The Developing Countries: Economic and Social Problems

HL Deb 03 March 1982 vol 427 cc1303-64

4.12 p.m.

Debate resumed.

Lord Banks

My Lords, the whole House will be grateful to the noble Lord, Lord Oram, for raising this important subject this afternoon. I am sure that he was right to place the subject in the context of the interdependence of the nations of the world, rich and poor alike. The world poverty lobby—I do not use that phrase in any critical sense— has succeeded in bringing home some of the facts about world poverty to a large number of people in this country; the fact that 800 million people are in a permanent and chronic state of poverty, according to the World Bank; the fact that the North, including Eastern Europe, has one-quarter of the world's population and four-fifths of its income; the fact that in the poorest countries, one out of four children die before the age of five. So one could go on reciting these appalling statistics. The mass lobby of Parliament last year, the support for the Brandt Report in this country and the number of copies of the report which have been sold in this country, higher than elsewhere, have shown that the people in this country are aware of the importance, the magnitude and the urgency of this problem.

There has been a remarkably favourable reaction to the Brandt Report to which the noble Lord, Lord Oram, referred. That report speaks of a massive transfer of resources from the developed to the developing countries and, as the noble Lord mentioned, it calls for free access for the goods of the developing countries to the developed countries, even including semi-manufactured and manufactured goods as well as raw materials. So the Brandt Report was, in essence aiming for world expansion coupled with world free trade. The report looked at arms expenditure and speculated on what could be done with that arms expenditure if it were available to be spent on development; and we must hope that there will be some breakthrough in the multilateral discussions taking place in various places at the present time, so that before too long something at any rate of this burden can be taken off arms and some money transferred to more productive uses.

In 1945, Sir William Beveridge (as he then was) wrote his book, Full Employment in a Free Society. That was a plan for expansion in one nation. Recently President Mitterand of France has called for a limited expansion in the EEC. And that was a plan for expansion in one region. But the Brandt Report really is a plan for expansion on a world scale, a kind of global Keynesianism aimed at the development of, first, the least-developed and, through that, the expansion of world economy. As the noble Lord, Lord Oram, emphasised, the Brandt Report argues that it is in the interests of the rich countries that they should embrace such a policy.

It is important to ensure that the transfer of resources reaches the poorest countries of all, and the poorest people within those countries. A lot depends on the quality of the projects on which the transfer is spent and priority must be the encouragement of food production in third world countries. In spite of the new hope which I think the Brandt Report gave to people who were concerned about this problem, the deterioration continues, the gap gets wider and, as the noble Lord has said, the mountain of debt increases. The poorest countries face possible financial collapse. They are forced into restructuring their debts; this leads them to seek loans from the International Monetary Fund and the quid pro quo is that, in return, they must apply deflationary policies within their own economies, which depresses those economies still further.

Alex Brummer, writing in the Guardian, said that when the poor countries go to the International Monetary Fund they tend to become "wards of a hostile world". I think there is something in that. The current account deficits at the present time are growing as a consequence of high energy costs, falling exports, lower commodity prices and world recession. Even looked at from the point of view of our own self-interest, we cannot be content with that—just under one-quarter of this country's exports go to third world countries; and this is the time when the rich countries have decided to make cuts in resources.

Earlier this afternoon, we heard about the International Development Agency and the fact that its budget is cut from 4.1 billion dollars to 2.6 billion dollars, a figure not contradicted by the Minister. The United Kingdom aid programme has been cut, and the noble Lord, Lord Oram, gave the figures. It was at one time the fastest-growing programme that we had. Now the opposite is true. We have to realise that the United States and the United Kingdom arc only two of 17 industrialised countries which are cutting aid.

The Brandt Report suggested that there should be a summit at which these matters and the proposals that they put forward could be discussed. The summit has been held and the argument goes on as to whether that summit was a qualified success, as some of its participants claim for it, including some leaders of the less developed countries, or whether it was the abject failure that its critics assert. Undoubtedly, there were some gains. The very fact that these leaders could meet together in what we understand was a good atmosphere and discuss these problems was at least a point gained.

From our own national point of view, it was encouraging to see that our own Government's attitude appeared to have softened a bit and that we are now ahead of the United States on the question of the establishment of an energy affiliate of the World Bank which would help finance the exploration of energy resources in developing countries, and also that we are ahead of the United States on the question of the common fund.

We have to admit that looking at the conference as a whole, there was no agreement on the energy affiliate proposal, although much support for it; that global negotiations within the agencies of the United Nations discussing in turn the important problems, as the poorer nations see them, are still not under way and there is no agreement about the procedure to be followed regarding them. The proposed additional allocation of special drawing rights was opposed by western countries although it would have added only 1 per cent. to world liquidity. I should like to ask the noble Lord who is to reply on behalf of the Government what the Government's view is now on the possibility of an increased allocation of special drawing rights, and what the Government think about the proposed link between them and development finance.

It has taken a very long time indeed to get the common fund to deal with the commodities established. I should like to ask how near that is to operation. Is it in any sense operational yet? Its budget is to be 1 billion dollars instead of the 6 billion dollars that was originally suggested. This common fund will not be able to initiate any new commodity agreements. It can assist those that already exist.

I should like to ask what new commodity agreements the Government envisage will be set up in the years immediately ahead and what ones the Government would like to see set up. I wonder whether the STABEX arrangement which is used within the context of the Lomé Agreement and also the IMF's compensatory financing facility, which guarantees income rather than prices, can be applied on a greater scale because the resources available at the moment behind what seems an excellent idea are very small and might be capable of extension on a wider scale.

Then there is the vexed question of the control of the various bodies which deal with these matters in the world and to which these problems are referred, the World Bank, the International Monetary Fund and GATT, in all of which the West have a preponderance. I believe that it is true that in the IMF the United Kingdom voting power is greater than that of China, India, Bangladesh and Pakistan put together; and yet those countries have over 40 per cent. of the world's population. It is clearly not going to be possible to sustain that for ever, and I wonder when the Government envisage that some modification of that might take place. This one of the problems behind the disagreements over global negotiations.

The noble Lord, Lord Oram, referred to the conference last week of 44 developing countries in New Delhi. At that conference Mrs. Ghandi, after attacking Western protectionism said: We are deeply concerned with the visible deterioration in the global economy since the Cancun summit". Of course, the developing countries are divided among themselves just as the western countries are. Faults are not by any means on one side. But that fact is no excuse for inaction.

I am glad that the Brandt Commission have decided to continue in operation. We need a continual spur of the kind which they can provide. We need a sense of urgency among all Governments. We need dynamic leadership in the world if these very considerable problems are to be overcome—a leadership which will actually get things done and not merely get them talked about. Today in this House we press the Government to help provide that positive leadership.

4.26 p.m.

The Lord Bishop of Derby

My Lords, those of us who are concerned with various voluntary agencies working in the cause of world development find great difficulty because the faster we seem to run to catch up with the situation, the further behind we seem to get. My own gratitude is great to the noble Lord, Lord Oram, for having brought forward this Motion, and particularly for drawing attention to the deteriorating situation. Here are the facts of which we need to take account. Only if full account of them is taken will any real progress be made. The Motion refers to the growing indebtedness of the least developed countries. In a debate on overseas development in February of this year in another place, Dame Judith Hart quoted an estimate of third world indebtedness in 1982 to be £250 billion. This represents an increase of 15 per cent, on last year. Interest charges on this debt will be £55 billion—an increase of 22 per cent.

It is difficult to take in figures like that but the increase is vast and it is caused by a number of factors. Terms of trade, for example, in Tanzania. In 1965, one imported British Leyland tractor cost the equivalent of 17 tons of sisal exported to the United Kingdom. In 1977, the equivalent was 42 tons. Again there is an increasing need for, and cost of, food imports, for example in Zaire. In 1960, that was a net food exporting country. In 1980, because food production failed to keep pace with population growth, Zaire now spends 300 million dollars on food imports, which is one-third of her total export earnings. In 14 African countries, growth in agricultural production has been slower than the growth in the population, thus leading to less food per person, unless more food is imported, adding to their overseas debt.

There is also the increasing cost of energy imports. The increase in the price of oil in 1973–74 and 1979 now means that countries like India and Thailand have to spend up to 40 per cent. of their total export earnings on buying oil. To quote Mrs. Gandhi again—this time at the Nairobi Conference on energy resources last August—she said: We have neither the margins of waste, nor the wherewithal to meet the increasing expense". In Africa, 90 per cent. of the wood that is felled is used for fuel. This is causing problems of soil erosion and the consequences that follow from that.

We are to hear more from other noble Lords about rapidly increasing population and the problems that this presents. However, let me say this briefly: the Brandt Report estimated that the world population was now growing by 1 million extra people every five days, nine-tenths of this in the third world. This will mean that the world population will grow from 4.3 billion in 1980 to 6.5 billion by the year 2000.

A recent World Bank Report suggests that there will be 100 million more people living in abject poverty by 1990 unless a substantial programme of aid and investment is undertaken immediately. This means that the industrialised countries should aim to reduce their consumption of natural resources to reduce pressure on their availability and supply. Thus the United States of America, with 6 per cent. of the world's population, consumes 30 per cent. of the world's natural resources. This is an example of the need for a change of mind which voluntary agencies can do something to bring about; but they need support from Governments.

Our own Government have responded. The Minister for Overseas Development said in another place: We recognise that official aid continues to be an essential element in development, especially for the poorest countries". Two-thirds of the United Kingdom aid programme goes to help the poorest countries, and 30 per cent. of bilateral aid. But the 1982–83 level of £950 million equals 0.34 per cent. of the gross national product, while the Government are committed to a target of 9.7 per cent. The question is: When is the date to be fixed for reaching the target? At the Paris Conference last September the Government committed themselves to 0.15 per cent. of gross national product to be allocated to the least developed countries. The present level is 0-14 per cent., so there is an increase of 0.01 per cent. The proportion of our aid programme going to the least developed countries is in fact falling from nearly 70 per cent. (as it was five years ago) to 60 per cent. this year. Aid is one part of the Government's action, but giving help to enable other countries themselves to cure their own problems is another important piece of work, and the Government have allocated an extra £1.5 million over the next three years for agricultural research in selected African countries, together with an increase of half a million pounds to multilateral agencies concerned with population control. However, vast problems remain in respect of help over agricultural research, over population problems, over water and sanitation and over energy.

At the Cancun Conference there was an important Austrian initiative, as one of the host nations, with the objective of the financing of large projects to improve the infrastructures and growth potential of the least developed countries. The one question I would add to those put by the noble Lord, Lord Oram, is whether the Government have gone any further ahead in their support of that particular proposal.

Important things remain to be done, and a debate of this sort is something which can do a great deal to educate the country as a whole and so make it easier for the Government to take the action to which it is already committed; but those of us who in various ways are trying to deal with this world problem look for the support that the Government and the official agencies can give. One set of influences helps another and Government and voluntary agencies can go together in helping the world to overcome this vast problem.

4.34 p.m.

Lord Holderness

My Lords, I too, like the right reverend Prelate, should like to express deep gratitude to the noble Lord, Lord Oram, both for the content of his speech and for providing another occasion for us to discuss this very important matter. Many of your Lordships are to speak in this debate and I hope I shall not abuse the privilege I have this afternoon of speaking early. I also hope your Lordships will forgive me if it so happens that I have to leave before the end of the debate tonight.

Almost exactly two years ago the noble Earl, Lord Listowel, enabled your Lordships' House to lead the way in this country in the public discussion of the weighty issues which had been covered by the Brandt Report. On that occasion two years ago, I think there was general agreement not only that the needs were vast and were growing larger, but that they could be met only by a new determination and will, particularly on the part of the richer nations. I continue to hope that that will and determination are there. Certainly, I know from my own experience that they are prominent in the minds of many enlightened members of Western Governments. But occasionally I am bound to admit to a feeling of unease that the long course of the recession and, perhaps even more, the economic problems that loom beyond the recession not only are reducing the ability of Governments to respond but may be sapping their will to do so.

Our own aid programme, as has been pointed out already, is smaller. We are as far as ever, as the noble Lord, Lord Oram, said, from the 0.7 per cent. aid target. Even more worrying for me is that the international negotiations after the meeting at Cancun carry a strong suggestion that the quite widely-based enthusiasm for aid, say in the 1960s, has to some extent become disillusioned. I believe it is worth spending a moment or two trying to examine why this disillusionment, if it is that, exists. Since the last war, most of the transferred resources for development have been made available by the capitalist democracies of the West, if it is possible to include Japan among those western capitalist democracies; and the comparative contribution between capitalism and communism is well illustrated and put into perspective by the considerable superiority of the aid effort of this country itself over that of the powerful Soviet Union, even though Britain, like other democracies, in the face of our present economic difficulties, has had to take and is taking energetic steps to try to contain all public expenditure.

It is obvious to any passing student of politics that the precise decisions taken by any democratic government must accord, at least to some extent, to public opinion, and a public and popular opinion in favour of the apparent—and I would underline that word "apparent" —altruistic objective of development aid needs to be exceptionally vigorous if it is to prevail over expenditure or the avoidance of cutting expenditure on what may be thought by many to be more desirable things here at home. I fear, to be realistic, that the aid idea does not possess this overwhelming strength and that it never will. I have seen opinion polls which have suggested—and I think these polls seem to follow the path of common sense—that between a smallish percentage of enthusiastic "aiders" and perhaps a rather smaller percentage at the other end of the age spectrum who are quite convinced, in what the noble Lord, Lord Oram, pointed out was a "refuge phrase", that "charity begins at home", perhaps three-quarters of the electors of this country appear to hold no particular views and seem reasonably content to follow the lead of a Government which may be either hostile or friendly to the whole concept of development aid. If this diagnosis is correct, then I think that both the present and past Governments deserve credit for maintaining policies which are very definitely directed towards a substantial and costly aid effort.

However disappointing to the enthusiast—and I share the disappointment myself— Britain's present aid programme, in spite of our economic difficulties, is not far short of £l billion. About two-thirds of our bilateral programme goes to the poorest countries of the world, and the largest part of that programme, which is directed towards India, is entirely on grant terms. Meanwhile, the flow of British private investment remains very considerable.

I always remember British private investment, when I had some responsibility for these matters, being considered by the opposition as a bit non-U, or perhaps a little inferior to genuine aid; perhaps vastly inferior to genuine aid. But I always thought it had great importance in its contribution to wealth, to employment and, perhaps most important, to the growth of technology in the developing countries. I myself remain unashamedly pleased that private investment, together with the official programme, add up to quite a respectable percentage of our gross national product.

All these things, in a recession, strike me as quite remarkable achievements but they, too, need to be put into perspective. It is, unhappily, true that the whole of western aid, even if it were trebled—and I think that this echoes the thought of the right reverend Prelate who has just spoken—would barely cover the amount which the less developed countries pay for oil. Moreover, the levels of aid seem to me to be less significant than the opportunities for trade, and this has already been pointed out by several noble Lords.

Trade flows are many times greater than the flows of aid, and our ability and willingness to import both finished goods and commodities at a remunerative price to the producer will, ultimately, be of far greater value to developing countries than an expansion of the aid programme. In this connection, I believe that the aid and trade provision, of which your Lordships will be aware, could be significant, both from our point of view and from the point of view of the recipients.

I believe that all this has a very close relevance to what I consider is probably the world's greatest disorder, in the proper sense of that word. Here in Britain, one of the richer nations, we have over 3 million men and women wanting work but unable to find a job. Meanwhile, the total of the world's unemployed is a great deal more frightening than that. Meanwhile, too, as has been several times pointed out, over vast areas of Asia, Africa and South America we have millions of our fellow human beings either starving to death or just managing to avoid it. Their needs are basic—food, warmth, shelter, water, clothing and so on. A little further up the economic scale, the demand may be for simple tools, perhaps a bicycle or some means of transport, and so on further up the scale to greater degrees of sophistication.

But at all levels where the demand exists—and I think that the noble Lord, Lord Oram, made this point—hardly ever is the demand able to be what the economists call effective. At present all our aid programmes, all the activities of the great agencies, such as the IDA and the United Nations development programme, and even the more extensive trade relationships between the richer and the poorer nations, seem hardly to scratch the surface of the problem of this ineffective demand.

I understand—and I hope that my noble friend will confirm it—that the Government are in favour of these high-sounding global negotiations. But, to outside observers, and to relatively ignorant observers, we appear to be divided from these negotiations by what looks like interminable argument and formidable obstacle. It is this delay in the face of urgent need, rather than the present performance of Her Majesty's Government, which gives to me great cause for despondency, because it leads to serious doubt whether or not there is a weakening in the world's will to solve the problem of an almost insatiable demand, which the poorest of our fellow creatures lack all power to make effective.

I am quite convinced that when my noble friend replies he will speak frankly to the House—he always does. I hope, if I may be impudent, that he will not provide us with too many statistics and will not be too rigid in defence of the Government's present aid programme, because my own view is that, in these circumstances, few Governments would do better and many Governments might do worse. But my own present disquiet, as he has no doubt gathered, is rather deeper than all these things, and that disquiet will be greatly diminished if he will speak to us simply enough to convince me, and others, not only that he shares the major objective which I have outlined, but also that, in his view, there is no weakening among the western nations in their determination to reach that objective.

4.46 p.m.

Lord Vernon

My Lords, I should like to join previous speakers in expressing my appreciation from this Bench at the Motion which has been put before the House by the noble Lord, Lord Oram. I should like to begin my speech by welcoming the new lease of life—I think it was mentioned by the noble Lord, Lord Banks—which has been given to the Brandt Commission, at their meeting held recently in Kuwait. It seems to me desirable, in helping to solve the problems outlined in their report, that this distinguished body of international statesmen should remain in being to keep a watching brief and to impress on, sometimes, sluggish Governments, both in the West and in the third world, a sense of urgency which is sorely needed in present circumstances.

Some people were disappointed by the outcome of the Cancun summit. I was not myself disappointed, but then I did not have great expectations of anything very constructive coming out of a meeting lasting two days among heads of state, some of whom did not even know each other. The disappointing feature was the lack of follow-up. That was, in a sense, the fault of the third world countries who failed to respond to the initiative of the joint chairmen of the conference, and opted instead for these global negotiations through the United Nations; and I think we all know what that is likely to lead to. Progress will be very slow indeed. Therefore, it is all the more important that the Brandt Commission should remain in being.

The seriousness of the problems outlined by Brandt, and the time-scale involved if we are to avoid catastrophe on an enormous scale, can hardly be over-stressed. If, as we have been told by Brandt, 800 million people are living in a state of absolute poverty today, which means, in effect, that many of them are living in a state of semi-starvation, if not of actual starvation, and if, as we are told, third world countries are becoming steadily poorer, what will things be like in 20 years' time, when populations in many of these countries will have doubled? To take two examples, Bangladesh and Nigeria, both with 80 million people, will become 160 million. Mexico's present population of 60 million will become 130 million. I could go on almost indefinitely with different examples from third world countries. There are 200,000 more mouths to be fed in the world every single day—and not only to be fed but to be given education, work, shelter, medicine and many other things besides.

These facts are not always appreciated in the third world countries themselves and they are often not appreciated here at home. People just do not want to know. The implications are unpleasant and the threat not immediate. Many people will say that what happens in third world countries is their own affair, not ours. The fact, as the Brandt Report makes clear, that the world is now interdependent and that our children, if not we ourselves, will be vitally affected, is largely ignored. I am afraid that both the Government and the media have failed dismally in their task of education.

Last summer I attended a conference held in Lincoln Cathedral, sponsored by Population Concern. It was a youth conference and the audience was drawn from sixth formers from East Midlands schools. The principal speaker was Dr. David Bellamy who will be known to most of your Lordships. He was able to demonstrate very effectively how much damage was being done to our planet by the relentless pressure of people on resources. The cathedral was packed and the conference was a great success, but I could not help reflecting that it was not the task of a voluntary organisation to bring these facts to the notice of those children; it was the task of the Government who control the education system.

One of the complaints of the poorer nations is that the terms of trade are unfairly weighted against them. Shah Azizur Rahman, the Prime Minister of Bangladesh, said at the Cancun Summit that trading jute, which is Bangladesh's main export, is not the same thing as trading technology or technological products. While the price of technology only goes up, the price of commodities, with the exception of oil (and of course oil is no longer an exception) only weakens and fluctuates. Surely this is a field where the North, the richer nations, can take positive action to correct the imbalance. This is not to say that we are doing nothing to help. Through the Lomé Convention, negotiated by the EEC, we are granting many of these third world countries most favoured nation treatment. In passing, may I say that sometimes I wonder whether those noble Lords or members of the Labour Party who so often criticise the EEC as being a selfish and an inward-looking organisation, have ever heard of the Lom. Convention and, indeed, of the aid in terms of grants which goes from that body to the third world.

Other problems, especially of food, forestry and population, all of which are interrelated, arc much more intractable. More people require more food. Forests are cut down to provide increased cropping. Because of the lack of firewood, the dung which should fertilise the land is burned for fuel. Soil erosion and dust bowl conditions set in and the desert gradually encroaches.

Much has already been said this afternoon about the serious implications of the food situation, but I think it is worth repeating what was said by the noble Lord, Lord Oram, when he initiated the debate: that during the decade of the 'fifties, the annual growth in world grain production was nearly double that of population growth, but that by the late 'seventies the picture had dramatically altered. Even with the return of idled United States cropland to production, the grain supply was barely keeping pace with population. And in Africa, with some of the highest birthrates in the world, there was an actual 14 per cent. decline in grain production during the decade. That was a real decline, not a per capita decline. Nigeria, according to the Food Policy Resources Institute, will by 1990 have to import 17 million tonnes of grain annually.

The fact of the matter is that many of these countries, like Algeria, which used to be exporters of grain are now importers. The same, of course, is true of the USSR. With world grain reserves standing at 40 days' supply and agricultural scientists in the United States suggesting that cereal yields in their country, upon which the rest of the world so largely depends, are beginning to decline as a result of overcropping and soil erosion, it is possible to visualise famine on a far larger scale than anything previously experienced.

Food aid is not the answer, even if it is available. It can only be a palliative and it postpones the day of reckoning. In any case, many of the less developed countries have not got the infrastructure to cope with the aid. They lack the distribution and storage facilities, and so on. In the end, these countries have got to stand on their own feet. Indeed, it is what they want themselves. President Nyerere of Tanzania was, I believe, entirely right when, speaking at the recent conference of third world countries in New Delhi, he was reported as saying: Disaster can befall the third world if it continues to try to catch up with the North. We have to make a deliberate commitment to a development directed at meeting the needs of the people and based on our own third world resources and capacity ". We in the North have got to try to help these countries to achieve the sort of development envisaged by President Nyerere but, in doing so, certain things must be made crystal clear. The most important is that the condition of their people will never be improved until such time as their excess of births over deaths can be dramatically reduced. It used to be said that if the standard of living of the poorer nations could be brought nearer to our own, and if, like us, they could be provided with the necessary social security, their birth rate would decline just as ours has done. That might perhaps be possible if there were sufficient time, although one cannot help wondering what sort of a world it would be if all the inhabitants of Latin America, Asia and Africa had our own western standard of living. With population growth rates at present levels, the time is simply not available.

I suggest to your Lordships that all countries, our own included, should have as their objective self-sufficiency in basic foodstuffs, and their national population policies should be adjusted accordingly. This cannot be achieved overnight, but it is a target at which we should aim. It means that third world countries should put far greater emphasis on agricultural as opposed to industrial development, while at the same time mounting massive propaganda exercises, especially among the young, to promote family planning. It may be unpleasant and it may be that in some countries, at least for a period, one-child families are the norm, but we know from the Chinese experience that it can be done. If we do nothing, nature will solve the problem in its own way and nature's way will be much more painful.

Finally, I want to touch on what our own Govern- ment are doing and can do to help. It would be churlish of me not to express appreciation for the policy announced by the Minister, Mr. Neil Marten, towards the end of 1980, that in future a population element would be included in all new development projects financed by the ODA. That statement was especially welcome and I should like to ask the Minister who is to reply a specific question in that connection. Has any family planning provision been made in the health clinics, funded by the ODA through the Save the Children Fund, in the Afghan refugee camps? If not, will the Government consider introducing such services on grounds of maternal and child welfare? Credit must be given also to the Minister for increasing the grants to the international agencies concerned with population at a time when cuts are generally the order of the day. The amounts involved, of £2.25 million to the United Nations' Fund for population activities in 1981 rising to £2.4 million in 1982, and a similar increase in the case of the IPPF, are still a pathetically small percentage of the total £1,000 million given annually in overseas aid.

I submit to the Government, having myself seen something of the work of those agencies, that taking a long-term view they are getting excellent value for money for the support that they give. I hope that when the time comes to plan expenditure for 1983–84, the Minister will consider whether a significantly higher proportion of overseas aid funds cannot be allocated to them.

The debate we are having this afternoon does not relate to the day to day issues which confront us in this country—those of unemployment, productivity, and improving the social conditions of our people, and so on. It relates to something even more important. What we are discussing is whether humanity as we know it can survive on this planet. That is the essence of the message in the Brandt Report. I only hope that the response of our Government and of other Governments will measure up to such a tremendous challenge.

5.5 p.m.

Lord Hatch of Lusby

My Lords, I feel that the debate this afternoon, so far as I personally am concerned, is tinged with a profound sadness. I believe that this is the first time we have debated this subject when the voice of Lord Ritchie-Calder has been silent. Ritchie had an intense passion for, and an unrivalled experience in, this field. He was a personal colleague and friend of mine for some 30 years, and I would like to pay tribute to the tremendous contribution he made to every aspect of the subject we are debating this afternoon. His unstinting generosity and infinite interest in ideas brought him naturally to this subject. In fact, the last time I saw him, just before the Christmas Recess, he asked me for a copy of a scientific paper I had written concerning this subject. This debate will be the poorer for his silence. The intellectual vitality of this House is diminished by his absence and each of us who knew him feels lessened by the absence of his warm love for humanity. But Lord Ritchie-Calder would have been the last to have wished mourning for him to interfere with the attack on inhumanity in the world, and that is the subject we are debating this afternoon.

A few days ago, I returned from spending several months in Central Africa, where I have been living for most of the past 18 months. May I just say to the noble Lord, Lord Vernon, that those of us who live in Africa, while completely sympathising with the desperate issue of population increase and with the continuing necessity for family planning provisions, would like him to consider that everyone who lives among Africans—and this can be extended to Asia and Latin America, too—recognises that the restriction on population increase can come only when infant mortality has been reduced. When one has the situation where a mother can anticipate that one or two of her four children will die within the first year or two of life, one cannot expect to convince such a woman of the necessity for family planning. While fully supporting the campaign with which the noble Lord, Lord Vernon, is associated, I would ask him to recognise that this is a social fact of very profound importance.

As I said, I have been living in Zambia. During the past year the price of the staple food of Zambia, maize, has risen by between 30 and 50 per cent. In the first seven months of 1981 the Zambian Government had to spend on oil imports as much as they spent in the whole of 1980. In that country 1 million young people out of a total population of under 6 million are unemployed. According to a recently published ILO report, 80 per cent. of the rural population and 25 per cent. of the urban population do not have incomes capable of providing them with the basic needs of life.

In that and other third world countries 50 per cent. of the imports have to be paid for by 100 per cent. of the exports. You have only to follow the commodity prices in any of the newspapers to see what has happened to the mono-export of copper from Zambia, over any period you like, but certainly over the last 20 years. The price of copper today is below the cost of production of certain of the copper mines.

What is the result of this? The inevitable consequence is that the Zambian Government have had to call in the International Monetary Fund. I want to speak for a moment about what happens when the International Monetary Fund as it is at present constituted comes into a country like Zambia. Remember that when I am talking about Zambia I am not talking about one of the poorest of the developing nations but one of the middle group. The IMF comes into the country because the country has got itself heavily into debt. It lays down conditions for that Government to have drawing rights. The immediate effect is that all the basic necessities of life rise in price. The second result is that there is a freeze, or an attempted freeze, on wages. And the third result is that Government expenditure has to be reduced.

What happens when Government expenditure is reduced in a third world country where the Government are in fact the only institution who have any control over capital? It means that fewer roads are built, that the railway system deteriorates. It means that public transport becomes unobtainable, that the telephones start breaking down, that the whole infrastructure on which the economic life of the country depends deteriorates very rapidly, particularly in tropical countries.

But repayment, not just in Zambia, but in any of these third world countries, has become impossible. With high energy costs, with falling exports, with lower commodity prices, every one of these third world countries is now having to draw on the IMF in order to pay for previous loans and the interest on existing loans. It does not apply just to countries like Zambia. Take the economic miracle of Latin America—Brazil. The Brazil foreign debt is calculated at 54.9 billion dollars. That, incidentally, is twice the foreign debt of Poland. This year it is estimated by the World Bank that the current account deficit of the combined developing countries is going to come to well over 100 billion dollars.

If we look at the figures, provided for us each year now by the World Bank, we see that in the late 1960s and early 1970s the rate of economic growth in most third world countries was higher than that in the industrialised world. This was debt-fuelled growth. Since 1973 that debt-fuelled growth, the use of the borrowed money for development for economic growth, has been transformed into debt-constrained decline. Why? Because all the sources of revenue on which third world Governments have traditionally depended have been in a state of decline now for nearly 10 years, at least since 1973–74. So the loans that are now being asked for are loans in a monetary sense to repay and cannot be invested.

Why is it that a country like Zambia no longer qualifies for the Government insurance scheme of ECGD? It is because even when the Zambian Government have exercised their drawing rights they cannot use that money to clear the pipeline of debts to this country. They are forced by the IMF to take the debts in chronological order; in order words, the money they are now receiving from the IMF is being paid back to banks. That is a very serious situation, not just for the third world. I would suggest that there are many noble Lords in this House who know a great deal more about banking than I do who would agree with me that the state of indebtedness of the third world towards the banks of the western world is now on the verge of crisis proportions which could very easily begin to undermine the whole of the international financial system.

I would like to ask what the Government are doing, not just about the points that I have put forward this afternoon but about the various points that have been raised from all parts of the House, about the crisis that is now attacking the relationship between the two worlds which make up our human race. I would like to know what the Government's attitude is. It is not enough to say, "We will do more when our economy improves". We did not do more when we were a relatively affluent society. We did not do more when there was virtually full employment in this country. I would like to know what the Government, taking the practical situation of today, are now doing and are now intending to do to play their part in what is a very profound human drama.

Their representatives attended Cancun. Their chief representative at Cancun then went on to Mexico, apparently following the precepts laid down by the noble Lord, Lord Carrington, the Foreign Secretary, when he said in February 1980 that the Government considered they must give greater weight in the allo- cation of our aid to political, industrial and commercial considerations.

The Prime Minister went to Mexico. What happened in Mexico? There was a £200 million steel-plate mill contract signed by the firm of Davey Lowey and the Mexicans were given £195 million in export credits plus £35 million in non-repayable aid. Then there was Brazil. We gave the Brazilians £55 million in export credits plus a £13 million interest-free aid loan for converting a power station. Then there was India and the Paradip steel plant with export credits of £660 million and, in addition, £150 million taken from the aid funds for India and the contract was given to the same corporation—the Davey corporation. Yet the four publicly-owned steel plants in India were working at half capacity.

Is this providing aid for need, or is it providing aid for British commercial interests? Is the object to stimulate the industrial life of this country or to provide the widespread human needs that have been listed on all sides of the House during this afternoon? As we know 70 per cent. of our direct aid spending comes back to this country in export orders—we get trade from aid—and since the Overseas Development Ministry was dissolved and brought into the Foreign Office it has been encouraged and perhaps ordered to work much more closely with the Department of Trade, I suggest that it means that a great deal of our so-called aid effort today is really based upon the demands of British industry and the initiative frequently comes from companies in this country rather than from the demands or the requests of those who have needs in the third world. That hardly squares with the continued pledge of the Government to concentrate their aid on the low income countries and on the poor in those countries. In fact, two-thirds of our aid now goes to the advanced developing countries.

Finally, I turn to the Brandt Report. I believe that the publication of the Brandt Report has had a very important impact upon public opinion in this country with 40,000 copies of the first edition being sold. But, as the noble Lord, Lord Holderness, pointed out, there is still a great deal of ignorance and even greater apathy in this country about the whole question of our relations with the people about whom we have been talking in the third world and about the importance of overseas aid to Government policy. Unfortunately, it was this Government who, in their first few days of office, destroyed the work that had been going on for nearly three years within the Ministry of Overseas Development in putting together a plan for the education of the people of Britain as regards the importance and the need of development education. That has never been replaced. However many times I have asked noble Lords opposite what are they doing about it and how have they replaced that committee —you may sneer at it as a quango, but it must be remembered that it was an unpaid quango—and what have they done about replacing the HMI which was, and which traditionally had been, specially appointed in order to look after international influence, there has been no answer. It would appear— I would be glad to be corrected if I am wrong—that this Government do not believe that they have any responsibility for educating the people of this country in the realities and the needs of our relationship with the people of the third world.

A great deal has been said about the Brandt Commission report this afternoon. I believe that it may have—I repeat, may have—some little effect on the financial crisis about which I have spoken. I am very dubious about its recommendations and its analysis of the needs of the developing world for the following reason. The Brandt Commission report really accepts international institutions as they are today. It may suggest a few amendments, but it accepts the context of today. I have given up trying to convince the Government that it is in their interests, on their own terms, in their own language and according to their own values to put the Brandt Commission report into effect. It is in their interests because the Brandt Commission report shows how a western or industrialised country can begin to lift itself out of the present economic depression by creating demand or by supplying the demand which is already there in the third world, by creating the institutions which will bridge the gap between the 3 million unemployed in this country and the 300 million unemployed in the third world and the 30 people who have been dying every minute of this debate through malnutrition. The Brandt Commission Report shows how the industrialised world can do this. But that, my Lords, is Keynesian. It was Lord Keynes who taught this in the national context. This is simply the same lesson in the international context.

As this Government have rejected Keynes, I see no reason to suppose that anything that we can say or, indeed, anything any rational person can say, can have any effect upon the Government's policy. However, I am much more concerned about the attitude towards the Brandt Commission report on this side of the House than on the other side—I have given the other side up. We attempt to persuade them that their one chance of saving international capitalism is to be found in the Brandt Commission report. But on this side of the House we have got to watch what is happening in the real world.

We talk about supplying the people of the third world with their needs. Which people in the third world are we talking about?—because the needs that we arc able to provide today and the needs which we are asked to mobilise today, are the needs of the urban minority, of the consumer society, and very largely of the élite. That is not good enough. It is not good enough when, as anyone who has lived in a third world country knows, the majority of the people are living in the rural areas.

What is more, when we are told that in this country we must depend upon new technology, what kind of new technology will it be? Capital intensive new technology. But this is simply increasing the gaps which are tragically developing between the minority in the urban areas of third world countries and the majority who are in the rural areas. Inevitably, this is bound to increase the economic dependence of such countries on the multinational companies, on the industrialised world, with—again, inevitably—a repetition of the crisis which we face today.

Therefore, so far as I am concerned, what little power of persuasion I have within the third world will now go to encouraging third world countries to develop new OPECs in different commodity agreements, to develop the same kind of co-operation as we have seen in the Southern African Development Co-ordinating Conference founded in Lusaka fewer than two years ago, in the Preferential Tariff Agreement, also signed in Lusaka as recently as last December, and as put together by the 44 nations that met in New Dehli last week. In other words, the South—the third world—has now to strengthen itself through greater mobilisation of its own power, because this Government here—just like the Government in Washington—have totally rejected the economic policies put forward by Lord Keynes. There is no power to make them follow the Brandt Commission in transferring technology and in investing in the third world. The third world has to look to itself.

But I should still like to know, from the Minister who will wind up the debate, what is the Government's policy, on their own terms, and what part does the relationship between Britain and the third world play in their economic strategy. How does the Minister see the future of the relationship between this country and the third world countries as regards British policy and as regards our contribution to international policy?

Lord Sandys

My Lords, the noble Lord, Lord Hatch, has asked my noble friend Lord Trefgarne a question. I would remind him that after a speech lasting 28 minutes and if one assumes that the later 16 speakers speak for the same length of time, he will have to assume that my noble friend will reply to the debate at about three o'clock in the morning.

Lord Vernon

My Lords, before the noble Lord, Lord Hatch, resumes his seat, he took me up on the question of infant mortality. If he cares to examine statistics in countries such as Kenya and Nigeria, he will find that infant mortality in these countries is on western levels, and that is the whole cause of the trouble today—there is death control, but there is insufficient birth control.

5.35 p.m.

Lord Harris of High Cross

My Lords, I join others in thanking the noble Lord, Lord Oram, for his initiative in bringing forward this Motion. At the outset I want to say that I fully respect his devotion to these noble causes and I hope that he may give me the benefit of the doubt, even though my approach is fundamentally different from his, though the disagreements may be more about means than about ends. It is the first time that I have followed the noble Lord, Lord Hatch of Lusby, who I have heard many times. I am still no nearer to following him philosophically and promise not to do so, at any rate at such length.

I start with more than usual diffidence because I want to question what seems to me to be the assumption implicit in this Motion, that the plight of the less developed countries is somehow the fault of Britain, the United States and others for not giving them more money. At the outset, it seems to me that an objective observer might be struck that, 30 years after foreign aid was launched as a panacea for all problems of development, its champions now complain, in the words of this Motion, of "the deteriorating situation", and can think of nothing more ingenious than demanding still more massive transfers of other people's money.

If the victims of aid now bemoan what the Motion calls the "growing burden of indebtedness" —which the noble Lord, Lord Hatch, also mentioned—are we allowed to ask what they did in better times with all that money that was lent on favourable terms? May we ask what became of the take-off into self-sustaining growth that was widely promised? Nor I think would a sceptical observer be very impressed by the reference in the Motion to: inadequate food and energy resources". Rather, he might ponder the contrast between well-endowed African economies, like Tanzania, Uganda and Ghana that are now failing so dismally, and such Asian oases as Hong Kong, Singapore and Taiwan whose remarkable and continued progress certainly cannot be attributed to foreign aid or to natural resources.

No one who has read the extensive writings of Professor P. T. Bauer of the London School of Economics will be surprised at the sorry failure of so-called "aid"—he has inverted commas round it, because he is not sure that it really helps—to fulfil the hopes and dreams of its well-intentioned advocates. His analysis seems to me to demonstrate that the necessary precondition of economic advance is not capital investment and certainly not free gifts. Instead, Bauer draws on the classical teaching, supported increasingly by contemporary case studies, to demonstrate that the first requirement for sustained development is a stable framework of law and institutions that harness the diverse talents of local people to improve their own conditions.

The fatal flaw of foreign aid is that money is handed over to incompetent politicians who pursue ambitious but wholly inappropriate policies that impoverish their subjects and that are not redeemed by enriching favoured minorities with often corrupt political connections. This will appear a harsh verdict, and I shall produce three witnesses, starting with Professor Gunnar Myrdal, who has the right to claim to be a pioneer of the case for foreign aid. Yet in 1980 he wrote in a Swedish journal that these huge sums had not much helped the masses, whom he saw as being oppressed by inefficient bureaucracies, and he urged closer control by donors, together with more concern for the direct relief of suffering.

My second witness is Professor Dudley Seers of the Institute of Development Studies at Sussex University, whose work and publications on behalf of underdeveloped countries occupy three and a half inches in Who's Who. Writing in the Third World Quarterly for October 1980, his chief complaint against the Brandt Commission was not its biased membership, nor its tendentious terms of reference, nor even what he calls the substitution of evangelism for investigation. His most lethal criticism was the claim by Brandt on page 43 that, the South needs above all finance". Professor Seers totally dismisses this widely held view as "simply untrue", and adopts the full frontal Bauer position that most underdeveloped countries have adequate resources, in his words, to end destitution immediately or quite soon", but need, "above all", appropriate political and administrative reforms. Professor Seers is especially contemptuous of what he calls the "patronising double standard" of Brandt and others who display great courage in telling western Governments what to do, but shrink from criticising the appalling misuse of funds by so many of the recipients of aid.

This rather craven approach is nicely exposed in my third and final testimony, drawn from the recent World Bank report on sub-Saharan Africa. It may be recalled that although the study was inspired by pressures from the African bloc, its findings could be published only after extensive diplomatic editing to avoid giving them too much offence. And so, amid buckets of the usual bromide, we come across passages that could have been penned by Professor Bauer, or indeed even by Adam Smith.

Without direct reference to the cruel, compulsory "villagisation" of President Nyerere, the report points to the damage done in countries like Tanzania, Ghana, Uganda, and Zambia by misguided Government policies on nationalisation, and massive state intervention in the forms of marketing boards, price rigging, artificial exchange rates, distortionary taxes, and the protection of grossly inefficient industry based upon costly imported materials. The report delicately recalls the earlier hopes that public enterprises would be self-supporting, but it points out that they have become a burden and urges acceptance of the principle that "liquidation of an enterprise may be desirable".

The foreword by the new bank president, Mr. Clausen sums up much of this report as urging "greater reliance on the private sector" not, he hastens to add, from any "preconceived philosophy of ownership" but from what he simply calls" considerations of efficiency". Yet in the final chapter under the side heading "The Need for Increased Aid" we run into the following passage: Thus to the extent that Africa's problems are the result of unsuitable project concepts or perpetuation of inappropriate policies, the donor community shares in the responsibility". My Lords, you cannot win. I have personally always rejected the phantom guilt of colonialism, but I now find that I must accept my share of this new guilt by association with foreign aid, and I therefore propose to purge my guilt by offering four brief suggestions.

Lord Hatch of Lusby

My Lords, would the noble Lord allow me? If I understand him aright, he has just been quoting criticisms of both the donor nations and of the Governments which included, if I heard him aright, certainly Tanzania and Zambia. May I ask him two questions. First, so far as the noble Lord's latter point was concerned, regarding the donor nations, would he not accept that there can be foreign aid given in such a way as to deepen the economic dependence of the recipient nation, and that that is what is being criticised in the passage he has quoted? Secondly, on the former point, will he say who it was that was interfered with by the Governments of countries like Tanzania and Zambia, when he suggests that the economies of these countries were being damaged by Government interference? Who was being interfered with?

Lord Harris of High Cross

My Lords, I am not too sure that I follow the tendency of the last question. If the noble Lord would do me the honour of reading my argument he would see that I am quoting a report which says that in the end we must share the guilt, and in so far as we have set up expectations which have not been fulfilled among recipients, then perhaps I will amend my proposals now and, instead of proposing that foreign aid should cease forthwith, I will say that notice should be served of the intention to cease foreign aid except in the following ways.

Let me put first that Government finance to multinational agencies should be brought to an end in any event, because they are the source of much well-intentioned mischief. I would argue that we should apply all humanitarian relief through private charitable channels. And then, thirdly, I would confine development aid, after a period of warning to satisfy the noble Lord, to specified projects in countries whose Governments pursue the essential functions of government which Bauer and others have outlined, so as to encourage domestic private enterprise and attract commercial investment and foreign trade. Finally, I would say that we should remove all barriers against the exports of these developing countries.

The outraged third world lobby would no doubt chant in rare unison against intervention in their domestic affairs. It seems to me we have no alternative but to plead guilty for having already intervened, with disastrous effect, with aid that has not always done much good, and we should promise in future to intervene only with positive partnerships that may do much better.

5.48 p.m.

Lord Pitt of Hampstead

My Lords, may I join other noble Lords in thanking my noble friend Lord Oram for proposing this Motion and giving us an opportunity of discussing this important subject. May 1 also join my noble friend Lord Oram and my noble friend Lord Hatch in paying tribute to Lord Ritchie-Calder, whose presence is very much missed by us.

I shall not follow the previous speaker. I want to say to my noble friend Lord Oram that his timing in introducing this Motion is absolutely right, because 1981 has been a crisis year for commodities. No commodity price has increased in real terms; not one. Even in those that appear to have increased, the increases were below the rate of inflation, and some have had phenomenal falls in their prices. For example, the price of sugar fell by as much as 54 per cent.

The record levels of interest rates have compounded the damage, because at the same time as commodity export revenues are falling the price of servicing debts goes up, thus placing the third world in the grip of a dangerous pincer. If prices and exports continue at current levels, a country like Barbados will have its sugar export revenue cut by 38 million United States dollars, which is equivalent to a 17 per cent. reduction in its export earnings.

Public attention has been distracted because of the agreement, on paper, for an international common fund for commodities. But it now appears clear that the common fund agreement may never be more than an agreement on paper, and the international commodity agreements which the common fund is supposed to foster are either under severe strain or simply do not exist. Because of the over-enthusiasm—I am sorry that the noble Lord, Lord Vernon, is not in his place at the moment—of EEC beet producers, the EEC is now dumping sugar on the world market. That has played a major part in causing the drop in the price of sugar, from 45 cents per pound in 1980 to 12 cents in the last few months. The EEC is now the leading exporter of sugar on the free market; its exports of sugar in 1981 exceeded the exports in 1980 by 33 per cent.

The over-production of sugar by the EEC threatens the ACP sugar exports to the EEC which were guaranteed under the Lomé sugar protocol, and the ACP countries are now anxious to have the EEC join the International Sugar Agreement, which they hope will impose an external constraint on its over-production. The closure of Tate and Lyle's sugar cane refinery in Liverpool was felt by the ACP countries to have been motivated by the increase in beet sugar production in the United Kingdom and is regarded as the first step in a systematic move to reduce Europe's cane sugar refining capacity. I hope that when the Minister replies he will be able to assure the House that the Government will do everything possible to get the EEC to join the International Sugar Agreement and will support policies which will stop this over-production of beet sugar. I remind the House that this overproduction is paid for by subsidies provided by the British taxpayer.

Although an international cocoa agreement has been effected, the main producer, the Ivory Coast, and the main consumer, the United States, have not joined, which means of course that the agreement is considerably weakened. Moreover, there were legal problems involved in the transfer of accumulated funds from the previous agreement to the new pact, and until that was settled the buffer stock manager could not deal effectively with the present situation, under which the market price is below the lower intervention price. It has been so for some time and is still so. If that situation persists, the fund will be insufficient to enable stabilisation to be maintained.

I have been told that cocoa is of only marginal economic importance. I recently read an analysis of the importance of the chocolate industry to the British economy and it showed that the British people bought an estimated 360,000 tonnes of chocolate confectionery during 1980, the individual consumer spending an average of £17 in that year on it. Chocolate has increased its share of the confectionery market from 57.7 per cent. in 1958 to 63.7 per cent. in 1978, and has continued to increase its share. It appears therefore that the future viability of the confectionery industry in this country rests heavily on chocolate products, and the confectionery industry constitutes a major portion of food manufacturing in the United Kingdom and is a major foreign exchange earner. Furthermore, it contributes either directly or indirectly to the incomes of more than 700,000 individuals. Chocolate confectionery accounts for 6.66 per cent. of output in the British food manufacturing industry and for 10 per cent. of its employment. In money terms, that represents annual sales of £1,200 million, and that figure includes cocoa-related products.

In 1978, 74,300 people were directly employed by the confectionery industry. That is a small percentage of all United Kingdom manufacturing industrial employment, but it is of great regional importance because, in places like Yorkshire and Humber- side, the confectionery industry is very significant; they are areas where unemployment is often high and a decline in cocoa-related industries would have serious consequences, and those consequences would not be restricted to those made redundant by the collapse. Moreover, local retailers derive part of their income from the sale of chocolate products; just as their customers are employed in chocolate manufacturing. so they are dependent on that industry, and there are many ancillary industries which are also affected. About 300,000 people are thought to be involved in selling chocolate products—in grocery shops, cinemas and other establishments—while a further 300,000 are employed in confectioners, tobacconists and newsagents.

The production of chocolate confectionery of course involves inputs of milk and sugar, and in the same article I read that one factory operated by Cadbury near Hereford processes 700,000 gallons of milk a week. One can see from that that a severe cutback of output in that plant would reach down to hurt local farmers in the area from whom the factory obtains its milk. A similar effect would be felt in the sugar industry and, as I mentioned earlier in dealing with the EEC's policy on sugar—of course, it might help in a sense—it would certainly further complicate the problems of the agricultural policy of the EEC.

The United Kingdom chocolate manufacturing industry is an important consumer of goods and services from other industries, such as packaging and advertising. In addition, it is a supplier to certain food industries, such as producers of biscuits and ice cream. A loss of supply of semi-processed cocoa products would therefore cause disruption to some of the major earning lines produced by those companies. The chocolate industries are also major contributors to United Kingdom export earnings. In fact, among the food and drink industries of the United Kingdom only the value of Scotch whisky exports exceeds that of confectionery exports.

Chocolate products account for more than two-thirds of the combined export value of confectionery. In 1978 that amounted to £145 million, and it is expected that by 1983 cocoa exports will reach the £180 million mark. If that figure is added to the £1,200 million traded internally, and the fact that more than 700,000 people derive total or partial income from cocoa-related industries, it becomes clear that the effect of coca on the British economy, although marginal, is of some importance.

But, my Lords, there are many more important commodities produced by poor third world countries which are needed by rich industrial countries such as the United Kingdom. and I think it as well that we should always understand that. The Brandt Report underlined the interdependence of the two groups. What is needed is a Marshall-type plan on a world scale—here I could not possibly agree with the previous speaker. Unfortunately, the will is not there. Like my noble friend Lord Hatch of Lusby, I accept that; the will to do what is required just is not there. Those of us who see the problem and are concerned about it must do everything in our power to secure action along the lines that we realise should he followed. But in the meantime we must take action to reduce the worst effects of the present situation.

The only sources open to commodity producers to help them cope with the phenomenal drop in their revenues as a result of the fall in prices of their commodities are the compensatory financing facility of the International Monetary Fund and STABEX, which is part of the Lomé Convention. The compensatory financing facility of the IMF is insufficiently funded—everybody who has studied it has said that. It also has a serious handicap in that it has quota-based limits, and that makes it hardly useful to many of the countries that most need it. STABEX. I fear, is in danger of collapse because of insufficient funds.

In 1980 there were claims totalling 261 million European units of account, as against a ceiling of 110 million. Eventually, as a result of the carry forward of the 5.9 million left over from Lomé I, and 20 per cent. advance on funds scheduled for STABEX transfers for 1981, there was a total of 137.9 million European units of account, which was 123 million less than the claims. Thus, the 21 least developed states which had put in claims for STABEX transfers received 64.8 million, instead of the 106 million that they had initially requested. In other words, 42 million European units of account were lost to the poorest countries. The six normal "ACP states received 73 million instead of the initial demands of 154 million.

It is obvious that there is need to increase the resources available for STABEX. The noble Lord the Minister who is to reply will remember that when we debated Lomé, I pointed out that the STABEX allowance was too low. The EEC should agree to give additional financing to STABEX for 1980, to make up the amount that it has been short, and should agree to make additional grants in any other crisis year. I really hope that Her Majesty's Government will support the French Foreign Minister, who I know is very keen on the EEC adopting this particular course. I am sure that all noble Lords here will agree that it is better to use EEC funds for STABEX than to subsidise sugar to be dumped on the world market.

I do not want to burden your Lordships further, and therefore I shall not take on the other point to which I intended to refer. In conclusion, I would say that I hope that Her Majesty's Government. whatever might be the limitations on their approach, will take seriously the need at least to offset some of the more difficult situations that have arisen as a result of the fall in commodity prices during the past year. I also hope that the Minister will be able to assure us that when Her Majesty's Government signed the Melbourne Declaration they meant what they signed.

6.6 p.m.

Lord John-Mackie

My Lords, like other noble Lords, I, too, am delighted that my noble friend Lord Oram has initiated this debate. I am also delighted that he and other noble Lords mentioned the name of my old friend Lord Ritchie-Calder. It is just 30 years since I entertained him in my then home in Scotland, and my other two guests were Lord Boyd-Orr and Aneurin Bevan. During a very stimulating evening one of the subjects of conversation was what we are discussing today. I am sure that those three gentlemen, whom we all miss, would be disappointed at how little progress—perhaps I am being a little hard—has been made during those 30 years. In the debate in the other House, and here today, blame has been thrown about as to who has brought down the aid and so on. All I should like to say is that it is not enough, not nearly enough. When we think of how well satisfied are the needs of the developed countries, surely we could do without many of our wants and increase the aid to the areas where it is most needed. After all, way back in the middle 'fifties, Aneurin Bevan said that the aid should be 1 per cent. and here we are dragging it round about 0.5 per cent.

Mention has been made by several noble Lords, in particular the noble Lord, Lord Vernon, about the increases in populations, and I believe that this is something that must be looked at. Surely control of population is an essential aid nowadays, when we are told that every day 200,000 more children are born into the world. I know that many people have strong feelings about birth control, but in my opinion there is nothing worse than bringing into the world children doomed to lives of poverty and deprivation. My noble friend Lord Oram suggested that the situation involved a long-term policy, as did the noble Lord, Lord Vernon, to a certain extent. I remember not many months ago a Question was asked on this subject. I think that it was the noble Lord, Lord Renton, from the other side, who said, For goodness sake! don't look at these types of aid as short term ". This problem will be with us for a long time. After all, my Lords, when you think that a child conceived today will be wanting something more than his mother's milk in a year's time, not by any manner or means does the situation call for a short-term programme. I do not want to expand on the subject; the noble Lord, Lord Vernon, who is obviously expert on it, did a very good job in putting it to us.

Now we have the two types of aid which have been mentioned. One is the immediate aid and the other, of course, is the long-term aid of education and training, particularly training in growing food, and this essential thing which most noble Lords have emphasised, the help that every developed country can give by trading with these growing countries. This is really most essential. On the subject of training for growing food, my noble friend Lord Pitt went to great lengths—rightly so—on the subject of sugar. I am sorry he emphasised the amount of chocolate and sweets eaten in this country, because I think his medical and dental friends would not agree with him that it is a good thing at all. But it is with us, and we may have to put up with it.

But the EEC is not altogether to blame for the sugar situation. I think the developing countries, particularly the sugar-producing countries, will have to watch their step very carefully in the monoculture of sugar cane. I know it has been going on for a long time, but the Americans went on with monoculture for a very long time in the Prairies and in the Tennessee Valley, and look what has happened there. If anybody has seen a foot of topsoil washed down the Tennessee River they will realise what monoculture can do.

If I may go back to the subject of Lord Pitt's chocolates, it would be much better if the sugar-cane growers could rotate with fruit, which is much better for children than chocolates. I know that the EEC is being blamed, and a figure was quoted to me today to the effect that the reduction in the price of sugar has cost the underdeveloped countries or the developing countries more than the aid that the EEC gives them. It is rather a shocking figure, and I do not think it is quite correct to put all the blame on them and to express it in that way.

On the question of training to produce more food, one of the mistakes made by a lot of people who go out there to help is that they try to develop large-scale farming overnight, as if that was the be all and end all of food production. This is a huge mistake. I can give several instances of this. 1 went out to Basutoland (whose new name I cannot remember; it was one of the protectorates then) and 1 was asked to go down to a corner of the country because they were having trouble with their harvest. I went down there, and there I found that they had bought—and this is nearly 20 years ago—a 12-ft. Massey Harris combine harvester. They had no idea how to service it; their fields were not much bigger than this Chamber, if that size; and it was so ridiculous. I had difficulty, almost falling out with them, telling them how stupid it really was; but they had been advised that they had to have a combine harvester.

Then, in Botswana, they built a beautiful abattoir at Lobatsi to take cattle so that they could be processed and killed and go into the good markets in South Africa and elsewhere. But the cattle were reared on the other side of the Kalahari Desert, and they drove them from one side to the other. I do not know what they were like when they started, but I saw them when they had finished their journey. But there you are; they had put up this enormous slaughterhouse, but they had not been taught how to rear good cattle, fatten them and transport them properly. So we have to be very careful in what we do in trying to increase food production.

When I was in Swaziland, or one of the three protectorates, they were worried about not getting good crops, and I was taken round quite a few of the farms. What they really required was not equipment but know-how. They wanted seed; they wanted fertilisers. These, too, could be put on by hand perfectly simply in the areas that these small farmers were cultivating, and you could harvest by hand. There was need for sprays. An old knapsack sprayer will do the job; you do not need an expensive power sprayer. That is the sort of thing they wanted. The other thing was that quite a lot of their crops were eaten by cattle. I said, "You need to do some fencing. Why do you not get an electric fence?" I was told, "The chief would not allow a fence; that is where he gets his feed for the cattle". That is the sort of thing which has to be stopped if they are going to get on.

Now amalgamating farms. There is a craze that big is beautiful. When I was MP for Enfield I was interested in housing and (wrongly as it turned out) was interested in saving land by building tower blocks. It was pointed out to me (or was proved to me, although I was unwilling to believe it at the time, though I believe it now) that if you put eight two-storey houses to the acre then the gardens, if properly cultivated, will produce more than an acre under modern agriculture. So there is no reason why the small farms in these developing countries should not produce the food which they want without an enormous programme of more equipment, amalgamations and so on.

What I should like to talk about, however, is the immediate aid to the literally starving men and women, and particularly children, in these countries. The capability of agriculturally-developed countries in producing food is enormous; there is no question about it. We are being appealed to by the EEC, which of course includes this country, to reduce food production; and someone has said that the USA has an enormous land bank because we are producing more food. Canada, Australia, New Zealand—all are capable of increasing production; and other countries could help as well. As to the USSR, it is an absolute scandal that they cannot feed themselves and are taking 40 million or 50 million tons of grain which could be used elsewhere. Somebody said that they had bad harvests. I think it was the noble Lord, Lord Oram, himself who said that. They have not; they have badly managed harvests, if I can put it in that way.

If this food is produced as much as possible, then we should get it to the people who so definitely need it. I know this is not easy. I had an experience in 1966, 1967 and 1968, when we had a potato surplus in this country. You do not try to dispose of such a surplus until you are sure that there is not an early frost in the Canaries, or something like that, or in the Scilly Isles, and so on. So in about early March it was decided that there was to be a surplus, and the then Minister of Agriculture, the noble Lord, Lord Peart, said, "What are we going to do with these potatoes, John?" At that time there was a very bad famine in Chad, in the middle of Northern Africa. I suggested, "Why not try to get these potatoes to Chad?"

Your Lordships have no idea of the difficulties. First of all I had to get hold of a committee, and then we got hold of a shipping agent. He said, "As soon as we are round the corner of the Bay of Biscay the heat and the humidity will be so great that the potatoes will be rotten before we get to Lagos". I then suggested that we get the refrigerated ships which are going back round the Cape to New Zealand and Australia. I was told that that would be too expensive and, anyway, they would sit on the quay at Lagos and just rot there. I then suggested, "All right; let us process them", and so we went and got the Smash people, as I think they call them, and they said they had not got the capacity to deal with them as they were a comparatively new business.

So it was suggested that we should turn them into crisps, and somebody said, "You'll need container boats twice the size of these houses before you can get them there." Then a chap in the Colonial Office who knew something about the eating habits of the Chad people said, "They will not eat them because they insist that they must process their food somehow, even if it is only pouring boiling water on Smash." So I was almost stuck completely—in fact, I was stuck —but finally the Potato Marketing Board phoned up and said, "We are sorry, but the potatoes are all rotten in the pits in Lincolnshire." That is just my own experience of trying to get food to starving people.

Then I had another experience. I was speaking at an Oxfam meeting to raise money, and a friend came to me afterwards and said, "Look, John—I would give you some money but are you sure that it is being properly spent and that there is not a lot spent on administration?" So I thought I would do something about that because I could not answer him, so with a doctor friend I went out to Northern Greece, to the Albanian border, where Oxfam were doing a very good job. Of course there were mistakes. There is no question but that mistakes will happen these days. A very nice Canadian thought we should start a chicken farm, and he said, "You get going and I'll send you 5,000 chicks from Canada". But he did not wait until the "Hoovers" were ready to hold the chicks, or anything else; they were literally winging their way across the Atlantic, and 3,000 or 4,000 of them died. This was used as something against what Oxfam were doing, but they did a tremendous job there in a very impoverished area, particularly in the medical field; and I should like to pay tribute to them after what I saw of their work. Although there were mistakes made, they did a tremendously good job.

We hear a lot about these children and we see these dreadful pictures from Somaliland of kids often literally starving to death. One of the things that would save them would be milk—milk as fresh as we could get it to them. There is an enormous surplus of milk here. We skim off the cream and make butter with it and put it in store. Then we dry the skimmed milk and send it out to them. They use dirty water to reconvert it into liquid milk—and it is of no use.

I had the feeling—I discussed this with technical people, the scientific people and the Milk Marketing Board—that long-life milk could be put into 40-gallon plastic barrels and could keep for six or eight months. There is no reason why that could not be sent to the areas where children are so much in need of this essential thing in a child's early life—although I know that the county council of Gloucestershire for some reason is stopping giving milk to children.

I should like to wind up by saying that communication in all its aspects today is such that all these things are brought to us (if you like) in our homes, in front of our televisions, by travel, by newspapers and magazines and so on. But the same thing is happening the other way round. I think the noble Lord, Lord Oram, quoted from Rudyard Kipling rather in that vein. They see how we live, what we do, and the waste that goes on in our own country. I think it essential to narrow this gap between the North and the South, the developed and the underdeveloped, call it what you will. After all, much of our standard of living today came from our late colonial empire where much of the deprivation now exists. Our standard of living came from there and we owe it to them to do more than we are doing at the present moment.

6.22 p.m.

Lord Robbins

My Lords, in common with other speakers who have preceded me, I should like to express gratitude to the noble Lord, Lord Oram, for having introduced this Motion. Although one may not altogether agree with the points that he made, it is well that they should be discussed in this House and he put them in a way which made one think. The noble Lord made reference to the so-called Brandt Report and he appeared to regard its recommendations as incumbent upon all men of goodwill who are interested in the problems with which it deals. With respect, I wish to differ. Without disparaging the motives with which this report was written and without criticising the august names which were attached to the report, I find it in many respects to be unhelpful and misleading.

May I burden your Lordships with some of my reactions in this connection? First, I want to suggest that the very title of the report, North/South and, still more, the map which appears on the cover represents a gross over-simplification of the problem with which we are confronted. It is true that in the text occasional reference is made to the difference between the nations included in what it calls the South. But I am bound to say that the differences between, let us say, Saudi Arabia, which is bang in the middle, Brazil, Taiwan and many of the poor states south of the Sahara, scarcely admit a common trend of economic difficulties. The second way in which I regard the report as definitely misleading is the penumbra of implications that what poverty there is in what it calls the South is somehow or other to be attributed to the policies (or the absence of policies) in what it calls the North. 1 would not wish to be thought to extenuate all policies, past and present, of the nations of the North. 1 certainly deplore the growth of protectionism in one form or another which hits the poorer countries and I am prepared to acknowledge some errors of education, or lack of education, which in the past were administered by the so-called colonial powers. But I submit that it is utterly grotesque to attribute the poverty in the poorer areas of the world to the richer areas. The chief causes of poverty in the poorer areas are, surely, bad government, the disproportionate growth of population and the lack of technical skills and knowledge.

May I expatiate a little under these headings. Bad government embraces a variety of things: bad leaders, bad policies, and very important in this connection, had security for foreign investment. So far as the disproportionate growth of population is concerned, I agree largely with what the noble Lord, Lord Vernon, said. In my judgment, short of nuclear war, disproportionate growth of population is the main danger to the human race in the next century. To realise this, one has only to consider that doubling the world population—which we are assured will take place in the next half century—represents a ratio of poverty to resources which would obtain if with the present population the size of the planet were reduced by half. It seems to me to he very bad luck on the population of those areas which have reduced their population to have to hear the burden in the future of indiscriminate multiplication. I agree very much that whatever aid is given should he coupled with the requirement of attempts at family planning.

My third condition of poverty was lack of technical knowledge. In the long run, perhaps, this has been the main cause of poverty. One must realise that elsewhere in the world, in the North, as the Brandt Committee call it, development has taken place without official international aid. I am sure that over time technical skills can be communicated, especially by education in more advanced communities, a policy, a form of aid, which I favour but which does not seem very popular in Government circles at the moment.

My third reservation about the report concerns financial institutions and finance. So far as existing financial institutions arc concerned, I am glad to see that the Brandt Committee recognise the importance of the International Monetary Fund and the World Bank. I was a delegate at Bretton Woods; and I can still—if I shut my eyes and listen to nothing else—recollect the final scene, when the assembled conference rose and cheered Maynard Keynes in recognition of the part he played in bringing about these organs of international financial regulation and co-operation. That is a sad contrast with what, today, if often to be heard in criticism of these institutions at the various organs of the United Nations.

I am sorry to see that the Brandt Committee, having recognised the importance of the IMF and the World Bank, proceeds to promulgate proposals for modification of their constitution which, instead of improving things, would make them very much worse. The voting power on both these bodies was not distributed as in the voting power in the Assembly of the United Nations, where El Salvador has an equal vote with the United States. It was based in the financial institutions on complicated formulae which were put forward both by the United States and by the United Kingdom involving roughly the contributions of the areas involved.

The proposals of the Brandt Committee would upset all these arrangements. They would make decisions regarding the movement of international capital more influenced than they are at present by the borrowers and less by the lenders. I find it difficult to conceive any arrangement which would more speedily bring the institutions concerned into gross discredit. As to the total finances involved by the numerous recommendations of the Brandt Committee, it is safe to say that, regardless of principle, in the present circumstances of the economies of the North, they are not politically practicable.

The committee talks of massive transfers—and indeed, they are massive. Doubtless, in the end, they are transfers of real wealth rather than of finance. I recollect a very popular noun and its adjective in the years immediately after the Second World War: what the Brandt Committee is recommending is unrequited exports. But, apart from defence, which, in the opinion of many of us—lamentably— has first priority in the budgets of the West, the Brandt Committee do not say what items of domestic expenditure are to be cut down in order to augment the aid that is already given.

Although my mind is open to persuasion as regards the remoter effects of successful aid, I doubt whether the cuts that would be involved by unrequited exports in the short term would be popular in the North, if their implications were spelt out. I do not need to remind your Lordships that in this country we are still suffering an inflation of something like 12 per cent.— I see that the noble Lord, Lord Hatch, is not in his place—and that is an entirely different position to that against which Lord Keynes protested in the inter-war period, when we were suffering positive deflation: a shrinkage in aggregate expenditure, rather than an excessive increase.

I conclude, my Lords, by disposing of possible misunderstandings. I am not against aid as such. If a widespread earthquake were to break out tomorrow in the poorer parts of the world, I doubt whether any of your Lordships would oppose grants from the richer areas to alleviate its consequences. Supporting as I do the original purposes of the IMF and the World Bank, I am not against subventions which fulfil these original intentions which, so far as the World Bank is concerned, have been slightly whittled away in the past.

But in general, I agree with the noble Lord, Lord Harris of High Cross, that if aid is to be given outside these institutions and outside the relief of these possibly catastrophic occurrences, then grants should be given in aid, not of Governments— which in many parts of what is called the South are not what they might be—but in aid of specific projects which can be disinterested by appraised by experts.

Let me conclude by saying that I doubt very much whether we help the poorer members of the world by encouraging them to think that the massive transfers contemplated by the Brandt Committee from the rest of the world are likely politically to be forthcoming.

6.39 p.m.

Lord Soper

My Lords, had 1 been a member of the Christian Church in the primitive days when they were lively in their expectation of the parousia, I should have thought myself considerably more at home in this debate than in some that have occasioned your Lordships' attention, for there has been an underlying current of apocalyptic in what has been discussed today, particularly in what was said from the Benches behind me by the noble Lord, Lord Vernon. Indeed, it is a critical question and may be a terminal one to which we are invited to address ourselves today. For that reason, I am more than grateful to the noble Lord who initiated this debate for the way in which he brought to bear upon our consideration two factors which 1 think are imperative. The first is the personal—that is to say we are dealing with people—and the second is the moral.

Two hundred and fifty thousand children go blind every year before they reach the age of five. They could all be saved by a handful of green vegetables. I do not believe that anybody in your Lordships' House would doubt that, whatever the future prospects of those children might be and however happy one might feel about their moral condition, to deny them opportunity of sight would be an unworkable and an unworthy occupation. Indeed, a boy rescued from blindness might see his way to become a Methodist, or he might not; he might become a communist, or even a burglar; but none of these matters has anything to do with the peremptory requirement that where people are in that kind of absolute need the only civilised and right thing to do is to endeavour to deal with it. That is where I begin.

I have listened with considerable care this afternoon to a mountain of statistics. They can, unless they are closely scrutinised, disguise the fact that we are dealing with people; and the statistics arc only valuable as they enlighten our conception of individual behaviour and individual character. It is in that respect that I believe this is essentially a moral debate. But to say that is insufficient, because a great deal of what is ideally moral is practically unattainable—and this of course belongs to the story of poverty. In the New Testament we have Jesus saying: The poor ye have always with you". Indeed they were, because the productive capacity and the distributive capacity were unequal to the task of feeding all those who were hungry. There is an interesting corollary to that in the story of Islam. One of the required practices of the good Moslem is that he has to give alms, but the giving of alms is the implicit recognition that poverty on a general scale is ineradicable.

Up to a few years ago—and here I speak with care in view of what the noble Lord, Lord Vernon, has already said—it seemed to me that this situation had radically changed and for the first time the moral imperative to show compassion—which is infinitely preferable to charity—was not only morally desirable but practically possible. Therefore, added to the elementary and primitive kind of compassion which I believe belongs to any human being if he is allowed to exercise it, there is this sense of what, after all, compassion intends to do—that it can, in a modern technological society reduced to the size of a neighbourhood, in fact be attained. That is where I start and that is, I believe, the beginning of the answer to which we must proceed if we can.

I believe that what is morally right in the long run, and perhaps in the short run, will be practically possible. I therefore find a particular interest in looking both at the Brandt Commission's Report and at the attitude, which I will now dilate upon a little, of the Government of the day. They are committed by their own statement that, it believes strongly in the merits of the present world economic system with its wide reliance on open markets for trade and financial flows". I suppose that is an extension of the doctrine of enlightened self-interest. It is certainly not an ethical principle at all, and in fact the general impact of what seems to come across the Atlantic today would tend to emphasise the fact that, instead of some kind of general moral principle in the assumption that if you do what is right you will find it works in this world, there is the prolongation of programmes which seem to me to come, particularly in the United States of America, from an attitude in politics that is an extension of cowboys and Indians. I find that where this particular programme is carried out it denies automatically what after all Tawney said was inevitable in a capitalist society—you have to make up your own moral rules because the moral rules which are there already (and implicit in the Christian faith, for instance) are inapplicable and contrary to the interests of that society. I still believe that.

Therefore, I ask the Government, in looking at their programme, can they deny that there is an overall reduction in prospect of 11 per cent. in their aid to developing countries? I do not think they can. Can they deny that the IDA is either reducing or is in prospect of reducing very largely that which would make it easier for those who need to borrow money to do it on reasonable terms? Is it not true that, because Mr. Reagan has taken 25 per cent. off his own contribution to IDA, the Tonto to this Lone Ranger is now doing it over here? Is it not true that in general principle there is a reduction of cultural opportunities for students who could immensely benefit from a sojourn over here? Is it not made much more difficult for them to come? Is not the logical impact of this likely to be that they will go elsewhere and take with them to other countries orders and opportunities which might very well reside within these shores?

It seems to me that the whole programme of the Government belies the claim that it is a consistent programme. It is not. It is not part of the economic system, because it is not a system. There are a number of ways in which we are now encouraged to believe that our own welfare will depend ultimately on a retraction from commitments elsewhere in order that we may improve our affairs at home. I doubt it. Although I agree that some of the strictures on the Brandt Report seem to be justifiable in view of what the noble Lord, Lord Robbins, has just been telling us, they are committed to that system which I abominate. But nevertheless I think that in some respects what they say is likely to be true. If you improve the welfare of those who are undernourished you release into the community creative powers which are stifled if they are not nourished. The only creative capacity we have is that which lies within our opportunities to develop, and to extend those faculties with which we are endowed. Deny food, clothing and shelter to those who might develop these faculties, and you stifle them. Therefore, in one sense, the increase in the total wealth in the world community in which we live would be immensely enhanced if we developed a programme whereby we gave people an opportunity of realising themselves and growing up in a world to which they can contribute instead of being paupers with no ability to contribute anything.

In the same way, on the vital question of population, I am a little disturbed. I remember the days long ago when Le Gros Clark was the apostle of programmes about the inevitability of a world which would be soaked in a population explosiont—that is if you can soak people in an explosion. Certainly it has not come true in some respects. I say with some care—and I am subject to information which comes to me from sources which are far more competent than the information I command. But, having said that, I am not at all sure that you will not in fact meet new opportunities of cultural growth in a number of children when you obliterate that condition in which poverty-stricken parents will regard offspring as wage-earners, or at any rate as those who will increase their meagre standard of living, and where you can increase the opportunities and the amenities of life and separate them from that almost exclusive pleasure which comes from the marriage bed.

Will your Lordships allow me for a moment to draw upon my experience of 50 years as a social worker? I assure this House that I have evidence which to me leads incontrovertibly to the conclusion that when you offer to people a higher standard of life and the opportunity of greater means of pleasure, vocational opportunities and cultural opportunities, you tend to build a system which does not utterly depend on the pleasures of the marriage bed and on the procreation of children. Therefore, I believe there is every evidence that the somewhat melancholy prognostications as to the proliferation of population in the next 100 years may well be denied by the kind of changes that can happen when you increase the actual cultural level, and, if I may say so, the spiritual level, of families.

It is in that regard that I cannot sit down without reminding myself of how dangerous it is in the developing world, where there are so many who look to Rome for their comfort and assurance, that the noble Prelate, that charismatic and undoubtedly good man, is now committed irrevocably to programmes of refusal of various kinds of birth control and family planning. I believe that he would be infinitely wiser and, if I may say so, much more infallible, if he would stop telling us that we cannot do any of these things, and would recognise that, having the instruments whereby we can create a better future, those instruments are not necessarily to be denied because of a theocratic base from which, historically, a masculine attitude to sex has predominated for so long.

Here is a situation in which I, for one, would advance the following proposition as I sit down. There is enough evidence in the world already that, when you begin to do what is morally right you tend to get your political structures accurate and true as well. Therefore, partly—I suppose, pre-eminently—because I happen to believe in God and in His providence, I would commend this view to this House. In considering what is our moral duty to those who are hungry, let us get on with feeding them and let us believe in the Kreisky Report, which 1 think was not even considered by the Government, for in so doing we shall not, in fact, be putting ourselves into penury, but advancing into that kind of age in which every child would have enough to eat, time to say his prayers, and nothing much to be afraid of if he hears a bang in the night.

6.52 p.m.

Lord Roberthall

My Lords, I must join every other speaker in welcoming the opportunity given to us by the noble Lord, Lord Oram, to discuss this very important subject. He put down so many things to which he wanted to call attention that one has to be a bit selective. By far the most important in my view, is the reference to population and I entirely agree with the noble Lord, Lord Robbins, about that. We are heading, inevitably, for a most disastrous situation and it is very depressing, when you think about the troubles of developing countries, to see how often all we are doing is stopping two people from dying, so that four people can die in the next generation. That is the simplest way of putting the problem.

My noble friend Lord Vernon has already dealt very fully with this aspect, and I have no doubt that the noble Lord, Lord Houghton, will do so too. I cannot exactly give him a blank cheque, but I shall be very much surprised if I do not agree with everything that he says. So I shall confine myself to a rather narrower field, and say a little about the United Kingdom's contribution.

The timing of this debate is very suitable, because the whole subject was debated a fortnight ago in another place, when the Minister gave quite a full account of what the United Kingdom is doing. I think one can sum up the whole debate very simply, by saying that what is wrong with our programme is that it is much too small; and what is right about it is that we are doing what little we can in what is probably the best way, and the way that makes us think that, at least so far as the United Kingdom is concerned, all our aid is not being wasted, which is something that can happen.

As has been repeatedly said in the debate, the position of the developing countries has deteriorated tremendously in the past few years. The two main reasons for that are, first the increasing burden placed on those countries by the price of oil. OPEC put a burden on all the oil importing countries, but the developed ones have by their own efforts, to a large extent managed to deal with it. However, the result has been that the surplus generated by the richer oil producing countries, which must have a deficit elsewhere to match, has tended to end up with the less developed countries; and, as the noble Lord, Lord Hatch, said, many of them are now in the position w here all the new aid that they get is required to pay the service of what they have already borrowed. I know that the aid which they have had should help their output and help them to service the debt, which raises the question of how they have used it. But it has been a very severe blow to them that they have had to pay all this extra for oil.

The other burden that many of them have had to bear—this has also been referred to by a number of speakers—is the effect of the world recession on their export receipts. I had the honour of being the chairman of your Lordships' Select Committee which dealt with commodity prices some years ago. I think that the noble Lord, Lord Oram, at least, will remember, because he replied to the debate on the subject. That committee recommended to the Government that we should encourage the UNCTAD initiative for a new economic order, with a good deal of attention paid to the question of stability of commodity prices.

The noble Lord. Lord Robbins, referred to Lord Keynes and the enormous part that he played in the post-war arrangements. One of them, as I am sure the noble Lord will remember, was his advocacy of commodity agreements, simply because the great swings in prices which took place had a very bad effect on commodities themselves, and helped to add to the instability of some developed countries, because they lost their customers due to the lack of income. We recommended that that policy should go on, and the Government seemed, more or less, to accept it.

But no progress whatever has been made in the intervening period in reaching these agreements. The producing countries cannot agree on the terms on which they will join in, and the consuming countries will not agree about putting up the money. We are now in a most terrible recession—we have not had such a bad one since the 1930s, and this is almost worse—and the troubles of the developing countries have been very much increased by it. Looking at the position of the Government we have, as has been pointed out, been cutting our aid in the last few years. We are going back and back from the target.

T ask your Lordships to take these two factors—oil and commodities. We have been insulated in recent years from the burden of oil prices, because we have had our own North Sea oil and, as importers, we are getting our primary products, our raw materials, very cheaply indeed. Tin is the only commodity whose price has kept up. Also, it is almost the only commodity in regard to which a successful agreement has been reached. Therefore, it seems to me to be most unfortunate that we have chosen to cut our aid. The excuse put forward is that we are in difficulty ourselves and that we have to economise. I do not agree with that analysis. I believe that a great deal of our recession is self-inflicted.

So far as the logic of monetarism is concerned, there is a case for tightening up and hoping that the hardships caused by the recession will make manufacturers accept lower prices and workers lower wages—thus working against inflation. But what earthly good can it do to our struggle with inflation if we cut our miserable aid to these underdeveloped countries? Whatever pressure we bring to bear on them will not have the slightest effect on anything that we do here. It is scandalous that under the pretext of our self-inflicted, or largely self-inflicted, troubles we should put some of the burden on to them.

To turn to the way in which our aid is spent, there is unfortunately a good deal of force in the argument that often it does not do the recipient countries much good. The noble Lord, Lord Robbins, gave a very good analysis of the reasons. The reasons are either a corrupt administration or—what is almost endemic—the lack of skills and ability to use the aid. I used to think that untied aid was best. I was very naive at the time. I was thinking of the aid which we received from the United States. It seemed to me that we were the best judges of how to use that aid and that therefore untied aid was the best. But I have completely changed my mind about this in terms of the less developed countries.

The account which the Minister gave of the way in which our aid is used is quite good advocacy for the claim that at least we ourselves are doing more good than harm. I do not think that the export credit guarantees which were mentioned by the noble Lord, Lord Hatch of Lusby, have got much to do with it. Export credits are meant to help exporting industries, not recipients. Apart from that, the hulk of our aid goes to the poorest countries. We spend a good deal of it on sending experts to help with development programmes and on providing training places for people from those countries who are sent here.

Most of our aid is project aid. We find in the report that we are spending more and more time upon evaluating the planning and the progress of projects. That seems to me to be a strong argument for increasing what we give, since we know that they are getting something, whereas in the case of a number of donors and recipients of aid it is rather hard to say what the recipients are getting.

Finally, I noticed in the report that we are giving more money to the Commonwealth Development Corporation and increasing their borrowing powers. It is always a great pleasure to read the annual reports of the corporation. They make sure that their projects are wanted, that they are within the capacity of the country concerned, that they learn how to operate them and how to find a market. In fact, they provide an example of how best to provide aid. Although I do not think that the Government have quite kept up their grant in real terms, the fact that they have increased it should at least be counted to their credit.

Lord Kaldor

My Lords, before the noble Lord sits down, may I ask him whether he agrees that the losses sustained by the non-oil developing countries as a result of the recession in the industrial countries are quite as large as the losses due to the rise in the price of oil? According to the official figures for the last 12 months, the terms of trade of these countries deteriorated by 17 per cent., which is enormous. The average price of raw materials, food and minerals fell by 20 per cent.

Lord Sandys

My Lords, if the noble Lord, Lord Kaldor, wishes to make a speech he will have an opportunity to do so. However, he must confine himself now to a question.

Lord Kaldor

My Lords, I want to ask the noble Lord whether or not the position could be alleviated enormously if the industrial countries agreed not to reduce below the normal their disbursement in dollars and in any other form of international currency to these countries on account of their own recessions?

Lord Roberthall

My Lords, so far as I followed the noble Lord, I think that my argument would support what he has said.

7.9 p.m.

Lord Beloff

My Lords, I believe that there is the possibility in this debate of some misunderstanding on the part of those like the noble Lord, Lord Oram, to whom we are grateful for introducing the subject, and the noble Lord, Lord Soper, who took up some of the moral points with which he rightly began—a misunderstanding as to whether those who are critical of the particular solutions for the problems of the poorer countries which are advocated in the Brandt Report, or in other aid practices, arc at the same time not so concerned as are the noble Lords with the problem of poverty.

For my part, I would totally accept both the moral argument with which the noble Lord, Lord Oram, began and also, with less certainty (because I am adrift in economics), the argument for enlightened self-interest. Both of these arguments, I think, are correct. Nevertheless, this does not necessarily commit us to a particular set of solutions. It is surely the business of this House and of all who care about these problems to look coldly, rationally and in the light of experience at what we know about the most difficult problem, not only in economics but in human society generally—what Adam Smith called the source of the wealth of nations.

The criticism which the noble Lord, Lord Robbins, and the noble Lord, Lord Harris of High Cross, has made of the Brandt Report stems from two main arguments. One is that its intellectual penetration is inadequate; secondly, that those serving the commission (and indeed many of the distinguished members of the commission would have been capable of greater intellectual penetration) were concerned not to rub up the wrong way important figures (particularly but not exclusively in the third world because this also applies to other countries) and this prevented them from giving us the groundwork upon which an argument of this kind might be based. If we look at what is required in order to create wealth and eliminate poverty, we have after all experience extending over many centuries, and it would appear that there are at least three elements which must exist in a situation, and exist together.

It is my contention, and I believe the contention of other noble Lords who have spoken, that the absence of some of these conditions is due to the primacy of politics, of certain political interests, and of certain political ideologies which between them have made aid and the efforts of the aided countries themselves less effective than they might be. Let us take technology. It is obvious that to have the skills required, particularly in the area of growing foods, is more than ever essential. These technologies exist. A year or so ago, I had the privilege of visiting on the northern border of the Negev Desert, the Israel Desert Research Station, which is working on modern methods of how one can derive crops or animal husbandry from arid or semi-arid areas, and also on reconstituting those methods by which in the ancient world so much of the Mediterranean basin was fitted for the growing of crops. Yet for reasons which we know about, and which have nothing to do with the subject of this debate, those countries in North Africa and the Middle East which could best use this information are debarred from using it for political reasons.

The second lesson would appear to be the desirability of entrepreneurship. If a new invention, a new procedure or a new method of marketing is to be discovered and implemented, it is necessary that there should be people with a burning desire—arising perhaps out of material self-interest, out of self-advancement, or merely out of an interest for the thing. That is the desire we know as entrepreneurship. It has often been minorities who have shown this particular capacity. Yet in Africa, the most important and effective of these minorities—those who originally came from the sub-continent of India—have been largely expelled. To some extent, we in this country are enjoying the fruits of their entrepreneurship. Yet this has been a self-inflicted wound by the Government of Zambia, to which the noble Lord, Lord Hatch of Lusby, drew attention; by the Government of Tanzania; and to a lesser but still considerable extent by the Government of Kenya.

Thirdly, and most important of all, there are the lessons of our own history in Europe, which would suggest that the basic argument of the Brandt Report that economic prosperity will generate political stability is an argument contrary to the lessons of history. The lessons of history would suggest that where one has political stability, uncorrupt administration and a sense of national togetherness, prosperity comes afterwards. The two most remarkable examples in European history are the Netherlands in the 17th century and Denmark. In the Netherlands, this tiny community in bogs and swamps became within three generations the financial and trading leaders of Europe. In the 19th century, the most backward of all European countries was Denmark. In a few generations, through popular education and through the discovery and exploitation of the principle of agricultural co-operation, it became one of the leading food exporters.

We have to ask very seriously whether the aid we are giving, or the form of aid we are giving, is going to encourage countries to create circumstances which will promote the production of wealth. If people are left alone—particularly the peasants, and we have been told that it is the rural areas with which we are concerned—and are allowed to garner the fruits of their husbandry, and are given some assistance in marketing their produce, they can sustain themselves and their families, and in many areas they can possibly sustain more people than they have in the past. But what do we see? In Tanzania, as the noble Lord, Lord Harris of High Cross, reminded us, a perfectly viable peasant economy was wilfully destroyed by President Nyerere in the form of forced collectivism, so that a country which could have avoided creating misery for its people is now a burden and a deficit country. This lesson can be repeated. We should not be surprised, and nor should we take the patronising view which is so often expressed, that this has something to do with the incapacity of the peoples of the third world, because we can find it much nearer home.

The noble Lord, Lord Oram, rightly pointed out that one of the grave features of the current scene is that, whereas we had half a dozen countries capable of exporting important quantities of food grains a few generations or even a generation ago, we are now left only with the United States. This is not the fruit of a change in nature. Nature has not become more cruel. In Europe and elsewhere, nature has always given good harvests and bad harvests, runs of bad years and runs of good years. These run all through history. Is it not the fact that the particular form of organisation of agriculture adopted by the Soviet Union removed the Soviet Union from being a food exporter and made it a competitor with poorer countries for the buying of food abroad? A similar system imposed upon Poland, which was an important exporter of food before the war, and upon Romania and Hungary, which were granaries for Europe, has created the problem and not changes in nature.

In dealing with aid, and here I agree with the noble Lord, Lord Roberthall, so far as I could follow his argument, it is important that we should have a precise knowledge of what is done. Whether one calls this tied aid or not seems to me to be a matter of very little consequence. 1 would have thought that there were three areas in which we could believe with satisfaction that money we chose to save from other expenditure (we must save it from other expenditure if we are to spend it) could be used successfully. First, the work of the voluntary societies in giving many forms of medical and agricultural aid could be supported to a greater extent. But again one has to remind oneself that there are limits to the risks to which one can expect members of voluntary organisations to submit themselves, in countries where it is not a question of security for the investor but a question of the security of the doctors and the nurses. This is a serious question in a country like Uganda, where I begin to feel, after successive changes of regime, that the only hope would be something equivalent to an international receivership, an international body which would actually have to adminster that country. One of our guilts may perhaps he in the mind of a future historian not colonialism but premature decolonisation. The second area is this—and I know on this at least my noble friend the Minister will not be able to satisfy me completely; I agree that spending of money on students and study, on making technical information available, is something we can do because we can monitor it; it is done here at home. There are difficulties; there are problems. I do not say that we had an ideal system before the present changes, but this is another area.

The third area must, I think, again be a moral one. This is another precept of morality, which I suppose the noble Lord, Lord Soper, would put perhaps not quite equivalent with "love thy neighbour"; that is the precept "Tell the truth". As long as we conceal from the public—and this, I think, explains part of the apathy to which reference has been made—the fact that there are very serious ways in which some Governments which ask for aid, clamour for aid, fall short of their own duties to their people, we cannot really expect our people to be enthusiastic about giving them inter-governmental aid.

7.22 p.m.

Lord Houghton of Sowerby

My Lords, I am sure your Lordships will agree that we have just listened to a most fascinating speech from the noble Lord and he has undoubtedly made an important contribution to the debate of the day. I look forward to reading it in Hansard tomorrow because I think the noble Lord gave us quite a lot to think about. My noble friend, Lord Soper, commented on the general mood of the debate today. Well, I do not think I have any particular optimism to bring to the proceedings myself. I do not ascribe it to age, more perhaps to acquired wisdom, to have a reasonable degree of despondency about the condition of mankind and the future of the world.

I want to concentrate on population, and I was very glad that the noble Lord, Lord Robbins, stressed this in the early part of his speech because I think we shall all agree that poverty, pollution and population are the major social concerns of our time. I believe that in the final issue it will be population which will determine the quality of life on earth. That appeared to be the view also of the noble Lord, Lord Robbins. In my belief, no other danger—not excluding nuclear war—is as great, or almost as inevitable, as this. So I go rather further than the noble Lord, Lord Robbins, in stressing the vital importance of population in our vision of the future.

I fear that the collective foresight of human beings is not clear enough, nor the will to meet the danger strong enough, to avert catastrophe. That is my fear. Multitudes are not very good at shaping their own destiny. This, I think, is where world leadership must exert itself, and those with vision and power in their hands should use it to lead people towards the solution of our problems rather than leave the political apathy of so many people to dominate the policies of political parties.

The noble Lord, Lord Holderness, referred to the falling off of enthusiams in the public mind, as he believed, in the last two years, for the part which this country should play in giving aid to other countries. It surely cannot make sense if man is bent on controlling or destroying at will every form of life except his own. The only greater folly would be to destroy himself, and there is probably a question mark over that.

But, assuming survival, I do not believe it will be possible, so far as we can at present foresee, for a greatly increased world population to attain living standards remotely comparable to those we enjoy in the western countries. The resources likely to be available and the mechanics of international exchange of goods and services that we are using will simply fall short of the minimum needed to relieve the distressing plight of the over-breeding by human beings. In many lands standards are falling already because larger populations are having to use more energy, more transport and more food for bare subsistence. Rising costs, reflecting the commercial practices of those who know about supply and demand, are depleting the surpluses of their own products for export, with the result that they cannot afford to buy improvement in their lives.

When one speaks frankly and openly in politics about population control a chill goes down the spine of many a delicate person, because population control means birth control and birth control means contraception; and contraception, we are led to believe, leads to abortion. Thus the debate on population control soon lands us in the thick of religious controversy. Well, my Lords, I do not see how one can have population control without birth control in some form or other. There is an alternative if we are prepared to give it a moment's serious thought. It is the one described in the Economist survey on Nigeria which was published on 23rd January this year and which seemed to have been undertaken to coincide with the visit to Nigeria of the Pope.

Nigeria's population increase is very close to that of the world record holders, Kenya and Zimbabwe, with around 32½ per cent. The dreadful alternative to population control is described in this survey on Nigeria, from which I now quote: Maybe Nigeria's notorious filth, and the absence of piped water practically everywhere, will kill enough babies to make up for the present zealous propensity to breed. Maybe war, or epidemic, or some unthinkable calamity, will intervene to curb the growth of population. Setting aside such dreadful fantasies, if seems that Nigeria entered the 1980s with a population of around 100 million, and that it will start the millennium with over 200 million people. At present rates they would consume as much oil as Nigeria now produces, with none over for export. They would certainly want to eat twice as much food as Nigeria's farmers now grow. It is a formula for catastrophe". The survey ends, still on Nigeria, with the heading "Whatever Next?"; and the concluding paragraph I beg your Lordships' leave to quote: Meanwhile, at a rate nobody knows, the babies are being born, and for each one born the chances of any getting educated grows slimmer. In Nigeria, as in all tropical Africa, the economic theories under test are not those of Marx or Marshall or Keynes, but of the more ancient Malthus. Gloomsters like this correspondent must remind themselves that Malthus's vision has never come true—yet". They key word seems to me to be "yet". As long as that word can be used there is a ray of hope.

With all the familiar homilies in mind about the joys of family life, we should note that, of the 31 countries listed as least developed, 21 are in Africa and 11 of those are land-locked. They have a total population of about 270 million which is expected to double by the year 2010. All suffer from stagnant growth, illiteracy and infant mortality. What hope is there for children being born in those countries with the right to live? Our doctrine of the sanctity of life which we seek to establish from the time of conception can have no practical meaning in Africa. Nature is cruelly doing the work of more humane methods of population control, contraception being one of them, and the only one of them which is likely to make any impact upon this load of human misery.

I am glad that seven out of the 31 least developed countries were receiving direct bilateral aid from this country for population programmes in 1977 to 1979. It would be reassuring to know that those programmes are being continued. I would also like to know how many of the 31 countries listed as least developed, applied to this country for similar aid and were refused. We must not slip back on this, notwithstanding our financial difficulties. Our hardships compared with those of three-quarters of the rest of the world are purely marginal and it seems to me that it would be quite shameful if this country were to plead poverty to the destitute of the world.

I should like to turn for a moment or two to a programme on BBC 2 last Monday called "Horizon". That programme dealt with the contraceptive in use in Northern Thailand which is banned in the United States because of the possible cancer risks, but which in Northern Thailand, whatever its medical hazards, has saved the people from economic disaster. As one of the villagers pointed out in the film, the soil in the area is now so poor that the local people cannot afford to have big families—it is contraception or starvation.

We now have China which is apprehensive as its population rises to 1,000 million. It is now campaigning intensely for the one child family. Government propaganda, social pressures and expanded contraceptive services all combine to this end. I think that one of the welcome developments in Asia is the way in which China and India are taking the lead in the formation of an Asian regional conference to stimulate population programmes on their own in their own regions. Mexico is another example of a country with a national population policy. Although a Catholic country, the Government are having to meet an appalling threat of urban congestion by providing birth control facilities. This is very significant and welcome, but it will not be entirely enough.

The Brandt Report carries the discussion to the wider perspective of world co-operation. Extremes of wealth and poverty between the citizens of the nation state are becoming less and less acceptable. Fair shares, social justice and greater equality are the social aims and political slogans now familiar to us all. But how many nation states extend that principle to other nation states in anything like the same spirit? Charity does not begin at home; it is self-interest that begins at home, and it needs to be enlightened self-interest to be tolerable in the world today. Politicians are turned into statesmen by sticking up for their own country against all odds and all comers. So that, really, is what Brandt is discussing.

There are many difficulties and weaknesses in the Brandt proposals and both the noble Lord, Lord Robbins, and the noble Lord, Lord Beloff, have referred to some of them. I think that the Brandt Report was weak on population. But we have at present in this Government a Minister for Overseas Development, Mr. Neil Marten, who is fully seized of the importance of using an increasing proportion of our overseas aid to finance population programmes. Rather more support is being given to the United Nations Fund for Population Activities and to the International Planned Parenthood Federation. My noble friends will probably be surprised to learn that there is one enlightened Minister in the present Government and I think he stated his policy pretty clearly at a conference in Paris last September when he said: We have identified four areas of great importance to the least developed countries in which we are taking new initiatives. These are agricultural research, population, water and sanitation … We consider that in the short term the most effective way of assisting population programmes is to increase our contributions to international agencies active in this field.". That is what the Government are doing. I think that in the longer term the greatest of all the identified matters of importance is population. In my view, population control is the best medium- and long-term investment for the world today. It is probably the one peaceful hope for mankind.

7.38 p.m.

Baroness Denington

My Lords, we have had a rather long but very interesting and very important discussion in this Chamber this afternoon. We have heard about world economy problems and world financial problems, but as I have sat here I have had the growing feeling that we have perhaps got rather far away from the day-to-day pressing problems of the poor of the third world which, to me, is what this matter is all about.

I want to speak briefly on two very simple matters: first, the importance of a pure water supply to settlements all over the third world which do not have such a supply; and, secondly, to some of the problems faced by women in poor communities, because in my view they are very dire indeed. Those two matters are closely related and they also have a direct bearing on our success in curbing population growth. I agree emphatically with what the noble Lord has just been saying about the need to curb population growth in our world.

We all know the statement, "mankind cannot live without water". But we must be more particular: mankind cannot live a full and healthy life without clean, unpolluted water. That is the problem, because clean water is not available to millions in the third world. The World Health Organisation estimates that 80 per cent. of all sickness is due to contamination from impure water. I want to give a few statistics because I am trying to bring home to your Lordships what you know as well as I do, but I must bring it home. The World Health Organisation states that 500 million people are going blind or are blind with trachoma; that 250 million have swollen legs from elephantiasis; that 200 million are urinating blood from bilharzia; that 100 million are ill and incapacitated with diarrhoea and that 30 million are blind or going blind with river blindness.

These are horrifying figures. What I am saying relates to these millions of people in their day-to-day lives and to what they are suffering while we talk and while all these conferences about which we have been hearing, however worthy, talk and talk. The diseases I have mentioned in large measure come from infection from impure water. Other illnesses are spread by contaminated water, when people wash their hands and their hands are dirty. Others arise from having insufficient water and others, as noble Lords well know, come from water-based insects. There are other illnesses because there is no sanitation in these remote communities.

I am sorry to inflict all this on your Lordships, but I am trying to emphasise the urgent, pressing need in human terms for universal clean water supplies. I know that we may well be told and reminded that there are programmes to supply pure water in many countries, but I find that the progress is far too slow. When the water does come, the provision is often inadequate both in the number of settlements covered and in the actual positioning, number and spacing of the wells or taps or from whatever the water comes. The length of carry from the well or water source to the home is a matter of gravest importance and I learn that where tube-wells have been put down that are too far from people's homes, the water from those pure water wells is used only for drinking. It is not used for washing or for washing one's hands; it is not even used in cooking. Therefore, it is perfectly plain that the effort and the money spent on supplying the pure water is partially negated because it is not used for everything and, as I have said, there is contamination when hands are dirty or when the bucket that is used to fetch the clean water is rinsed out, as it is, in dirty water on the way to fetch the clean water. These people need simple health education, which must go hand in hand with the provision of the clean water.

If the supply is dependent on pumps, as it so often is, there needs to be some arrangement for someone in the village to be responsible for the pump when it goes wrong; to have had tuition to know how to put it right. It can he quite a simple matter to have spares, and if something more serious goes wrong, something needs to be laid on—perhaps a stamped printed postcard that he can send to some nearby place from where some other help can come. But it is no good having wells if the pumps are not working. These are small matters, but they all need organisation and they all need attention. I would have hoped that aid could go to provide an answer to this very basic need of pure water.

As we all know—and it has been mentioned in this Chamber this afternoon—impure water is a cause of the death of babies, who are poisoned at birth by the use of impure water and other insanitary practices, and it is a cause of the death of young children. ironically, at the moment it is, of course, a cause of overpopulation. Several noble Lords have said that the uncertainty that their children will survive is one powerful reason why millions of women in the third world are worn out with continual childbearing—they feel that there must always be replacements. If there is to be any hope in our efforts to curb the growth of the world's population, women must be given a firm expectation that the child that is born to them will live, and not die.

I ask your Lordships to consider for a moment the lives of millions of women in the third world. They toil from morn till night. They look after their large and sickly families; they must provide, prepare and cook the food; they must fetch the clean water from the well—it is usually the women who do it and occasionally the children, and I would remind your Lordships that water is a very heavy commodity; they must tend and grow the crops for the family to eat, and usually they must weed the fields of crops that are to he sold. While they work they are often heavy with child, with another toddler beside them who has to be looked after, and other children on whom they also have to keep an eye and organise. No wonder the women become absolutely worn out. These burdens would be taxing and hard to bear for women who were young, strong and healthy, but the women about whom I am talking in the third world are already debilitated, worn out, illiterate and without any status. I believe that the provision of nearby and adequate supplies of clean water will be the fundamental way of helping them.

As I mentioned before, this must also go hand in hand with simple health education. They have to understand why they must not use dirty water; why a stream that runs past their dwelling which looks clean can be contaminated higher up and therefore cannot be used; why the buckets and utensils that they use must be kept clean and washed in clear water. I repeat, they can only be saved from continual child-bearing if they get clean water and their children do not die. If they can be saved from those burdens, they may get some little leisure, and I suppose that leisure is one of the foundations of what we call civilisation.

When they gather together—and here I strongly support the noble Lord, Lord Houghton—they can learn about contraception, which I think is absolutely vital to them. I would plead with the noble Lord the Minister that those who oppose birth control should think again. I cannot understand how it is possible to be aware of the evils that are now resulting from overpopulation—not only the disasters to the environment, but the evils and the human misery, the degradation, the squalor that results from the inordinate and unprecedented growth of cities, and the fact that we are told that 400 million people are now undernourished—and not see that action must be taken if the beauty of the earth and its creatures and the dignity of man is to be preserved.

Human beings are remarkable creatures. We have wonderful brains. We know the menace of the growth of the world's population. We know that the growth must be controlled. We have the resources and the technical knowledge to control it. The problem lies in the third world, in its poverty and its ignorance. We can help it if we will; help it to health, and the acceptance of smaller families, which is so vital. The future of the world is in the hands of the developed countries. We know the necessity to act, and we have the power to act. I wonder, with noble Lords who spoke earlier, have we the determination and the will to act, and indeed, beyond that, have we the wisdom?

7.51 p.m.

Lord Davies of Leek

My Lords, it has been a fascinating debate. Once again the experience of the House has demonstrated the worthiness of the subject raised by my noble friend. May I say to those who have tirelessly sat through it that I am not going to take very long; your Lordships will be glad about that. I want to congratulate my noble friend on bringing forward this subject, which he introduced with his usual skill in a workmanlike and constructive fashion. We are calling attention to the deteriorating situation of the less developed countries.

Listening to one or two of the speeches I would have thought that the less developed countries were doing all right; that we need not bother too much—there were a few speeches that were less courageous than others—about the less developed countries and their growing burden of indebtedness (I shall have a word to say about that usury) and their rapidly increasing population, which we have just heard something about, and their inadequate food and energy resources, and the response of Her Majesty's Government. I had the honour of sitting on the committee under the skilful chairmanship of the noble Lord, Lord Robert-hall, on commodity prices. I should have loved to have about four hours to talk about this problem. It has not advanced very far since we sat on that committee for many months trying to deal with stabilisation of commodity prices. Maybe we shall hear a word about it.

I do not want to go Government-bashing, and I do not want to be too party minded, but when this Government on 30th October 1979 won a vote, 299 to 242, they dissolved the Ministry of Overseas Development, which had first been created in 1964. They made a grave error. The Foreign and Commonwealth Secretary now assumes full responsibility for overseas development. I do not know whether it was maintained, and I may be corrected, but I believe that we threw away much expertise that had been built up in that Ministry of Overseas Development, and pushed it aside and shifted to the Foreign Office responsibility of growing development services and aid to the third world.

The Ministry of Overseas Development had developed a technical know-how with the International Monetary Fund. I consider that of great importance. Never mind the under-developed parts of the world, Poland's tragedy today is that her exports will not pay the interest on the money she has borrowed. I make that as a simple statement; it needs some qualification, but it is roughly right. There comes a pitch when no matter how hard you try to catch up and pay for your loans, you cannot do it. This point has been made in another way, and I believe that it is true.

On 12th February 1979 81 countries met in Tanzania at Arusha. They were known as the Group of the Seventy-seven Nations. It was Nyerere who called them a kind of trade union of the poor. They were beginning to realise their own responsibilities. The under-nourished nations are not asking to be fed like babies, but they want constructive help and direction. The Arusha programme spiked down one—the changes in the International Monetary Fund; secondly, they considered drawing up a code of conduct on a transfer of technology as suggested in Geneva in March 1979 at a similar conference; thirdly, structural reform for international trade and the monetary system; and fourthly, large-scale resources transferring to development countries. They were beginning to talk of a trade union in commodities like OPEC. The lucky world—our world; the industrial, capitalist, commercial, whatever-you-want-to-call-it world—may have to meet a situation where certain commodities could be held and pushed up in price if this trade union of the poor, as they were calling themselves, developed an OPEC outlook.

Putting the subject of this debate into a sentence, what is it? It is a battle for a full stomach for the under-privileged in the world. It is no easy option. I was going to talk about birth control and the population. So many have spoken about it constructively that if 1 started I should only be dilating the points made, and be repetitive. However, I believe that this question has to be looked at seriously, whatever religious opinion people may have; whether they are agnostics, or eclectic in their philosophy, or whether they are primitive Methodists or, like myself, more or less eclectic and willing to listen to anybody's religion.

Incidentally, this puts into focus the difficulties created in the third world by too rapid progress into modern technology. Here I want to put forward a caveat. The rapid and remarkable development of machinery becomes, for most of the working population in every advanced country, the source not of complete freedom but of a kind of enslavement and lack of security in their job. This may not be believed, but as we develop more and more technology we are finding that in the electronic and technological world the new jobs created are not making up for the unemployment of those who worked in the cruder type of production. The overall result, therefore, will be a large increase in unemployment in the western world if we are not careful. Unlike events in previous periods of rapid technological innovation during the period of the Industrial Revolution, computers and electronics which are now introduced on a wide scale do not cushion the unskilled against unemployment. I do not know the answers to this, and neither does that side of the House, but the western world will have to face it.

The United Kingdom's unemployment is going to rise. May I, to be fair, say that if Labour wins the next election they will, like any other party, have a big problem facing them on this issue. The Government are almost alone in pretending that the few jobs created by the micro-electronic industry will compensate for the millions that will be lost. The Brandt Report—if you want to give it a little true criticism and not a niggardly one—did not take this revolution into account.

I come to the last point, trying to keep within my 10 minutes. Last week we had—and it was quoted, I forget by whom—the Delhi conference. The Prime Minister of India herself was there. They were asking, like Nyerere in Tanzania, for economic co-operation among the under-privileged. They want to go back to the formula of the Arusha declaration. It is interesting to note that 44 developing nations, China included, took part. I have had the good fortune to visit China a number of times. I remember discussing birth control with the First Minister of Health, a very able woman, and at that time China was very much against it. There has since been a complete change of outlook and, fortunately for the world, China has entered more than ever into the comity of nations.

In our help for the third world, I suggest that we are not giving enough analysis to the question of how to finance it. I do not have time to go into the whole aspect of the original purpose of the World Bank, but I suggest that we must review that purpose again. I recall the efforts of Lord Boyd-Orr (I was in China with him on one occasion) and the great work that that wonderful human being did for the under-privileged parts of the world. I do not know whether my noble friend Lord Roberthall would agree—I mention him in view of his standing in economics—that we must look again at how the World Bank finances underdeveloped areas. In looking at that, we must remember that what comes first is agriculture, food to fill the people's stomachs. Having said that I will sit down, because I feel I have spoken for long enough on what has been a tiring day, having occupied exactly 10 minutes of your Lordships' time.

8.3 p.m.

Lord Chorley

My Lords, I wish I could follow the inimitable style of the noble Lord, Lord Davies. Like him, I will try to be brief; in fact, I will try to beat him. I wish to concentrate on agriculture, in particular agriculture in Sub-Saharan Africa. My remarks are based in the main on my own observations from a professional involvement with economic development in Africa, but they are partly reinforced—and reinforced with a great deal more authority than I can command—by a World Bank report which has already been referred to and which was published last summer.

That report showed, with a wealth of absolutely dispassionate analysis, how seriously in the last decade economic development has deteriorated and (this is the important point) how it is likely to continue to deteriorate unless there are significant changes in the domestic policies of the countries concerned, and particularly as they affect agriculture. Agriculture is the overwhelming basis of economic activity, and therefore of development, in those countries. Thus, if you get your policies for agriculture wrong, everything else in the economy will go wrong too, and no amount of external aid will get you on to a proper footing.

Much has been said this afternoon about the need for more aid, but little about the environment in which it is spent, and it is on that, and specifically on domestic policies, that I wish to concentrate. Any number of statistics have been thrown at us and I will try to keep mine to the minimum. Suffice it to say that in that part of the world in the 1960s, agricultural output kept up with population growth; in the 1970s it grew only half as fast as the population; and it is inevitable that by the year 2000 the populations of Sub-Saharan Africa will virtually double. There is nothing one can do about that now; no amount of family planning or anything else, other than the pure holocaust to which the noble Lord, Lord Robbins, referred. Thus, if the agricultural situation is to be contained where it now is, the rate of growth of agriculture must be doubled, and that, I suggest, is inconceivable on the domestic policies adopted by most of those countries.

I recognise that over the last decade there have been adverse external factors such as higher energy prices and the low growth of the industrialised economies, leading to low growth and poor prices in the trade in commodities in primary products. There have also been internal factors such as droughts, civil wars, strife and so on, to which reference has been made. Those lie outside the control of Governments, though I am not sure whether civil war and strife lie outside their control. Be that as it may, in three crucial areas domestic policies have severely exacerbated the situation and I cannot do better than quote directly from the World Bank report: First, trade and exchange rate policies have over-protected industry, held back agriculture and absorbed much administrative capacity. Second, too little attention has been paid to administrative constraints in mobilising and managing resources for development; given the widespread weakness of planning, decision-making and management capacities, public sectors frequently become over-extended. Third, there has been a consistent bias against agriculture in price, tax and exchange rate policies". A striking feature of nearly all these countries is the way in which Governments have allowed— deliberately allowed—their effective exchange rates to appreciate, in some cases several-fold or even more, and that has had a disastrous effect on farming incomes. Coupled with that has been a heavy reliance on restricting imports. In Kenya, to give just one example, it is estimated that the imposition of a 100 per cent. tariff barrier on textiles and a ban on imported second-hand clothing has reduced rural incomes by 10 per cent.

But even then, if those matters are put right and there are proper devaluations of their currencies, there remains the fact that in the majority of those countries farmers are required to sell their produce to state monopolies at wholly inadequate prices. Take the case of Ghana, where cocoa production has deteriorated severely. We now see, I am told, that the age structure of the cocoa planters in Ghana is increasing every year because their children are not going into cocoa farming; they are all going to the towns, where in effect the food is subsidised. We are also told—one will not find this among the official statistics, of course—that a vast amount of cocoa is smuggled across the border.

There are other factors, but the list is long and time does not permit me to develop the point further, except to draw attention to one important factor; namely, the growth and extension of the public sector, and 1 shall confine myself to two examples. The first is the growth of parastatals, which in many African countries now dominate much of their economic activity. My experience suggests that they have actually damaged development. They cause serious fiscal burdens and pre-empt both skilled manpower—an exceedingly scarce resource, in fact by far the most scarce resource in those countries—and investment from the private sector. Yet, even so, paradoxically, they do not have an adequate managerial and technical capacity. In my view, their roles should be reduced and, where possible, eliminated.

My second example is the size of government, where we see in the last decade that expenditure on public administration and defence has grown twice as fast as output. This overhead for many African countries is far in excess of 10 per cent. of the GDP. This is a massive burden for the enterprise sector of those poor countries to carry, and inevitably it is an additional tax on farmers. For example, the World Bank reports that levies of 40 to 50 per cent. are commonly imposed on export crops, in addition to what amounts to taxation arising from the over-valued exchange rates and inefficient marketing systems. The effect of all that is to place a wholly unreasonable burden on the local farming communities. Let us not add unnecessarily to the inherent problems of droughts, civil wars and institutional impediments. What are needed are positive incentives and positive help to farmers, especially the smallholder. As the noble Lord, Lord John-Mackie reminded us in his speech, all experience shows that, given the right encouragement, they will respond rapidly.

The position as I see it is this. It is just possible —just—that with both increased aid and massive domestic policy changes, development over the next two decades may be able to keep pace with population growth. But without those policy changes there is the real prospect of an accelerating downward spiral, irrespective of the level of aid provided. In these circumstances, the question that I would suggest we have to ask ourselves is whether we, in concert with the international agencies and other Governments, should adopt a more robust policy to aid with strings. To put the matter bluntly, should aid levels be conditional on changes in the policies and attitudes of African Governments? I have no hesitation in coming to the conclusion that we should do that—and that, I may say, is the view of the World Bank in its report.

The noble Lord, Lord Oram, to whom we are grateful for introducing today's debate, concluded his speech by asking whether the Government could not be more positive in their aid initiatives. I submit that what I have suggested would be one way in which they could be more positive. To me the future in Africa is far too bleak and serious to let matters drift.

8.11 p.m.

Lord Walston

My Lords, I would ask your Lordships to forget, just for a moment, the subjects that we have been talking about and envisage a somewhat different scene—a scene of an elderly, prosperous, well-fed, well-dressed, gentleman, sitting in his comfortable and well-heated office. He has just finished dictating a letter. The letter is to the treasurer of a local charity, explaining why he has been compelled to reduce his subscription from 20 guineas a year to 10 guineas, the reason being the rising cost of living, the burden of taxation and inflation. He then leaves his office, gets into his Rolls-Royce, and is driven to the Savoy Hotel, where he lunches. Because of the need for economy, he probably has only half a dozen oysters, instead of his usual dozen. At the end of the meal he smokes a small cigar, not a large one, and be returns to his office.

I do not think that I need to pursue the analogy any further. But that is the position in which, through our Government, we are now claiming to be. There are those who say, "Much as we should like to send the equivalent of 20 guineas to the local charity, unfortunately, because of poverty, because of world circumstances, because of the economic crisis, we cannot do so; we have to reduce our subscription". As I say, there are those who say that, though I am glad to say that so far in this debate we have not heard those voices raised, and I hope we shall not hear them.

There are those such as the noble Lord, Lord Harris of High Cross, who do not use that argument. They do not say, "We cannot afford to". They say, "It is inefficient for us to do so. The money is being wasted. Let us leave it to private enterprise". I would not dispute that much of the money is being wasted. It sticks to grubby fingers and sweaty palms on its way through to the areas to which we intend it to go. But much of it does a proper job, and the record is not all that bad if it is looked at objectively, carefully and knowledgeably.

But the noble Lord, Lord Harris of High Cross, says, "Let us leave it to private enterprise; they can do this job". What is stopping them from doing this job now, my Lords? The mere fact that there are international aid agencies and that there is Government money going to the areas in question in no way prohibits, or inhibits, private enterprise from investing money and helping the third world. In any case, is it realistic to believe that private enterprise will provide the infrastructure that is so necessary? Will it provide the schools in which to teach the young in the rural areas of the third world? There is no profit in schools. Will it provide the water supplies?—which the noble Baroness, Lady Denington, so rightly spoke about, and without which there can be no true health. Will it ensure proper nutrition to the growing population?—and without proper nutrition it is impossible for them to develop fully, either physically or mentally.

All those things must be provided, and one cannot look to private enterprise to provide them. They must come from aid from Government sources, and in my view such aid should not come from loans, however soft; it should come from actual downright gifts. That, very briefly, is in my view the reason why the argument which says that we must rely on private enterprise and not on public charity falls to the ground.

However, there is here another point, which rather to my surprise has not yet been mentioned. One of the factors which makes it difficult for us in this country, for the West as a whole, to provide appropriate amounts of money for aid to the South, is the need for armaments. Why do we need armaments? We need armaments because we are afraid of the Russians. They are, I agree, a very serious threat and a menace. So it is only reasonable for us to try to envisage what those gentlemen in the Kremlin, who are responsible for the third world, say when they see our present policy. Surely—and here I agree so much with what the noble Lord, Lord Beloff, said—they must rub their hands in glee when we cut grants to overseas students. That means not only that fewer students will come to these shores, that fewer will be imbued (I hope) with the benefits of our forms of democracy, that fewer will be trained in such ways that when they go back to posts of responsibility in their own countries they will naturally look to the United Kingdom for their supplies, but that more of them will be available to go to the Soviet Union and its satellites to be inculcated there with Soviet ideas and ideologies. So the gentlemen in the Kremlin must be pleased with that situation.

They must surely he pleased, too, if they see that the economic development of the third world, in particular of strategic areas in the third world, proceeds slower than it otherwise would because aid has been curtailed. It can only be to their benefit in the long-term struggle between Russian imperalism—and I deliberately use that expression, rather than "communism"—and the western way of life if the countries of Africa, South-East Asia, Central and South America do not develop economically as rapidly as they might, but continue with their old-fashioned ways, with their discontent, inequities and suffering. So on those grounds it seems to me that any policy which reduces aid at this time is short-sighted and will lead to many future difficulties.

There is one further point here. To many people, in particular the uncommitted, one can say that capitalism is on trial today. On the one hand, you have 3 million unemployed in this country, you have empty factories, under-utilised industrial capacity, and bankruptcies. On the other hand, you have hundreds of millions of people who are crying out for the products of those factories; who want the simple agricultural machinery, who want the fertilisers, who want the transistor radios and the bicycles and who want the galvanised iron instead of their thatch to put over their roofs. They want the things which we in this country can produce, and want to produce.

Is it beyond the skills of those who believe in the values and the efficiency of the form of economy, the capitalist society, that we have here today to marry those people who want to produce with those people who want their products? It is a challenge to capitalism, and a challenge which it is not meeting. I wish it were. Although I have strong reservations about the efficacy, in many cases, of unbridled capitalism, I should like to see it succeed as I think it will be ill for this world, as we know it and as we believe in it, if it fails. It will then leave the field open to far less attractive ideologies and far less pleasant methods of regulating economies.

My Lords, those are some of the material challenges that we face; but, basically, as other noble Lords have said, fundamentally the challenge is a moral one. Even though all of us may not be technically professing Christians, all of us in this Chamber and in this country believe in the Christian ethic, in the Christian teaching. We know what Christ said to the rich young man who came to him. He said: "Sell all that you have and give to the poor"—and the young man went away sorrowing because he had great possessions. It is not realistic, alas!, to suggest that we give all that we have to the poor, but it is realistic to suggest that we give a little more than we are giving now to the poor, who are in their hundreds of millions around us in this world. If we were to do that we would not go away sorrowing: we would go away humbly, I hope, but happy in that we were making some contribution towards the achievement of the form of society to which we so often pay lip service.

8.23 p.m.

Lord Cledwyn of Penrhos

My Lords, my noble friend Lord Oram, to whom we are grateful for initiating this debate, made an opening speech which showed his great knowledge and his concern about this question of aid to the so-called third world, and the implications of the Brandt Report. Like other noble Lords who have referred to Ritchie-Calder, I lament his passing. He was my neighbour here in London, and very often we walked home together at night. We all found him a man of wide knowledge and compassion. Ritchie-Calder was in a true sense a citizen of the world, and we shall all miss him.

The debate has covered a wide field, and the speeches from all sides have shown a knowledge and a concern about the subject, although there have been differing approaches to the problem. When the Brandt Report was published over two years ago it was praised and generally supported, and its analysis was accepted by many people. Ministers in this country and elsewhere have made encouraging speeches, but the united, concerted effort that is needed and that Brandt saw as essential has not been started.

I listened with respect, as 1 always do, to the speech of the noble Lord, Lord Robbins, whom 1 have always admired. I thought he took a curiously narrow view of the Brandt Report. Of course, it has deficiencies; but the noble Lord was unable to put anything in its place. I hope that in relation to this subject he will inspire some of the same compassion that he showed when he published his great report on education a few years ago and dealt with the need for equality of opportunity in education, because the needs of the people we are now considering are even greater than the needs of some of the young people of our own country.

As my noble friend Lord Oram has said, many people believe that poor countries should tackle their own difficulties without reliance on outside help. That, broadly, I thought, was the view of the noble Lord, Lord Harris of High Cross. Others argue that aid should be given to suit political objectives, and they point to the example of the Soviet Union and, currently and sadly, to some of the attitudes of the United States of America.

Then there is the argument that we are in a recession and that there are strict limits to what we in this country can afford. I understand the last argument perfectly well. When a country is in economic difficulties—and this seems to have been our state for about 25 years—the Treasury squeezes all departments very hard, and overseas aid is not excluded. But the Brandt message—and this is a message which is supported by one of the most eminent Conservatives in the country, Mr. Edward Heath—is that if we are to have a reasonable future, and if we are to have a peaceful world, then we neglect these problems of world poverty at our peril. Continuing world poverty is as potent a threat as the ideological argument between East and West—probably more potent. The divide between North and South may become unbridgeable. The statistics in themselves illustrate the size of the problem, and they have been stressed in the debate by a number of noble Lords.

The world population will increase by 2 billion by the year 2,000, an increase of 50 per cent. in 20 years. In 1900 there were 2,000 million people in the world; in the year 2000 there will he about 6,500 million people. The consequences of this in terms of the demand for food, for raw materials and for energy must be obvious to everyone; and we listened with great respect to the speeches of my noble friend Lord Houghton of Sowerby, of Lord Vernon and of my noble friend Lady Denington.

It is against this background that one must look at the appalling problems of the third world. The recession and last year's oil price rise have made things much more difficult for them. Whatever our difficulties in this country may be—and we do have difficulties—the difficulties of these poor countries are infinitely worse than anything we have experienced in this country for centuries. For the 10 years from 1970—I give this as an example—the 36 poorest countries in the world saw very little real economic expansion, with an average annual growth rate of 0.8 per cent., and the poorest African countries actually had a fall of 0.4 per cent. Therefore, the Government's proposal to cut aid for 1982–83 by 11 per cent. in real terms seems to me to be disheartening and really indefensible —and it is that point that I should like the noble Lord the Minister to deal with when he replies. I hope the Minister will also pay attention to the impressive speech of my noble friend Lord Pitt, backed up as it was by very well marshalled statistics, when he referred to all the implications of the Lomé Convention.

Another action which I find hard to understand is the cut of 25 per cent. in the United States contribution to the IDA section of the World Bank, which has also been referred to by a number of noble Lords. This is the unit which gives low-interest loans to the poorer nations. The Minister gave an interesting reply on this point in answer to a Question by my noble friend Lord Listowel today, but I should like him, if he will, to expand on that because to me there was a certain lack of clarity (it was probably my fault) in his answer. Given the reduction in the global sum by the United States and given that our contribution will also be reduced, will the revised sum now be big enough to meet the applications of the poorer countries? That is the question we would wish to have answered.

Again, I was glad to note that the Government, at the Paris Conference in December, eventually accepted the proposed target of 0.15 per cent. of the GNP to help the least developed countries. Can the Minister indicate when the Government expect to achieve this target?—12 months, two years, five years? There is an urgency about this. The new target is a reasonable one and I hope that the Government will make an effort to attain it within a short time. The noble Lord, Lord Banks, asked an important question about the allocation of drawing rights. We must show more positively in all of these things that we mean business; for the sad fact is that the Cancun Conference was bitterly disappointing. The developing crisis calls for action and for organisation; and Calcun failed to provide them. It is not that President Reagan, Mrs. Thatcher and the others are unfeeling and wicked people. On the contrary, they are personally well meaning and kindly people, but they are obstinately locked into dogma on this subject. President Reagan should have read the Declaration of Independence before he set out for Cancun.

In fairness, it must be said that the noble Lord, Lord Carrington, uttered some wise remarks at Cancun. He listed three reasons for urgent action: First, "Because it is the right thing to do…", secondly, "because it is in Britain's interest … "and, thirdly, "because we are one world". It could not have been better said by Willy Brandt himself. The noble Lord made some constructive suggestions and stressed the importance of "global negotiations". Unfortunately, and sadly, because of the dead hand of the United States of America, nothing was achieved. The Foreign Secretary's attitude shows that there is at least some hope that the Government might take some initiative. They certainly should not follow the American lead in cutting the IDA loans; they should make for the 0.15 per cent. target as quickly as possible; they should reorientate our aid programme to the really poor countries, and they should consider very carefully our position on the IMF.

I would welcome a clear explanation from the Minister of the Government's policy towards the American move away from the United Nations. In December, the United States tabled a preliminary draft resolution calling for the resumption of talks and made it clear that they were not prepared to entrust crucial agenda items to the United Nations General Assembly. This appeared to me to mean that, on the vital issues of money and trade, it will be the World Bank, the IMF and the GATT which make the decisions. The EEC sought to amend this position, quite rightly, but I am not sure where the Government stand on this.

The West control these agencies. Is it the intention that when the third world call for more just economic measures, they will be referred to these specialised agencies in future? These agencies have a vital role to play, but they were not set up to deal with the almost intractable problems of the poorer countries of the world. Something more than the IMF and the World Bank, as they are now geared and constituted, is needed to tackle the ailments of, for example, sub-Saharan Africa, probably the poorest area in the world.

Again, UNCTAD is a good example of the way in which things appear to be moving. As the House knows, no United Nations agency is more important to the poorer countries than UNCTAD. If they have a voice in the United Nations, it is UNCTAD. Last year, they were engaged on important work in organising the Paris Conference on more aid for underdeveloped countries. But, in September, they were replaced by the World Bank. Why was this done; and what part did this country play in it? Furthermore, UNCTAD has been seeking to plan a programme whereby developing countries are able to process rather more of their primary products. It stands to reason that this could be of immense value to them and, indirectly, to us in the medium and long term. And it would improve their trade prospects. This is a very important point. I hope that the noble Lord will give the House an assurance that the Government will support such United Nations agencies as UNCTAD as much as we support the other outside agencies like IMF and GATT.

There were a number of important contributions on agriculture from my noble friend Lord John-Mackie and the noble Lord, Lord Chorley. My noble friend Lord John-Mackie made a vital point when he was talking about the possibility of exporting milk that is wasted in the West to help the starving population of the poorer countries of the world. As I have said before in this House, the man in the street cannot understand how we come to produce surpluses and then destroy them when there are millions starving. I think that the speech of my noble friend Lord John-Mackie and that of the noble Baroness, Lady Denington, should be heeded.

It is frequently pointed out that the best way to assist poor countries is by helping them to help themselves. The processing of primary products is the most obvious and in my view the most important. Will the Minister tell us what the reaction of the Government is to this proposal? It has been said that the West decided that this fell outside the competence of UNCTAD and that the issues of marketing and processing are more properly dealt with by the World Bank and other agencies. Is this true? If it is, it is a good example of the closed shop. I would hope that the Minister can say that we are not involved in this.

I listened with great care to the speech of the noble Lord, Lord Holderness, who was himself a Minister in charge of overseas development and an old friend of mine. It was good to hear him. He referred to private investment and seemed to indicate that we on these Benches were somehow hostile or indifferent to private investment. From this Box, I would say that private investment is very welcome when it strengthens the economy of a country. In some cases it does so. But private investment is unlikely to be directed towards those projects which developing countries most need: the infrastructure of such things as education, health, transport and so on. These must never be overlooked.

My Lords, I come back to the Brandt Report. We do not have to agree with every detail of it, as 1 said when referring to the speech of the noble Lord, Lord Robbins. But the report made some central recommendations which were of vital importance and which in my view must be carried out if we are to avoid a slide to economic disaster. So far, nothing has been done about this. There is a need for co-ordination, for organisation between the developed countries of the world. It calls for political will and determination and I had hoped that this country would provide it. It also needs public support.

My noble friend Lord Oram, when he opened the debate this afternoon, said that the appeal to compassion had failed. He was talking about the compassion of Governments. One thing about which I am absolutely certain in an uncertain world—and it is good to have at least one certainty—is that there is an enormous reservoir of compassion in our community and in other countries for those in need—the poor, the sick, the oppressed, wherever they may be. The response to Oxfam, to Christian Aid, to the Penlee Disaster Fund and to other funds following disasters, such as those to which the noble Lord, Lord Robbins, has referred, proves this beyond doubt. The generality of people are anxious to help. It is for Governments to harness this compassion. This is the most dynamic power of all in the world. This, in my view, is the great task before us if we are to face the future with any sort of confidence.

8.40 p.m.

Lord Trefgarne

My Lords, as my noble friend Lord Holderness reminded us, it is two years since your Lordships first debated the report of the Brandt Commission. As the noble Earl, Lord Listowel, then observed, there was unanimity on both sides of the House concerning the gravity of the problems facing the international community and especially the poorest countries. There was unanimity, too, in welcoming the contribution of the Brandt Commission to the international search for solutions. I well remember that debate. It was I who replied for the Government on that occasion. I remember, too, that the right honourable gentleman the Member for Bexley Sidcup sat upon the steps of the Throne during the course of that debate.

The seriousness of today's debate and the issues raised by many noble Lords—to some of which I will try to respond later—bear witness to the impact of the Brandt Commission's analysis on this House and on the country at large. I therefore add my thanks to the noble Lord, Lord Oram, for bringing these matters before us today. The Government fully share the concern that he and other noble Lords have expressed. The Brandt Report has kept before us the scale of the problems which we must try to overcome. Its analysis, which we broadly endorse, confronts us with the responsibility to do what we can to improve the co-operation between developed and developing countries and to combat world poverty.

The motives are clear enough. If I may echo the words of my noble friend Lord Carrington at Cancun to which the noble Lord, Lord Cledwyn of Penrhos, referred, they are as follows. First of all, for reasons of humanity; and, secondly, for reasons of common interest and mutual benefit. There is common economic interest, because we all share in growing world prosperity. There is common political interest, because countries beset by economic troubles can rarely achieve lasting political stability.

We are passing through difficult years; difficult for this country, difficult for the world economy, hardest of all for the many impoverished countries of the developing world. But it would be wrong to despair in the face of the accumulated problems which confront the developing countries and their teaming populations. That would be alien to the values and traditions of this country. It would also be wrong to reach for extreme and unrealistic solutions, which go against good sense and are bound to disappoint the expectations they arouse.

Change is essential, but it must be organic and orderly. The whole complex of international economic relations cannot somehow be swept away and a brand new international system legislated into its place. Capital flows, investment and transfers of technology are essential for developing countries. But they cannot be produced by order or by Government decree. Aid is essential, especially for the poorest countries. But transfers of official aid cannot alone constitute a basis for sound development.

We must, therefore, seek practical and workable measures of co-operation, which contain benefits for all and promote the advance of the developing countries. This is our aim within the international community. We are very much aware that the situation of many developing countries has worsened. That lends additional urgency to our search for practical means of helping them. At the same time, other countries have made impressive advances, against all the odds. The international community has made some real progress in treating the intransigent problems of the developing countries, though much remains to be done.

I should like to say something about the course of international co-operation in recent months. In the second half of last year, my right honourable friend the Prime Minister attended three summit meetings which devoted much time to these subjects. These were at Ottawa, Melbourne and of course Cancun. The countries that took part all recognised the need to tackle these matters at the highest level. Some people have been disappointed at the results, especially of the Cancun Summit, which was largely inspired by the Brandt Report. But this was never meant to be a dramatic meeting. The leaders dealt, in a down-to-earth way, with specific issues such as food and energy, to determine how best to act both in their national policies and in co-operation together.

Some may also be disappointed that more has not happened since. We have done our best to keep up the momentum. We promised at Cancun to ratify the common fund for commodities. We have done this, well ahead of most other countries. We have taken part in replenishments of the International Fund for Agricultural Development and of the African Development Fund. Subject to the approval of Parliament, we shall contribute £12.9 million to the first, and £24 million to the second. We have joined our Community partners in a programme to combat world hunger, focussing on food strategies in developing countries. At the General Assembly, we took the lead in suggesting formulae which might launch global negotiations on an agreed basis, so that the work begun at Cancun could continue with all United Nation members taking part. We did not quite succeed then in bridging the gap. We welcome the efforts to find a way forward made by developing countries meeting in Delhi last week. We still hope that agreement can be found.

I shall have occasion to mention other actions that we have taken under the four headings mentioned in the Motion before your Lordships, to which I now turn. First, on the issue of indebtedness, the total medium and long-term debts of developing countries, estimated at £439 billion at the end of 1980, are huge in cash terms and continue to increase. The difficulties of servicing these debts are also growing. High interest rates are a new and serious burden; we would wish they could come down.

Nevertheless, though the debts of the developing countries grew fast in the 1970s, their exports of goods and services have grown even faster, despite the recession. The World Bank concluded last year: While these trends indicate that the developing countries will face more serious debt-management difficulties in the future, they do not signal a generalised debt problem for the developing countries". By far the largest debtors are countries like Mexico and Brazil and some other newly industrialising countries. Such countries are, of course, not immune from financial difficulties. But they have considerable resources and capability for dynamic performance. Provided they follow sound policies, they can attract funds from the markets and it is right that they should do so. This allows official aid funds to be directed to the poorer countries, who have less access to commercial finance. We already concentrate our aid on the poorest countries, more than any other major donor, with over 60 per cent. of our bilateral aid going to them. At the same time, Britain was in 1980 by far the largest single channel for private funds for developing countries, providing 11 billion dollars, some of this of course originating in OPEC surplus countries.

But though there is not a "generalised debt problem" many individual developing countries find it hard to cope with large debts and external deficits. For these countries the enlarged resources of the International Monetary Fund are critical. Since 1980, IMF members may borrow up to a total of four-and-a-half times their quota over a three year period. In January 1981 all quotas were increased by 50 per cent.

Resources available to the IMF were supplemented last year both by substantial loans from Saudi Arabia and by an arrangement, in which we participate, whereby 13 OECD countries make available a further 1.1 billion dollars to the fund. Such arrangements and, if necessary, borrowing from the market should enable the fund to meet the calls placed upon it until the eighth quota review, now taking place, comes into operation.

The fund has therefore been able to increase its operations greatly. It has negotiated standby or extended fund programmes in almost 40 countries and in 1981 committed 18 billion dollars, as compared with less than 3 billion dollars in 1979. There has been criticism of the terms on which the IMF provides its loans and relations with borrowing countries can he difficult. The purpose of fund "conditionality"— as it is called— is to ensure that the borrowers gradually restore their economies to a healthy position, from which sustained growth can be resumed.

As we in this country know only too well, sound economic policy is rarely politically popular, but the fund and the World Bank have modified their practices to take account of the deeper structural problems facing countries, particularly in the developing world, and this has our full support. Borrowing countries will often be obliged to take painful decisions. The fund should apply its necessary conditions in a sensible and sensitive way. For some countries, support from the IMF alone will not be enough. They may be obliged to seek the rescheduling of their debts, whether to banks or Governments or both. There are established procedures for such cases, so that they can he handled in an orderly and agreed way. They are being used and are working.

A few countries, in acute financial difficulty, have had IMF programmes and debt rescheduling reinforced by emergency aid support by groups of donors. We have played our part in these, for example for Turkey, Jamaica and, most recently, Sudan. Naturally, no one wants to see any country reduced to such straits. But, when needed, arrangements can be found to relieve the crisis.

My next topic is population growth—a matter dear to the hearts of several noble Lords this evening, not least the noble Lord, Lord Vernon, and the noble Lord, Lord Houghton of Sowerby, both of whom have spoken on this subject before. Several of your Lordships are members of the British Parliamentary Group on Population and Development. I would wish them to be aware of the great importance which the Government attach to population activities within the aid programme.

We do not have a sectoral allocation for population aid as such, but it runs throughout the programme. Our bilateral programme, this year and next, will see continued spending in Orissa State in India and we hope to become involved also in Pakistan. We have a large project in Egypt, and hope for another in Kenya, co-financed with the World Bank. Our bilateral projects depend on requests from recipient countries but my right honourable friend the Minister for Overseas Development has directed that all new projects, wherever appropriate, should take account of, and if possible include, a population element.

My right honourable friend announced last September increases in contributions to multilateral agencies dealing with population to 5 million in 1981–82 and to 6 million in 1982–83. We have announced increased contributions to the International Planned Parenthood Federation, the UN Family Planning Association and the World Health Organisation Special Programme on Human Reproduction. We will make a new contribution to the World Fertility Survey and, despite the pressure on the aid programme, these pledges will be honoured.

Furthermore, we have continued our support for the Overseas Section of the Centre for Population Studies at the London School of Hygiene and Tropical Medicine and the David Owen Centre—not Dr. David Owen—for Population Growth Studies at University College, Cardiff. We have worked with voluntary agencies in population activities under the Joint Funding Scheme and increased our spending on population research. We are recruiting a full-time population programme officer to strengthen the Health and Population Division of the Overseas Development Administration. This detailed account of our plans will. I hope, show your Lordships that the Government attach high priority to population policy in developing countries. In this context, we were glad that the Cancun Summit recognised clearly the contribution that population policy can make to development.

The third issue to be examined is food and agricultural development. Few things, I believe, so directly move people in this country as starvation in the developing world. In her opening speech at Cancun, my right honourable friend the Prime Minister said: With rapidly increasing populations, the first priority must be for developing countries to grow more food for their own people. It is wrong to encourage reliance on food aid, apart from emergency situations". This was the key-note for the discussion of food at Cancun, which was one of the most valuable parts of the meeting. It was agreed there that developing countries should prepare national food strategies covering the entire cycle of food production, distribution and consumption. This is not a new idea. We have already helped one African country— the Gambia —to prepare such a strategy. We offer to provide technical assistance to others in this specialised field. The European Community is also beginning to help some African countries with food strategies.

Effective action in this field means, first of all, increasing the incomes of food producers. The farmer must be rewarded with a reasonable price for the food that he produces for the market; otherwise he will drift back into subsistence farming. Sadly, this has been happening all over Africa. Low prices depress production. Over-staffed bureaucracies hinder the supply of inputs like seeds and fertilisers, and disrupt marketing. Artificially high exchange rates encourage the import of foreign foods. In this way, many countries, formerly self-sufficient in food, have drifted into deficit.

My Lords, example is better than precept. The example of South Asia is enormously encouraging. Practical policies, geared to the needs of individual farmers, have enabled the populous nations of the subcontinent to take full advantage of the Green Revolution and of improved seeds and farming practices. They have made impressive progress towards self-sufficiency in food. The prospect of the inevitable recurrence of periods of famine in India has receded, thanks to the humane and sensible policies of the Indian Government.

While developing countries implement agricultural policy reforms, they look for the right kind of external support, both technical and financial. Our own record in this field is good; the main thrust of our programme is directed at improving local agriculture. In his speech the noble Lord, Lord Chorley, underlined this with particular eloquence. Food aid—and this, too, was agreed at Cancun—has a distinct, but supplementary role. Food aid can have adverse consequences for domestic food production and this must never be forgotten, but it remains necessary, particularly for humanitarian reasons. The United Kingdom makes its contribution, amounting to about 80 million for food aid in 1982, and the European Community as a whole is active in this area.

The final theme in today's Motion is energy. I shall refer to three aspects: prices, conservation and investment. The oil price increases of 1979 and 1980 imposed a hugh additional burden on the balance of payments of energy-importing developing countries. The extra cost greatly exceeded total flows of aid to those countries. There are now hopeful signs as regards oil prices. The oil market is soft. Oil prices may remain static, or decline, as we have seen happen recently. The sudden increases in oil prices, which have caused so much damage, may not be repeated at least for the next few years. This will bring some relief to hard-pressed developing countries.

The easing of prices is partly caused by the world recession. But there is a second reason, of great importance. The industrialised countries have taken to heart accusations that they wasted energy. We and our partners have given serious attention to conserving energy, with remarkable success. Oil consumption in the United Kingdom dropped by 14 per cent. in 1980 and, on the figures now available, appears to have dropped a further 8 per cent. last year. These figures probably reflect long-term structural change. We have learnt to make do with less oil, and the price of oil in future will reflect that. The poorer developing countries, who suffered most from the oil price increases, will also benefit most from this change. This illustrates, my Lords, a theme of great importance to this Government. Domestic policy measures in this country—and energy conservation is just one aspect of putting our economic house in order-can prove of great benefit to the developing countries. They also need to build up their own energy resources. 'Here we can help directly, supplementing the activities of the private sector. In our bilateral aid we have devoted around a quarter of our commitments to the energy sector in recent years. In the multilateral field, the World Bank is rightly increasing its lending for energy projects.

There is much interest in a special Energy Affiliate of the World Bank. This idea was welcomed by many present at the Cancun Summit, including Saudi Arabia and other OPEC countries. My right honourable friend the Prime Minister made clear that Britain gladly supports this suggestion, assuming that it will attract additional funds, particularly from oil surplus countries, which would not otherwise go to the World Bank, and that remains our position.

May I turn briefly to some of the points that have been raised during the course of the debate this evening? Perhaps I may deal principally with the ones raised by noble Lords who are still in the Chamber. The noble Lord, Lord Banks, raised a number of interesting points during the course of his speech. I have dealt with a number of them already in what I have said, but he particularly asked about the Government's position in regard to commodities. This was a theme raised by several other noble Lords. We are playing a full part in the negotiation of international commodity agreements under the United Nations integrated programme for commodities.

We support individual commodity agreements, if they are feasible, cost-effective and beneficial to producers and consumers alike. We belong to agreements covering tin, rubber, cocoa, coffee and wheat. We have consistently pressed for the Community to accede to the International Sugar Agreement—a point raised by the noble Lord, Lord Pitt of Hampstead. Commodity agreements can moderate short-term fluctuations in price, but the long-term trends reflect the working of market forces. The noble Lord, Lord Pitt of Hampstead, raised a number of detailed points on this and perhaps, with your Lordships' permission, I may write to the noble Lord with answers on them.

The right reverend Prelate the Bishop of Derby, the noble Lord, Lord Soper, and I think one other noble Lord, referred to the Austrian proposal for financial assistance to developing countries. The Austrian Government did, indeed, circulate a paper at the Cancun Summit containing proposals for financial assistance for infrastructure development worth 100 billion dollars over 15 years. As was, unfortunately, the case with other papers tabled at the summit, time did not allow for it to be discussed, nor did the Austrians explain their ideas further or seek to pursue them. We believe that they may do so at the United Nations in New York, when we shall be better able to examine their ideas in detail. A major question is whether they envisage additional aid above that already extended by OECD countries, which amounted in total to 26.7 billion dollars in 1980 and, if so, how this would be financed. The noble Lord, Lord Oram, mentioned the problems created for the balance of payments of developing countries by their need to import food. The IMF has recognised this problem and adapted one of its facilities so as to help countries finance their imports of cereals when they are faced with a particular difficulty in this area.

The noble Lord, Lord Cledwyn, touched on a number of points in his speech. I want particularly to try to clarify the position on the International Development Association replenishment, which I endeavoured to describe at Question Time, and I am sorry if I did not make myself clear. The position—and I hope that this will set the minds of noble Lords at rest—is that the United States has contributed 700 million dollars of its second instalment, instead of 1,080 million dollars. The availability to the IDA for investment purposes of contributions by most other members, including the five largest, is therefore limited in proportion, as in the terms of the IDA.6 agreement. The total contributions available to the IDA for commitment to its financial year will thus be about 2.6 billion dollars, instead of 4.1 billion dollars which was the original hoped for figure.

Her Majesty's Government are not prepared to waive the pro rata arrangements in respect of the second and third instalments of their contribution to IDA.6. We are merely adhering to the terms of the IDA.6 replenishment, as approved by Parliament. We regret the hardship caused to borrowers, and we support the steps being taken by the IDA to minimise it, including the provision of some 800 million dollars additional lending on IBRD terms to IDA borrowers who are sufficiently creditworthy. The agreed United Kingdom contribution is £555 million, representing 10.1 per cent. of the replenishment. We continue to support the IDA as a major source of multilateral assistance to the world's neediest countries, and we have been able to make this very substantial contribution despite our own difficulties.

Lord Cledwyn of Penrhos

My Lords, I am very grateful to the noble Lord for his full explanation on this point, which is of great assistance to the House. I wonder whether he can explain how it is that we are unable to waive the rule, whereas the Scandinavian countries appear to be able to do so.

Lord Trefgarne

My Lords, I have no doubt that we could waive the rule, if we decided to do so, but it would be a very substantial departure from our policy on this matter. The IDA.6 replenishment agreement is very clear on this point. The United States Congress, as I said earlier, have not yet appropriated the full amount which they originally pledged. It is possible that they will at some future date. The shortfall is, to some extent, being made up by the IBRD facilities, to which I have referred, and I do not think that the shortfall of funds, which the IDA will suffer as a result of this, will bear too heavily upon borrowers. The other points raised by the noble Lord, Lord Cledwyn, included a point about the processing of primary products. We recognise the wish of developing countries to process their own primary products, but, sometimes, it will make more sense for them to process their products nearer the principal markets for those products.

On the question of UNCTAD, to which the noble Lord referred, we are preparing to take part in the next UNCTAD conference, which is due in 1983. As I haw already said, we have ratified the UNCTAD common fund. We are taking an active part in UNCTAD discussions on individual commodities. The noble Lord, Lord Cledwyn, asked me about various aid target percentages, which are mentioned from time to time. We continue to accept the principle of 0.7 per cent. of GNP aid target, but we are not committed to a timetable for reaching it. Successive Governments have made it clear that progress must depend upon our own economic conditions and, indeed, upon other calls on our resources. I am not in a position to forecast aid as a percentage of GNP for this or future years. Figures will, of course, depend upon changes in the economy as a whole, as well as upon the level of aid.

On the 0.15 per cent. target for least developed countries, at the UN conference on the least developed countries Britain accepted the target of 0.15 per cent. of GNP in recognition of the very serious problems which those countries face. But we are concerned that aid should not be diverted away from other poor countries such as India, Pakistan and Sri Lanka which are not classified as least developed. So I cannot give the noble Lord a date upon which that target will be reached.

The problems which we have considered today are deep-seated. Although they appear dramatic, they will seldom respond to drastic remedies. They must be met by patient, practical and enlightened action by Governments, whether nationally or in co-operation, and by their peoples. We shall contribute to that to the best of our ability. We all recognise the common interest in generating sustained economic growth. This is difficult for all Governments. For the poorest countries, the problems are especially acute. They deserve our special support, thus helping their peoples to realise their full potential.

The Brandt Commission have brought this range of subjects into a clearer focus, identified particular areas of concern and suggested ways of treating those long-standing problems. The commissioners are continuing their work, and we welcome this.

What I have tried to do today is to describe what is being done by the Government in the various fields on which the Brandt Report so carefully focused attention and to outline some of the ideas we have about how we should proceed from here. This is a matter of crucial importance to our future and that of the whole international community. I repeat my thanks to the noble Lord, Lord Oram, for providing us with the occasion for this wide-ranging and timely debate.

9.11 p.m.

Lord Oram

My Lords, at this hour I am sure your Lordships would wish me to do little more than thank the many noble Lords who have taken part in this very valuable debate. I am tempted by the Minister's closing remarks to follow up some of the IDA points, but I shall refrain from doing so. I am sure that I would be unpopular if I went into them in any detail.

I will make only one general point in conclusion. It was, I think, the right reverend Prelate the Bishop of Derby who suggested that this debate was a very good educational occasion, and it was the noble Lord, Lord Holderness, who drew attention to the lethargy in public opinion with which we who are interested in these matters have to wrestle. They are both important points. I do hope that the very well informed speeches which we have heard on all sides of the House will help both in the educational process and in overcoming the public opinion problem to which our minds were directed.

I hope that the debate will have gone a little further than that. In a very helpful speech the noble Lord, Lord Trefgarne, indicated many of the things which the Government are doing, with which we on this side of the House thoroughly agree. But the noble Lord will not mind my saying that there are areas in which, though we agree in general with what the Government are doing, we feel that they ought to be acting more vigorously and more expansively. That was the main burden of the speeches of most of my noble friends on this side of the House.

Finally, may I thank my noble friend Lord Cledwyn of Penrhos for so briskly bringing into sharp focus the most important points from this rather complicated but, I think, valuable debate. It would be superfluous of me, following him, to take up any other points. Therefore, I beg leave to withdraw my motion for Papers.

Motion for Papers, by leave, withdrawn.