HL Deb 13 April 1978 vol 390 cc787-90

3.17 p.m.

Lord BROCKWAY

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what response has been given to the proposal of the Commonwealth Heads of Government in the Pacific and Asian Region that a meeting should he called at ministerial level to advance international consensus on the establishment of a Common Fund as proposed by the Third World Committee of 77.

Baroness STEDMAN

My Lords, the meeting is being held today and tomorrow in London. We welcome this opportunity for an exchange of views in the Commonwealth, which we hope will make a positive contribution to wider international consultations on the prospects for a resumption of negotiations on the Common Fund.

Lord BROCKWAY

My Lords, while welcoming the meeting, of which I was aware, may I ask the Minister whether special consideration will be given by Her Majesty's Government to the three major differences which have occurred about the Common Fund—first, the indexation of prices and imports; secondly, Government contributions to the Fund; and, thirdly, the use of the Fund for the diversification of production?

Baroness STEDMAN

My Lords, I am advised that there are two, not three, difficulties which the Conference will be looking at: first of all, the sources of finance for the Fund's operations in support of the international buffer stocks in order to stabilise the commodity prices, and, secondly, the Fund's role in respect of commodity measures other than buffer stocking. On the first, on the direct contributions, we and most of the other developed countries believe that the capital structure of the Fund's buffer stock facility should be based on the international commodity agreements, and this reflects the principle that producing and consuming countries within the framework of the ICAs must themselves bear the prime responsibility for buffer stock financing.

On the second problem, we are not yet convinced that a case has been established for new financial facilities for the Fund to support other measures. The Group B countries, which are mostly the developed countries, have made clear that their minds are not closed on this issue and they would be prepared to consider a rôle for the Fund in this area. We, ourselves, are doing what we can to encourage other developed countries to think very seriously about the scope and nature of this possible second lead of aid to the underdeveloped countries. These are all things that will come under discussion at the Conference being held today and tomorrow.

Lord BROCKWAY

My Lords, I thank the Minister for that very detailed reply. Would not the responsibility of the commodity agreements for costs mean increased poverty for people in the developing countries and increased prices for the consumers in this country? Cannot we follow the example of the six European countries which have now agreed to Government contributions, the Netherlands even making a substantial offer in order to meet the hunger which there is in half the world today?

Baroness STEDMAN

My Lords, it is true that the Netherlands and the Scandinavian countries have leaned rather more towards the view of the so-called Group 77. We hope our approach is a positive one on this matter. We stand by our commitment to establish the Common Fund, and we are by no means inflexible. We are doing what we can to try to influence the other countries. Informal contacts are being made with all concerned. We shall try to get all the countries to indicate informally, and without commitment at this stage, the elements of flexibility in their thinking. Then, on that basis, we can go for even better things.

Lord BALOGH

Does the noble Baroness not realise that commodity schemes do not benefit the poorest people and countries, because the exportable commodities are a source of wealth which most of the poorest countries do not have?

Baroness STEDMAN

We are supporting the trading negotiations for the commodities in order to try to stabilise the prices of these commodities at a time when they are in short supply. We have done a lot in this form. The other developed countries are also doing a lot to help in this way. I do not completely accept that the actions we are taking are to the disadvantage of the poorer countries.

Lord ELTON

Does the noble Baroness agree that these discussions are very important preliminaries in another sense to the Lomée meeting which is to take place in September? Will she assure us that the diplomatic preparation by the Group B countries which was so conspicuously absent in the latter stages of the last UNCTAD meeting will be supplied on this occasion, so that the developed countries have an agreed policy with which to meet the Group of 77? Does she, in that light, take on board the contention of the Foreign Secretary of Jamaica that the Stabex and the Common Fund principles are not exclusive but may be complementary?

Baroness STEDMAN

I cannot commit my right honourable friend the Foreign Secretary by suggesting what would be his view on the last issue. What I can say is that we are doing what we can as a Government, and through all the means at our disposal, to try to encourage the other developed countries to come to some general agreement and to be flexible as to the way in which they can help.

So far as aid is concerned, the planned level for the aid programme which we gave to the underdeveloped countries in 1977 and 1978 was £623 million. Then, for 1978 and 1979, we set it at £669 million. Despite all the constraints that we have had on public expenditure, it has been possible to increase that level for 1978-1979 by yet a further £20 million—that is, to £689 million. That, I am sure, is an indication of the concern that Her Majesty's Government feel for the poorer countries. I am sure that that provides positive evidence of the real concern that we feel and of our intention to do what we can with the other developed countries.

Lord ELTON

While accepting that assurance and, indeed, welcoming it in part, will the noble Baroness not also accept that, while it is admirable to encourage a shared view among the Group of 77, it is more important first to get a shared view among our own friends?

Baroness STEDMAN

That is one of the objects of the meetings that are being held today and tomorrow.