Orders of the Day — Overseas Development

Part of the debate – in the House of Commons at 12:00 am on 13th June 1977.

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Photo of Bernard Braine Bernard Braine , Essex South East 12:00 am, 13th June 1977

I beg to move, That this House takes note of the Second Report from the Select Committee on Overseas Development in the last Session of Parliament (House of Commons Paper No. 705), the First Special Report in the present Session of Parliament (House of Commons Paper No. 335), the Second Report in the present Session of Parliament (House of Commons Paper No. 222) and the Second Special Report in the present Session of Parliament (House of Commons Paper No. 367). The Select Committee on Overseas Development is grateful for the opportunity which this debate provides of focusing attention on what many hon. Members and many thoughtful people elsewhere consider to be the most urgent and important task of our time—namely, how to eradicate world poverty sensibly and peacefully, by agreement and with mutuality of benefit, while there is still time. World poverty is not new: the poor have always been with us. What is new is that the poor are now aware that the world's resources are maldistributed and that a minority of countries which are rich are consuming 20 times as much per capita as the majority of countries which are poor. What is new is that the poor are now convinced that the disparity in living standards is a direct consequence of the way in which the economic and trading system to which history has obliged them to belong is operating.

Of course, it is not as clear cut as that, but it is not so much the facts which matter in shaping human destiny as what people believe the facts to be. We in this country should know well enough how difficult it is when we are facing serious economic problems and high unemployment to convince our own people that there is a connection between our situation and that of far poorer countries and that that interdependence is now a fact of modern life.

What cannot be disputed is that the gap between the relatively rich and the very poor of the world, a gap which in all conscience was wide enough a decade ago, is now widening still further and that frustration in many parts of the Third World is giving way—I choose my words with care—to despair. It is imperative for our own survival in the industrialised West that we should understand why that despair exists and why we should bend all our energies to devising an international strategy for overcoming it.

Let me speak plainly. It is right that President Carter should have re-emphasised the importance of civil and political rights for all men. We know exactly what he meant by that and we applaud him for it. But, as the Secretary-General of the Commonwealth rightly reminded us recently, to the very poor, who constitute the vast majority of mankind, human rights are as much concerned with the right to work as with the right to vote, with freedom from starvation as with freedom from oppression, with the right to shelter as with the right to privacy, and with the right to be literate as with the right to dissent.

What we must realise in the richer countries is that our own prosperity, freedom and security—in short, our own basic human rights—cannot be long enjoyed if the majority of mankind suffers acute deprivation but is increasingly convinced that this need no longer be so if only the world's leaders would summon up the will to order things differently. In saying that, I believe that I reflect the views of all my colleagues on the Select Committee. Certainly, our reports which are before the House today should be read in that wider context. Indeed, we have had to take into account five disturbing developments.

The first is the aftermath of the oil crisis, which has disrupted the economies of both rich and poor nations, but those of the poor most of all.

The second is the continuing low rate of growth of income per head, which has made it more difficult to find more resources for development everywhere, but markedly more so in the poor countries.

The third is the rising accumulation of debt by poor countries and their decreasing ability to make repayment.

The fourth development is the social and political consequences of high and rising unemployment, especially among the semi-educated young in urban areas in poor countries, occuring simultaneously, and uniquely in the post-war world, with high unemployment in rich countries.

Finally, there is the plethora of international meetings at which all these issues have been discussed ad nauseam, but which have resulted in little agreement about what should be done about them.

We make no apology, therefore, for the fact that our report on the UNCTAD negotiations took the developed countries in general and the British Government in particular to task. The Government published their response when the Select Committee felt that it was unconvincing on 6th May, a day before the much-heralded Downing Street Summit of leaders from seven of the world's richest nations.

Since then there has been the North-South dialogue at the Conference on International and Economic Co-operation in Paris and the conference of the Commonwealth Heads of State in London, and there has been much talk about the need for a new and fairer world economic system. But there is very little to show for all this.

At the heart of the controversy lies what has been happening in commodities. Though many of the rich countries are larger producers of primary commodities than the poor countries and the share of the latter in world trade in primary products has fallen sharply in the last 20 years, exports of primary products remain the main source of earnings for the poor countries and their lifeline for essential imports.

How they have fared has been vividly described by President Nyerere. He said that in 1965 he could buy a tractor by selling 17·2 tons of sisal. In 1972 the same model needed the sale of 42 tons of sisal. Even during the commodity boom of 1974 it required 57 per cent. more sisal to buy the same tractor than nine years before. Since then the price of sisal has fallen again while the price of the tractor has gone up still further.

For countries that are utterly dependent on exports of primary products such a situation spells disaster. It erodes confidence, inhibits economic development and undermines political stability. As we say in our report on the UNCTAD negotiations, there may be short-run advantages for industrialised countries such as our own in keeping commodity prices low, but in the long run the real prize to be gained by obtaining fair prices for primary producers is an expansion in world trade. That is what we in the industrialised countries need if we are to maintain our living standards and reduce the distressingly high level of unemployment.

All this emphasises that waging war against world poverty and stimulating economic activity in poor countries are not merely a question of providing financial aid and technical assistance, important though these are. Even if they were, Britain's performance on that score would be open to severe criticism since the Government have already been obliged to cut the aid programme by £100 million spread over the next two years—the largest cut ever in planned aid expenditure. That in itself is bad enough, but much more than that is involved.

Let me make plain where the Select Committee stands. We are not solely concerned with surveying the aid programme. We see trade as a vastly more effective instrument than aid in promoting development. That is why we have been studying not only aid policy but the total impact of British trade, investment and aid practices on the economies of the developing countries. That is why we see the need for a co-ordinated strategy for trade and aid that will attack world poverty at its roots, reduce chronic unemployment and give the poor of the world the dignity and self-respect that come from selling what they can produce at fair prices instead of living from hand to mouth and borrowing vast sums that we know they are incapable of repaying.

Such a strategy would also make a significant contribution to solving the problems of the richer countries who are so often accused by the ignorant of exporting jobs when they give aid to the poor. Our inquiries have already established that there is a pressing need to overhaul and integrate our own aid and trade policies. Thus the Select Committee sees an advantage in concentrating our aid on identifying markets for the products of developing countries which we in Britain and the EEC, along with the rest of the developed world, can absorb, a task which has been strangely neglected.

There is also the need to identify the products of developed countries which are most appropriate to the needs of developing economies. That implies among many other things the training of a new generation of managers, salesmen and technical specialists. But identification of markets is one thing; the availability of markets for a reasonable time ahead is another, and it is vital. Trade policy has not only to take that into account but must ensure that, as development gathers pace and as the pattern of demand shifts, the production structure of the British economy adjusts with the minimum of stress and dislocation.

Such is the grand design demanded by the situation. But what is the reality that has been exposed by the Select Committee's investigations to date? Perhaps on this point I should explain that our second report for 1975–76 dealt with the Caribbean purely as a pilot study for a much larger inquiry into the related issues of British aid, trade and investment. We are continuing that larger inquiry and we shall be reporting later this year.

Some of the earlier evidence we took, however, led us to the conclusion that an urgent report to the House on the British position in the UNCTAD negotiations was necessary. That position is, frankly, negative and timorous. We have not yet reached our final conclusions, but hon. Members will have gathered from reading them that the whole trend of the two reports before the House and the evidence that the Committee has heard in connection with its larger inquiry, some of which has been published, shows that there is a great deal to criticise in the way in which the British Government deal with aid to and trade with the developing countries.

The Committee is conscious that before producing the final report we shall have to pay close attention to what has been achieved in the EEC in the co-ordination of aid and trade. We are encouraged by the forward-looking views of Commissioner Cheysson, and we intend to visit Brussels next month. The House will therefore understand if I do not deal with the various EEC documents listed on the Order Paper.

Let me summarise what the Select Committee has discovered so far about the British performance. First, there is no unified concept of policy. The integration of aid and trade policy between Government Departments is supposed to be the responsibility of the Foreign and Commonwealth Office. Our investigations suggest that this hardly exists. Whitehall is a cluster of competing baronies, the rival strengths of which actually determine what little policy there is.

Secondly, on the aid side, thanks to the right hon. Lady the Minister of State and her Department, there is some understanding of the inter-relationship which should exist between aid and trade, but there is a seeming inability on the part of the Government as a whole, no doubt because of the unsatisfactory nature of the co-ordinating machinery to pull the two together in an effective and coherent whole. There appears to be too much administration and too little professional input.

Thirdly, on the trade side, British interests are defined in so short-term and narrow a context that their defence actually constitutes long-term impairment of those interests. In contrast with the EEC, our exports to the non-oil-exporting developing countries are falling—from 17 per cent. of our exports in 1969 to only 8 per cent. in 1976. While we are doing better in the oil countries, it is surely a matter of the gravest concern that potentially valuable markets in the developing world are being exploited much more successfully by our main industrial competitors.

I do not wish to draw upon evidence on which the Select Committee as a whole has not yet reported, although I am bound to say that this strongly sup- ports the criticisms I have been making. But there are two observations I must make.

First, I must express the Committee's deep disappointment at the Government's reaction to the proposal we made for the creation of a trade development agency for the Caribbean. The case for such an agency is made out clearly in paragraphs 107 and 108 of the Second Report for 1975–76. What we hoped to achieve by that proposal was a more positive, intelligent and realistic approach to the development of two-way trade with the region.

Given the unsatisfactory attitudes that prevail in the corridors of power, we were not at all surprised by the Government's reaction. But if they cannot react favourably to specific proposals such as this, the least they can do is to tell us what their proposals are for tackling the problems which we have identified, and with far more imagination and determination than they have displayed up to now.

My second observation is this. The Committee is fully aware of the importance of the study currently being made by the Central Policy Review Staff under Sir Kenneth Berrill and the relevance of that study to our work. I should like a firm assurance today that the House will have the fullest opportunity to debate the many important issues that the Berrill Report will undoubtedly raise. In that debate the Committee hopes to be able to play a key rôle because of the knowledge and experience we have gained of the arrangements for our country's representation overseas.

A moment ago I spoke of the dearth of imagination in the conduct of trade and aid policies and the poor figure we have generally cut in the UNCTAD negotiations so far. Nowhere has this been so starkly revealed as in official attitudes on the key question of commodity stabilisation. To be fair, these attitudes are shared by other, though by no means all developed countries. True, there was a little progress in Paris a fortnight ago. True, there was a commitment to increase development aid.

Incidentally, it will be useful for us to be told how the British and EEC contributions are to be financed. Is there to be a real increase in our total aid effort?

True, also it was at last acknowledged that prices in commodity agreements should take account of inflation, which the poor countries did not cause in the first place.

What this will mean in hard economic terms has to be left until the talks are resumed in Geneva in November. Today we are concerned with the British contribution to these negotiations, with British initiatives. I am bound to say that on that score the Select Committee was singularly unimpressed by what it learned from its witnesses. Let me spell out the implications of this failure on our part to champion the cause of Third World countries, to whom we are bound by so many ties of history and common interest.

Falling barter terms of trade in most, although not all, developing countries, if unchecked, can result only in a lower demand for British exports. That can mean only fewer jobs in our traditional exporting industries. Here we have two problems as I see it. The first is how to fashion an international economic system that will enable the economies of the poorer countries to grow faster. That is why the Select Committee regards such issues as the integrated programme for commodities, the common fund, the expansion of Stabex, the Lomé Convention scheme, as crucial. It is also why we regard an improvement in the exporting capacity, and therefore in access, of the non-oil exporting developing, countries as being fundamentally linked to institutional improvements. These are all of a piece integrated and mutually interdependent in a way that the British Government have not yet begun to recognise.

One point needs to be specially emphasised. In seeking to improve the international competitiveness of the developing countries we must not lose sight of the fact that some start from a better position than others. Some will make more headway than others. A few start from the bottom, for a whole variety of reasons. They may have too few resources, lack the ability to pick themselves up from the ground, and so will advance slowly.