HL Deb 22 June 1976 vol 372 cc261-88

7.37 p.m.

Lord BROCKWAY rose to ask Her Majesty's Government what were the conclusions of the United Nations Conference on Trade and Development. The noble Lord said: My Lords, I regret that we are discussing this matter so late in the evening. I originally had this Question on the Order Paper last Thursday and was advised that there was heavy business that day, and it was suggested that I should take it this evening. Unfortunately, before the opportunity had arisen, a very controversial Bill occupied us to this later hour. But I do not apologise for raising this issue. In my view the discussion at this Conference, generally known as UNCTAD, was the most important issue of our time; more important even than disarmament and peace, because I believe that disarmament and peace in the world will depend on the degree of economic co-operation undertaken.

The present structure of the world's economic order was decided at the Bretton Woods Conference 30 years ago. It decided the condition of the exploitation of the natural resources in the colonial territories, the terms of trade between them and the developed world, and the financing of the development. But at the time of the Bretton Woods Conference none of the developing countries had independence, and therefore they were not represented. I do not think that anyone can look at the conclusions which were then reached without saying that they were heavily weighted on the side of the industrial nations and against the interests of the developing countries.

The situation has now changed. The nations of Africa and Asia have become independent, they are politically powerful, they are a majority in the United Nations Assembly; and they are economically powerful, as has been shown during the last few years by the oil producing countries of the Middle East. I do not endorse all that the oil monopoly in the Middle East has done, but it has revealed to the producing countries of the world how they can influence their economic relations with the developed countries.

With extraordinary unanimity, the developing countries have now prepared an integrated plan for a new world economic order. It was initiated by a committee of 77 developing countries. The 77 have become 113, and at the Nairobi UNCTAD there was absolute unanimity among all the developing countries in the demands which they made. This integrated plan is now item number one on the agendas of all international conferences. It was so at the Commonwealth Prime Ministers' Conference, and I pay tribute to the initiative which Sir Harold Wilson took there. It dominated a special session of the United Nations, it dominates GATT, it dominates the OECD and now, as UNCTAD at Nairobi has shown, it dominates that Conference as well. During the next three years the proposals of the developing countries for a New World Economic structure will become the overwhelming issue in all conferences between the developed and underdeveloped nations of the world.

Yet very little is known about these proposals. The media have not described them. I doubt very much whether one in ten of the Members of another place or one in ten of your Lordships knows what are the proposals of the new world economic order. In planning this speech I had intended to outline them; I hope that another opportunity will occur to do so. I refrain from doing so now only because of the necessity for reasonable brevity. However, let me say that they are so comprehensive—beginning at the roots of development, passing through every aspect of trade, concerned with finance and suggesting a new world economic authority—that they could not possibly be discussed fully at the Nairobi Conference; indeed, it would need a new Bretton Woods Conference lasting a year if they were to be discussed adequately.

The two main issues which were discussed at Nairobi were commodities and debts. In accordance with the proposals for the New World Economic Order, the developing countries demanded radical changes in the world community trading structure and a necessity for the prior establishment of an international common fund to stabilise those prices. There were three responses to that proposal. Dr. Kissinger proposed an international resources bank to finance the exploitation of natural resources. The developing countries rejected that because it would mean exploitation by private interests, including the multinational companies, while the developing countries are demanding that they should own their own natural resources. Secondly, France proposed immediate negotiations on an extended list of commodities, with an examination of the utility of a central financial facility such as the common fund. This French proposal was welcomed as an advance by the representatives of the developing nations.

Thirdly, the United States, West Germany, Japan and, I am sorry to say, the United Kingdom insisted on a case-by-case approach on commodities and refused prior consideration of a common fund. It became clear that the industrialised nations were deeply divided. They submitted two papers to the Conference, seven out of nine of the Members of the EEC, the Scandinavian countries and Greece, supporting the proposal of France to which I have referred. The United Kingdom, the United States, Japan and West Germany submitted proposals on the lines to which I have also referred, a much weaker paper. I am not surprised that Dr. Kissinger yesterday in Paris suggested that the West should speak with one voice to the Third World; I hope that it will not be the voice of the United States. I am glad that after Dr. Kissinger's speech, our Foreign Secretary made some reservations.

It is distressing to many of us that at Nairobi a British Labour Government should have sided with the most reactionary elements in that Conference on these issues. The final document accepted by the Conference requested UNCTAD: To convene a negotiating conference open to all Members of UNCTAD on a Common Fund not later than March 1977.

Secondly, it agreed: To convene in consultation with international organisations concerned preparatory meetings for international negotiation on individual products.

Thirdly, it was agreed: That there should be parallel negotiations on the Common Fund and 18 commodities.

These were bauxite, iron ore, manganese, phosphates, copper, tin, rubber, hard fibres, tropical timber, jute, cotton, vegetable oils, coffee, cocoa, sugar, tea, bananas and meat. Those represent the greater part of exports from the developing countries. Moreover, these negotiations would encompass such wide ranging objectives as improvement of market access, diversification measures and, very importantly, procedures for regular price reviews taking into account, the price of manufactured imports.

These decisions represent a big step towards the integrated programme on commodities which the developing countries have demanded. But there is a snag. There is no compulsion on Governments to attend these negotiating conferences and consultations. The resolution merely says that it is open to them to do so. UNCTAD will call the meetings, but there is at present no promise that the intransigent nations, which unfortunately included the United Kingdom, will attend. If their mood at Nairobi is maintained, it is doubtful whether some will. I ask the Minister now for an assurance that the British Government will be represented at these negotiations and consultations which were forecast in the decisions at Nairobi.

The second great issue is debts, and I must be brief in my reference to them. According to the International Monetary Fund, the developing countries have a balance of payments deficiency of 35 billion dollars, and it is estimated that they have a 10-8 million dollar debt in serving payments in 1975 alone. The developing countries asked for a debt conference to negotiate a settlement and for a moratorium for the least developed countries. I regret to say that the United Kingdom was one of the strongest opponents of those proposals, insisting instead on a case-by-case approach to the nations concerned. The decision of the conference was to urge the international institutions to advise on measures of debt relief by the end of 1976. On this issue, I shall content myself with saying to the Government that Britain, as an ex-imperial Power, has a great responsibility for the economic distress of many of the developing countries. We denied them a balanced economy by insisting that they served primarily our needs with supplies of cheap foods and raw materials. If for nothing else, we should seek to meet them in their present difficulties.

I come to my conclusion. Other issues were discussed at Nairobi, including the transfer of technology, access of manufactured goods to developed countries, problems of the least developed nations. However, little of substance was decided on any of these issues. There was no provision to consider the role of multinational companies, but I am glad that the OECD yesterday agreed to a code to govern multinationals. It is depressingly timid and thoroughly inadequate, but it is a beginning on which we can build for the future.

I want to submit to the Government that the insistence on a case-by-case approach to the developing countries is no longer realistic. There is the amazing unity among the developing countries which I have described and, today, decisions are generally being reached on a regional and group basis rather than just with national Governments. Comecon among the Communist countries, the European Community, the projected Western Summit on Economy, the appeal for a common front to the Third World made by Dr. Kissinger—all these indicate that we are now passing to group negotiations rather than case-by-case discussions with separate countries. There is a unity among the developing countries which will demand this.

Indeed, when the British Government, with their three allies at Nairobi, declined to accept a common fund, the developing countries replied, "We will do it our selves". Half the money necessary for a common fund to maintain prices has already been pledged. Are we really going to move to a position where there is to be this opposition between the industrialised and the developing countries, or are we to move towards co-operation?

Sridath Ramphal, the very able general secretary of the Commonwealth Secretariat, has just said, Nothing is more misguided than a belief in the developed world that fundamental restructuring, if postponed long enough, may be deferred altogether.

It will not be deferred. In these coming years it will be the principal issue at all international conferences, and I beg our Government, as the discussions take place, to seek agreement with the developing world so that there may be unity between North and South. The danger is of disunity, of the present conflict between East and West becoming a conflict between North and South. My hope after over 70 years in the Labour movement would be that a Labour Government today would seek to make their contribution towards that economic co-operation and the peace that would follow.

7.57 p.m.

Lord ELTON

My Lords, it is always difficult to follow the noble Lord, Lord Brockway, who has the gift of combining passion with lucidity at a level which is rarely equalled by anybody in this House. I was surprised for once to discover that I can follow him for some distance down the path he has taken—a greater distance than I have been accustomed to find myself following him in the past.

At the time when I was growing from adolescence to manhood, the world, which had been divided between the Axis powers and our allies when I was a child, realigned itself for a new and more subterraneous struggle. I came rapidly to accept, as did most of us in those days, that it was divided roughly into an Eastern and a Western hemisphere. They met upon the central German plain. On the one hand were repressive Communist regimes existing in a hierarchy of which the apex was Moscow and presenting a threatening front to the West, and on the other was an association of democratic countries of which the centre of gravity very rapidly moved to Washington and which presented a defensive posture to the East. The distinction between the two camps lay in their political systems and aspirations. Since then, the arrangement has again been re-shuffled and re-settled. The Eastern bloc is no longer a monolithic whole and tensions between Moscow and Peking are often at an acute level. Even the debate in Nairobi could be used as a platform for their ideological differences. In Western Europe itself, there is a Communist element of considerable force, as we have seen confirmed in the results of this weekend's General Election in Italy.

It is not only the case that the old, starkly simple, division between the East and the West has become more complex and less precise; it is also the case that this division is no longer the only world division of great consequence, as the noble Lord, Lord Brockway, has so eloquently said. There is another which will overtake it in importance within a generation, and with implications as potentially disastrous, if we do not now begin to take action upon it. This division is between those countries which have sufficient resources to maintain their populations in modest comfort and those which do not. In many of the latter the means do not always exist simply to keep all their population alive all the time. This division is not between the East and the West; it is between the North and the South; and it is a matter of very great significance indeed that the natural place for China is in the Southern half of that dichotomy. It is an odd, and a very important, reflection indeed, that in terms of material wealth both the Russians and the Americans are among the "haves ", while the Chinese are closest to the "have nots". In very general terms you can now say, in addition, that the countries in which you do not find people starving to death lie in the North, and the countries where you may, and in fact from time to time do, find them starving to death, are in the South. Those are the extremes, but there are levels of poverty short of actual starvation which are still unacceptable.

At the outset of our considerations we must, I think, accept that there is a very strong moral obligation upon us, as members of what we repeatedly claim to be a society informed by Christian principles, not to disregard the poor. That argument might be sufficient alone to move most of us at least to the theory, if not to the practice, of compassion, and most of us have by now received enough evidence through the media to know that there are very large areas of quite unacceptable poverty in other parts of the world. But the world, though it is shrinking, it still a big place, and altruism is apt to be shortsighted. Self interest, on the other hand, is not, and if we put on that pair of spectacles for a moment we shall at once see that, as happens with such striking frequency in this life, our moral duty and our own self interest counsel the same intervention.

It is not merely a matter of considering that securely enduring growth in the industrial countries cannot be built upon a world economy of which the near bankruptcy of the producing countries is a dominant or a recurrent feature. Some might even argue that it is possible to build on such loose foundations. It is a matter rather of counting heads and judging motives and allegiances. Whether expressed by Lenin or by Mao Tse-tung, it is the final objective of the Communist system to establish itself world-wide in place of existing regimes, including our own; and it is the right and proper objective of every country to secure for its own people the right and the means to survive, and to survive in something better than conditions under which that survival is from year to year in doubt. If it ever appears to these impoverished countries that we, the Group B countries, are sitting upon our wealth and denying to them the means of survival, we implant in them a very bitter spirit of resentment and we place a very real and compelling instrument in the hands of those who would unite them to overthrow the institutions of the free world.

Your Lordships have discussed the question of nuclear proliferation. If we think in terms of decades rather than years the day is not at all far off when a group of nations recruited on those principles, armed with those resources, and informed with a political philosophy entirely hostile to our own, could be a far more immediate and deadly threat to world peace than anything the cold war between the East and West has yet produced, and there would be the added spectre of a moral justification if it arose from our own intransigence. That is the context in which we should be looking at the efforts which Her Majesty's Government have contributed to the conclusion of UNCTAD at Nairobi.

When they got there what did they find? They found the less developed countries, numbering 113, with a united policy worked out in advance and actually published in advance, as well as the Manila Declaration. And what about the developed countries? Not only had they not concerted an approach to the problem with any of the Group of 77, they had not even concerted a policy among themselves; and the noble Lord, Lord Brockway, pointed out sharply that within Europe itself there was no unanimity.

My Lords, it is almost impossible not to quote from the leading article in the Financial Timeswhich followed the conclusion of the conference, and which sums this up in a nutshell: The issues were known well in advance. They had been discussed at countless previous meetings, including the seventh special session of the United Nations last September which ended in a surprising measure of agreement and was to have set the guidelines for future negotiations. Since then there have been talks in the OECD and the European Community as well as other less formal groupings. Yet the Western countries arrived in Nairobi without even the semblance of a joint position. Not even the EEC could speak as one, let alone the Europeans and the Americans. The central debate turned, predictably because of this démarche of the 77, upon the question of commodities. It was therefore an interesting exercise to pick through the reports in the Financial Times the same day's news on the commodity front. On the 17th, on page 16, they alluded to the speech of our Secretary to the Board of Trade, saying that he had taken a sober line, stressing the difficulties of falling in with the demands already tabled by the developing countries; and on page 17 there were two headlines— London coffee prices soar to new records". Tin prices reach new peaks". On the 8th, when the Americans had produced the idea of an international resources bank, like a rabbit out of a hat, the 77 had pronounced themselves cool upon it, and M. Fourcade had preferred a central fund, the Tin Council had raised the ceiling price by 100 dollars Malaysian and coffee futures were at a record high. On 11th May we learned that Brazil's coffee harvest was down from 28 million to 72 million bags—a staggering drop—and that, combined with the Angolan fall from 32 million to just over half a million 66 kilobags, amounts to an impending world shortage. The result of this is that the workers in Brazil—57 per cent. of whom are on a minimum wage, including those producing coffee—can now not afford to drink the stuff that they produce and they are drinking on a large scale an ersatz product of roasted barley; not, I take it, beer which would account perhaps for its popularity for other reasons.

On the day that Mr. Chou Hua Min launched his diatribe against Russia, not without some justification, Japan opted against the common fund, and the day after that coffee futures rose a further £42.5."Cotton demand ", we were told "outstrips forecast yields." Two days later there followed news of a voluntary freeze on speculative zinc trading on the London Metal Exchange.

One cannot therefore fail to look with some sympathy at the first aim pronounced in the resolution of the integrated programme for commodities. It might put it in perspective if I gave your Lordships a paragraph from the second McIntyre Report of the Commonwealth experts who have been working on commodities, as your Lordships' know: The prices of the principal commodity exports of the developing countries (excluding fuel) have fallen sharply since the peak period of March-April 1974, and although prices rallied to some extent in the latter half of 1975, estimates by the UNCTAD Secretariat show a fall of 17 per cent. in 1975. If these prices are deflated by the UN index of prices of manufacturers, the real fall is estimated at 30 per cent.; and a comparison of available data on the import prices of developing countries shows that this index greatly understates the real fall. My Lords, therefore there must be some sympathy with demands to equalise supply and demand as reflected in price. The avoidance of excessive price fluctuations is a prime aim of the document. It must be to the advantage of both producer and consumer to be able to predict at least the extremes within which these fluctuations can occur and to narrow the gap between them. Eighty per cent. of foreign exchange earnings of poor countries, after all, come from exporting raw materials.

The situation is this. The Group of 77 brought to the conference a prepared position; the B Group countries did not, nor did Europe. This amounts to both a political and a diplomatic defeat in the first instance for the Common Market and, in the second, for the United Kingdom. The United Kingdom and Germany were in fact participants in the disagreement. I would not say that one must lay the blame totally at the doorsteps of this country or of Germany because there are two sides to the argument. But the fact is that the prime objective was to reach an agreement, and it was not reached.

It is my contention, therefore, that our delegation should have arrived at Nairobi prepared; and if they had reservations, as have we, about the efficiency of a common fund, they should have sought not to damn but to modify it. After all, though there was an impressive superficial unity among the Group of 77, Sr. Alfonso Arias Schreiber of Peru pointed out in the last few days of the conference that the differences are not just between the developed and the developing nations but between the conservatives and the progressives within the two groups.

Therefore, my Lords, there is room for diplomatic manoeuvre. Our delegation had the example of our experience of Stabex to draw upon. They could also have built up the good will of the Third World instead of dissipating it almost entirely; and we had the example, not only of the Netherlands and of Norway, who pioneered a view with which we do not concur, but also that of France, which, with great skill appears to have put in a compromise bid, avoided the odium which we have incurred and to be signing the same document. Even the Secretary-General of the Commonwealth expressed disappointment at the role we had played. When the document finally emerged, not from the conference hall, be it noted, but from the Nairobi Hilton, it was to have attached to it an explanatory memorandum from our own United Kingdom delegation, of which the central paragraph reads: We understand the feeling among developing countries that a common fund is an essential element in that programme. We think it realistic however that the resolution notes that there are differences of view on the objectives and modalities of a common fund, and provides for further preparation prior to negotiations on a fund. So even in going into talks we are not committing ourselves to negotiations.

My Lords, that paragraph is open to a number of interpretations, and it must have been drafted with exceeding care. It is open to the Government in fact to proceed in an open-handed or at least an open-minded way, and I hope that they will do so. One does not need to subscribe to the totality of the philosophy of a common fund in order to do that. Otherwise, we look as if we are endorsing the translation of the UNCTAD actonym as, "Until next conference, try and delay". I would not wish to belittle what has been done by this country in the past. Mr. Dell, in his introductory speech, recited figures which were quite creditable to us in the guise of aid figures, both in the gross and as a percentage; but I think it is quite clear from this debate, quite clear from Press commentary and quite clear from conversations outside the Chamber that aid is not what is wanted. The developing countries want something more secure and something to which they themselves can contribute, and to which, in fact, a lot of them are already pledged to contribute on a scale which makes us look niggardly at present.

Turning (because it is late, and I do not wish to extend my remarks unacceptably) briefly to debt, I do not follow the noble Lord, Lord Brockway, there because, in my admittedly narrow and not expert opinion, problems of debt are better resolved by debt re-scheduling clubs set up to meet the circumstances of the individual country than by some great waiver across the board which can in fact only invite further indebtedness. I believe that much can be done about alleviating the terms of indebtedness. I do not think it is possible to write a debt off entirely without finally undermining the whole financial system of trade; but it is possible to be humane, and it is possible to be humane intelligently. This, I think, we should do, but not en masse; I think it must be done in the groups.

On technology, here I must tell your Lordships that there is a mountain of evidence to be digested for this debate. Really, one could almost wish it had waited six months. But, on technology, I would merely say this. It is a very delicate situation. One must realise that there are people in this country who see that if we export our expertise we are in fact also exporting our own earning power. On the other hand, the multinational company is in a position either to keep to itself or to disseminate its earning skills, and where those skills depend upon a back-up from a country which is not the manufacturing country but only houses the subsidiary, then there is justice in considering ways in which technological skills can be transferred. I wonder whether, now that the OECD has come out, as it did last night, with an agreement on the behaviour of multinationals in various fields, there are not precedents within this document itself (which will be given a trial run for three years, as I understand) which could be used usefully in applying the behaviour of multinationals in the technological field as well as the fiscal field in developing countries.

My Lords, I should like again, as I did at the time of the Statement, to welcome the extension of the GSP, which I think buys time, but time is valuable. I hope that the result of this debate, if it is read in another place, will be to effect the conversion, not necessarily to the whole idea of the common fund but to the principle of co-operative development in the undeveloped countries, of Mr. Judd, who pronounced himself at Nairobi as a good agnostic open to conversion. I think that is our function.

It always sounds slightly absurd and theatrical, in the advance of great events, to say that great events are coming because so often they do not, but I think that in the perspective of time great events are moving in this field, as the noble Lord, Lord Brockway, has said; and it is our children who will not thank us if, for misguided motives, we are less than generous or less than far-sighted in our dealing with what we have come to call the Third World. If I may revert to what I said in opening, there is a mass of world population uncommitted and underfed. There are rival ideologies standing on either side of it. One is ours, the other is not. What we are doing, if we are less than efficient and generous in our dealings now, is recruiting for the other side.

8.17 p.m.

Lord BANKS

My Lords, I think we would all be agreed that the relationship between the nations of the rich North and the nations of the poor South is a matter of vital consequence for the future harmony of the world, and we must be grateful to the noble Lord, Lord Brockway, for giving us a chance to broaden out the brief exchange which we had when the noble Lord, Lord Oram, repeated the Statement made in another place about the UNCTAD Conference on the 8th June. I said then that we on these Benches were glad that the Conference had not ended in failure and disagreement, but that I was not sure how much we could say it had been a success. In the interim, I have been confirmed in the view that the success was certainly only partial.

It was clear well before the Conference that commodities would he the central issue, and the UNCTAD had prepared plans for a common fund, as we have been hearing, for buffer stocks and for an overall framework within which individual commodities could he dealt with case by case. The object was, first, to iron out fluctuations in demand; and, secondly, to see that reasonable prices were obtained, in certain cases by pushing up prices—in other words, by securing a transfer of resources, and, of course, the example of what had happened with regard to oil was there. Then, thirdly, once prices were at an appropriate level, the intention was that they should be indexed to the cost of imported manufactured goods from the industrialised countries, so that the prices for commodities would not be eroded by inflation in the industrialised countries. This plan, as the noble Lord, Lord Brockway, has said, was endorsed by the Group of 77, now encompassing some 113 developing nations, at their meeting in Manila.

As the noble Lord, Lord Elton, has said, the industrialised countries had no coherent alternative strategy. In the words of one commentator, they were divided and fractious. The United States, West Germany, Japan and the United Kingdom emerged as the hardliners opposing the concept of the common fund and arguing that there should be a case-by-case consideration only of each individual commodity and that this would be the only efficient way in which to arrange things. But Mr. Cora, Secretary-General of UNCTAD, had already dealt with the case-by-case argument in an interview he gave in Europa in April of this year. He said then: I think there has been some misunderstanding. There has been a false juxtaposition between the UNCTAD approach which has been described as comprehensive and the case-by-case approach. UNCTAD also want a case-by-case approach but it has to be brought under a common umbrella. What we do not want is to deal with commodities in a fragmented, isolated way and to repeat the experience of the past. He went on to say: After the Santiago Conference in 1972, there was a decision to hold intensive consultations on 14 commodities on a case-by-case or product-byproduct basis. Nothing came out of it. We do not want to repeat that experience and to get into another round of futile, frustating negotiations on individual products. The Western objections to the common fund concept and the general framework within which individual commodities would be dealt with case by case, seemed to be based first on the argument that it would distort the free market economy; but it is possible to support the principle of the free market economy and yet to accept modifications of it in practice in certain particulars. It is difficult for a country which is a party to the Common Agricultural Fund to argue that in all circumstances the pure doctrine of Adam Smith must be applied without any modification whatsoever. Although, even so, it is possible that the Stabex arrangement which is incorporated in the Lomè Convention and which guarantees earnings and not prices, could be used in the case of some of the commodities just as it is being used within the more limited field of the countries who are parties to that Convention.

Then it is argued that all developing countries would not benefit from a plan of the kind which I have outlined. This would he because some of them have no raw materials to sell and yet require to import raw materials; and therefore they would be faced themselves with higher prices. But it is notable that at the Conference these very nations supported strongly the concept of the common fund and the argument that there should be special consideration for any poor nation which would suffer as a consequence of the implementation of the plan. Then it is argued that it would be inefficient to have the common fund because if the money was known to be there centrally it would be spent in any event whether or not it was required. But it seems to me since there is bound to be a transfer of resources, that it would be better to see in a global amount exactly how much was involved and how much was being applied. The Western countries that had raised the objections that I have mentioned a minute ago, were perhaps, some of them, for some ultimate form of co-ordination once the case-by-case method was being employed. But I think there is a strong case for saying that if you have the central fund you know precisely what is the overall amount being involved in the whole object.

Then there is the argument put forward by the noble Lord, Lord Robbins, when we had this brief exchange about the UNCTAD Conference the week before last, when he said we had to be on our guard against policies which might result in a pronounced turn in the terms of trade of this country at a time when we could ill afford it. Of course, in our present predicament we have to bear that very much in mind; we cannot ignore it. Half of our raw materials come from the Third World. Yet is it not true that there has to be some turn in the terms of trade, that this is implicit in the whole exercise? Would it not be much better that that turn in the terms of trade should be carried out on an agreed basis, an agreed, limited and controlled basis, rather than in the abrupt, crude and disruptive way in which it happened with respect to oil.

The threat of an increase in the price of oil, if there was not agreement in Nairobi, was one of the factors influencing the Conference, as well as the possibility that there might be continuing confrontation and hostility in the North-South dialogue when it was resumed in Paris. As the noble Lord, Lord Brockway, said, Dr. Kissinger's plan for a resources bank to invest mainly private enterprise funds in the exploitation of raw materials in the developing countries was narrowly defeated. I think that part of the reason for that was that many people felt that it was no use producing more if this only led to depressed prices. I think that the hostility to the common fund caused a reaction against the idea of the resources bank; but I would hope that that idea might not be lost sight of and might be introduced eventually alongside a form of the common fund. In the event, as your Lordships know, the Conference agreed that steps should be taken towards the negotiating of a common fund for the financing of buffer stocks and a detailed timetable was agreed for these negotiations and for negotiations on, I think, 19 individual products.

Sixteen industrial countries welcomed the resolution and I think it worth while mentioning them. They were: Austria, Belgium, Canada, Denmark, Finland, Greece, the Irish Republic, Italy, Luxembourg, Norway, the Netherlands, Portugal, Spain, Switzerland, Sweden, and Turkey. They welcomed the resolution. In a separate statement, France said that she, too, agreed with the terms of the resolution. The U.S.A., Britain, West Germany and Japan felt under no obligation to take part in a negotiating conference. They clearly remained hostile to the concept of the common fund. That is why I said earlier that success was only partial. Important industrial nations did not agree with the main decision of the Conference. The industrial nations were divided; the European Economic Community was divided, in contrast to the proposals of M. Tindemans in his report that they should always present a united front to the rest of the world. The United Kingdom had been classified as a hardliner and, in fact, was described as the "UNCTAD snail of Europe". Mr. Richard Norman Taylor writing in the Gaurdian on 3rd June said: Britain's attitude led to deep resentment among representatives of the developing countries". In conclusion, I should like to ask the noble Lord who is to reply for the Government these questions. Do the Government intend to attend the negotiating conference? Do the Government intend to contribute to the common fund and to participate in its operations? What plans have the Government to recapture the spirit of Sir Harold Wilson's initiative at the Commonwealth Conference at Jamaica last year to which the noble Lord, Lord Brockway referred? In short, what positive ideas have the Government for solving the very difficult problem of the economic relationship between the rich nations and the poor nations of the world?

8.30 P.m.

Lord RITCHIE-CALDER

My Lords, I rise to follow the admirable speeches that we have had. I want especially to thank the noble Lord, Lord Elton, for having spelt out clearly what is our embarrassment on this side of the House, and also my noble friend Lord Brockway for giving us this opportunity of discussing this subject. He went back to Bretton Woods. I go back further. I go back to raw materials and the Atlantic Charter. Most of us have forgotten that. It was 4th August 1941 when Roosevelt and Churchill pledged—Clause 4 of the Atlantic Charter—that all nations, great and small, victor or vanquished, should have access to trade and raw materials necessary for their economic development. It is ironic, looking back now, because they could do it. Between them they possessed most of what they were talking about.

However, the fact is that the British Empire—which represented a large part of that promise—is now divided up into the territories that we now call the less-developed countries. They are the people who now command the commodities which Roosevelt and Churchill were prepared to dispose of—in this case with the best intentions. We are no longer in a position to dispose of them. We are on the wrong side of the line. We are dependent now for these resources on the people whom we used to command. They are now in a position to deny us them. That is true of the United States as it is of Great Britain.

What distresses me is I have an awful sense of deja-vu. Thirty years ago in Geneva we were discussing what was a common fund and buffer stock situation. In this case, it was in relation to food and Sir John Boyd-Orr's plan which raised in every essential issue the matter we are discussing tonight. Eroding this away was the British delegation, although Ministers made the proper speeches. My noble friend Lady Summerskill, who spoke for the British delegation at the beginning, said she sat at the feet of Sir John Boyd-Orr and followed him in all that he wanted. Going through the lobbies, in the Palais des Nations the British Delegation consisted of no Ministers. They were entirely civil servants. A friend of mine made the remark about them: "There go the PUKES". This was a new word in circulation in Geneva—I had been away for a week—and it meant, "The poor U.K.". It had started off as the "PUs "the "Poor Under-Secretaries" because by this time they were leading the delegation and were being hammered.

This is the kind of thing that I do not understand. I cannot understand what happens in half the conferences that I attend in which I know the principles of my Party and my Government. I see the whole thing going to blazes in every case. It has gone to blazes in every conference I have been at for the past 10 or 15 years. I do not understand what we are doing. We have the right instincts, we make the right noises and then when we get into conference we deny everything that we are supposed to stand for. The speeches in Nairobi said the right things. All right rhetoric! When we come to the challenge, what do we do? We finish up, as has been pointed out, with Japan, the USA and West Germany against what was in fact our world of the Commonwealth, the people we should have understood. This is total betrayal. I listen to it, I see it happening and I cannot understand the reason for this or any basis on which this could possibly happen.

The facts are plain: the New Economic Order is as much part of our living world as anything is ever going to be. My noble friend Lord Brockway pointed out that this is an issue; it may sound like rhetoric, but they are trying to spell it out and break it down. Every time we draw their attention to our vulnerable areas, when we oppose them, that is when we are packing in the trouble. It is happening all the time. The 77 Group or the 113 Group, whatever it is, are not a solid bloc; they are amenable as the noble Lord, Lord Elton, pointed out, in the sense that they are people who can be convinced one way or the other as to where the depth of real principles may lie. Are we to let them down, as we are doing now, and have done it in one conference after another? The tragedy of Santiago —of which Nairobi was the follow-up conference—I do not know how we survived that as a nation; why we did not cover ourselves in sackcloth and ashes. Nairobi was not a total tragedy, but we must know what it meant when we start to spell out what our attitude to the common fund is, to debts, to technological exchange and so forth. Let us be clear: they know what they are after and we do not.

Of course, there should be a common fund—not a Dr. Kissinger fund; it is not going to be that kind of a fund. It is at least somewhere where people can turn, particularly the poorest of the poor who have little to offer in exchange. Secondly, the buffer stocks. How can anyone argue in the world today that we should not have buffer stocks, that we should not have some way of counter-balancing the fluctuations in times of collapsing commodity market situations, when we know we are going to need the materials?

As a result of the Atlantic Charter, the British Association for the Advancement of Science held a conference—an international conference—in London in I94I. There, under Stafford Cripps, our President (he was brought in not because he was a politician but because he happened to be a scientist at one time), we threshed out the commodities and the raw materials which the Atlantic Charter was supposed to cover. Look at it today! I went over them the other day; most of them have little relevance because the raw materials have changed their nature. At that time uranium was not mentioned. At that time the emphasis was on manganese because we were making armour plate. All the things which are now in one way or another becoming significant, in those days were not named.

Materials determine the history of the world. Who has a critical commodity or has not got it determines history. We have now such a situation that if we do not face up to it—and time is not on our side—we are going to be sunk. It is not just pointing to the warning example of OPEC; it is the fact that we will be forgotten in all our requirements and needs because the countries we are spurning are the people who presently will dictate what we will get or not get. Do not think they have not learned that lesson. Some may be the poorest of the poor and have nothing, but others can hold us one way and another to ransom. How can we in moral terms—because this is a moral issue, as has been stressed—deal with this?

It is an issue of peace and war, as my noble friend Lord Brockway pointed out, because in what happens in the evolution of this history we are facing possible disaster. There will certainly be continuing friction between North and South. Why cannot we understand? Who writes these briefs? Who makes these situations? How do they get us out on a limb from which we cannot climb back?—because, as has been pointed out, there was room for negotiation in this forum. The 77 or the 113 had prepared, as we had not, their plan of campaign and their strategy but they were not intractable, in that sense, until they found themselves being opposed and resisted on the simplest and most manifest terms. I went to the Seventh Special Conference of the United Nations. At that time I was enormously comforted. I was encouraged because the 77 (or the 113) of the developing countries were talking sense. There was no invective; there was none of the old violent rhetoric. They had come down to cases and were talking adult sense. We have put them back in the kindergarten.

8.41 p.m.

Lord ORAM

My Lords, one of the remarks made by the noble Lord, Lord Elton, was that it might have been better had there been a six months' gap between the Conference at Nairobi and this debate. I rather feel it would have been a good thing if there had been a gap before the summing-up speech that I am embarking on following this debate, because so many complex issues have been so interestingly raised that it is not easy to give a rounded reply, as I would wish. However, I am sure we all join in our appreciation of my noble friend Lord Brockway in giving us this quick, short opportunity for dealing, at least in outline, with the problem that we have all agreed is absolutely fundamental to the welfare and the continuing peace of the world. We can always rely on my noble friend to take this kind of opportunity whenever the interests of the Third World arc involved, and he does so in a splendid way.

The noble Lord, Lord Elton, began with a most interesting survey of the general world situation in respect of world poverty, and I hope he will not expect me to follow that, because there is a great deal in respect of the actual Conference at Nariobi that I wish to deal with. But the noble Lord made one general point with which I entirely agree. He gave example of the enormous fluctuations in commodity prices, and said that we must all therefore have the utmost sympathy with those who see their livelihoods dependent upon these fluctuations and that we ought to strive to do what we can about them. I do assure the noble Lord, Lord Elton, and my noble friend Lord Brockway, together with other noble Lords who have spoken on this theme, that there is no difference between them and the Government as regards the importance of that problem and the need to overcome it. There is no difference between us on that. There is, however, as has emerged at Nairobi and also during this debate, a great difference concerning the methods by which that highly difficult problem should be tackled.

When I repeated on the 8th June the Statement that the Secretary of State for Trade was making in another place, I ventured to express my personal anxieties about polarisation, not only within UNCTAD but within other world fora, which is characterised by the so-called Group of 77 or Group B countries, and so on. A number of noble Lords have expressed disappointment this evening that there was no unanimity of the polarisation among the developed countries at UNCTAD. I know what they mean: perhaps the case could have been made more effectively and put forward in a better way had there not been differences between the developed countries. But I would make this plea, that this wish for unanimity within groups should not be overdone, as I believe it has tended to be. I do not think we want confrontation in world fora. We want to build bridges between groups and, as the noble Lord, Lord Elton, pointed out, it seemed that although there was an apparent unanimity on many issues within the 77 there were underlying differences there as well.

There is another tendency at UNCTAD and at other United Nations gatherings which I personally feel anxious about. That is the tendency, before a conference is convened, to raise certain general targets expressed in very general terms, almost as symbols. Then, when the conference takes place, everything is tested by the adherence or otherwise to that symbolic target. I believe that this is an undesirable tendency in these matters.

At the UNCTAD Conference we are considering, I believe there was something of that character in the target which earlier had been raised about an integrated approach to commodity questions. Even the common fund tended to take on that aspect, of being a touchstone or a symbol of success, without necessarily the recognition early enough of the differences in points of view about such symbols. I am not saying it is not a good thing to have these. At least the conferences would have provided objectives so that we might set our eyes on the stars for guidance; but someone also has to look at the ground under our feet and to point out the possible pitfalls and the possible snares. I think this is really the difference in approach on this question of the common fund, on the one hand, and the so-called case-by-case approach, on the other hand.

The noble Lord, Lord Banks, gave an interesting quotation from the Secretary General of UNCTAD concerning UNCTAD III, in which he said there had in effect been case-by-case conclusions, but that nothing had come of them. I think there is an important difference in this matter if we compare UNCTAD IV with UNCTAD III. Those who advocated, as we did, the case-by-case approach also advocated a timetable and that is where UNCTAD IV differs from UNCTAD III. If, as has emerged, you have a case-by-case approach, to set the timetable of your Conference in March 1977 and to say that negotiations should be concluded by the end of 1978, and so on, makes a very big difference, or so it seems to me, in considering these commodity problems.

As I have said, someone has to look at the paths rather than at the stars, and I think my right honourable friend the Secretary of State was doing that in his opening speech. He would admit, as I would, that having done that he paid the price by a distinctly unfriendly Press and public reaction to what he said. But I urge upon my noble friend Lord Brockway that it is unfair, having regard to the whole picture—some of which I hope to convey in a moment—to characterise the role of the United Kingdom delegation as having been entirely reactionary. Indeed, if one reads the opening speech of my right honourable friend the Secretary of State for Trade, and with the benefit of hindsight now that the Conference is done, one can see a number of passages in it which turn out to have been wise pointers to the conclusions which the Conference ultimately reached by consensus.

In his speech, Mr. Dell stressed the need for concrete work by the Conference on the very difficult problems before it, and he expressed our willingness to participate in certain practical conclusions. I am glad to say that on a wide range of issues—indeed, on the great majority of agenda items—the Conference came to decisions that reflected the spirit of constructive compromise for which we had hoped in a 'range of areas; for example, on trade, technology and special measures for the least developed. Real, if unspectacular, progress was made in furthering agreement on measures and policies to assist the development of the Third World, and we should not allow the highly charged atmosphere surrounding one or two issues—which I agree were important and vital, but which dominated the scene—to obscure the workmanlike debate that characterised much of the Conference's work.

May I now turn in a little more detail to the question of commodities. The feeling has been expressed that the Government's stance at the UNCTAD Conference was unduly negative, and that the opportunity was thereby lost to achieve progress in a number of important areas. I do not accept this criticism. On commodities, the delegation went to Nairobi with the aim of gaining international acceptance for those principles and practical proposals set out in Sir Harold Wilson's Kingston initiatives. My noble friend Lord Brockway has, I think, paid tribute, if not today then certainly earlier, to those initiatives—

Lord BROCKWAY: And today.

Lord ORAM

and I hope he will recognise that within the resolution on commodities that was adopted by UNCTAD there is a considerable input from the Kingston Conference, which was an important contribution from our delegation. Leaving aside the issue of the common fund, on which there were obviously many differences of view, that aim was substantially achieved. As I have said, the Kingston principles are to a large extent embodied in the objectives section of the Nairobi commodities resolution. In addition, UNCTAD has set in motion precisely the kind of urgent programme of work on individual commodities advocated by my right honourable friend Sir Harold Wilson. Eighteen commodities have initially been selected for discussion and possible negotiation within—I stress this again—a tight timetable, and other commodities may be added to the list subsequently. It is now up to the producers and consumers participating in these discussions to show their will to make progress towards mutually beneficial arrangements.

A number of noble Lords have made the point that the question of commodities was the central issue before the Conference. The Conference adopted by consensus a resolution establishing an integrated programme for commodities. The main elements in this programme are a series of preparatory meetings, followed where appropriate by negotiations on particular commodities of export interest to developing countries; and preparatory meetings on a common fund, to be followed by a negotiating conference on such a fund. As my right honourable friend the Secretary of State for Trade indicated in the Statement that he made on 8th June, the United Kingdom Government very much welcome the proposed programme of action on individual commodities.

The products selected as the subject for early discussions were chosen by the developing countries themselves in their Manila declaration and programme of action. My noble friend Lord Brockway spelled it all out and I need not do so again. But he and the noble Lord, Lord Banks, asked me whether it is the intention of Her Majesty's Government to participate in this preparatory work. We will, of course, participate fully and constructively in the discussions on the eighteen individual products, and in the preparatory meetings on a common fund. We hope that these meetings will provide the opportunity for a full discussion on the role and function of a common fund, thus enabling participants in the negotiating countries to take informed decisions.

I believe the noble Lord, Lord Banks, wanted me to go further and asked whether we would establish ourselves on the point about making a contribution. This will depend upon the preparatory work that is done between now and the Conference, and certainly it is too early for me to make any commitment in response to the noble Lord. But in terms of participating willingly in the work that is forecast, I can give a positive answer.

As to the common fund, which has been at the centre of much of this debate, the word "agnostic" has been attributed to my honourable friend Frank Judd. Frankly, we remain agnostic about this common fund. Of course, we do not underestimate the importance attached by developing countries to the concept of a common fund which, as I have said, they see almost as a symbol of a political commitment towards the restructuring of commodity trade, though we believe that our own commitment has been clearly and repeatedly expressed without the need for such symbols. But we continue to question the claimed objective benefits which a single common fund would provide, and doubt whether the case for such a fund can be effectively evaluated before the financial needs of individual commodity agreements can be more clearly foreseen. In the end, we come back to a case-by-case approach. The resolution adopted in Nairobi recognised that there are important differences of view on the objectives and modalities of such a fund, and these differences of view exist among the developing countries no less than among the industrialised nations. As I have said, we hope that the preparatory meetings on the common fund will explore the whole question objectively and in detail to permit an informed decision to be made in due course.

Since a number of noble Lords have raised it, may I deal with the question of the so-called disarray or divisions on this question of commodities in the common fund within the delegations of the developed countries. In a conference dealing with matters of great political importance and technical complexity, it is only to be expected that divergent views will be expressed. If they exist, I believe it is best that they should be expressed. But the extent of the differences at Nairobi should, I suggest, not be exaggerated nor allowed to obscure the very closely shared approach of developed countries on nearly all issues. While, on commodities, there were differences of opinion, these were confined to the question of the common fund.

After commodities, the question of the indebtedness of developing countries was one of the most important topics at UNCTAD IV. It was a point very much stressed by my noble friend Lord Brockway, and it was gratifying to Her Majesty's Government that it was possible to arrive at a resolution which commanded the support of developing and developed countries alike and was adopted by consensus. I suggest to your Lordships that this is another matter regarding which Mr. Dell's speech can usefully be re-read. One passage in his speech is particularly helpful.

The resolution avoids the earlier proposals regarding generalised measures for debt relief and for an international debt conference, both of which we regard as ill-judged. Instead—I think that the noble Lord, Lord Elton, expressed his concurrence in the main with the Government's view on this subject—the developed countries have pledged themselves to give quick and constructive consideration to individual requests by developing countries which suffer from debt service difficulties; in particular, the least developed and most seriously affected developing countries. The agreement reached is wholly consistent with the view of Her Majesty's Government that debt situations must be dealt with—I do not apologise for using the phrase again—case by case as they arise. The reason for this is that individual circumstances are too complex and widely differing for generalised solutions to be appropriate. As I have said, however, the developed countries have shown their willingness to approach individual cases in a sympathetic manner and, in fact, this is current practice and policy. May I stress that the British delegation took a prominent part in bringing about the compromise on this question.

Two noble Lords—I think the noble Lord, Lord Elton, and my noble friend Lord Brockway—raised questions concerning multinational corporations and made particular reference to a more recent conference than UNCTAD IV; namely, that which took place yesterday in Paris. In response to their reference to this more recent development, I wish to say that the OECD code is a set of voluntary guidelines which cover policies on investment, employment, use of local resources, et cetera, and which are concerned principally with multinational corporation activities in the territories of OECD Member States. We accept them fully and regard them as a useful model for the universal code of conduct for multinational enterprises to be negotiated in the United Nations Commission on Trans-national Corporations. We fully support the work on multinationals in this body, which is recognised as the main United Nations focus of activity on this subject.

In this connection there was a reference to technology. The OECD code contains provisions on technology that could provide a useful input to the work of drafting a code of conduct on the transfer of technology by an UNCTAD group of experts. We are in favour of voluntary guidelines for Governments and enterprises. Provided that agreements are freely negotiated between buyer and seller, we regard the export of technology as a matter of mutual benefit—for us a useful source of foreign exchange earnings and for recipients a way to acquire technology.

I think that I have touched upon most of the important issues that were raised in the debate. I am conscious that we had a most interesting contribution from my noble friend Lord Ritchie-Calder upon which I have not commented. I am not really anxious or able to do so because my noble friend draws on such a history and on such an experience of scientific matters within the United Nations that it is extremely difficult to follow him. However, his contribution helped to round off what I hope your Lordships will agree has been a useful exchange on a subject of great importance, upon which it has emerged that there arc important differences. Nevertheless, the area of these differences is surely important in itself. For this reason, I repeat what I said at the outset; that is, that we are most grateful to my noble friend Lord Brockway for having given us this opportunity.

Lord BROCKWAY

My Lords, before the Minister sits down, may I ask him this question. All of us greatly welcome the statement that he has made; that is, that the United Kingdom will participate in the coming conferences and consultations which were left open at Nairobi. Is he able to say whether the United Kingdom's allies at Nairobi, the United States of America, West Germany and Japan, have reached a similar decision? Is there any information about that?

Lord ORAM

My Lords, I have no doubt that a certain amount of information exists, but neither in my notes nor in my head. If I can find out, I will certainly communicate with my noble friend.