing the real I essential problems. These are stark and uncomfortable but without facing them we cannot make any real progress. What it comes to, over-simplifying rather dangerously, is this. Most of the developing countries are primary producers mainly of food but also of industrial products. Most of the developed countries are consumers of those primary products. Unless we in the developed countries are prepared to pay more for the primary products there will never be any real progress or any real distribution of wealth as between the rich and the poor countries.

If your Lordships will bear with me, I should like to speak now as a primary producer in a developing country. a very small one, which allows one to give perhaps a rather more realistic picture of what these problems are than is conveyed by the more abstruse speeches which are made at UNCTAD and elsewhere. In this particular island in the Caribbean almost the only source of external wealth is agriculture. There is a small tourist industry developing, and an important one, but it can never be the basis of improving the standard of living of these people. They do not want special drawing rights and it does not make a great deal of difference to them if they have "soft" loans or "hard" loans. Of course, gifts and grants are valuable and important. There are some of them and I hope that there will be more. But the essential need in countries such as this are stable and remunerative prices for the primary producers.

The noble Earl, Lord Limerick—and in his absence I should like to congratulate him on his appointment and to wish him well; just as I congratulate in advance the noble Baroness who is going to reply—said something to the effect that he was and always had been in favour of prices equitable to both sides, to the producer and to the consumer. With respect to the noble Earl, those are lovely words, but what do they mean? What are prices equitable to both sides? Who is to decide an equitable price? Would any noble Lord here say that an equitable price for bananas (the commodity I produce) is something between 1p and 1½p to the producer and 9p to the consumer? Or would noble Lords consider perhaps that it would be more equitable to fix it at between 2p and 2½p to the producer and 10p to the consumer? It is questions like these which really matter; because an increase from 1½p to 2p per lb. for bananas is of infinite value to the people who make their living by growing bananas, to the workers who work in the fields and to the shop keeper who sells the goods, to those who earn their wages by growing them and to the Government whose taxes depend upon the standard of living and the standard of prices of these people. Those are the things which matter. Unless we in the rich countries are prepared to say that we shall give not just equitable, but generous and assured prices over a long term for the primary commodities—not unlimited quantities of them, for that is obviously impossible; but for specified quantities—there will be no real progress.

We have done that with sugar. The Commonwealth Sugar Agreement is a model, but it is a model which has never been followed. I cannot help feeling that we are sheltering behind some of these international organisations in saying that we cannot get agreement for cocoa or coffee or sisal or jute or vegetable oils or other products because other countries will not come in with us and that they will break such an agreement. We did not say this in the case of sugar. We gave to the members of the Commonwealth specific contracts at fixed prices for a number of years which were remunerative and just, and in some cases generous. The result is manifest for all to see. We can take action ourselves in this country if we have the will. I believe that the international influence of Great Britain, the largest importer of food in the whole world, taking the initiative in commodities other than just sugar would be infinitely more valuable than any speeches (even those made by the Prime Minister himself) to an international conference saying how much we hope to help and how much we realise the importance of the matter. What we must have is a realisation that real help from us to the poorer countries can be achieved only at some sacrifice to ourselves; and that the greater the help we want to give, the greater the sacrifices that we must be prepared to make. Do not let us be hypocritical and say that we want to help but only if it does not hurt us.

LORD HAWKE

My Lords, the noble Lord's example of bananas is not a good one. Sugar is a necessity. Bananas are a luxury. If people are going to have to pay two shillings a lb. for bananas they will not buy many.

LORD WALSTON

My Lords, people pay more than two shillings a lb. for peaches, which are even more of a luxury than bananas. I should like to develop a more detailed argument on bananas with the noble Lord; but the point I am making is that the actual amount paid to the primary producer is only a small proportion of the final price which the consumer pays. The value of the cocoa bean in a bar of chocolate is well under 10 per cent. of the price; it used to be somewhere about 5 per cent. There we can make an impact.

The first thing we must do is to make this conscious effort and be prepared to lower our own rate of advance—no more than that—in the interests of other people. Secondly, we must realise that the primary producer is the main person concerned with the economy of the developing countries; and the third point is not to shelter behind international agreements or to say that until we get international agreements between all the rich countries we can do nothing. We I must take the initiative ourselves and go ahead and do it. Actions of that kind will speak very much louder than any words from any Prime Minister, Cabinet I Minister or even noble Lords in this House.

5.30 p.m.

LORD TANLAW

My Lords, I felt I should put down my name to speak in this debate primarily because of my experience of six years in the Indian sub continent working in companies which made textiles or produced tea for importing to this country, or, even in one glorious moment in the 'fifties, coals to Cardiff! Your Lordships may therefore think I wish to talk about trade and aid. I do not, because I believe that one of the difficulties about UNCTAD is the air of unreality which has crept in and has, I am afraid, crept into this debate too. To whom is the aid we are talking about designed to be given? Statistics in general are not much help in answer to this question. Each country has its own special problem and its own special statistics, and special reasons for not listening to anybody else. The only statistic which I should like noble Lords to take note of—it is the only one I wish to give—is that 80 per cent. of the population of the Third World live in rural areas.

My Lords, I ask again, to whom is this aid about which we have been talking meant to be given? Is it to go to centralised institutions, only to industrialised cities or to great bureaucracies to pass on to the needy? I wonder. Because something obviously has gone wrong with the distribution of aid over the years. Each speaker in the debate has said how disappointing it has been. Perhaps they will be disappointed again, and I am afraid that they will be. A number of speakers have said that the rich get richer and the poor get poorer. That is to evade the issue. The rich cannot help the poor; they never have done in the past and they never will in the future, in the history either of this country or of developing countries. The poor, by which I mean the poor countries, must take the lead of the Chinese delegation at Santiago, who said that the poor countries must help themselves. Unless aid is directed towards the mobilisation of a self-help policy, that aid will be evaporated, and in another three years there will be another UNCTAD and another lot of questions about where the aid has gone.

I believe that if UNCTAD is to achieve anything it must break away from the conception of quantitative aid and get down to efforts to make aid more effective. It must recognise that money alone is not the answer, nor is monetary reform. Of course it will help trade, but I do not think that it will help the 80 per cent. of the people about whom I have been talking and to whom my words are directed. If they do not agree in principle to give untied aid directed towards policies of self-help in the agricultural regions, the whole thing will have failed in the principle of giving to the Third World.

My Lords, I should like to say a word about the cost effectiveness of self-help policies through the medium of intermediate technology and its undoubted effect in creating new work places at a reasonable cost. Instead of requiring 1 per cent. of the gross national product, or 0.7 per cent., or 0.5 per cent., only 1 per mil is necessary to introduce policies to implement intermediate technology. We do not need all the money if the money is to help all the people in the region. In Western technology a work place costs approximately £2,000. Through intermediate technology a work place—that is, employment at work for one man—costs between £50 and £100. It will vary according to the area and the type of work.

Some noble Lords other than those who know more than I do about intermediate technology, may ask what it is all about. First there is the Intermediate Technology Development Group Limited, a recognised charity, which gives a very good description of what it is about through Dr. Shumacher's excellent papers on the subject. But, in one sentence, intermediate technology is rural industry, low-cost technology, designed to create a cultural and industrial structure to suit local conditions. There are no grandiose ideas, no ideas leading to the industrialising of the whole of an underdeveloped nation. The aims are modest and I believe the effects are practical. For instance, in many of the developing countries, if not in all of them, water is a major problem—getting water to the villages and for irrigation. A lot of time is taken in just getting safe water to drink. One of the ways in which this may be done is by the implementation of a very simple pump policy where pumped water can be made readily available for the community.

As many noble Lords will know, in terms of crop storage approximately 30 per cent. of the crops stored in developing countries—certainly in India—is eaten by termites or is damaged. There are few efficient methods of crop storage—in one sense that means the provision of rat-proof barns. This is a simple matter. They are simple to build, but many hundreds of thousands more need to be built. Noble Lords may think it most frivolous to talk about trying to improve the efficiency of the axle on a bullock cart, but many people have looked at this problem seriously, including the Ford Foundation. Improving the axle of a bullock cart can mean the life of the bullock may be extended by up to 30 per cent. which means in turn that the tractive effort available, the source of transport and the means of pulling the plough becomes 30 per cent. more efficient.

My Lords, I could talk for some time about some of these small things, but I will mention only one: a cheap energy source. There is usually no source of energy available in the remote regions. Often in this House we use that dreadful word "infrastructure". I am afraid that when I first heard it used I had to ask the noble Lord, Lord Byers, what it meant. Infrastructure, as we talk about it here, is not relevant in most of the remote country districts in parts of India or Africa. There is neither power nor water, nor are there roads, so I presume that this is something that the aid we are talking about must put right. What is needed is a cheap source of energy derived either from the sun or water or wind, in areas which are remote and which infrastructure in its modern sense has not reached; for the development of a solar still or a windmill or an improvement on the Pelton wheel would be of immense benefit. These are small objectives, but it is incredible what amount of benefits they will produce in those areas which we are trying to help.

How may this be done? It is all very well to talk about it and to mention long words like "intermediate technology", but I think this can be brought about through the universities here in Britain by spending hardly a penny. If courses were put forward by the universities allowing intermediate technology to be recognised as a prime source of study—and there is a lot of study to be done—I feel that the response from students and young people would be enormous. We often say that the young people in this country have lost their sense of purpose, but I feel that many people would find a sense of purpose in making a study of this sort and going to visit the countries which they might assist by their studies. I believe that Voluntary Service Overseas have a wonderful record of people who have found a sense of purpose in trying to assist as best they can in the developing world. This is just a thought, but if managers or directors of companies who have skills of the sort that may be of assistance in the kind of technology that I have been describing could be subsidised by the Government for a year so that they had no loss of salary, I feel that many between the ages of 35 and 45 would be quite prepared to devote one year of their lives in a remote part of the Third World to pass on their knowledge and know-how, knowing that they had done something before they went back to the ordinary run of their business or company and the apparent dullness that often comes to one's work at that age. I feel that there could be an enormous response, just as there has been for the V.S.O.

The aim that I have been trying to explain, and the direction of it, is designed to help the small cultivator. I want to make it clear that he is not a person who appears in many economic papers. This is not an emotional or liberal appeal, but because we believe in people and we believe that people count. When people ask me who is the small cultivator, I think the easiest reply is to refer to the latest television film on Vietnam, some disaster in Iran, or a drought somewhere else. The backdrop of those television films always portrays a family pushing a barrow; a man with a bullock and a few bags wrapped in a sack or sheet. These are the small cultivators who appear on our news bulletins because things have gone wrong: they have run out of water; there has been an earthquake or the bombs have dropped on them in Vietnam. These are the people whom we are trying to assist in the Third World. But these are the people who are never mentioned. I sincerely hope that they will be mentioned this time at UNCTAD, but I suspect that earnest people as they have done in this debate, will get bogged down with interest rates, S.D.R.s, trade and aid programmes and so on. I do not think these are very relevant to the people whom I have just mentioned.

But, above all, the political theory behind this kind of aid is that once a cultivator is forced to leave his village community he starts naturally to migrate towards the town centres. At the moment when he moves outside his native area quite often for him the dialects change, the ways of life change and he becomes perhaps a source of political unrest on the peripheries of one of the great cities like Calcutta. He almost certainly remains unemployed, and almost certainly he is a burden on the Government for one reason or another which cannot be overlooked.

Some noble Lords may ask: Where is intermediate technology at work? Is there a place where we can go and see it? I think there are places in India, Kenya and Tanzania, but perhaps the one that is given the most publicity—and people do not realise that it is carrying out this policy of self-help and intermediate technology—is in the kibbutz in Israel or the communes of the People's Republic of China. These people have practised self-help and intermediate technology: there is no work to rule; there are no cries of the right to work; it is a will to work, and the responsibility to work is on all of the community.

I hope that what I have been saying does not appear too woolly. It is idealistic; but I believe that the whole concept of aid is idealistic: at least, I think it is down to earth, and it is far more effective than some of the intricate formulae that are often advocated by Western economists, based on, for example, capital output ratios. For instance, Dr. Kaldor said in 1966: Research has shown that the most modern machinery produces much more output per unit of capital invested than less sophisticated machinery which employs more people. And he said that "capital" and "wages goods" determine the limits on wages employment in any country at any given time. I have mentioned the cost of the work places in Western technology. What Dr. Kaldor is saying is that if you put the maximum amount of capital into an industrialised situation or an industrial unit you will get the maximum output; but you will not employ the maximum number of people. This is not the answer for the rural areas, where we want to employ the maximum number of people in a job that is of maximum use to the community. Dr. Mansholt has already, in some of his speeches in Santiago and elsewhere, said that in modern countries of the West the rural populations employed in agro-industries are not benefiting from economic growth to the same extent as their city cousins working in capital output industries. I think this is another area where we go wrong. The concept that a modern industrial centre will grow so quickly that the fiscal benefits will percolate through to the rural outback is just not borne out by the facts, either in Europe—and I speak as someone who lives in Scotland—or in the developing countries.

I think that one of the greatest contributions European Governments can make towards assisting the Third World, other than in the ways that I have touched on, is in food production; that is, to practise what we preach in terms of self-help. I mean by this to work out policies wherever possible of self-sufficiency in agricultural production, even if this entails in this country a reconsideration of the present production grant policies and replacement with capital grant systems. Sooner or later the Third World will need most of its own proteins. We can no longer go on. say, in the next 15 years, importing food in the way that we do. I think that a policy based on self-sufficiency in British agriculture will give a much needed boost to our own regions in Scotland and Wales and in other parts of Britain that are not doing so well.

I have perhaps taken too much of your Lordships' time, but I should like to conclude with a quotation from Mr. George McRobie, who is also from the Intermediate Technology Development Group. He said: For 20 years now the industrialised countries of the West have engaged in programmes of aid and support designed to promote the industrialisation of the poorer countries of the world. The motives of the donor countries are mixed, but not always altruistic; but the results have been surprisingly uniform, and almost universally unsatisfactory. The gap between the rich and the poor countries continues to widen. For many of the underdeveloped nations political liberty has not brought economic freedom, but instead a new form of economic dependence on the West—the dependence of the debtor. This is what a number of noble Lords and noble Baronesses have been saying.

I only want to say, in conclusion, that Mr. McNamara has been credited, rightly or wrongly, with inventing the cost effectiveness method in the art of making war. He has now turned his sword into a ploughshare and is trying to assist the developing countries through UNCTAD and his great work in the World Bank. I just hope that he will also give an ear to any representative who puts forward some of the ideas of aid based not on money, not on interest rates, but on cost effectiveness through intermediate technology and an understanding that 80 per cent. of the Third World are the people to whom it should be geared, and not the centres of industrialisation.

5.49 p.m.

LORD BLACKETT

My Lords, I never expected this afternoon to hear such an eloquent account from the noble Lord, Lord Tanlaw. I was delighted to hear his talk about technology, a subject on which I have spent a lot of time and in which I am keenly interested. I have some differences with the noble Lord. I think you cannot do too much by intermediate technology, but you want a spectrum from the very light to the very heavy. The immediate problem of economists is to work out a proper spectrum of light, even to handicraft, and to heavy power stations. You must have power stations, and in my view it would be quite disastrous to go too far in the intermediate range. I think there is a great deal of value in this. I had the impression that the noble Lord rather thought that aid was not always very necessary. I must say that in listening to-day to the discussion about UNCTAD I have learned a great deal. I have read a number of UNCTAD reports, and I confess I have found it difficult to make head or tail of them.

This is a difficult subject. My own interest has been more concerned with aid in the traditional sense, and I therefore look with some alarm at the decrease in official aid. I believe I am right in saying that the figures show that in the 1960s the total official aid from the donor countries dropped from 0.52 per cent. to 0.37 per cent. of the total g.n.p.—a big reduction. Official aid, I believe, has great advantages. It is more easily directed to certain projects and developments. You can use it in intermediate technology if you want, and you can use it for other kinds of activity; you can and must use it a great deal in agriculture.

I should here like to quote a remark made by Lester Brown, a very well known American expert on the "Green Revolution": The collision between population growth and food production has been averted temporarily. The new seeds have bought time to seek a break-through in contraception. While man breeds new wheats Nature breeds new rusts. Thus plant breeding is a never-ending process. …The course of the 'Green Revolution' will depend very largely on what the rich countries do. The aid policies will directly determine the speed with which the drive towards self-sufficiency in food proceeds. This is a very good example of the importance of aid and investment in relation to technology. Sometimes people think that new technology is cheap and if you have a good invention such as hybrid wheat, you can use it without much else. Of course that is quite untrue. Investment of any 'kind needs many resources before it can come to fruition and it is quite obvious that the "Green Revolution" needs a good deal of industrialisation, the development of electric power, water supply and so on. So I think that the aid which is being referred to, official Government aid, could not be met by the UNCTAD type of aid. Therefore I feel convinced that official aid is extremely important, and I sincerely hope that the British contribution to the official aid will be raised sooner or later to the 0.7 per cent. of the Lester Pearson target.

In conclusion I should like to say a word about India. I have been there quite a lot recently and it is very much a centre of my interest—partly because of its late Imperial connections. I learned about it in my youth but got to know it only after the last war. In their problem the value of aid is extremely important. India has the largest population in the world except China; they are by far the biggest parliamentary democracy in the world, and especially notable in a part of the world where parliamentary democracies are very scarce, if indeed they can be found at all. In 1947, after 150 years of British rule, India had an income per head of 100 dollars a year. This is a twentieth of the British figure and about a fortieth of the American figure. The country of 550 million people is growing at the rate of 2.5 per cent. a year, with a very low industrial rate and a very high rate on the land. This is a situation which I think has been dealt with reasonably efficiently and successfully. There is no doubt whatever that India is beginning to take big steps forward, that her industry is increasing. Exports of machine tools are becoming substantial, and India is becoming a modern State. But she started with very grave difficulties. She gets one of the lowest amounts of aid per head of any country in the world: between 4 and 5 dollars per head. Pakistan gets 7 dollars, and many countries receive very much more. I think I am right in saying that the noble Lord, Lord Gladwyn, mentioned Korea or Taiwan, or both, as being countries which had become very prosperous. This shows what can be done without aid.

LORD GLADWYN

My Lords, I instanced Taiwan as a State which has progressed, and I said that it had done so with very substantial aid.

LORD BLACKETT

I am obliged to the noble Lord. I misunderstood. In my view, there is no doubt that aid does pay. If it is given in small amounts it is rather difficult sometimes to calculate the effect, but there is no doubt at all that it is extremely important. I hope that the Government will keep to the aid programme and will even increase it later on.

I feel that we in this country are bound to do our very best for India because of her unique qualities, her history, her size and her difficult problems. Her population problem is enormously difficult. India has in fact recognised this. I think that India was the first country openly to say that she thought she would be better off with fewer people. There they now have the largest family planning organisation in the world and it is beginning to be fairly effective. They have a very big budget—up to 80 million dollars per year—and over 60,000 people are employed in the organisation all over the country. So a very serious attempt is being made to deal with the problem. How quickly the scheme will go nobody knows, but already they think they have the birth rate per thousand down from 39 to 37; and in the tea states, curiously enough—because there they have better medical attention—they claim to have got it down to 31 per 1,000. So clearly things are beginning to happen, though it will take time. In the present state of the country, the burden on India's economy of the very big birth rate is enormous. In an Indian Government leaflet that I found it was stated that the population is rising at about 2.5 per cent. a year, and in terms of their present population that represents 13 million people per year. Thus there is a need for 130,000 schools a year, 2.5 million houses and 4 million jobs: that is the price to be paid for a big population.

I do not think you can do very much to help them by trade. It is a matter for their own resources, supplemented by what aid they can get from outside. But that is what they have got to do. We hope that the population will continue to decrease. This is their biggest problem. In regard to that we should give them every possible support. They have no religious opposition to the population problem; it is simply a question of organisation. There are some political difficulties in all developing countries; for example, "You want to have fewer people; with fewer people we would be weak".

That is all I want to say. To sum up, I am convinced that official aid is extremely important—in some respects more important than other sorts of aid. I therefore deeply regret that it has been allowed to be reduced; I hope that it will be increased to the 0.7 per cent. The one per cent. figure of all aid has already been reached, but that is mainly not official aid; I hope that official aid will return to 0.7 per cent. This is extremely important. All the ideas that have been referred to to-day about intermediate technology deserve close study in this country and abroad. We have to do some hard thinking. The problem is not simple, and a great deal of serious, hard thinking is needed if India is to use best her very short resources. She is a poor country; she is especially poor in investment capital. If she could double her investment capital, as the Japanese have done, all would be different. The limit of 12 per cent. of her g.n.p. is so small that India cannot expect a big growth rate until she gets her capital investment increased. This is where aid directly helps.

6.2 p.m.

LORD SUDELEY

My Lords, as I am no expert on economics I hesitated to intervene in this debate. But the noble Baroness, Lady White, has said that the issues which she has raised extend beyond the technicalities of trade, and I should like to make a few observations on power politics. In that connection I should like to speak in particular of two issues, aid and preferences. For my premise I need to reiterate a well-established difference in social philosophy dividing the opposite Benches from the extreme Right, whose point of view I shall try to represent. On the one hand, the outlook on the Left is international. As heir to the enlightenment the Left looks at everything from the point of view of man generally. On the other hand, the extreme Right stands for the protection and advancement of our own national interests. To look after your own interests and "hang the rest!" is an honest definition of "Right-Wingery". So as a protagonist of the Right I am afraid that I may have to provoke the Opposition Benches in my advocacy of some unashamed realpolitik.

On the issue of aid, the Left is divided. Many Socialists support aid as a charity. Provoked by that attitude, members of the extreme Right, such as the Member in another place for Wolverhampton, South-West, have attacked aid. At political meetings of the extreme Right which I have attended in this building I have watched how bitterly overseas aid is regarded. There are other members of the Left, however, who have come to see the full implications of aid and so attacked it as the weapon by which a country may increase its political and economic power. That is the gist of the remarkable speech in Santiago last week of Dr. Allende. I refer also to another Marxist, my Oxford contemporary, Miss Hayter, as the authoress of a book called Aid as Imperialism and to the writer of a recent article in the New Statesman entitled "The Aid Racket". I think that to some extent also I am referring to the noble Baroness, Lady White. It is through standing the arguments of Dr. Allende. and others who think as he does, on their heads that I think the extreme Right should commend aid. I shall recite just a few of its blessings from the point of view of the donor country, as with the Right these points have remained hitherto rather too much a matter of private conviction.

So far from being a charity, aid is the instrument of our own enrichment. As proof of this, I point out that if that were not the case aid would not have attracted its large degree of private investment. There is no country perhaps so bent on commercial progress as Japan, and the Japanese are one of the largest donors of aid in order to create a market for their own goods. In order to ensure that the aid which we give creates a market for our own goods, much of Britain's aid is tied.

In a variety of ways, my Lords, aid may extend the donor's political and economic power. To put it in a phrase, there was a time when we sent out gun boats and soldiers, and now we should do very well to send out cheques. The giving of aid helps to procure a political ally. It may provide a presence overseas. An excellent example of that is the extent to which the French have retained their presence in North Africa. In any country to which we give aid the existence of a Left-Wing Government does not contribute to our own enrichment. Such a Government tends to be no respecter of private property and to cause inflation by spending too much money on social services. By the giving of aid we may encourage the existence of Right-Wing Governments, and even, as I am arguing from a Right-Wing point of view, of military regimes which are very uncongenial to Left-Wing taste. No matter what Government abroad is in power, through the giving of aid we may shape its internal policy for our own benefit. The noble Baroness, Lady White, has referred to the attempt to stop the election to power of Dr. Allende. The Letter of Intent that accompanies a grant of aid may prevent that Government from doing all the things so damaging to our own interest to which Left-Wing politicians are tempted.

Such are the ways in which the donor countries may employ aid as their tool in order to enrich themselves and extend their powers. The question is whether the preferences which are to be discussed at UNCTAD, and for which the Minister has said that some allowance was made in the scheme put into effect on January 1, could ever provide so effective a tool as aid. A grant of preferences to the countries of the Third World may provide us with some power over them. If a poor country which enjoys our preferences then goes on to pursue a policy which is not to our taste, we can say to that country: "We shall increase the tariff on your fish". But we cannot anticipate whether any such policy, if it were ever to be adopted, would provide us with as much of a hold over that country as we have enjoyed in the lending of money which we have never had to part with unconditionally. Moreover, we should now be able to lend money to the poor countries under conditions of greater stringency than in the past. Already the poor nations have had so much that they are heavily in debt. Their position is much weaker than it used to be (the noble Baroness, Lady White, has referred to Ghana) and so the rich countries can demand better terms.

Because preferences would do less than aid to enhance the power of the rich countries we must doubt the extent to which, from the point of view of the Third World, these two kinds of help will be compatible. Both forms of help may be received by the poor countries principally to assist them in their balance of payments. The International Monetary Fund came to be such an important instrument of aid through its concern in the first place with international exchange. Should the export trade of the Third World be stimulated to any great extent by our granting of preferences, that will go so far to rectify their balance of payments that the poor countries will not stand in much need of aid and so be in the position to attack it.

In the first instance we may envisage that they will strike at the terms of aid much more extensively than may be anticipated by our Government, which refers to some softening. They will be in the position to press further still for loans at low rates of interest, with long periods for repayment. They will be able to call for more of the aid which they receive to be untied so that they can make their purchases from the most competitive sources, and for much of their aid to be given multilaterally so that they may elude the grasp of any individual power. The donors of aid will not then be able to dictate terms to their recipients unless they can agree among themselves. In the second instance it is not too fanciful to suppose that some of the poor countries will refuse aid altogether. In any of these countries a Left-Wing or nationalistically minded Government, like that of Dr. Allende, may say to us: "You are giving less to us than you got out of us, otherwise you would not be here. You are exploiting us, and we intend to get rid of you."

My Lords, two further observations on our helping the poor countries with their export trade, and with these observations I shall conclude. First, such a policy will make it easier for the poor countries to withhold their supplies of raw materials so as to increase their price. In this fashion we have already been forced to pay more for our oil, and it is better we should avoid being held to ransom over other commodities. Secondly, it is doubtful whether we should benefit politically from making the poor countries much richer than they are now, even if we were to leave aside the question of aid. Often it is said that if the poor countries can be enriched that will save them from Communism. But that is a fallacy. The members of a rich country may be just as tempted to believe in the redistribution of property. Czechoslovakia, for instance, is a rich country, and the Czechs are great natural Communists. There is a very general sense in which our policy to increase the prosperity of the Third World may, on the contrary, do us a disservice. Taking a very long view, in the great increase of trade that should follow we should benefit because the countries of the Third World would take more of our manufactured goods. True enough! But as the gap between rich and poor is narrowed, we, as one of the rich, would lose much of our political power.

6.10 p.m.

LORD CARADON

My Lords, I wish to join with others this afternoon in thanking the noble Earl, Lord Limerick, who led for the Government earlier in the day for the statement he made. I particularly thank him for his most welcome and timely statement that the Government propose to do everything they can to make the UNCTAD Conference in Santiago a success. I say that because it is important to dispel the doubt which now exists in the matter; it is important, after the short visit by a comparatively junior Minister to Santiago to make an unimpressive speech and then to return, to correct the impression given to the world that Great Britain is not prepared to take a leading part in all the great issues which now have to be considered. I would also add my congratulations to the noble Baroness, Lady Tweedsmuir of Belhelvie, on taking her new Office. I have had the privilege and great pleasure of working with her when we were fellow members of the British delegation in times gone by. I very much hope that the progressive influences which arose from that association have not been altogether dissipated in subsequent years.

I would say first of all that the impression I get from listening to this debate is one which must be in all our minds: that the position of the so-called developing countries is a position so unenviable and almost so hopeless that we cannot fail, all of us, to be shocked by the situation which we find.

LORD GLADWYN

My Lords, may I interrupt the noble Lord? Would he think that the situation in China, a developing country, is so lamentable as all that?

LORD CARADON

My Lords, I may make some reference to China, and I welcome very much what the noble Lord, Lord Gladwyn, said earlier. It may well be that we have a great deal to learn from China, both in questions of development and in questions, for instance, of controlling population in the country with the largest population in the world. But in the developing world generally I believe that the situation is such that none of us can possibly review it without the greatest alarm and indeed despondency. Everything that works against the new nations goes up and everything that works in their favour goes down. The trade goes down; the aid goes down; the share of the world's trade diminishes; the prices diminish. In every possible respect they now find that the advantages they enjoyed ten years ago are largely dissipated. On the other hand, the debts go up; the barriers go up; the population goes up. Indeed, one sometimes feels that, after we have created a situation in which they live in a state of economic submission, they are now being barred from escaping from the prison which we have created. I was in Jamaica a week or so ago and was greatly impressed by the feeling that this new Government, newly elected, eager to carry through its reforms, feels that everywhere it turns it is barred from its own decisions; it has no hope even of participating in the main decisions which are to affect its future. Therefore I feel that the situation we see at the moment is one which must excite sympathy. What is the use of sympathy? Sympathy without action is unacceptable, and sympathy with reaction is intolerable.

Then I would go on to say that the second impression that comes, not only from this debate but from experience in different parts of the world, is this. We find that all the factors which affect the developing nations are in fact one; we cannot separate them out, one from another. One of us will speak on one aspect of this problem; one on another. Some will speak on the question of aid, some on the question of trade, some on the question of population, some on the question of race. All are one. It is impossible, though I wish we could, to separate out these subjects and deal with them separately. The whole consists of factors which, put together, tend to degrade and to divide mankind—and to divide mankind is the most important factor. We know very well that rapidly, day by day, increasingly, the gap is growing between the affluent, complacent, comfortable white people of the older nations, on the one hand, and the overcrowded, discontented, impoverished people—the great majority of mankind —on the other. This is the gap and it cries out for international action. Each one of these aspects is in itself important, there is no doubt. In the poorer countries there is the sucking in of the people to the towns. I believe that one of the most frightening statistics I have seen (and we do not want any surfeit of statistics) is that it is estimated that in twenty years half the population of the whole world will live in tropical slums and half the children of the world will be brought up in conditions which are unfit for animals. The fact is that every effort at development is likely to be swept away by the tide of incoming population, with the increase of one million a week. There are the racial problems which are going, I believe, maybe to poison all our efforts if we find that we are at loggerheads with the Afro-Asians in the world, particularly with the addition of 800 million in China, in which case all our other efforts at development can be put aside. All these aspects are the same, and as I look at them I feel that the need for international action is overwhelming.

I make one reference to what was said by the noble Lord, Lord Walston, just now. I do not know whether he intended it, but he gave me the impression that he believed that UNCTAD or international conferences are places where one makes speeches and nothing more; and that seemed to be the impression given by the Minister of this Government who went to make a speech and came away. International conferences are not held only for making speeches; they are places at which to work, to seek to find agreement, and places for settlement. To go to make a speech and come away is an insult to UNCTAD, an insult to the 140 nations there represented. I feel that we now have in this country an opportunity of leadership in the world greater than ever before. We are no longer an imperial Power, and a very good thing too; no longer a super Power, and I make no complaint about that. But we have an opportunity now, with the middle Powers and the smaller Powers, of leadership, that I believe we are throwing away.

We of all people, with wider experience in these matters, talk about commodity agreements. We in this country know more about commodity agreements than any other country. The Commonwealth Sugar Agreement that was made when I was involved with the work we did in the West Indies was an example to the world. In the cocoa agreement with West Africa again we were involved. We have a contribution to make which is second to none. If I may say so, the great tragedy of the last year or two has been that this opportunity of leadership is being thrown away. As to what we are doing now, I have no time to develop each particular theme but the first is that of undermining the United Nations. We walked out of the Colonial Committee. We say we will take no part in the discussion of the colonial issues which remain. We vote with South Africa and Portugal—we alone with South Africa and Portugal—on racial issues of Southern Africa. We show that we are in support of Portugal in its colonial wars. We refuse to accept the findings and opinion of the World Court on Namibia. We sell arms in spite of the ban imposed by the United Nations. Clearly we have shown that in the racial issues of the world we are on the wrong side. I understand why a Minister goes to Santiago and leaves. No Minister of ours can compare with the contribution of the Germans, let alone the Scandinavians. The German comes forward with positive proposals, and I look forward to finding out what the Chinese are going to say, because I think that in the racial matters of the world the Chinese will exercise an overwhelming influence, and I should welcome their assistance on the side of racial justice.

So we face a situation now where this Government have made it impossible to give a leadership to the world. What a wonderful thing it would be if we could say now, "We are the advocates of the Commonwealth; we are the champions of the new nations."! Who is better qualified? The Commonwealth is in disruption as a result of the actions of this Government. The United Nations is treated largely with contempt. In those circumstances how can we give a leadership to the world in the matters of aid? I speak with great respect—and if I say that I speak with respect of a section of the Conservative Government it is a matter to be noted—of the Ministry of Overseas Development, as it was. It has now become an administration, and I see no difference in the people who are actually doing the work. But in the understanding of the need for international aid, in the support which is given to the United Nations Development Programme, in the support which is given to the United Nations Population Fund, I welcome and admire what is being done, and I think that the Minister responsible has a good understanding of the need for multilateral aid.

But, my Lords, how can we speak in Santiago, and how can we speak later this month in Stockholm, how can we speak in the conferences of the world, when the British representative is known to be in fact a supporter and a subsidiser of the white-dominated régimes of Southern Africa? What I found most intolerable was that we were told we must constantly remember British interests, as if the British interests were contrary to the interests of the world. No country in the world needs world peace more than we do; no country in the world needs a good understanding with the developing nations more than we do; no country in the world needs a world which is growing generally more prosperous, and not only in small pockets or regions. To say that it is a British interest to take the side of white South Africa, and to say that it is a British interest to play into the hands of the Communists throughout the world; to say that it is a British interest to throw away the opportunity of world leadership in the matters under discussion is, I suggest, intolerable.

6.24 p.m.

LORD GARNER

My Lords, it seems to me that this debate is important because Santiago could be a turning point. But while I accept the word of the noble Earl, Lord Limerick, that one cannot expect miracles from the Santiago conference, nevertheless I was disappointed that the statement from the Minister did not appear to give any recognition of the fact that indeed the world as a whole has failed in recent years to deal with this gigantic problem, and that we have not yet succeeded in devising satisfactory international arrangements.

What has been happening in recent years, surely, is that the poor (to call them that still) and the poorer nations have become frustrated and are tending to grow more militant; and that in the industrial nations there has been a growth of disillusionment and, I think, a growing preoccupation and obsession with their own domestic affairs. Yet, as has been said so often in this debate, the case for aid is stronger than ever, and when I use the word "aid" I mean it in its broadest sense to cover all possible forms: capital aid, technical assistance, fair trading arrangements, sensible international monetary arrangements, but above all, perhaps, a sense of what I would term uncondescending compassion or, if that is too pompous, at least a deeper understanding of the economic difficulties that arise in the Third World.

There is a real problem here. Most of the developing countries were until recently under colonial rule. I am the last person to take exception to that fact. I think certainly British rule has a magnificent record as, if I may say so, was admirably exemplified by the noble Lord, Lord Caradon. But the fact is that most of these independent countries—and certainly the smaller ones—started life without any sophisticated infrastructure, which is required in the harsh modern world. I apologise to the noble Lord, Lord Tanlaw, for making that remark although I agree with the comment which was made subsequently, that although the prime need may well be in the rural areas, any country does require—to use the word again—an infrastructure, a central planning organisation, to organise education and planning and government as a whole in a reasonable way. But many of the developing countries, economically and organisationally, were like children (if one may use the phrase) expected to hold their own in a jungle of adults, a world in which most of the power was in the hands of capitalists and industrial nations.

The case for aid has been eloquently put in many previous speeches, both on moral grounds relating to the past and on grounds of self-interest relating to the future. The plain fact is that the world is one, and as the noble Lord, Lord Caradon, was saying we cannot divide any of these things: it is one and to my mind it cannot continue on its present course without an explosion, whether one thinks of the bomb, whether one thinks of pollution, whether one thinks of the population crisis—and here I agree most emphatically with all those speakers who have laid emphasis on the vital need to control population if we are to have any effective development at all—or whether one thinks of the corrosive division caused by the division of the world into haves and have-nots.

The need seems to me to be to work for a better atmosphere; to try to achieve a world order where power is not so blatantly and so obviously in the hands of the powerful. What I have in mind is, I think, something similar to what the right reverend Prelate the Bishop of Southwark spoke of when he referred to a "rethink". If we are to achieve this all have to play their part. Certainly there is a need for a better balance in the outlook of those in the industrialised countries. To quote one obvious example, there is a clear need to change the psychology of the West, which seems to think it reasonable to spend billions of pounds on preparations for a war which, if it occurs, will destroy us all, and at the same time seems to think it reasonable to spend a mere pittance on the sort of world problems which face us all and will affect us all and which we are discussing this evening.

But, my Lords, equally the developing nations must play their part. There have been far too many examples in the past of waste and corruption, of extragavant prestige expenditure, of an imbalance in planning between town and country, and —this point has been touched on before —of inadequately co-ordinated education programmes. Surely we do not want to encourage the developing nations to imitate the worst excesses of urban industrialisation, such as we know them in the West!

Then, too, there has been political instability, fighting in Africa and Asia, things which do not help to create a good image. More recently there has been a degree of intransigence, many quite wild allegations about plundering and exploitation, and remarks about still suffering from the yoke of colonialism. Again, there have been many hot-tempered, and in my view unjustified, Quacks from time to time on British policies. Confrontation is not the way to make progress in these matters. Unreasonable pressures will not succeed, and equally on our part a reaction of irritation, as I think Lord Caradon was suggesting, does nothing to solve the problem.

Therefore, I come back to emphasising the need for a change in atmosphere. But, of course, that will achieve nothing without our taking practical steps, which can take very many forms. In my view, capital aid is not necessarily the most important of the ways in which this can be done. I personally am not mesmerised by statistics and percentages, and I agree with the noble Lord, Lord Hawke, that a good deal of capital expenditure in the past may well have been unrealistic. What matters in capital aid, I think, is the quality and the spirit in which that aid is given and the purposes for which it is used. But nevertheless one cannot but recall the urgency of the note in the Pearson Report stressing the need for capital assistance, and, if I may say so, one can only remember with some humility that the British record is not a specially glorious one.

But in the long run I think it is trade that is even more significant. It has been highly convenient for Britain, no doubt, that the terms of trade continue to run in our favour; we can sell manufactured goods at what appear to be continually inflating costs, while paying for tropical products at depressed prices. But as has been suggested earlier, the picture looks very different in, say, Ghana, where world prices for her major export, cocoa, recently slumped disastrously. Then I think there is much scope for better international co-operation in world monetary arrangements, in shipping, and, more generally, in more genuine consultation. I would just add finally a small, but in my view vital, area where sometimes the most effective psychological attack on the problems can be mounted. I am thinking of the network of personal contacts at individual level which can do so much to help make for a better atmosphere. Such contacts are sometimes wholly, sometimes partly, sometimes not at all under Government auspices. I am thinking of the number of educators, doctors and engineers on contract, and the effects of such organisations as the Red Cross and Oxfam and UNICEF and so on which come to their aid in any disaster; of the hundreds of volunteers who go out every year to share their skills and live the life of the country, of the thousands of students from all over the world, including very large numbers from developing countries, who come to these shores for training and higher education. All these contacts involve communication between people and seek to find the right answer in a human way.

So, my Lords, I would urge the Government at Santiago to be forthcoming, to show the utmost understanding, as they have promised to do—and I was delighted to hear it from the Minister—and a readiness to help; and also perhaps I could say to show a little tact, sometimes patience, sometimes restraint. Finally, looking to the future I most earnestly hope that the British entry into the European Economic Community, far from blinkering us in a sort of fortress Europa, will encourage us to use our full influence with our new partners and, in collaboration with the United States, to work more imaginatively and more effectively for a world order which will embrace both developed and developing on a basis of greater sanity and fairness. In the long run tinkering, and complacent tinkering, will not help. Only radical solutions and a concerted effort by all will help us to see towards the end of this problem.

6.38 p.m.

LORD BROCKWAY

My Lords, I find myself in a rather strange position. Generally during the debates I am in a minority, but I have now listened to three speeches with all of which I am in agreement. I should like to express my appreciation to the noble Lord, Lord Garner, of the spirit of his speech. I think we were all deeply moved by the humane internationalism of my noble (and, if I may say so, loved) friend Lord Caradon. Lord Blackett is not here now, but I felt better that such a great scientist should have acknowledged that he had indigestion in reading all the reports and documents about the United Nations Conference on Trade and Development. I spent the Easter Recess reading them. Honestly, when I had finished reading everything on which I could place my hands, I felt that I knew less than I had known before I began to read. Those of us who follow the discussions at Santiago must be still more confused.

I think, however, that this is really the deep issue: is there to be confrontation at this Conference between the poor nations and the rich nations, between the developing nations and the developed nations? At the first UNCTAD there was undoubtedly that confrontation, and its results were miserably poor. At the second UNCTAD that was the impression left by the debates, but fortunately there were set up by the Conference commissions which since have had some constructive results. On the whole, I have been encouraged by the proceedings which have taken place at the third UNCTAD, by the contribution of its General Secretary, by the speeches of Dr. Mansholt, by the contribution of Mr. Robert McNamara, the head of the World Bank, and most of all—and to this I shall return—the constructive contributions made by the Foreign Secretary of the Government of Western Germany.

My only disappointment has been the contribution which the British Government have made to these discussions. It has certainly been lukewarm, even if it has not indicated indifference. While I should like to say something else to the noble Earl, Lord Limerick, on his first appearance on the Front Bench, I must say that his speech to this House to-day has been a cold douche on our hopes that the Conference at Santiago may lead to better results. I am disturbed because the attitude of this Government, which I accept as the worst Conservative Government there has ever been, has fallen so far below that of even previous Conservative Governments.

At the 1964 Conference, the present Prime Minister led the British delegation, and I pay tribute to him. He took the initiative in making the proposal for the generalised system of preferences. At the New Delhi Conference in 1968 a Cabinet Minister was present, and that Cabinet Minister contributed, on the whole hopefully, to the discussions. In Santiago, there is no Cabinet Minister. The Minister for Trade delivers an undistinguished speech, with hardly a constructive idea (despite all the hopeful contributions which have been made by others) and leaves after two days. My Lords, this is an absolute insult, not only to the developing nations represented at Santiago but to the Conference itself. There ought at least to have been at that Conference a Cabinet Minister; there ought at least to have been a Minister representing the Overseas Development Department; there ought at least to have been a representative of the Treasury. The attitude of the British Government in Santiago has given the impression, not only to the developing countries but to many of the developed countries (strangely, particularly those in Western Europe), of an attitude, I repeat, if not of indifference certainly of lukewarmness, which I think has been a tragedy.

I recognise that the most important way of dealing with the problems of the developing nations is by the extension of trade. They recognise that themselves. They have a sense of self-respect and self-reliance, and they do not want paternalistic aid: they would much rather they were able to develop themselves by trade. But it must he on fair terms. I do not propose, because of earlier speeches which have been delivered, to go into each of these issues in detail. Take first the International Monetary Fund. The peoples who have been worst hit by the crisis in currency have been the peoples in the developing countries; the peoples who were worst hit by the decision of the United States Government to impose a 10 per cent. surcharge were the peoples in the developing countries. Yet the International Monetary Fund is entirely under the control of the big ten rich industrialised countries; the poor developing countries of the world have no say at all. They are right now—and I hope our Government will support them—in demanding some representation in the International Monetary Fund.

Just one sentence about the Special Drawing Rights—that is to say, money borrowed for the expansion of circulation. It is now limited by the degree of contributions to the I.M.F. Only a fraction of the poorer nations who need it most can secure it. I believe that the developing nations are absolutely correct in urging now that they should have representation in the I.M.F., and be able to participate in the establishment of a new international monetary order. The second point that is essential when we are discussing trade is preferences. The Liberal doctrine of Free Trade and of GATT will not do. It is possible to have equality in trade only when there is equality in the nations engaged in that trade, and at present it is a trade between unequals. I hope that Her Majesty's Government will have sufficient sense of history to support Mr. Edward Heath, the Prime Minister, who in 1964 first put forward the proposal for a generalised system of preferences.

The third necessity for trade is commodity agreements. The peoples of the developing countries absolutely depend on the payments for their commodity products and their raw materials, yet the prices for these things are decided in London, Paris and New York. Again, the developing countries have no say in the decisions. There is the proposal for buffer stocks; and this idea might contribute. Stocks would be bought, and they would be some guarantee against reduced prices later. However, I want to suggest something very much bigger than any ideas which have so far been put forward. It is that following the Santiago Conference there should be established (because these decisions cannot be reached just at the Conference) commissions representing both the rich nations and the poor nations, to agree on guaranteed prices and guaranteed purchases over a period of years, so as to prevent the sudden fall to poverty which now occurs in the developing countries whenever prices fall.

Fourthly, so far as trade is concerned, there are shipping rates, which are very important. Forty per cent. of the volume of trade in the world comes from the exports of the developing countries. Their share in the merchant service is 8 per cent. At present, freight rates are decided by the Liner Conferences. Here again there should be representation of the developing nations, and it might well be that one method of showing preference would be in the rate allowed to their goods.

But, my Lords, while trade is the first essential, I recognise that aid is still necessary. We ought to feel some responsibility, because we were a great Colonial Power, and all the Colonial Powers used those territories to gain the foodstuffs they needed, to gain the raw materials they needed, and to enable investment in minerals, but left them without a balanced economy. When those nations obtained their independence they had to face the difficulties of that imbalance. The first reason why we should feel a responsibility for aid is because of our responsibility in the past as an imperial Power.

Secondly, I would urge that aid must be multi-lateral. The danger of aid if given by one Government is that strings are attached. Yes, my Lords, whether it is on the side of the West or on the side of the Communist countries, strings are attached; perhaps not in such terms, but inevitably that is the effect. Thirdly, much of the national aid which is given is tied to purchases from donors, and consequently what is purchased by the developing nations is often not what they most need. In my view, all Governmental aid should be channelled through the Special United Nations Development Fund. Fourthly, private investment and export credits should not be included when we are thinking in terms of aid. I welcome very much what the noble Baroness, Lady White, said in this connection.

May I read to the House the statement made by Mr. Robert Wood, the Director of Studies at the Overseas Development Institute? He wrote: When British Petroleum invests in Alaska, it never occurs to us to think of this as part of a British aid programme to the United States. When credits arc made available to facilitate the export of capital goods to the Ruhr, no one thinks that this is aid to West Germany. If such credits carry low rates of interest, they do so to enable Britain to compete with other suppliers and not because we want to help the Germans. Yet if B.P. invests in Nigeria "— and we heard the advertisement the noble Baroness read this afternoon— or if we make export credits available to Mexico, there is a disposition in some quarters to say that this is aid. But what has changed? Is business with rich countries business, and business with poor countries aid? All private financial investment in developing countries is for profit.

I want to read to your Lordships the contribution of Sir Paul Chambers, the former and very distinguished Chairman of I.C.I. This is what he said: It is no part of the duty of any private enterprise company to use the funds of the stockholders to help the development of an undeveloped country in such a way that the profits accruing to the shareholders are less than if the funds were used in some other ways. All private capitalist financial investment in the developing countries is aimed at profit for the shareholders, and how it can be regarded as aid to the developing countries I do not know.

It has been accepted that in the target of 1 per cent. of gross national produot, 0.7 per cent. should be Governmental aid. Her Majesty's Government refuse to accept even that. In 1970, only 0.37 per cent. of our gross national product was given as official aid, with more than 0.6 per cent. as private financial investment. The attitude of Her Majesty's Government, in denying any limitation of private investment when we are circulating aid, illustrates more clearly than anything how they are identified with capitalist profit-making interests. We have the ironical situation that, because of private financial interests the developing countries are now paying to the rich countries more every year than all the aid we are giving. In Latin America, 'four times more is being repaid to the rich countries than the rich countries are giving in aid. Many nations of Africa and Asia are paying back two or three times more in interest and dividend than the aid which is being given. For the developing countries overall, the repayments are greater each year than the aid which is contributed.

All profit-making investment should be excluded. France takes that view. I want to pay a particular tribute to-night, especially in view of the visit of Herr Brandt to this country, to the constructive contribution which West Germany has made at Santiago. It is quite extraordinary. West Germany has agreed that it will give to the 25 poorest nations—16 African, 8 Asian and 1 Latin American—loans on the World Bank at 0.75 per cent. interest to be repaid in 50 years; that is, less than 1 per cent. interest. West Germany has agreed that in the case of the other developing countries the interest shall be at the rate of 2 per cent. for 30 years. West Germany's grant level is 60 per cent. higher than our British contribution. I take the view that West Germany to-day, in its foreign policy, both towards the East and towards the developing countries, is giving a lead to the whole world. I wish to God we had a Foreign Office and a Foreign Secretary who could he equal to that kind of lead!

My Lords, what is to be the future of UNCTAD? It has no executive power. I hope that at Santiago agreements may be reached between the developing and the developed countries; but surely now it is necessary that we have much more than UNCTAD. UNCTAD can have its discussions and make its recommendations, but it has no executive power. We need now in the world an economic arm of the United Nations which will be just as strong as its political arm. We need that because the world is passing under the control of great multi-national corporations possessing -Europe, possessing Latin America, possessing Africa, possessing Asia. We need it because of an international pollution which may make all our technological advance of no account. We need it because of the over-population explosion, which, unless we have a great international authority to develop the deserts and farm the oceans, will bring starvation to millions. We need it because of the relations between rich and poor nations as illustrated at Santiago to-day.

My Lords, I am proud of the fact that the British Humanist Association, of which I am a member, has today issued this declaration: To overcome the man-made threats to the survival of life on the earth, to change our economic system and to create a humane society in which life can have joy, purpose and fulfilment—this is an immense task. It requires a world strategy, deliberately resolved upon by all nations". My Lords, we have to create the international instrument which may realise those purposes.

7.4 p.m.

BARONESS SEEAR

My Lords, I must first apologise that I was not in my seat when the noble Baroness opened this debate—I was foolish enough to try to get to your Lordships' House by train. At this late hour I certainly do not want to repeat any of the arguments which have been so powerfully put on the major matters connected with this debate; on such subjects as the population explosion and the vaster aspect of international collaboration in attempting to deal with the problems of the developing countries. I should like very briefly, and much more humbly, to attempt to pinpoint one or two minor aspects of this question, but aspects which are to some extent within our own control and about which we could take practical action here in this country.

First—and this touches, of course, on matters which have been raised already —it seems to me the greatest humbug (not to put too fine a point on it) to talk eloquently about the importance of aid and the suffering in the developing countries when we persistently exclude, by preferential tariffs, goods made in developing countries. The noble Lord, Lord Brockway, saw fit to point the finger at Liberal policies of free trade. My Lords, it may be that it is time we went further than this, and gave preferences to developing countries; but at least we might take the first step and remove the preferences against them which already exist in many parts of this country—and exist, my Lords, with the very strong support of people who would he the first to stress the importance of human rights the world over.

What we need is an educational programme to get all people in this country —employers, trade unions, the workers and the rest—to recognise that there has to be an international division of labour, and that there are established industries in this country which face contraction, if not ultimate elimination, if the developing countries are to be able to develop, to be able to join in international trade, and that we must not stand in their way. Of course, the people in those industries, be it employer or employees, must not bear the weight of meeting this contraction, and it is necessary for all of us so to organise the restructuring of industry in this country that there can be a gradual and orderly contraction of those industries and a recognition that goods of that kind will in the future be produced in the developing countries and not here.

Having said that, I want to talk about only one facet of this problem, which was raised by my noble friend Lord Gladwyn but which, to the best of my knowledge (I having not been able to be here for the whole of the debate) has not been subsequently developed; and this is the immensely important question of the training of the personnel of the developing countries themselves. Nothing is more important, I will not use the phrase "to enable those countries to stand on their own feet"—far be it from me—but to enable them to make progress themselves and in their own way; and we cannot help them better than by helping them with trained personnel. We in this country are particularly well placed to do just that. To me, my Lords, as a member of the staff of an organisation which is always accused or praised, according to your point of view, for having produced the majority of the revolutionaries in the British Empire, it was a matter of very great shame that a British Government saw fit to charge students coming from overseas, including the developing countries, a greatly enhanced fee in comparison with United Kingdom students. That situation still holds. It may not be a large issue, but to deal with it is something practical that we can do.

I can well see that there is a strong argument for saying that there is no reason why the British taxpayer should subsidise the well-to-do American student who wishes to spend a year or two studying in this country, but it ought not to be beyond our wit to be able to distinguish between a student of that kind and a student coming from a developing country. Every year I have the embarrassment—and it is an embarrassment—of teaching students from developing countries whose funds I know are got together by contributions from fifth cousins and from the most strange assortment of sources, and who often find themselves in very considerable difficulty; and yet those students are being charged a substantially larger fee than we charge to our own. If we are sincere in wanting to help developing countries, surely this is something that we can look at. It would cost very little in total terms, but it would make a great deal of difference in our whole approach to the students who come here and the contributions that we can make.

The second practical thing that we can do is this. We train people, yes, but not enough. I think we have to face that if we are going to make our contribution in training—and this is a thing that I think we are uniquely good at doing—then we have our own problem of expanding universities and polytechnics, it is true. If we are going to make room for these people, some of our own students will have to be a little more uncomfortable and a little more overcrowded or else we shall have to find still larger resources from public funds for the running of universities and training institutions of one kind and another. But it does not stop with the provision of training. Whenever one has any contact with the developing countries one is acutely aware of the shortage of experienced manpower to take responsible managerial or higher-level technical jobs. It would be of the greatest assistance if the larger companies—not only the larger companies, but it is the larger companies that have to take the lead—and the public employers, the nationalised industries in this country, would go out of their way to offer junior, middle, and indeed senior, management and technical posts to people from developing countries who have studied in this country. In my own experience I know competent, able men from the developing countries who have looked and looked again for openings of this kind and have been quite unable to find them.

If we want to help, this is one of the inexpensive but immeasurably valuable ways in which we can help them. If after qualifying here they were able to get jobs for three, four or five years in really well-organised companies where not only would they learn the basic knowledge that goes into the running of an enterprise, but would gain the experience of working in well-organised, well-controlled, successful businesses, it would cost the taxpayer nothing in fact but would be an enormous contribution to the development of the countries of which we are talking, and, may I add, it would be an enormous contribution to race relations in this country. For as anybody in contact with race relations problems knows, there is not much difficulty, except in areas of high unemployment, for people from overseas, coloured people, to get jobs of a sort in this country, but there is enormous difficulty for them to get promotion to jobs of a higher level; and if integration is going to mean anything we in this country need to see immigrants in higher level jobs. By encouraging development of this kind we should help race relations at home and we should very substantially help the development of the countries to which these men and women would ultimately return.

That brings me to the last thing I want to say, and I realise that I run the risk of becoming the House's biggest bore on two subjects, the subject of training and the subject of women. This evening I run the further risk of compounding this error by talking about the two together. I had the interesting experience eighteen months ago of attending a United Nations seminar in Moscow on the question of the employment of women. At this seminar there were a considerable number of women from the developing countries and they were crying out for assistance in education, and particularly in practical training. This is something with which with the diversion of really quite small resources we could make a disproportionately large contribution.

There are three reasons for looking at this question of the education and vocational training of women in developing countries. The first reason is that the position of women in these countries is lagging sadly behind the development of men, and this is socially an extremely dangerous thing. If you educate your men far ahead of the education of your women in a country in which society is changing very fast in any case, you are creating problems at the very heart and centre of people's lives to an unnecessary extent and in an extremely dangerous way. So, for social reasons, we need to pay perhaps disproportionate attention now to the education and training opportunities for women. The second reason is that they are able to make a big economic contribution if they are given the training. It is no secret that it is the tradition in many of the countries for women to do the lioness's share of the work, if I may put it like that. With training, they could continue to do a great deal of work—that will not be a new experience for them—but do it at a higher and more productive level. They are extremely good material for training courses that can be offered to them.

The third reason, and this came home powerfully in the Moscow seminar, is that the very small number of women in those countries who have had the education and training to tackle the jobs that need to be done are almost breaking under the burden because there are so few of them. Again and again they said, "We are asked to look after our overworked men; we are asked to bring up our families; we are asked to do jobs; and in our spare time we are asked to sit on so many committees and to run so many good causes that we have hardly time to do any of it at all adequately, and certainly no time for rest and refreshment in between". May I therefore urge that this Conference and Her Majesty's Government should look particularly at this not vastly expensive but, I think at this moment of time, immensely important question of what in the developing countries can be done to speed up better education and the provision of better training facilities for the women in the developing countries.

7.18 p.m.

BARONESS GAITSKELL

My Lords, I am very happy to follow the noble Baroness, Lady Seear, who has made her usual extremely valuable contribution to the debate. I am also very grateful to my noble friend Lady White for introducing the debate, this far-reaching and very important debate. I support everything that she said in her excellent speech, except that I am not so worried about Mr. Noble and about exactly what his presence at UNCTAD meant. The present Government are not notable for their tact, and what worries me more is that there are two excellent Ministers in the Ministry of Overseas Development—Mr. Richard Wood and Mr. Godber—and surely one of these would have been far better as a representative of the British Government at Santiago. I should like to congratulate the noble Earl, Lord Limerick, on his maiden speech and on his appointment. I do not wish to make any partisan criticism about his speech, I only wish that he had not been quite so cautious in his approach to development aid. This is a subject where exceptional measures are needed, and to invoke the word "realistic" all the time means that you never take off.

My Lords, aid and trade are the two sides of the coin of development in the poorer two-thirds of the world. Because the United Nations Conference on Trade and Development is not a legislative body, the first and second Conferences were not taken seriously by the rich countries, but were treated as an exhaust valve for the grievances of impoverished countries. I hope that UNCTAD III will make a more pragmatic impact because there is a serious strategic implementation for development to be considered by the developing countries. In the last few years there has been an increasing disenchantment in the affluent countries about aid and a slightly decreasing allocation of aid. As there is never enough aid to keep pace with the increase in the world population, there is more poverty in the world to-day than there was ten years ago. Mistakes have been made by donor and recipient countries, but lessons have been learned; and despite many discouraging statistics, the record of development in developing countries is still an impressive one.

Here, my Lords, I disagree with a great deal of what has been said to-day. How else during the 1960s could the poorer countries of the world have achieved the goal of a 5 per cent. economic growth? What are called the "small facts" of development—that is to say, roads, crops, disease prevention and schools, among other things—are apparent for anyone to see. The bad image of aid in the public mind is due more to ignorance than to indifference. Blindness about the achievements of aid and the stringency of its terms, and unawareness of how much of Britain's trade is with developing countries who never before have done so much for themselves—all this contributes to the rather poor image. In this scientific and technological age, the maxim "Charity begins at home", is not only short-sighted but is bad business, for poor countries are poor customers. That is why, valuable as private investment can be (and here I do not go along with my noble friend Lord Brockway) it was George Woods, an ex-President of the World Bank, who pointed out that the international flow of private capital tends to by-pass most of the very poor countries.

To-day, UNCTAD III, the Conference on Trade and Development, must outline a strategy to deal with the massive problems of aid repayment by the developing countries. This, I believe, is its main task. The problems are clear. Interest rates on loans to developing countries are increasing, the terms are becoming stiffer; a large percentage of the loans and grants are tied to purchases from the donor countries. The result (and I believe this has been pointed out this afternoon) is that about 50 per cent. of new loans must currently be used by the developing countries to pay off the interest and capital on old loans. Donor trade policies can thus injure the recipient countries.

A rapid expansion in foreign trade is essential for poorer countries, while aid is necessary to build up the savings crucial for their development. Despite this fact, trade agreements between the rich countries—and no one can deny it—are made with little concern for their effects on the weaker countries; so that trade patterns often cancel out some of the aid benefits. Can we wonder at Presi dent Allende's passionate condemnation of Western trade practices in his opening speech at the. UNCTAD Conference, when the share of world trade by the developing nations keeps on falling? Perhaps one of the most unfair aspects of international trading lies in the commercial policies of industrial countries which protect their own domestic agriculture. On this I agree with my noble friend Lord Walston. Many developing countries have to rely (and this has been said often before) on a single commodity or a few export commodities like coffee, sugar, textiles and so on. Professor Johnson, an expert on world trade, has estimated that a free trade in sugar would yield an increase of nearly 900 million dollars' worth of trade for developing countries and release for them about 500 million dollars for their own development. Developing countries are aware that the internationalisation of trade would be a tremendous resource for their development to-day.

More is known about aid and trade and development to-day than ever before. We now know that economic growth is not the end of the line and that economic and social development are indivisible. To-day, representatives at UNCTAD III will press for the use of free trade to help the poorer countries because the world suffers from a really bad distribution of world wealth. Exceptional action is needed for the modernisation and greater stability in developing countries where hunger and over-population generate political unrest.

My noble friend's Motion makes a plea that entry into the E.E.C. should not diminish our concern for a fair deal for poorer countries. The size of aid contribution from Germany, France and the Netherlands in this respect might reassure her, although most of the aid is bilateral and benefits their former Colonies. I am not sure that I take such a harsh view about bilateral aid, although I believe that multilateral aid is far better than bilateral aid. However, I read in The Times that West Germany, as my noble friend Lord Brockway has said, has taken the lead at the Conference. It is the first rich European country to order special aid concessions to the 25 poorest countries in the developing world. West Germany will give these countries capital and loans, at 0.75 per cent. interest, to mature over 50 years, with 10 years grace. The affluent donor countries spend—and here I am in a little difficulty for I cannot remember whether this is in dollars or pounds—6.3 billion on aid.

LORD BROCKWAY

My Lords, it is billions of dollars.

BARONESS GAITSKELL

We spend 5 billion on alcohol and 14 billion on cigarettes. We, the affluent countries, the donor countries, spend 25 times as much on armaments as on aid. So we must conclude that it is what a country is willing to afford that counts.

Finally, my Lords, Britain, because of her colonial past (and here I will echo what was said by my noble friend Lord Caradon, who was my boss at the General Assembly of the United Nations for four years), and because of her experience, is supremely equipped to take a star role in development aid. However, West Germany has taken the lead and has become the first European country with important concessionary proposals. It is often said that Britain has lost an empire and has not yet found a role. I believe that the role lies in development aid; because the growth in the world population—this flood that is happening—may defeat all the efforts of science and humanitarian drives towards raising the living standards of the poor people in the world.

7.30 p.m.

THE MARQUESS OF HERTFORD

My Lords, in calling attention to the United Nations Conference now in progress the noble Baroness, Lady White, has raised questions of such vast and world-wide importance and such overwhelming difficulties that any one individual in any one country might well be forgiven for feeling rather helpless. I do not believe that there is any quick or easy solution to the world-wide problems of poverty, unemployment and starvation. Although I was delighted to hear my noble friend Lord Limerick, speaking from the Front Bench, I did not get the impression that the Government have any quick or easy solution. I am afraid I got the impression that the Government feel that they are doing rather well; but I think that the message from this debate is that in fact that is not the case. I do not think that any Government are doing as well as they should be doing.

My Lords, there are two things I should like to suggest that we can try to do. We can, and should, make a serious attempt to influence public opinion towards the idea of greater generosity from the richer countries to the poorer ones. At the same time we should take a very careful look at the way in which aid is now being given. On the subject of generosity I would suggest that we are still a Christian nation and as such we have a definite duty towards our fellow human beings. That remark may be neither fashionable nor popular, but it is still perfectly true. We are a rich country, and we could do far more to help the poorer nations. For many centuries it was customary to give one-tenth of one's income to the Church; and though many of us nay far more than one-tenth of our income in taxation those taxes are only partly used for the benefit of people in need. Much of the money is spent simply in order to make our own lives more comfortable and secure, and ultimately even richer. I hate to say this, but perhaps we ought to be prepared to be taxed even more heavily than at present if we are ever to achieve a more equitable distribution of wealth not only as between richer and poorer people in this country but also as between Western Europe and so much of the rest of the world.

There are, of course, apart from Christianity, many perfectly sound reasons for doing this. There are the markets that we must develop for our exports. There are the political dangers of communism gaining ground in countries where the attractions of capitalism are less obvious than they are here. There are the dangers to peace in a situation in which two-thirds of the world is justifiably jealous of the standard of living enjoyed by a minority. A world in which the rich are getting richer and the poor are getting poorer cannot be a safe or a happy place in which to bring up one's children. Because we are fortunate enough to live in Western Europe it can make political sense only if we make at least some attempt to love our neighbours as ourselves.

My Lords, I am not ignoring the enormous amount which is already being done, particularly through the work of the United Nations. But having stressed the importance of giving aid it is almost equally important to look at the ways in which aid is now being given. The greatest single problem in the developing countries is surely unemployment, and it is getting worse, not better. Also in some ways it is becoming more painful; because when a man was unemployed in a farming area it was often possible for him to be kept by his family, even if at a fairly low level of subsistence, But now many people are moving into the towns and have no one to turn to. Not only have they no job but also no food, no shelter and no family or friends.

Many countries have made enormous improvements in their education system; but one cannot help wondering whether education provides the perfect solution when one remembers that in some countries as many as 50 per cent. of the young people leaving school are unable to find jobs. This can lead to the remarkable situation in which the average unemployed person is younger, fitter and better educated than the average employed person. As one who believes in the importance of education I find this puzzling and deeply distressing. It suggests that perhaps some of our priorities are wrong; that it is a waste of time for a poor nation to produce thousands of skilled engineers for whom there are no jobs and for whom there may never be any jobs. Is it possible that the aid-giving nations are making a mistake? Are we all acting on the assumption that our own highly mechanised, labour-saving technology is the only way to produce real wealth? Have we been assuming that a system which is suitable for a small country with a highly skilled, and very expensive, labour force, and with very few raw materials, is also suitable for much larger countries with vast reserves of unskilled and not expensive labour? As I have said, world unemployment is getting worse. Is it possible that we are actually making it worse by giving machinery which replaces men or by subsidising education in an entirely wrong way? Much of the aid that we give is tied to our own products, and one must ask whether our products are what are wanted. Does a farming community with masses of labour really require modern machinery? Would it not be better to allocate the money for seed and fertilisers?

My Lords, I do not pretend to know the answers to all these difficult questions. I can make only a few sugges tions. I suggest that some of our priorities are wrong and that we should approach these problems less on our own terms and more in terms of what is actually needed now in other countries. I question seriously whether the modern machinery which we produce is what is wanted in countries whose present assets are raw materials and which have immense reserves of unskilled labour. Should we not do more to encourage labour-intensive industries, small farms, agricultural co-operatives and traditional country handicrafts? Should we not send less machinery but provide more aid in the form of goods and capital? Finally should we not urge our own Government, and the Governments of other European countries, to think very carefully about the disadvantages of tariff barriers discriminating against the primary products the provision of which so often provides the prime source of employment in developing countries? I end, my Lords, by suggesting that our own future peace and prosperity may best be assured by our thoughtful generosity in the present.

7.37 p.m.

LORD REAY

My Lords, I wish to introduce an element of disagreement into this debate because I think that some of the basic principles of our approach are wrong and that this has consequences which are damaging to ourselves, to the developing countries and to the relationship between us and them.

The first mistake that we make—when I say "we" I am referring to the developed countries as a whole—is to accept targets for aid which we are unwilling to meet. These targets, currently of 1 per cent. and 0.7 per cent. of the gross national product, are not targets in the ordinary sense, targets which we set ourselves and can adjust ourselves according to our own judgment if we think that that is necessary. They are targets which we have accepted because we could not refuse the call of the underdeveloped countries that we, that is, the Western industrial nations, should make a sacrifice on their behalf. But having accepted the idea of sacrifice, the leadership of the rich nations have in no case been willing to take risks for the sake of this policy, basically because there is no obvious political need to do so. Official aid having risen during the early 1960s, has stagnated in absolute terms in recent years—the noble Baroness, Lady White, will correct me if I am wrong—that is to say, it has fallen further away from what is, after all, a moving target. Unable to adjust the target which we had not set ourselves our only recourse would he, and was, to give the facts themselves a better appearance; and so began those disreputable practices indignantly described by the noble Baroness, Lady White. I agree with the noble Baroness but I should like to know in what years she thinks those practices developed. These practices not only included ex-pressing private flows in the total figure for aid, but of replacing grants by loans, with the consequence that almost half the outlay now returns to us. It would be better if we gave less with less shame and less pretence. I therefore think that Her Majesty's Government are correct not to accept the 0.7 per cent. target at least until it is known that it will be achieved, and I hope that they will resist any attempt to have these targets revised upwards at Santiago.

Here I must refer to the romantic and extraordinary picture that the noble Lord, Lord Caradon, drew—I have heard him draw it before in this House—of this country having an opportunity now to lead the developing world. I find it difficult to believe that that is so to-day. In what direction should we lead them? How can we offer to lead them when what they want is independence for themselves; an identity of their own; some competition with ourselves and, through competition with ourselves, to achieve some equality of wealth with us? I really think that if a Government were to assume the task sketched for them by the noble Lord, Lord Caradon, the developing countries themselves would consider this an offensive pose.

BARONESS GAITSKELL

My Lords, may I interrupt the noble Lord for a moment? I do not think that either my noble friend Lord Caradon or myself—and I used the word "lead "—intended to lead the developing countries, but to lead in aid targets.

LORD REAY

My Lords, I do not think that that is so. If you set out to lead, this assumes that you are to lead them in a direction which is accepted by them. The consequence of our present policy is that our discussions are flavoured by a general tone of self-reproach—perhaps more so to-day than usual, because no one can bring greater oratorical gifts to the task of lashing our consciences than the noble Lord, Lord Caradon—and also by the renewal of resolves which it is basically known we will not try very hard to realise. All of this only stimulates the developing countries to blame us for their problems; to continue the discussion on colonialism long after that main problem has been solved; to revive the idea of colonialism and to apply it to modern situations in an ever more unrealistic manner; and to divert their attention and our own from the real choices, both economic and political, which they alone can take and which will primarily determine the out-come of these problems.

The second principal mistake that we make to which I wish to draw attention is the belief that we profess to have that politics have no part to play in the matter of aid. This proposition originates in the underdeveloped world, for the demand is again basically an aggression from their side; but the consequence of agreeing to it is that we put a distance between ourselves and the recipients of aid, either by making use of multilateral agencies or by other means, and so insulate ourselves from direct contact with those countries. But it is unnatural, not natural, that one country should assist another without regard to political considerations. And the fact that this is unnatural is proved by what happens. The major concentrations of aid have all had a political explanation: France in Algeria; Germany and the United States in Israel; Russia in Cuba and Egypt; the United States in Taiwan and South Korea; ourselves in the Commonwealth. and even within the Commonwealth, for example, in Malta. We must discriminate, and make it plain that we will discriminate, between countries which pursue one policy rather than another; we must not be eager to make most of our aid multilateral; and we must demand a change in some of the political attitudes taken towards us as part of the price of co-operation.

So we must be prepared to be more critical. It is only if the underdeveloped countries meet more aggression from our side, a more robust response to their public habit of blaming us for their situation, that they may be stimulated to accept that their own economic inefficiencies, their political prejudices and traditional cultural patterns are more of an immediate obstacle to their advancement than any sins of ours. In this context I should like to draw attention to a curious phenomenon. No underdeveloped nation has, I think, followed the example of Hong Kong in being a successful ex-porter on a large scale of manufactured goods. Why is this? The underdeveloped countries have increasingly large reserves of unemployed labour, increasingly well educated, increasingly concentrated in urban areas. At the same time, the rich countries pay increasingly higher wages to their working class to do manufacturing jobs which are now found to be of a type below their rightful expectations of career satisfaction. Why, then, is not a transfer of job activity, a movement in the division of labour, occurring to remedy this obvious dislocation? It is hard to believe that the explanation is economic: no economic factors can be common to all those countries. But if it is not economic, it is political; and if it is political, then I think the explanation must reside in a general unwillingness of the developing countries to make this leap and, in particular, perhaps, an unwillingness to comply with some of the considerations necessary to make this leap. And it comes to mind that a chief obstacle may be their unwillingness to establish a stable, co-operative relationship with Western firms, for these are likely to provide the best agents for such change.

An indication of this unwillingness to co-operate from the side of developing countries is provided by the measure that this Government took last summer towards indemnifying firms from the political risks of such investment. But it must be appreciated that the necessary willingness to co-operate will remain difficult for the developing countries for so long as their political approach to the Western World as a whole retains its present character.

It is one of the elements of UNCTAD that we should assist the underdeveloped countries over the matter of primary product prices, in particular, to compensate them for adverse price movements. Although it is not nearly so plain as many speakers assume that the terms of trade on the whole move unfavourably for the developing countries, nevertheless in this field much more remarkable gains can be made, as the activities of OPEC have shown, when the underdeveloped countries are able to act among themselves. In any case, there is less to be achieved from concentrating on the support of insufficient economic patterns of the past, rather than developing new patterns for the future. The contribution that we can make is one of helping to evolve a new political relationship. If we resolutely, but illogically, blame ourselves for the poverty of the rest of the world, it is only too simple for the Governments of those countries to agree that we are to blame. If we accept only those responsibilities that we can discharge—and we can never discharge the responsibility that we still assume in this field because we lack the political means to do so—the more readily will those countries reach responsibility themselves, and the sooner will they meet us as equal partners in a rapidly integrating world.

7.50 p.m.

LORD GREENWOOD OF ROSSENDALE

My Lords, I join in the general jubilation at the move that the noble Baroness, Lady Tweedsmuir of Belhelvie, has made from the Scottish Office to the Foreign and Commonwealth Office. I hope that the Scottish Office received a handsome transfer fee for the loss of so splendid a player, and I am sure that the Foreign and Commonwealth Office team will be greatly strengthened. May I welcome, too, the noble Earl, Lord Limerick, and compliment him on the very agreeable modesty with which he expressed himself this afternoon. I must confess I wished that the Department had provided rather better fare for him to try his Ministerial teeth upon, but my heart goes out to him because I have known myself what it is to have to make a speech on what I thought to be a thoroughly bad brief.

Turning now to the subject of our debate, in any war, civil war, plague or famine it is difficult to conceive of the full magnitude of the disaster, especially when that disaster is at a distance. As I listened to the debate in your Lord-ships' House this afternoon, I recalled a remark which a very distinguished actress made to me just before the war when she said it always seemed to her so much more tragic if a father and child were drowned in Chelsea than if a father and child were drowned in China. It is true that the further away things are, the less our personal experience, the more difficult it is to grasp the magnitude of the catastrophe. Distance, lack of personal experience and growing insensitivity blur our view and, I think, tend to sap our resolve.

But in to-day's debate there has been general agreement that the problem of world poverty is the gravest that we have to face, primarily because of our moral responsibility as a comparatively rich country. I hope that I shall not embarrass the noble Marquess, Lord Hertford, if I say that I agreed with every single word in his speech. Of course, there is also the responsibility we have because the poor countries will not accept indefinitely that poverty is part of a God-given order of things. It is therefore a little surprising that without the initiative of my noble friend Lady White, and the very welcome co-operation of the noble Lords who sit on the Liberal Benches, the issues being hammered out in Santiago would have passed almost unnoticed in this House. I think it rather bears out the view of the noble Marquess that, while the Mother of Parliaments can find endless time to discuss matters affecting the material wellbeing of ourselves and our own people, she becomes a little hard of hearing when the plight of other countries is crying for attention.

It may be a sign of lack of confidence on the part of Her Majesty's Government that they themselves did not seek an opportunity to consult your Lordships on the line to be taken at Santiago. I suspect that lack of confidence stems in large measure from the weakness of our representation there. As my noble friend Lord Caradon said, we have a tremendous contribution to make. I do not think that my noble friend spoke about leadership in any Chauvinistic sense; I believe he meant that we have a contribution to make and it is one which other countries would like to accept. We start the UNCTAD Conference with the great advantage that English is the official language of the Conference. And we throw that advantage away by sending, instead of a Minister of great standing, like Mr. Heath at UNCTAD I, a subordinate trade Minister. My noble friend Lord Ritchie-Calder may have been a little harsh when he accused Mr. Noble of treating the Conference flippantly; but other noble Lords have gone further than that, of course, and have said that to go to a Conference for two or three days and then leave it is insulting to the other delegates who stay for the whole of the Conference. The House is entitled to hear from the Government Front Bench to-night who is going to represent us for the rest of the UNCTAD Conference.

SEVERAL NOBLE LORDS

Hear, hear!

LORD GREENWOOD OF ROSSENDALE

We should like to know whether Mr. Noble is going back to the Conference; whether he is to be accompanied by any colleagues of the noble Earl and the noble Baroness who sit on the Benches opposite. There is no doubt in my own mind that in the original delegation there should have been not only Mr. Noble but Mr. Richard Wood, whose sincerity and ability in these respects are certainly not open to doubt. Indeed, I should have found it most acceptable if the noble Baroness herself had also been part of the delegation.

SEVERAL NOBLE LORDS

Hear, hear!

LORD GREENWOOD OF ROSSENDALE

But it certainly is not good enough, my Lords, to send a Minister not in the first rank and to allow him to come away before the real work of the Conference has started. My noble friend Lord Walston has apologised to me for being unable to stay for the concluding stages of the debate. I have some sympathy with him when he says that successive Governments have underrated the importance of trade and aid. I am sure that is right. I greatly regretted the fact that the Labour Government had, in fairly rapid succession, no fewer than five Ministers of Overseas Development, and that not long after my own brief tenure the Minister was no longer in the Cabinet. The present Prime Minister has downgraded the Ministry still more, so that it is now simply an Administration, under the Foreign and Commonwealth Office umbrella.

A number of well-defined themes have dominated this debate. The first is the question of the 1 per cent. We know that the Government have accepted the target of the total net financial flows to developing countries of 1 per cent. of our gross national product. I am quite certain that the United Kingdom is wrong, as many of your Lordships also believe. It is wrong in being almost alone—perhaps entirely alone—in refusing, as Mr. Noble once again refused in Santiago, to accept the principle of a separate target for official aid while holding to the 1 per cent. for official and private flows combined. Everything that my noble friend Lady White said on that was absolutely right.

Mr. Anthony Tasker has pointed out that the Government's policy really equates normal trade flows (which anyhow are largely unpredictable) with concessionary flows of capital designed to promote development. To concentrate exclusively on the 1 per cent. implies, quite wrongly, that these two flows are interchangeable. Like my noble friends Lady White and Lord Blackett, I would rather the Government chose the 0.7 per cent. for official aid than the 1 per cent. for which they take such credit. I believe it is hopelessly misleading and thoroughly dishonest, and I greatly welcome what I thought was my noble friend Lord Brockway's complete demolition of the Government's target.

In a remarkable letter to The Times on April 13 Mr. Richard Body, M.P., together with a number of other distinguished signatories, including my noble friends Lord Campbell of Eskan and Lord Caradon, summarised splendidly the plight of the developing countries. They wrote: … Their export efforts are hampered by fluctuating and falling prices of primary products and by quotas and tariffs against manufactures. Official aid from rich Governments carries a burden of capital and interest repayments and most rich countries, including Britain, have failed to implement the Pearson target for official aid of 0.7 per cent. of gross national product. Private investment also creates a problem of capital outflow. A World Bank report in 1970 esimated that annual take-out in profits was three times the inflow of new investment. Taken overall, there is a net outflow of resources from the poor countries and to the rich ones. This is surely indefensible! My Lords, I think the signatories to that letter were right: it is wholly indefensible.

I am not questioning the Government's wish to help. Our record is fairly good, as Ministers and my noble friend Lady Gaitskell rightly argue; but there is certainly room for improvement. At UNCTAD, Mr. Noble seems in the main to have been content to rest on our record rather than to support or to take new initiatives. The nearest he has come to supporting an initiative appears to have been his expression of belief that through the International Monetary Fund the developing countries should take a part in discussions on the reform of the international monetary system. I do not question the importance of that, but I doubt whether it received much of a cheer from the assembled delegates. Only a positive commitment to what the Labour Party has claimed—and I think Japan has now endorsed—that is to say, a linking of development with special drawing rights, will achieve very much.

A further theme to-day has been what Mr. McNamara called "repressive" trade barriers in his speech at the conference. I welcomed the remarks of the noble Baroness, Lady Seear. Mr. McNamara is quite right in saying that it is utterly illogical for richer countries to give aid to the Third World and then to deny them trade. I am sorry that the noble Lord, Lord Tanlaw, appeared to have so poor a view of statistics, because I was impressed by some of the statistics that Mr. McNamara gave. I was shocked, for example, to learn from him that United States tariffs on manufactured goods from rich countries were on average 7 per cent., as against 12 per cent. on those from poor countries. The comparable figures for the United Kingdom are 9 per cent. against the rich and 14 per cent. against the poor. For the E.E.C. the figures are 7 per cent. against the rich and 9 per cent. against the poor. It is a pretty shocking state of affairs.

The United States does not appear to have taken a line any more glorious than that of the United Kingdom. Nor do all the E.E.C. countries. Some at least—West Germany is an honourable exception—seem to have been much too busy protecting their own special interests. In that context it has been immensely encouraging to me, as one of those who fears the effects of the Common Market on the developing world and who believes that the Commonwealth producers—and most of all the sugar producers—have been badly led up the garden, to find that probably the most constructive line of all has come from Dr. Mansholt.

In his speech on Monday he boldly supported three demands for favourable treatment for the developing countries which do not seem so far to have evoked much enthusiasm from the Six or the United Kingdom. He called on industrialised nations to open their markets to permit a 15 per cent. annual increase in exports from the developing countries. He asked for future issues of "paper gold" within the International Monetary Fund to be used to help developing countries. And he called for a positive declaration concerning the £23,000 million debt burden now carried by the developing countries. Also greatly to the credit of Dr. Mansholt, he roundly criticised the six member countries of the E.E.C., before the Conference, for lacking "intellectual force and courage" in missing the opportunity to have initiated a new common development aid policy. If the E.E.C. countries and ourselves had been able to persuade the delegates of our intention to get more and better commodity agreements UNCTAD would have been a little more successful. I agree with the noble Lord, Lord Garner, that there is an important job to be done in that field.

Sadly, my Lords, I believe that we have missed an opportunity, one of which we in Britain were uniquely qualified to take advantage. We have missed it. I believe that, with the exception of Dr. Mansholt and Mr. McNamara, almost the whole of the Western world has missed it, too. The U.S.S.R. does not seem to have made any sparkling contribution to the discussions. Like my noble friend, Lord Caradon, I await with interest to hear what China has to say. But I am much more concerned with our own failure. That failure will certainly not escape the notice of the many poor countries who will go away from Santiago virtually empty-handed. To-day improved communications mean that within hours the world can be told of our failures and shortcomings. The posit ion is well summed up by Mr. John Hatch in the current number of Labour Weekly. He writes: We are living in an age of mass communications. Already hundreds of millions hear about the Americans spending over £55 on a throw-away paper dress, buying electric tie-selectors, purchasing 20,000 diapers a month for parakeets. He goes on, People living on £40 a year cannot tolerate such knowledge indefinitely without bursting out into some kind of action, however hopeless or indiscriminate. It may be that Mr. Hatch is exaggerating; but I think it would be wrong to ignore the warning in that last sentence. Poverty and anger, my Lords, are bad counsellors. Let us hope that before the conference ends generosity and wisdom will have taken their place.

8.7 p.m.

BARONESS TWEEDSMUIR OF BELHELVIE

My Lords, I should like to add my congratulations to the many that have already been given to my noble friend Lord Limerick, who made his maiden speech from the Front Bench today. I certainly feel that the experience that he brings to a debate of this character is a very great asset to the whole House. I should also like to say how very much I personally appreciated the good wishes given by the noble Baroness who opened this debate and by many other noble Lords, and also by the noble Lord the Leader of the Opposition yesterday, to myself in my new work: because I realise very well that, whatever its fascination, it holds formidable responsibilities. The noble Lord, Lord Greenwood of Rossendale, wondered whether the Scots had obtained a transfer fee. That I do not know, but I hope that the training given me by my Scots colleagues will stand me in good stead. I assure the House that I will do my very best to tackle all these problems with the same care and concern that has been shown by my noble friend Lord Lothian.

I would add my thanks to all those that have been given to the noble Baroness, Lady White, for giving us the chance to consider the very important issues before UNCTAD III. Without a doubt this debate has proved once again the very wide range of experience and interest in all parts of your Lordships' House on what is, after all, a vital subject; for that must be so if the great majority of the World's people to-day still live in extreme poverty, disease and hunger, while with so many others expectations soar and are very often achieved. That is why, as my noble friend said at the start of the debate, our delegation in Santiago will do its utmost to ensure the success of the Conference.

May I deal first with the points made by several noble Lords, and by the noble Baroness who opened the debate, about Ministerial representation in Santiago. My right honourable friend the Minister for Trade attended the opening days of UNCTAD because our delegations on behalf of the United Kingdom at these meetings have always been led by a Minister from the Department responsible for trade and industry. As has been said, at UNCTAD I our delegation was led by my right honourable friend the Prime Minister. He felt then, as he still does, very keenly about these huge problems. At UNCTAD II it was led, again, by the President of the Board of Trade. Of course, the Government realise very well the importance which members of UNCTAD attach to attendance by Ministers, but it must he recognised that it is not possible for Ministers to be away from their work in London to spend the whole five weeks at UNCTAD III in Santiago. Certainly this is true of all the developing countries. But it has been decided that a Minister at the Foreign and Commonwealth Office should return to the Conference, and I am happy to say that I have been asked to attend it from May 3 to 10.

SEVERAL NOBLE LORDS

Hear, hear!

BARONESS TWEEDSMUIR OF BELHELVIE

While I fear that this is not a Cabinet representation, my Lords, I hope that it will be acceptable to the House. This will be my first international meeting since I assumed my new office and responsibility for United Nations' affairs, and I look forward very much to the visit; to meeting old friends, and of course to learning much that is new. I would say to the noble Lord, Lord Caradon, that perhaps I shall be influenced by his progressive thought.

However, the first reports we have had from our delegation in Santiago are encouraging. There have been a number of very interesting speeches in plenary session, and announcements have been made which have been referred to in one or two speeches here to-day. But the importance of particular matters raised depends greatly on how they fit into the progress which developed and developing countries can make together in tackling what are really common problems at which they work throughout the year.

I am sorry that the noble Lords, Lord Ritchie-Calder, Lord Brockway and Lord Greenwood of Rossendale, criticised the speech in Santiago of my right honourable friend the Minister for Trade. I understand, however, from reports received, that a number of delegations considered it a British characteristic that it was right to promise only what one felt one could achieve. Indeed, this was the point made by the noble Lord, Lord Reay. We all know that the problems are enormous and fundamental and not least the need to get the right balance in our own economy if we are to be of real use to the developing world; and of course our record to date is as good as that of any advanced country. As the House knows well, UNCTAD'S work is carried on steadily between the formal four-year sessions. For example, the Trade and Development Board of 55 members usually holds a four-week session in August and September and reports to the United Nations' General Assembly. A great deal of the work of UNCTAD itself is extremely complex and interdependent with other international organisations. In fact, I understand that UNCTAD is a strong organisation backed by a professional secretariat whose achievements have been, and will be, the result of work throughout the year.

I feel bound to say that we think there is room for improvement in working methods. The agenda for the third Conference, for example, consists of over 30 items, and it seems to us that this agenda is too long for proper discussion, even over five weeks. And there is a formidable mass of documents before the Conference. I am advised that the quality overall is excellent, and I therefore naturally pay tribute to UNCTAD'S secretariat. But we should like to see an order of priorities introduced into the agenda, because, besides the plenary sessions, the Conference will work through six different committees of the whole, only three of which (because of logistic problems) can meet at the same time.

In addition, there will doubtless be a number of working groups, and there is a real danger that the Conference could become stifled under the weight of meetings, working parties, contact groups and resolutions. Our own priorities are the same as those in the Motion put before us by the noble Baroness, Lady White, and I felt that it might be most helpful to the House if I were to speak about those subjects that were not specifically mentioned by my noble friend, as well as try to answer the main points raised in this debate. If I cannot answer them all in an acceptable time for the last speech of a debate, I will certainly write to all the noble Lords concerned.

My Lords, I should like to deal with that part of this Motion which calls on us to ensure that British entry to E.E.C. will not diminish our concern for a fair deal for poorer countries which try to improve their living standards by their export trade. Our delegation in Santiago will stress our conviction that the United Kingdom's membership of the European Economic Community will improve our ability to help the developing world, and I was so glad that the noble Lord, Lord Gladwyn, said this in his speech. I felt also that that was the theme of the noble Lord, Lord Garner. But we in this country have always intended to join an outward-looking Community. After all, the Preamble to the Treaty of Rome includes these words: Intending to confirm the solidarity which binds Europe and overseas countries and desiring to ensure the development of their prosperity … ". As in our own case, most aid from present members of the Community is bilateral, although their aid policies are decided separately.

But in addition to bilateral aid from the Six, there is a multilateral contribution from the Community. This is a recognition of the obligation to share with poorer countries part of the wealth created by the Community's economic growth. The Community's collective aid is growing; and this, I hope, will perhaps reassure the noble Baroness, Lady Gaitskell. In 1970 it reached almost 221 million dollars, compared with 91 million dollars in 1964. This was in addition to bilateral and other multilateral aid given by members of the Six, for example, to United Nations' institutions. The Community's joint aid exceeded that given by a number of other countries. It was surpassed only by that of the United States, France, Germany, Japan, the United Kingdom and Canada. The main source of this joint aid has been successive European Development Funds. As noble Lords know, these make grants, loans and advances for social and economic development in the remaining French and Dutch dependent territories, and in the 18 African and Malagasy States associated under the Convention signed at Yaoundé. The third European Development Fund, set up in July, 1969, amounts now to 900 million dollars.

I know that fears have been expressed at Santiago about the effects of the common agricultural policy on the developing world; and it seems to me that this is the occasion on which to say something about it. With a number of exceptions and generally speaking, the common agricultural policy does not cover the commodities produced by the developing world. It is true that the declared aim of the Community is to become self-sufficient in agriculture so far as possible. But this policy can by definition extend only to temperate products, and the Common Agricultural Policy's mechanisms do not on the whole provide protection for the Community against the primary products which arc produced by developing countries and which are of such importance to them. I am sorry that the noble Lord, Lord Walston, is not here—he was good enough to say that he had to leave—because I thought that his speech on the necessity of trying to agree on commodity arrangements between countries was of great importance. He felt as a practising farmer in the Caribbean that to have stable prices and a continuing market for the primary producers was in many respects much more important than the aid we give in various forms. I was very glad to hear him say that he considered the Sugar Agreement a model of its kind. But United Kingdom aid is surely also in its own way a part of trade: each urges on the other.

I did not really believe the noble Lord, Lord Tanlaw, when—if I quote him correctly—he said that he did not think that the rich could help the poor. I believe that they can. On the other hand, I believed very much in what he said about intermediate technology, and also in what was said by the noble Baroness, Lady Seear, about the training of women, in particular. We undertake a great deal of technical assistance as well as capital aid; but when it comes to the training of women, in fact the developing countries themselves say who they wish to send to be trained, and I regret that so far they do not often include a large proportion of women. But the House will recall that in the debate last April I affirmed that Her Majesty's Government have accepted that developed countries should provide annually financial resource transfers of a minimum net amount of 1 per cent. of the gross national product, and we have undertaken to achieve this by 1975. I am glad to say that we reached the target in 1969 and 1970, and our first estimate is that we did so again in 1971. That will, I hope, reassure the noble Lord, Lord Blackett, although I do not think it will reassure my noble friend Lord Sudeley. I was not quite sure by the end of his speech whether he was for or against aid, but it was an interesting contribution.

The developing countries have suggested in the Declaration of Lima that the 1 per cent. target should be redefined, and I think the noble Baroness, Lady White, in her opening remarks also felt that. They proposed—and I think she did, too—that private direct investment should be excluded from the calculation. But, my Lords, Her Majesty's Government have never claimed that private investment is aid. The one per cent. target relates to the flow of financial resources which, by internationally accepted definition, includes private investment and export credits. The developing countries also wish to alter the basis on which the target for official aid was included in the International Development Strategy for the Second Development Decade.

My Lords, we do not think it wise to change targets which have been agreed only after considerable discussion and difficulty—because one must have a reasonable period of time in which to organise one's resources to reach that target. The noble Lord, Lord Greenwood, and many other noble Lords proposed that the developed countries should aim to devote 0.7 per cent. of their gross national product to official aid. As he rightly said, the United Kingdom, like many other donor countries, has not agreed the separate target for official development assistance. This is because the mixture of private and official aid flows must vary according to the different economic systems of the various donors, and this country has always been an important source of private investment in developing countries. The noble Baroness, Lady White, and indeed the noble Lord, Lord Brockway (who I think was very much more extreme in his views of private investment), questioned whether it should be there at all. But while it may be held that private investment is not aid, as is perfectly true, it is also true that it can contribute a great deal to development by virtue of managerial skills and technical knowledge, which many noble Lords have spoken of and have asked that we should supply in greater measure.

That is why the Government announced last year that they planned to increase the official aid at an average rate of 7.6 per cent. a year for the five financial years 1971 to 1976. In the last two years of this period there will be an increase of 9 per cent. a year, which exceeds that of expenditure in almost every domestic sector of our economy. Furthermore, official aid is now to be decided in constant prices of the relevant starting year, and net of loan repayments. The rising level of aid is therefore protected from price increases, and the actual gross annual total of new funds available will be enlarged by the addition of an amount equivalent to the loan repayments due in a particular year.

Our delegation in Santiago will also reaffirm our support for the general principle that aid should not be tied. My noble friend Lord Hawke was not very happy about this suggestion, but we feel that when we say that the bulk of aid should be untied it should also, if possible, be on a joint and reciprocal basis; and of course it was unfortunate that developments in the field of trade and monetary policies last year prevented the countries of O.E.C.D.'s Development Aid Committee from concluding a general agreement on untying. However, we are still working hard to achieve joint action and agreement on this very important matter. I should just add that in any case our contributions for multilateral institutions are all now untied; and in various ways, too, more than 30 per cent. of bilateral aid given by the United Kingdom to-day is untied.

The noble Baroness, Lady Gaitskell, raised a point which was raised also by other noble Lords and which I think is of great importance: I refer to the question of the debt burden of developing countries. This question will have to be raised by our delegation in Santiago. As the House knows, there has been much international discussion about this very difficult problem, and the World Bank recently produced a quite valuable study. It is true that for many countries their success in attracting capital resources for development enables them to meet the debt service charges without difficulty from their own expanding economies. But of course in a number of others the position is most unsatisfactory, and we believe that if serious problems are to be avoided the Governments of developing countries will have to make a special effort to ensure that capital resources are wisely used, and they will have to show some restraint in taking advantage of commercial credits.

The noble Lord, Lord Tanlaw, spoke in particular of what he calls "self help". I believe that all of us, however strongly we may feel that aid is necessary to the developing world, must never forget the position of the unemployed in this country, because we have to enlist the support of the people of this country to give more generously in aid. As my noble friend Lord Hertford said, we owe the tithe because we are among the richer in the developed world. My Lords, I think the House will know that the Prime Minister himself feels very strongly indeed about these problems, as he explained to the Secretary-General of the United Nations, Dr. Waldheim, and the heads of all the United Nations agencies when they were in London last week. We shall have to work out a system with other advanced nations whereby the developed world can not only give aid but provide trading opportunities to countries which are not only in deep economic trouble but almost swamped by a population explosion. I was glad that the noble Baroness, Lady Gaitskell, referred to the population problem, as also did the right reverend Prelate the Bishop of Southwark, who also very kindly apologised for having to leave early. It is perfectly true that there will have to be a massive effort in family planning throughout the world, and that is why we have the study in the Prime Minister's office, to see how we can help in this particular matter.

My Lords, the problems are immense. For example, should we try to get international co-operation to alter the terms of trade to the advantage of developing countries? To what extent would this affect our own industries and our own employment? How can we relieve the burden of debt in young countries, while at the same time trying to assure some stability for commercial investment? These matters involve economic and political decisions of the highest order. We are determined to tackle them, if only because our planet will never survive in peace in the grossly contrasting living condition's to-day. Therefore I would just say that we believe that we can make real progress in Santiago on a number of important issues. I shall consider very carefully again all that has been said during this debate, and I must thank noble Lords for the care and thought that they have given to the problems of UNCTAD III.

LORD HAWKE

My Lords, can the noble Baroness say something about Her Majesty's Government's attitude towards the specialist issue of S.D.R.s to developing countries?

BARONESS TWEEDSMUIR OF BELHELVIE

My Lords, we feel that this is very much bound up with the whole question of financial and monetary reform, and the fact of greater representation from the developing countries in the international forum. We believe that we shall achieve agreement on this.

8.31 p.m.

BARONESS WHITE

My Lords, I think the only disagreeable feature I have found in my relatively brief experience in your Lordships' House is that most of the debates seem to end at this rather awkward time. Therefore I will not detain your Lordships by trying to pick up any of the many interesting points that have been made, beyond saying to the noble Baroness how much we appreciated her extremely constructive speech, and also saying that while we still believe that our representation at UNCTAD should have been, at least for part of the time, by a full Cabinet Minister, we understand that the Government are so beset with problems that they cannot spare them, though I do not know how much they would be missed if they were not here. Short of that, we are of course delighted that the noble Baroness herself is to be there, and I think her speech to-night has shown that she will be a very worthy representative of our country. I am sure we are very proud that she will be going, and we wish her well.

I would warmly thank all noble Lords who have taken part in what I think has been a really admirably constructive debate. It is true we had two speeches which essayed Realpolitik, from the noble Lord, Lord Sudeley, and the noble Lord, Lord Reay. I have always thought that Realpolitik was very good as a corrective, but not a very good first principle. However, I will not pursue that point further. There were a great many interesting and stimulating speeches. I was agreeably surprised—it is the first time I have had the pleasure of listening to him—by the speech of the noble Marquess, Lord Hertford, with which, as did my noble friend Lord Greenwood, I agreed with virtually every word. It would be invidious for me to mention other speakers. I would just repeat my deep gratitude to everyone who has taken part in this excellent and very constructive debate. I hope that it will be listened to in the Department and that notice will he taken of it by our delegation at Santiago, and I am sure the noble Baroness will ensure that. Finally I must beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.