§ 3.38 p.m.
Lord GORON WYROBE RTSMy Lords, with the leave of the House, I shall repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
With permission, Mr. Speaker, I should like to make a Statement on the two-day meeting of the Heads of Government of seven of the world's largest industrial democracies at Puerto Rico. The Meeting was held at the 686 invitation and under the Chairmanship of the President of the United States and I was accompanied by the Chancellor of the Exchequer and the Foreign and Commonwealth Secretary. The text of the Joint Declaration issued at the end has been placed in the Library of the House.This meeting was similar in nature to that held at Rambouillet last November and its purpose was to take stock of developments on the world economic scene since then. As at Rambouillet our intention was not to reach decisions or to establish policies. We do that at the national level or, as appropriate, in the European Community and in other organisations of which we are members. Our aim was rather to establish trends, to clarify objectives and to identify future problems.Our discussion ranged over the most important aspects of the international economic, monetary and trading scene. We also considered East/West relations in this context, looking forward to a steady growth in East/West trade on a sound commercial basis in order to ensure that these economic ties enhance our general relationship with the Soviet Union and its partners.And finally we had a long and constructive exchange about the role that the industrialised democracies must play in helping the developing countries to achieve their rightful hopes and aspirations.This was a substantial agenda for a two-day meeting. The fact that we managed to cover it illustrates one of the features of this kind of meeting. The numbers attending are small and compact. Discussions are business-like and to the point. We do not make speeches at each other. We talk frankly but also as briefly as we can, and a lot of ground is covered.This was, on the whole, a confident meeting. There has been a marked change since Rambouillet, and economic recovery is well under way in the world. Some of the other major industrial Powers are emerging faster from recession than we, and their growing strength will give further impetus to us. But there was also understanding of what seemed to me to 687 be three significant elements in the industrialised world's present move out of recession. First, growth rates are still modest. Secondly, at this stage of the economic cycle, inflation is worryingly high; and thirdly, unemployment is still much too high—higher than at the same stage in previous cycles. Different countries are choosing different ways of dealing with these problems. Each of us has a different economic history and historical memories, which are reflected in our priorities. But we have common objectives—sustained expansion, lower unemployment and progress towards eliminating the problem of inflation. There was a general recognition of the crucial role that the social partners have to play, and appreciation of the success that we in Britain are having in overcoming inflation through this new social partnership. The best hope for a satisfactory outcome in the years ahead, for reducing inflation and unemployment, lies in a policy of maximum co-operation between Government, trade unions and employers, coupled with fiscal and monetary policies that will encourage the investment and increased production that are essential to ensure that we sustain the present recovery.The spirit of Puerto Rico can be summed up in two words: co-operation and interdependence. Economically, we depend upon each other more than ever before. And there is growing recognition of the need to co-operate in our policies and actions so that our interdependence can be used to benefit both developed and developing nations. That was what we sought to express last year at Rambouillet. At Puerto Rico we were able both to note good progress made already and to look with confidence to further progress ".
§ My Lords, that is the end of the Statement.
§ 3.43 p.m.
§ Lord CARRINGTONMy Lords, the House will be grateful to the noble Lord the Deputy Leader of the House for repeating this Statement, but I confess that I find it very difficult to make any constructive observations upon it. It is very difficult to quarrel with the statement that growth rates are modest, that inflation is 688 worryingly high, that unemployment is still too high, that different countries are choosing different ways of dealing with different problems and, of course, that each of us has a different history. Also, I am very glad that the seven leaders of the countries agreed that we depend upon each other now more than ever before.
I think the kindest thing I can say about this Statement is that it is a good idea that seven world leaders should meet together and exchange views. I think the second kindest thing I can say is that if reports are true about what was said at the Conference, then what was said to United Kingdom Ministers about our economic policy does not differ very much from what is said from these Benches to noble Lords in this House.
§ Lord BANKSMy Lords, I join in thanking the noble Lord, Lord Goronwy-Roberts, for repeating the Statement made in another place. I am glad that the Government have found the meeting of value, because in the Press comment some doubts had been cast on its usefulness. It was not, as the Statement makes clear, a meeting for decisions but was, as I understand it, more an occasion for an exchange of views. But I wonder whether it is a good idea to have a Summit meeting at which four of the EEC countries are represented but not the other five. Would it not be better to co-ordinate our economic policies among ourselves and then be represented by one EEC delegation ?
I should like, if I may, to put three brief questions. First, I understand that differences were expressed as to the desirable rate of growth to be sought by the industrialised countries, and I wonder whether these were resolved. Secondly, was any pressure brought to bear upon the United Kingdom to reduce public expenditure further? Thirdly, was the subject of a common fund for commodities, as approved at the UNCTAD Conference in Nairobi, discussed; and, if so, was there any consensus as to how that subject should be approached in the future?
§ 3.45 p.m.
§ Lord GORONWY-ROBERTSMy Lords, I am most grateful to both noble Lords for their contributions. As usual, the noble Lord, Lord Carrington, brims over with kindness and I will certainly 689 convey his kind feelings to my right honourable friend the Prime Minister. This was not, of course, a decisionary meeting, as the noble Lord, Lord Banks, rightly said. It was a stocktaking meeting of the major industrial countries of the world, including Japan, and we were delighted to see, this time, Canada. So it was expected not that there would be new departures as a result of these exchanges of views and ideas, but that there would be confirmation of the very valuable consensus of purpose achieved in Rambouillet, and that was abundantly forthcoming.
As to the specific points raised by the noble Lord, Lord Banks, certainly there is a variation of view as to what is a desirable rate of growth. One doubts whether a rate of growth applicable to the whole industrial world can ever be agreed. It will naturally vary, at least to some extent, from one country to another. It is our view that, while inflation certainly must be fought determinedly, we must not lose sight of the fact that unemployment presents both political as well as economic dangers to democracy. Therefore, we take the view that the greatest possible growth compatible with the defeat of inflation must be purposefully sought.
I am having difficulty in reading my notes on the noble Lord's second point, so I will pass to the third which was about the common fund which was discussed so helpfully at UNCTAD in Nairobi. Indeed, UNCTAD was discussed very usefully at this Conference, and I have no doubt that the common fund was further explored as a possible help towards a solution of the North/South imbalance. I will deal with the noble Lord's second point later.
§ Lord ROBBINSMy Lords, may I inquire whether the world is eventually to have some kind of procés-verbal of these weighty deliberations? While expressing due gratitude for the reading of the Statement, I must confess that I am completely at a loss to discover the intellectual processes which resulted in these (shall I say ?) banalities.
§ Lord GORONWY-ROBERTSMy Lords, I am sure my noble friend will join me and others in the House in welcoming the initiative of the American President in seeking to hold this important Conference.
690 If at first sight the reports do not reveal new decisions or departures, I am sure that on reflection it will be found to have been, on the American initiative, a very useful contribution to the co-operation of the major industrial democracies of the world.
§ Lord HANKEYMy Lords, the Statement said that individual countries would be pursuing their own policies in order to face their own problems. Is not the important point that in facing their problems and dealing with them individual countries should not take action which damages the interests and impedes the progress of other countries ? Was this fact recognised at the Summit meeting and, if so, may we take it that the processes and procedures of the OECD and the Common Market will be employed in order to see that that is done ?
§ Lord GORONWY-ROBERTSMy Lords, I think there are two points there. Certainly while the industrial countries must necessarily for the foreseeable future follow national policies, nevertheless increasingly—this Conference and others seek to emphasise this—they must relate their national policies more and more to international needs. Secondly, while the Community—and I think perhaps this was the second point made by the noble Lord, Lord Banks—was not separately represented at this Conference, nevertheless my right honourable friend, the Foreign Secretary, and indeed the Foreign Secretaries of other European industrial democracies represented at this Conference, will today be making reports to the Community as to what happened at Puerto Rico, so that the Community is brought into full knowledge and, indeed, co-operation with the spirit and content of these talks.
§ Lord GEORGE-BROWNYes, my Lords, but being brought into full knowledge is not really what we Europeans intended, which was to ensure that Europe would be one of the major Powers in the world and would have its own view. I do not understand how my noble friend's answer carries us forward to what we intended to do (a) when we applied for membership before the Conservatives and (b) when we held the Referendum upon it. It seems to me that then we wished to be a European Power with a European view. That 691 must be different from simply saying, "We will tell other European Powers what our view is".
§ Lord GORONWY-ROBERTSMy Lords, I take my noble friend's point. It is important to realise that this was a Conference of industrial Powers, convened at the initiative of our American friends, in order to exchange views as separate industrial Powers on these questions. No doubt in another forum and for another purpose consideration would certainly be given, as consideration has been given in the past, to the Community's being represented as a whole. Of course, my noble friend is very active in promoting this process as rapidly as possible, and many support him. Others feel that in this case it is best to hasten slowly. Not everybody in the Community—and I do not mean this country—is always in favour of the Community acting as a unit.
§ Lord BOOTHBYBut, my Lords, would the noble Lord agree that in itself this Statement does nothing to strengthen the political power of the European Community?
§ Lord GORONWY-ROBERTSMy Lords, I do not think it was so intended. It was a Conference on economic matters that was convened by a number of industrial countries. However, in response to my noble friend Lord Hankey I added that today in Luxembourg the Foreign Secretaries of the European countries concerned will be informing the Community as a whole of what happened at the Conference; and that, I think, is a useful thing to do from the point of view of the cohesion of the Community.
§ Lord GORE-BOOTHMy Lords, as one who has had some experience of this kind of gathering may I say that, while it is very easy to look for precision and disappointing not to find it, none the less I find that if a conference of this kind does not go wrong, certainly it adds to the mutual wisdom of those very important people who take part. One expression is used in this Statement which I hope the Government will continue to use; namely, the expression " largest industrial countries ". So much prejudice and emotion is created by the constant use of the words " rich and poor " that surely it is better to take emotion out of the situation by 692 using a term that is perfectly applicable, does not mislead anybody and does not arouse emotion.
§ Lord GORONWY-ROBERTSMy Lords, certainly I agree with the first part of my noble friend's statement, and I give him full assurance on the second.
§ Lord GEORGE-BROWNMy Lords, may I insert myself again just to say that that was exactly the advice I used to get from my noble friend Lord Gore-Booth when he was running my office—that if we have done no harm it must be good; whereas we should try to do good and run the risk of doing some harm.
Baroness LLEWELYN-DAVI ES of HASTOEMy Lords, we have spent quite a long time on this Statement. As the House knows, we have another Statement to come. Perhaps the House will now wish to take the second Statement.