§ 3.38 p.m.
§ The LORD PRIVY SEAL (Lord Peart)My Lords, with the leave of the House, I will now repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"A meeting was held in Bonn on 16th and 17th July of the Heads of Government of Germany, Canada, France, Italy, Japan, the United Kingdom and the United States, together with the President of the European Commission.
"The background is that the world economy is not growing fast enough, and world unemployment and inflation remain too high. Last March, in conversations with Chancellor Schmidt and President Carter, I proposed that all our countries should aim to agree on a concerted approach to five main issues; namely, world economic growth, better use of energy, increased trade, more currency stability and assistance for developing countries. I am glad 167 to report that at our meeting at Bonn we agreed on a number of measures dealing with these points, recognising that our actions are interdependent, and that the measures required are different according to internal conditions that our countries face.
"Contrary to much of the prior scepticism, we achieved a good measure of success with undertakings being given for specific action by those attending. We recognised that the long-term problems of the world economy will only yield to sustained efforts over a substantial period. But as a result of this meeting, the Summit countries are pointed in the right direction, and the measures that will follow from the individual commitments will help to create more jobs and more trade without rekindling inflation.
"Our first concern was that the worldwide level of unemployment is too high. We agreed on the need to reduce the general level of inflation still further, and that higher growth and reduced inflation will contribute to greater currency stability and will also lessen the pressure for reducing world trade through protectionism.
"Some of the specific proposals for action that Heads of Government intend to carry out in their own countries are summarised in the Declaration which I am placing in the Official Report.
"Among them, Germany undertook by the end of August to propose to its legislative bodies substantial additional measures of up to 1 per cent. of gross national product in order to strengthen demand. One per cent. is approximately 13 billion deutschmarks.
"Japan undertook to determine in the months of August and September whether additional measures are needed to raise domestic demand to achieve a growth target 1½ per cent. higher than last year.
"On behalf of the United Kingdom I undertook to continue our policies to contain inflation so as to improve still further the prospects for growth and employment.
"The United States undertook to have in place by the end of 1978 a comprehensive framework for reducing 168 American dependence on imported oil by as much as 2.5 million barrels per day by 1985. The United States stated that it is also determined that by 1980 the United States' oil price should be raised to the world level.
"The European Community has agreed to reduce dependence on imported energy to 50 per cent. by 1985.
"There was general agreement on the need for increased production particularly of coal and nuclear energy. The United States and Canada both stated their firm intention to continue as reliable suppliers of nuclear fuel within the framework of effective safeguards.
"We welcomed the progress made in the multilateral negotiations now taking place to improve and strengthen the international trading system. We called for them to be concluded by 15th December 1978. In this connection Japan stated their intention to work for an increase of imports to Japan, and to keep the total volume of Japanese exports for 1978 at or below the level of 1977.
"Throughout these discussions we were very conscious of the needs and interests of the developing countries.
"Our efforts to strengthen our own economies will be of indirect benefit to a number of them, but they need to make more direct economic progress. They also need increasing flows of financial assistance and other resources, and we noted with regret that the COMECON countries do not take their due share in this matter.
"We agreed that the lending of the International Development Association should be enabled to rise annually and in real terms. We also agreed to work for a successful conclusion to the negotiations on a Common Fund, to continue with efforts for individual commodity agreements, and to ask the World Bank to examine the prospect of financing hydrocarbon exploration to meet some of the needs of the developing countries. I suggested that we should study the possibility of doubling the capital of the World Bank.
"As regards international monetary policy, it is our view that implementing 169 the comprehensive measures I have outlined will help to bring about a better pattern of world payment balances, and thus lead to greater stability in exchange rates. Monetary authorities will continue to intervene to counter disorderly conditions in the markets. The meeting was informed of the proposals made at the last meeting of the European Council for a scheme for monetary co-operation, and the European Community representatives undertook to keep the other participants of the Summit informed.
"We reached an important agreement among ourselves to combat international terrorism through the hijacking of passenger aircraft. In particular, our countries will in future halt flights to and from countries which refuse extradition of or prosecution of those who have hijacked aircraft and/or do not return such aircraft. We urge other Governments to join us in this commitment. It is our joint intention that this important new policy shall operate immediately.
"Finally, Mr. Speaker, we instructed our representatives to convene by the end of 1978 in order to review the progress that will have been made as a result of this Declaration. It represents a combined attack on the economic problems that our countries confront. The measures on which we agreed will mutually reinforce each other. Their total effect should thus be more than the sum of their parts. We undertook to commend them to our Parliaments and to seek public support for the policies and measures that will be required and this with confidence I now do"
§ My Lords, that concludes the Statement.
§ Following is the Declaration referred to: