The Brandt Commission Report

Part of the debate – in the House of Commons at 7:44 pm on 18th April 1983.

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Photo of Mr Christopher Brocklebank-Fowler Mr Christopher Brocklebank-Fowler , North West Norfolk 7:44 pm, 18th April 1983

It is a pleasure to follow the hon. Member for Hertford and Stevenage (Mr. Wells) and to be able to agree with his call for political leadership. All parties in the House agree that the world is suffering the worst slump for 50 years. The Government not only recognise that but proclaim it. They often proclaim that the world slump alone is responsible for the high and unacceptable levels of unemployment in Britain. I accept that the international economy plays a major part in deciding the climate of our domestic economy, but I find it astonishing that the Government go no further and do not recognise that to overcome the problem it is necessary not only to have domestic economic policies but to have international economic policies.

Brandt recognises the problems. He analyses them and makes proposals. There was nothing in the speech by the Secretary of State for Foreign and Commonwealth Affairs today to give me confidence that the Government are prepared to give the political leadership in international forums that is necessary if the problem is to be resolved.

I have sympathy with the Government's loyal supporters. I have particular sympathy with those who wish that the Government would take action to deal with the problem, but they know, as I know, that however elegant the circumlocution of the Foreign Secretary, and while the Foreign Office may take a kindly view, the Treasury takes a less kindly view. Most of all, Government supporters know that "Mother" will have none of it.

It is an appalling waste of our status in the world that we look forward to an international conference at Williamsburg where the British Prime Minister will, for the first time in her career, be the doyen of the assembled Heads of State, but that there is no sign that she will use her seniority to move the world forward in the way that the right hon. Member for Sidcup (Mr. Heath) so wisely suggested we should in his impressive speech this afternoon.

I welcome the opportunity to pay a tribute to the right hon. Member for Sidcup. In 1964 he led the British delegation to UNCTAD, which probably made the most significant contribution to the expansion of world trade. I pay tribute to the right hon. Gentleman also for the tremendous effort that he put into his service on the Brandt commission, not only in discussing and helping to formulate the policy in the two reports, but in playing such a major part in encouraging people in Britain and throughout the world to recognise that the world economy is the central issue. Until statesmen from all the countries in the West and the leaders in the South get together to discuss in detail sensible ways forward, there is little hope for the world's economic recovery in the foreseeable future.

The essential message of Brandt 2 is not only that the problems are serious and require to be addressed by the world community, but, more importantly, that we are running out of time. I was saddened by the Foreign Secretary's speech today, because his tone suggested that we have all the time in the world. We have not. Many countries face disaster. The right hon. Gentleman said that he hoped that some of the poorest countries would get through the recession without too much pain, but of every 1,000 children born in Bangladesh, 294 will be dead within five years. That is nearly one third of the children born in one of the poorest countries. I do not think that it is elegant if one is Foreign Secretary of a great Western country to say "Of course we know about the difficulties, but we hope that they will not upset the world community too much." That is thoroughly unacceptable and we in the Western world have to play a much more positive role in leading the search for solutions to the economic problems that will envelop us all.

First and foremost, we in the SDP say that Britain should take a lead in calling for and working for a rejection of the restrictive economic policies which, together with the oil crisis, have driven the world into slump. They should be replaced by a co-operative and co-ordinated policy of joint expansion to chart a course out of world recession.

Co-ordinated action is required on three grounds. First, relatively small adjustments in the fiscal stance of the major countries involved could produce significant increases in gross national product and reductions in unemployment. In that way the world could gradually be led out of recession.

Secondly, substantial progress could be made towards achieving monetary stability trilaterally between the United States, the members of the European monetary system, of which I believe Britain should be a member, and Japan. Each bloc should define a target zone for its currency within which the value would be free to vary. That would mean that we would not be returning to the old rigid system of Bretton Woods. We would not have completely free floating exchange rates, but exchange rates would be floating within bands that would be agreed by the major trading blocs throughout the world.

The third area of policy for immediate attention is that of finance to the developing world. I do not confine myself to SDRs, World Bank lending, the IDA or triple aid programmes. I include access for the Third world to our markets and encouragement to develop their technologies and capacity to be full trading partners in the world.

The first two aspects of this strategy would provide a context within which expansion could restart. That would be measured, balanced and sustainable expansion. The third measure — finance for the developing world —would ensure that the expansion would not run into a barrier of markets blocked by penury. We believe that the construction of a new international strategy on these lines should be the main business of the economic summit in May. I join the right hon. Member for Sidcup in expressing disappointment that, in his words, it is to be just another tea party. It is far too important an occasion for that and it should be an occasion when substantial progress is made on the subjects that I have mentioned.

In addition to playing our full part in the construction of policies to overcome the world slump, we must consider also as individual countries the types of trade and aid policies that we should pursue that will maximise the assistance that we give to less developed countries to achieve increases in their standard of living, given the limited resources at our disposal.

In these respects the main lines of my party's policy are to increase stability and confidence in commodity trade and in foreign exchange dealings, to increase the real level of aid to the Third world and to improve its quality. I agree with the hon. Member for Hertford and Stevenage that it is necessary to develop mentally desirable investment in the Third world and to take the lead in enabling the international institutions to become more responsive to the needs of the Third world.

There are many who fear the disadvantages that might flow from trade liberalisation, and I shall dispel some of those fears. As developing countries spend their foreign exchange earnings, they would provide greater export opportunities for competitive British industries. Secondly, when less expensive imports displace more costly domestic or other foreign goods, that helps to reduce inflation. Thirdly, it provides a wider consumer choice, from which consumers benefit. Fourthly, industry will be encouraged to specialise in producing goods with a higher added value when we can secure a comparative advantage. This will increase our ability to match competition at home and abroad.

It is recognised that increased imports from developing countries initially concentrated on a fairly narrow range of products and might require a rather faster process of adjustment within our economy. Therefore, there are benefits to be gained in the domestic economy from freer trade and we in the SDP are determined that Britain should resist the forces of protectionism, which can be so damaging to developing countries and to the prospects of employment at home.

We believe that, given the right domestic policies, there can be a clear net balance of advantage in adopting a policy of greater trade liberalisation for the developed world. If other industrialised countries follow our example, the resulting growth in the world economy will benefit us all.

I reaffirm my party's commitment to the 0·7 per cent. target for aid, to be achieved by annual increases over five years of government. I do not subscribe to the view of the hon. Member for Hertford and Stevenage that 0·7 per cent. is merely an irrelevant target. It is a target that the international community has agreed, and it has been a target for many years. It has been set at a lamentably low level. The SDP believes that Britain should be pushing further ahead towards a 1 per cent. target for official aid. However, over the first five years of a SDP-Liberal alliance Government we would content ourselves with achieving the target that Britain has already undertaken.