HL Deb 10 June 1980 vol 410 cc160-3

2.37 p.m.

Lord HATCH of LUSBY

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 whether they are using their influence in the International Monetary Fund to modify its terms to Third World countries.

The MINISTER of STATE, TREASURY (Lord Cockfield)

My Lords, the IMF's role is to provide balance-of-payments assistance to its members and to help them take whatever corrective measures are needed to adjust their economies. Assistance from the Fund is essentially of a temporary nature, and this means that the Fund must ensure, by the imposition of conditions where necessary, that advances are repaid. The Fund's guidelines were revised in March 1979 and, in the light of this, Her Majesty's Government do not consider that any special initiative on their part is called for.

Lord HATCH of LUSBY

My Lords, may I ask the Minister to address himself to a specific example to illustrate the point behind the Question? Does he agree that in the case of a country like Jamaica—when it is short of foreign reserves as a result of massive increases in oil prices, high import costs and declining commodity prices—it is a scandal that the IMF should make it a condition of supporting its claim for foreign reserves that there should be massive devaluation, substantial increases in import prices, severe restrictions on budget expenditure—

Several noble Lords: Reading!

Lord HATCH of LUSBY

—and a relaxation of price controls, causing drastic cuts in social services, in addition to an already long queue of unemployed numbering between 10,000 and 11,000? Does the Minister agree that those conditions must be changed, and that we, as one of the major members of the IMF, should take a lead in that regard?

Lord COCKFIELD

No, my Lords, I would not agree with anything the noble Lord said. Negotiations between the IMF and Jamaica were broken off by Jamaica. One hopes that at some stage those negotiations will be resumed. I do not think it would in any way assist the matter in endeavouring to debate it by way of Question and Answer in this House.

Baroness GAITSKELL

My Lords, is the Minister aware that Mr. Michael Manley, the Prime Minister of Jamaica, is a remarkable man, not a Left-Wing "nut" or a man who in any way is like some of the very disreputable Prime Ministers in various parts of the world? He is a man whose economy really deserves to be helped. Would the Minister not be quite so hard in answering my noble friend Lord Hatch of Lusby on this issue?

Lord COCKFIELD

My Lords, I do not know whether the noble Baroness was endeavouring to distinguish between Mr. Michael Manley and her noble friend. I have already said that we are well aware of the negotiations between Jamaica and the IMF, and of course that they talk. Negotiations are essentially a matter for the management of the Fund and the country concerned. I do not think it would assist either in the resumption of such negotiations or in their successful conclusion to endeavour to debate the matter in the terms which both the noble Baroness and her noble friend have used.

Baroness LLEWELYN-DAVIES of HASTOE

My Lords, is the noble Lord aware that he is talking about a situation which is full of human tragedy, and that cheap gibes at this side of the House are not really appropriate? Is he further aware that if a country finds itself unable to benefit socially and politically from the terms of a loan of this kind, it makes the loan inoperable? Is it not time that Her Majesty's Government looked around them, outside their own terms of vision, and saw that the rest of the world already recognises that the IMF is too rigid in the way it approaches these matters?

Lord COCKFIELD

My Lords, it is because I am aware of the circumstances that the noble Baroness has mentioned that I have made the point that I do not think it would assist the matter by endeavouring to debate in your Lordships' House an individual case of this type in the kind of terms which have been used by noble Lords opposite.

Baroness LLEWELYN-DAVIES of HASTOE

My Lords, may I ask the noble Lord whether he is aware that it is not for him to say what we debate in this House? Any noble Lord is entitled to ask a Question and Her Majesty's Government then have to reply.

Lord COCKFIELD

My Lords, I entirely agree with the noble Baroness about the rights of Members of your Lordships' House. Nevertheless, it is a perfectly valid point that some of the comments of the kind which have come from Benches opposite are not the sort which assist the furtherance of negotiations in a matter of this nature. Her Majesty's Government have no responsibility for negotiations in individual cases; these are matters for the management of the IMF itself. I have already said that the guidelines were revised in 1979. We need to see what the effect of those revisions will be. There are periodic meetings at ministerial level, where all these matters can be, and are, kept under review. The last such meeting was held in Hamburg in April, and another meeting is scheduled for Washington in September.

Lord KILMARNOCK

My Lords, may I ask the noble Lord whether he has read the Brandt Commission Report, and, if so, what conclusions he has drawn from it?

Lord COCKFIELD

My Lords, the Brandt Commission Report is a matter to which Her Majesty's Government are giving their attention.

Lord BROCKWAY

My Lords, notwithstanding the economic views of the Government, does the Minister think it right that an international monetary fund for aiding nations in difficulty should impose conditions such as those which were proposed in Jamaica, which would have meant the deepening of the poverty of most of its people?

Lord COCKFIELD

My Lords, the imposition of conditions by the Fund is accepted by the great majority of its members. That is in fact essential if the Fund is to carry out the duties imposed on it by its articles. The loans from the Fund are of a temporary nature. They are intended to enable countries to adopt policies which will put their balance-of-payments situation on a healthy basis, and in many instances it is essential to impose conditions to ensure the repayment of the funds in question.

Lord HATCH of LUSBY

My Lords, may I draw the Minister back to my original Question? I am sure that he will accept that the British Government have a responsibility as a member of the IMF. He has mentioned the guidelines of March 1979. My Question is designed to elicit from the Government an indication of whether they consider that since that time conditions of the kind that I have described in fact—not in opinion—have not put those guidelines out of date. Will the British Government now use their influence to persuade the IMF to return to the articles which the Minister has mentioned and which include respect for members' policies?

Lord COCKFIELD

My Lords, while it is a matter for the IMF to defend their own decisions, I do not accept that they are acting outside the guidelines which have been laid down. I have already said that these matters are kept under review, that there are periodic meetings at ministerial level, that one such meeting has just taken place, and that another is scheduled for September.

Lord LOVAT

My Lords, on a point of order, am I not right in believing that questions should be asked, not read? I noticed that the first speaker on this Question read for a considerable time from his notes, and it is quite impossible for a Minister to make an intelligent answer when he does not know what is coming next.