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Commons Chamber

Volume 933: debated on Monday 13 June 1977

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House Of Commons

Monday 13th June 1977

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Oral Answers To Questions


Civil Aircraft


asked the Secretary of State for Industry whether he has yet made any decisions upon Government support for civil aircraft construction.

I have nothing to add to my answer to the hon. Member on 25th April.

Does the Minister understand that at the Paris aerospace salon during the last fortnight one of the main talking points among manufacturers, politicians and civil servants from countries abroad has been that the British Government have no policy whatever towards civil aerospace? Has he yet made up his mind whether it is the Gov- ernment's intention to produce a new design unilaterally or in collaboration with other countries, and, if so, with whom?

The hon. Gentleman obviously attended a different Paris air show from the one I did, because the British Aerospace stand under public ownership, and the British Aerospace chalet under public ownership, attracted admiration and support from all over the world. When I attended the French Prime Minister's lunch on Saturday I also noted that France has now found it necessary to extend public ownership in its aircraft industry in order to deal with the problems. Discussions have been taking place—they took place on Friday and again today—between British Aerospace and its Continental partners to explore the possibilities of sensible, commercial, profitable collaboration.

Is my hon. Friend aware of the desperate employment situation in British Aerospace at Hatfield? When are the consultations which he has mentioned likely to come to fruition, and when are we likely to have a decision about the HS146?

In general the consultations should come to some initial conclusions next month. I made it my business to discuss the HS146 in particular with one of the members of the board of British Aerospace in Paris on Saturday. I can assure my hon. Friend that the possibilities of the HS146 are being examined in a particularly positive way.

My hon. Friend the Member for Chingford (Mr. Tebbit) asked the Minister not who owned the aerospace industry but what his policy was. The Minister gave about one line of waffle at the end of his statement. Can he tell us what the policy is?

The one line of waffle was rather succinct waffle at any rate. It is our intention, now that we have the largest aircraft industry in Western Europe under one ownership, to maintain an independent, viable, British aircraft industry that will provide maximum employment in our factories and also profit for the British taxpayer—something which has been lacking over many years under private ownership.

Can the Minister say how the Government intend to deal with the apparent divergence of policies between the British and French aircraft industries in wishing respectively to develop an improved version of the BAC111 on the one hand and an improved version of the Airbus on the other? Will he assure the House that any discussion of these matters will be based on a realistic assessment of the market and the capability of the aircraft rather than on political problems of employment in both industries?

The one thing I have made absolutely clear is that we are not interested in political planes. We are interested in commercial planes which provide employment and make money. The conflict would not be between the X11 and the Airbus; it would be between the X11 and the A200. What British Aerospace has made clear to me is that, if possible, provided it is commercially sensible, it wants to assemble the compatible features of all contenders to make commercially the best plane. There is no amour propre. It wants the best plane.


asked the Secretary of State for Industry what action he is taking to encourage the British aircraft industry to produce aircraft that are both quiet and economical.

My Department continues to encourage the development of quieter aircraft technology with funds provided under its aircraft and aero-engine general research and development programme. Expenditure on noise research in 1976–77 totalled £2·7 million, going both to Government research and development establishments and to industry. In defining these research programmes, my Department lays due stress on the need for them to lead to aircraft that are economical, both for the manufacturer and for the operator. The Government also continue to work for international agreement on improved noise standards for civil aircraft. These negotiations are the responsibility of my right hon. Friend the Secretary of State for Trade.

What are the Government doing to encourage the industry to accept that the production of quiet and economical aircraft is likely to lead to better export performance, and to act accordingly?

I can only presume that the hon. Gentleman knows that the 747, the Lockheed Tri-Star and the DC10 are already examples of quieter aircraft with quieter engines in production. I hope he also recognises that the latest versions of planes like the BAC111 are themselves examples of quieter engine technology.

Is the hon. Gentleman aware that the WOR radio station in New York has alleged that the Port of New York Authority is suppressing a report that the Boeing 707 at New York is far noisier than the Concorde and far more numerous in its nights? In view of the fact that this aircraft seems to be about the noisiest civil aircraft flying, can the Minister say what steps he is taking to suppress this aircraft's anti-social noise?

I am sure the hon. Gentleman realises that this subject is a bit more complicated than hearing a report on one New York radio station. I hope he will also take into account that this matter is currently the subject of an appeal in New York and that it is probably best to await the outcome of that.

Are any steps being taken by British aerospace industries, perhaps in conjunction with United States and French aerospace industries, to begin to explore the possibility of a Concorde Mark 2 which, while continuing to be a supersonic aeroplane, would carry more passengers and tend to conserve fuel more than the Mark 1?

That is an ingenious way for the hon. Gentleman to ask another specific question. I hope that that will encourage him to table a specific Question about it.

British Leyland


asked the Secretary of State for Industry what proportion of the public funds allocated to Leyland Cars so far and due to be allocated under the Ryder or any modified plan is for the production of components or purchase of component manufacturers, as opposed to the proportion allocated for facilities for the assembly of cars.

Public funds made available to British Leyland to assist in furthering the company's plans are not allocated in the way suggested by the hon. Member. They are provided as the public contribution to the total funding requirements of British Leyland after assessment of the performance, the prospects and the major plans of the company.

Can the Minister give the House an assurance that he understands the value of the components industry, whose exports overtook that of the vehicle industry last year? Will he therefore make certain that due protection is given in the British Leyland plans to the position of component makers so that our strength in this area is not weakened?

Since many of my own constituents work in the components industry, I can assure the hon. Gentleman that I understand its relevance. It is my understanding that any expansion of component manufacture by British Leyland will be financed out of the profits of that activity by British Leyland.

Is my hon. Friend aware that there is great anxiety among the work force of the bus and truck division because funds from Ryder have not been released to promote the programme in that area, giving rise to great anxiety about future employment prospects because of this delay? Is my hon. Friend further aware that within the last half-hour I have had a telephone call assuring me that workers will appear on these premises tomorrow in order to meet the Minister to discuss this situation?

I am a little mystified by what my hon. Friend says. The finance and the plans of the truck and bus division have not been affected by the review which has been carried out by the NEB of the car division. If my hon. Friend has some further details and cares to communicate them to me, I shall look into them.

Do the Government intend to add to the information available to Parliament and the public about the way in which the Government and the NEB have arrived at their decisions about financial assistance to British Leyland? Does he accept that, although we have realised that much of this information is commercially confidential and that this House is no forum for commercial decisions, the main information coming to Members and to the public at the moment about the options available to the Government is from well-informed Press leaks rather than from any other statement of fact?

I am not sure whether they are well-informed or ill-informed. But the hon. Gentleman has answered his own question by saying that a lot of this information is commercially confidential. In any case, I draw his attention to the fact that there is at least one Question on the Order Paper dealing with this specific matter.

Why should not British Leyland have a share of the profitable components sector when companies like Lucas, Dunlop and GKN pay more tax to overseas Governments than to our own? At least, Leyland's profits would stay in this country.

Certainly British Leyland is not precluded from components manufacture. In fact, before public money on a large scale was put into British Leyland the company was already a large-scale component manufacturer.

As the Minister and the NEB have chosen the most expensive new model in cash flow terms but the most profitable in the long term, does he anticipate having to provide more funds in the short term to Leyland, or will he find other ways, with the components industry, of getting the NEB to help?

The point about further finance for British Leyland and the provision of it was covered adequately in my right hon. Friend's statement on the 26th of last month, and that has already been discussed and debated at length in the House on many occasions.


asked the Secretary of State for Industry if he has received the review of British Leyland from the NEB.


asked the Secretary of State for Industry when he intends to publish the NEB's review of British Leyland.

I thank my hon. Friend for that answer. Is he aware that the employees and managers of British Ley-land are lobbying hon. Members to support Scheme A, when we do not know what the rest of the alphabet holds? Will he seek at an early date to publish the alternatives put by Leyland to its employees, on the basis of which they are lobbying hon. Members?

As my hon. Friend will appreciate, the report which has been made by British Leyland and upon which comments have been made by the National Enterprise Board contains so much commercially confidential information that to publish it in detail would disadvantage British Leyland at the hands of its competitors. When he made his statement on 26th May, however, my right hon. Friend the Secretary of State made it clear that he wished to give the House the maximum possible information so that it could come to sensible conclusions when these matters were debated in detail.

Will the Minister take this opportunity to assure the House that he is willing to put at least an abridged version of the report in the Library? That would be to follow precedent. Does he recognise that one of the main problems, resulting in our having so little faith in the whole Ryder approach to the subject, is that Ryder has given wildly optimistic premises on which British Leyland has been developed through him?

The hon. Gentleman has tendencies to speak spontaneously about Lord Ryder. His faith in Lord Ryder is not relevant to this Question. What I have said to the House, and have said in answer to the hon. Gentleman, is that we shall provide the maximum amount of information that can be made available to the House without damaging the commercial prospects of British Leyland as against its competitors.

When Leyland's total production of vehicles in 1976 was 60,000 down on 1975, itself a record low year, how does the hon. Gentleman intend to get the necessary very high levels of production for the new Mini project? That at least is something about which he should tell the House.

The question of production levels at Leyland has been one of great concern to the Government, and it is one of the reasons why we have decided, in agreement with the National Enterprise Board, that it is not appropriate at this time to come to a definitive decision about the development plans for Leyland. At the same time, it ought to be pointed out that since Leyland's return to full operation, following the dispute earlier this year, the output that the company has been achieving is outstanding and gives good promise for prospects in the future.

Is the Minister aware that this area of commercial confidentiality is causing concern to the work force and trade union representatives? To what extent will the workers be allowed to participate in the activities of British Leyland if they are not involved in this area?

We want the workers to be involved in this area, and that is why we have been seeking to engage them in a dialogue with management over the preparation of a planning agreement with Leyland. Unfortunately, not all the workers are prepared to take part in the participation machinery. I urge all hon. Members to encourage the workers to do so in order that they can be given the information to which they have a right.

Does the hon. Gentleman accept that it is not just a matter of producing cars but that the cars must be sold? Will he give an assurance that the NEB and the Department will take account of the views of distributors, particularly about quality of production and the model mix?

Those are important matters, and, understandably, distributors make these points to us. There is a paradoxical situation in that when there is a demand the output is not satisfactory and that when the output is satisfactory lack of confidence has reduced demand. It is a sad situation, and that is why we must look carefully at further financing.

Industrial Development Advisory Board


asked the Secretary of State for Industry whether he proposes to make any changes to the powers or the constitution of the Industrial Development Advisory Board.

I welcome that reply. Can the Minister explain why the Government rejected the advice of IDAB on the use of taxpayers' money and made a further grant to the Kirkby workers' co-operative despite its advice that the fresh application for assistance to that co-operative did not accord with the Government's criteria? Is not that an example of political pressure overriding sensible commercial advice on the use of taxpayers' money?

Since its inception in June 1972, the Board has considered 367 cases. In only seven cases did the Government conclude differently from the Board. The hon. Member must accept that the final decision rests with the Government. In the case of the workers' co-operative at Kirkby, severe unemployment factors rightly influenced the Government.

It is interesting that the hon. Member should raise this question. The Government took the advice of IDAB into account and decided to rescue 700 jobs in Kirkby. Are the Opposition saying that the Government should have put 700 people on the dole? Are the Opposition opposed to this type of assistance, which will help towards a solution of the unemployment problem.

Can my hon. Friend confirm that not far from Kirkby, in Skelmersdale, Courtaulds—the industrial giant which has had £6 million from the taxpayer in order to continue with its factory and employ people in the textile industry and which made a profit of 9 per cent. generally over the last 12 months—is now discarding its employees and throwing them on the dole? Would it not be better to have more worker enterprises of this type fostered by the Government to keep more people in employment?

That is an interesting point. The Opposition did not raise the question of taxpayers' money being given to Courtaulds when that company announced 4,500 redundancies. Significant sums of taxpayers' money have been advanced. Some of that money has been the subject of recovery action. Courtaulds made a commercial judgment which resulted in 4,500 redundancies. There is strong political prejudice on the part of the Opposition spokesman. He fails to raise questions about Courtaulds but seems only too eager to raise the question of a workers' co-operative which has saved 700 jobs in an area of high unemployment.

Greater London


asked the Secretary of State for Industry if he will now take steps to encourage new industries to move into the Greater London area.

The forthcoming White Paper will contain proposals to encourage industry in inner urban areas, including those of London.

Will my hon. Friend consider liaising with the London boroughs to establish a register of industrial sites to see that they are protected so that industry can return to them? Will he ensure that they are not used for the construction of warehouses which will prevent industry from returning to the Greater London area?

That is an interesting suggestion which I shall consider. We have already had approaches from individual boroughs within the Greater London area. Where we can intervene to assist in the preservation of sites and to release sites which would otherwise be moribund, we shall do so.

Will my hon. Friend consult his colleague the Secretary of State for Employment on the question of the serious youth unemployment in London and see what he can do, in consultation with his right hon. Friend, to bring some relief to this problem?

My right hon. Friend the Secretary of State for Employment has been very much involved in the review of all the factors affecting youth unemployment, and I shall take my hon. Friend's points into account.

May I ask the hon. Gentleman whether, ahead of the publication of the White Paper, he agrees that another manifestation that urgent action is needed is that unemployment in the Greater London area in the last two years has for the first time become deep-seated and will become long-term unless the old traditional discouragement policies are discontinued?

The Government have great regard to unemployment in the London area and have been taking action where possible. There are a number of factors that have produced unemployment in the London area. It is not regional policy that has produced this situation. Many other factors are involved. As the hon. Gentleman knows, we are having discussions about the matter, and a White Paper will be produced, which is evidence of the concern that the Government have shown.

Is my hon. Friend aware that there are parts of the Greater London area where unemployment is a good deal higher than in many of the development areas? Will he take steps not only to bring in new industry but to prevent existing industry in London from moving out, because it is still moving out under the pressure of the regional policies with which he is proceeding?

Only 9 per cent. of jobs have gone to development areas from London. As I said earlier, there are many other factors that have led my hon. Friend to make the points that he has made today. The travel-to-work area statistics, which are general statistics, hide pools of much higher levels of unemployment. The Government are very concerned about the situation and are entering into discussions and producing a White Paper as a precursor to discussion and debate to see in what ways we can improve the situation.

When the hon. Gentleman is preparing the White Paper, will he take into account the need for positive encouragement to be given to firms that are already in London and wish to expand? Will he give them encouragement rather than the discouragement that they have had in the past?

As the hon. Gentleman knows, we have made a number of industrial development certificate concessions about this. We have taken into account the representations that have been made, and I can reiterate that the Government's concern is exhibited by the partnership proposals with inner city areas that have been announced, together with the White Paper that will be published very shortly.

Industrial Products (Price Components)


asked the Secretary of State for Industry what are the problems and advantages of determining the United Kingdom added-value component in the prices of industrial products; and if he will carry out a study and make a statement.

I am afraid that the complexity and costs of making dependable valuations throughout industry far outweigh any advantage that might be found in such information.

Although I appreciate the enormous difficulties in this area, will my hon. Friend look at certain industrial sectors where the manufacturers believe that this is feasible, as the obvious advantage, for example, in public sector ordering in these areas would be enormous because of the very great advantage of anything providing United Kingdom added value in terms of the economy and the Treasury compared with the imported sector?

I have noted what my hon. Friend has said both today and in his letter to The Times. To apply this principle rather more generally is a very complex and costly operation, especially if we are to avoid some of the mistakes of double counting made in the past. However, if my hon. Friend has any speci- fic scheme in any specific sector in mind which he would like to put to me, I shall be happy to look at it.

Post Office Workers (Industrial Action)


asked the Secretary of State for Industry what plans he has to change the law in relation to organising Post Office workers to strike.

I intend to propose amendments to Post Office legislation so as to enable Post Office workers to take normal industrial action without the fear of incurring criminal prosecution.

Has the right hon. Gentleman consulted the Liberal Party about whether its Members will support such legislation? [HON. MEMBERS: "Where are they? "] Secondly, in view of the Lord President's obvious belief that the general posting public would like their mail interrupted so that Post Office workers may pursue political vendettas in other countries, can the right hon. Gentleman at the same time arrange for the Post Office monopoly to be broken so that those of us who wish our mail to be delivered may rely on other organisations to do it?

The Post Office monopoly will not be broken arising out of any changes which I propose to make.

As for the question of consultation, we shall be consulting a wide range of views, including the Post Office management and the Post Office Users' National Council. If the arrangements existing between the Government and the Liberal Party exist by the time that I bring forward proposals, I. have no doubt that we shall consult the Liberal Party too. I dare say that the hon. Member for Cirencester and Tewkes-bury (Mr. Ridley) will have views which he will express from time to time. I hope to bring forward proposals as soon as possible.

Will my right hon. Friend, who no doubt recalls that Post Office workers recently gave their support to people out on strike at the Grunwick Processing Laboratories, state what action he proposes to take, in view of the fact that at least 50 people have been arrested outside those laboratories today, to ensure that the ACAS recommendation is carried out, tht ACAS is recognised and that this bitter and unnecessary dispute is brought to an end?

I have heard that there has been difficulty at Grunwick today, although I have not received an authoritative report. The matter no doubt will be considered by my right hon. Friend the Secretary of State for Employment, who, I am sure, will take steps to see whether he can be of assistance.

Does the right hon. Gentleman intend to include the right of Post Office workers selectively to black or to refuse to deliver mail on political grounds?

I cannot understand why Conservative Members are getting themselves worked up into a lather about this matter.

If the hon. Gentleman will give me time, I shall try to do so. The hon. Gentleman should contain himself, be patient and not be so impetuous, because usually when he is impetuous he is extremely offensive. The decision of the Court of Appeal on the Gouriet case put in doubt the right of Post Office workers to strike, a right which we had always thought existed and which the previous Conservative Government thought existed. We are trying to remove the uncertainty.

As the Post Office has no monopoly in the collection and delivery of parcels and newspapers, will the right hon. Gentleman use the opportunity of the legislation to remove the monopoly in the collection and delivery of letters?

No, Sir. Our proposal will be laid before the House in due course to clear up the uncertainty. When there was a strike of Post Office workers in 1971, the previous Conservative Government took no action. No legislative changes were made then nor, as far as I can recall, did the Conservative Government take any action when there was a selective boycott of France in 1973. The Conservatives must not have double standards in this matter.

Folkestone And Hythe (Area Status)


asked the Secretary of State for Industry if he will now give development area status to Folkestone and Hythe.

Does the Minister appreciate that unemployment in Folkestone and Hythe has been well above the national average almost since the present Government came to power? Why should a district with such good facilities for commerce and industry be deprived of the opportunity to get people to move to it because of legislation introduced by this Government? How high must unemployment rise before the Government come to their senses and give us development area status?

The unemployment in Folkestone and Hythe is certainly regretted by the Government, but the area has a number of factors that are special to it in that it is a seaside area with seasonal variations in employment. The Government are concerned but can see no justification at this stage for altering the area's status as the hon. Gentleman requests.

Regional Policies


asked the Secretary of State for Industry if he is satisfied with the workings and effectiveness of the Government's regional policies, particularly as they affect the South-West assisted areas.

A recession tends to reduce the effectiveness of regional policies, but this should improve with an improvement in the economy.

But is not the Minister aware that over the past 12 months the South-West Development Area—Cornwall in particular—has had the highest level of unemployment of any United Kingdom development area? Is it not time that a more flexible approach was introduced to take account of the needs of companies in rural development areas?

The Government are concerned about unemployment wherever it occurs. We have faced extreme economic difficulties, but the Government have taken positive steps to try to redress the position in the South-West. For example, we have built 25 advance factories and another four nursery units for small companies are due to be completed in the near future. We have given regional selective financial assistance of nearly £7·5 million to create about 7,000 jobs. I am sure that the hon. Member and his hon. Friend the Member for Folkestone and Hythe (Mr. Costain) will bear in mind the restrictions on public expenditure. It is strange that Conservative hon. Members advocate cuts in public expenditure but when they speak on behalf of their own constituencies they always seem to want more.

Is my hon. Friend aware that there is a great deal of dissatisfaction, particularly at present, about the operation of the regional policies on Merseyside? For example, there is dissatisfaction that an additional 1,400 workers are likely to be out of work as a result of the redundancies at Plessey's. Can my hon. Friend say why Lord Ryder's report on this matter was not properly discussed and action was not taken before the redundancies were announced by the Government? What action will the Government now take to stop those redundancies and create more work on Merseyside?

Order. I must draw attention to the fact that this Question is about the South-West.

The Ryder Report is due to be published in the near future. The Government are concerned about the effects of regional expenditure and levels of unemployment, particularly in Merseyside and elsewhere, but I am sure my hon. Friend will accept that regional expenditure can remedy only one of the structural defects of industry. The largely private enterprise economy that we have in this country is going through a crisis. Although regional expenditure can help to obviate some of the difficulties, it cannot alter the basic system and the difficulties associated with it.

Will the Minister turn his mind to the European element of the Government's regional policies? Is it not the case that the Commission's proposals greatly to increase the Regional Fund are likely to be stillborn because of the British Government's comparative lack of interest in such proposals? Is the Government's main difficulty their reluctance to relinquish their political control over any element of regional policy?

As with other Common Market matters, we are engaging in discussions about the general regional position in this country with regard to the Common Market, so the hon. Gentleman is wide of the mark. The Government are concerned and are engaged in discussions on the matter.

Is it not the case that the Government's present regional policies are based on the 1972 Industry Act passed by the previous Government? Is it not clear from the representations made to my hon. Friend's Department from the North-East of Scotland that that Act is far too inflexible and does not allow the Government to deal with circumstances as they arise instead of having to deal with them in a purely automatic and mechanistic way?

My hon. Friend has made an interesting point. The 1972 Industry Act, passed by the previous Conservative Government, is the basis for current regional policies. We have tried to adopt a more selective approach to produce the sort of flexibility for which my hon. Friend asks. But the notion that the central Government have enormous powers of intervention in industry is not correct. Our powers of intervention are quite limited.

To what level must unemployment rise in any of the regions before the Minister revises the policy on the regions or resigns and returns to his erstwhile friends below the Gangway?

Regional policy is designed to deal with basic structural unemployment, as the hon. Gentleman well knows. What alarms me is the double standards displayed by the hon. Gentleman and other Conservative Members, who constantly talk about cuts in public expenditure which would greatly increase the level of unemployment and yet, when they speak for their own constituencies, always seem to want more and more public expenditure.

Cable And Wireless


asked the Secretary of State for Industry whether he will make a further statement about the remuneration of the directors of Cable and Wireless.

I have nothing to add to the answer I gave the hon. Member on 25th April.

Will the Minister pay tribute to Cable and Wireless, which made a profit of £28 million in 1975 and a substantially greater profit in 1976? Following the resignation of the managing director, Mr. Willett, and since the salaries of senior officials now substantially exceed the salaries of directors, will the Minister urgently direct his attention to the matter of directors' salaries?

I paid tribute to the achievement of Cable and Wireless on 25th April and I do so again. The problems of the company have been aired by the hon. Member for Eastbourne (Mr. Gow) on several occasions. However, he does the company and its achievements no credit by the comments that he continually makes about the company. That was especially so when he introduced his denationalisation Bill for Cable and Wireless. I can say only that the whole matter of the salaries of the board of Cable and Wireless must be considered in relation to the salaries of the members of the boards of nationalised industries and that that is all part of the wider question of salaries in the next round of the pay policy.

I should be grateful if the hon. Gentleman would be kind enough to raise his point of order at the end of Questions.

In addition to worrying about the rates of pay in nationalised industries, will my hon. Friend take the trouble to investigate the disgracefully low wages of office cleaners employed in the headquarters of nationalised industries? Does he realise that they are given disgustingly low rates of pay to clear up all the rubbish?

My hon. Friend has brought to the attention of the House something that has been brought to the attention of hon. Members. I know that there is a great deal of sympathy for the point of view he has expressed, and I hope that he will raise the matter in the appropriate quarters.

If the directors of Cable and Wireless are underpaid or suffering, will the Minister suggest that they should stand for direct election to the European Parliament?

We all recognise those sentiments and the track record of the hon. Member for Banbury (Mr. Marten) on this matter. As far as I am aware—although I have not yet seen any specific details—there is nothing that would preclude them from standing for election.

Motor Industry (Productivity)


asked the Secretary of State for Industry what is the level of productivity in the motor industry expressed in percentage terms, compared with the level of productivity in the motor industries of West Germany, France and Japan, respectively.

I refer the hon. Member to the report on the future of the British car industry by the CPRS which concluded that, in terms of vehicles per employee, productivity in the British motor industry appeared to be approximately 30 per cent. below French and German levels and 60 per cent. below the Japanese level in 1973. I should remind the hon. Member that comparisons of this sort are complicated not only by product mix but by the degree of vertical integration, the relative level of labour costs and the amount and quality of capital equipment with which employees have to work.

We realise that the Minister would like to do his best to fudge the obvious message contained in those figures, but does he not agree that the reason for lower productivity probably has something to do with the level of direct taxation in this country, which seems to discourage people from working hard? Does the right hon. Gentleman agree with that point of view? If he does not agree, will he say what other Government policies are the cause?

There is another obvious answer, and that is that the private sector in this country has not done as well as the private sector in other countries.

Does my right hon. Friend agree that the only obvious message that arises from this Question is the desire of the Opposition to run down the British worker on every possible occasion, and that because of that the level of capital investment in the British motor industry is far below the level of investment in the industry's competitors in Germany and Japan?

My hon. Friend is absolutely correct. Little that is constructive comes from the Opposition Benches when we deal with industrial policy. Indeed, the question is perhaps typified by the dormant attitude of the Opposition Front Bench. We look forward to some maiden intervention from the Opposition Front Bench today.

Will the right hon. Gentleman stop siding with this senseless sniping of platitudes? Will he try to give a constructive answer and tell the House whether the plan for the new Mini provides for Japanese levels of production and productivity?

Obviously the aim of the industry must be to attain levels of productivity comparable to those of its major competitors. It is for that reason that the Government have been holding detailed discussions, in a tripartite environment, with the management and workers. We have been involved in order to find out what we can do to help, but the primary responsibility must rest with the industry.

Northern Region


asked the Secretary of State for Industry what recent representations he has received about the need for a Northern Development Agency.

This subject has been raised on a number of occasions, and views both for and against such an agency have been expressed.

Does my right hon. Friend realise that there is now growing support in the Northern Region for a Northern Development Agency along the lines of those in Scotland and Wales? Does he agree that if we now had a development agency in the Northern Region we might be less worried about what happens at C. A. Parsons?

I am not sure that my hon. Friend's conclusion in any way arises from his basic premise. An agency is not a magic formula. Unfortunately it is being seen as such by many people. We must bear in mind that the creation of an agency can do nothing in itself to further advance the cause of the North and that it would lead to demands for similar agencies from hon. Members who fight for Merseyside and the North-West. The demand would not be in only those areas. Similar demands would arise from most areas, and I suspect that the North would lose out to wealthier areas.

Can the right hon. Gentleman confirm that the regional policy—of which the proposed Northern Development Agency is but a part—has as one of its objectives the comparative discouragement of economic activity in once prosperous areas and that, therefore, regional policy can partly be blamed for the high level of unemployment in the West Midlands?

That does not follow. The hon. Gentleman will be aware that when world economic activity is at a normal level the West Midlands and certain industrial parts of London suffer a substantial inhibition on industry because of the lack of skilled labour. The correct economic objective, which has been recognised by both parties when they have been in office, is that we should get a better and more even distribution of industry, and that is what regional policy is intended to attain.

Does my right hon. Friend accept that one part of that even distribution is the even distribution of headquarters functions and senior jobs? Is he aware that there are now only six major companies based in the Northern Region compared with nearly 40 at the end of the war and that this decline is another reason why many of us are concerned about the future of C. A. Parsons and Reyrolle Parsons, which are locally based in the Tyneside area?

My hon. Friend is right in saying that there is a problem in all regions when there is a concentration of industry and headquarters functions move out. However, there is no evidence to suggest that at a time of closures there is greater vulnerability among branch units than among units in non-assisted areas.

Nationalised Industries


asked the Secretary of State for Industry when he next expects to meet the chairmen of nationalised industries for which he is responsible.

Will my right hon. Friend discuss with the chairmen the implications of the Daily Mail attack on British Leyland? Is it not obvious that this was a conspiracy against nationalised industries by the gutter Press, which used lies and forgery to try to topple the Labour Government in the hope of returning a Right-wing extremist Government headed by the Leader of the Opposition, whose silence over this whole sordid affair has been very conspicuous?

I have discussed the Daily Mail only with Lord Ryder, whom I asked to conduct an inquiry into the allegations. He has not reported to me yet, but he will do so in due course and I shall report to the House. I want to leave it at that.

Has the right hon. Gentleman discussed the NEDO Report on nationalised industries with the chairmen of the industries for which he is responsible? Are we to have the benefit of his Department's thinking on this matter, perhaps in the form of a White Paper?

I do not have ministerial responsibility for replying to that report, but I have discussed its wider implications with the chairmen of the industries for which I have responsibility. I have mixed views and there are mixed views generally about the recommendations. On the general question of industrial democracy, we have laid a Bill before the House that has received an unopposed Second Reading for an experiment in industrial democracy in the Post Office. The Aircraft and Shipbuilding Industries Bill included a clause laying a duty on the corporations to bring forward proposals within three months for industrial democracy, and Sir Charles Villiers has recently made proposals in respect of the British Steel Corporation. I understand that the Iron and Steel Trades Confederation and the TUC Steel Committee are likely to respond to them. Some good progress is being made.

Japanese Companies


asked the Secretary of State for Industry what representations he has received from Japanese companies to set up factories in the United Kingdom.

Three Japanese companies are at present discussing with my Department the conditions under which they might set up factories in the United Kingdom.

When my right hon. Friend considers the Hitachi application, will he take into account the effect that this will have on the electronics components industry in this country? Is he aware that it is causing a lot of dismay among workers, particularly as it seems that the tubes will come from Helsinki?

My hon. Friend was good enough to come with a deputation which made representations and expressed its concern quite clearly. I can undertake that we shall take into account the impact on British industry. I can assure my hon. Friend that the Finnish production will be a smaller unit than the Mullard unit and will be particularly aimed at the Russian market rather than the European market.

Is the right hon. Gentleman aware of the grave concern among both management and trade unions about the effect of the Hitachi assembly plant on United Kingdom employment because although a further 250 jobs may be provided another 5,000 may be lost? Is he aware that the United States consumer electronics industry has been ruined by what are regarded as unfair Japanese practices, and will he act robustly to ensure that this does not happen here?

That is why the discussions have taken so long. We want assurances before giving the go-ahead. We want assurances about exports and about the use of British components. It is encouraging to note that a spokesman for Hitachi made a public statement recently that the company would count any set in which there was more than 50 per cent. of imported components against sets that it would otherwise have imported into this country. To that extent, it would not have an adverse effect on British industry. However, we have not finished our consultations either with British industry or with Hitachi.

Power Plant


asked the Secretary of State for Industry if he will consult with the Chairman of the NEB and the Chairman of C. A. Parsons Ltd. with a view to forming an industrial unit to specialize in the design and export of small-scale electrical generating equipment, particularly to developing countries.

The United Kingdom has considerable manufacturing capacity for small-scale generating equipment but a request from any company for assistance in forming a unit to produce such equipment would be considered on its merits.

Would my right hon. Friend agree that the record of the electricity generating equipment industry in world markets over the past couple of decades has not been particularly impressive? Does he agree that it may be a good idea to establish a unit for producing equipment particularly with a view to penetrating world markets, especially with smaller equipment?

There is a great deal in what my hon. Friend says. A major part of the controversy surrounding the Government's attempt to restructure the power plant industry is whether we can have an industry that is internationally competitive. This is not a matter of a single power station order or anything of that sort. We hope that we shall be successful, because if we are not internationally competitive we shall lose out to some of the major giants of the world.



asked the Secretary of State for Industry if he is satisfied with the current level of investment in British industry.

Investment has generally been on a rising trend, and all the recent investment intentions surveys point to substantial increases this year and even larger increases in 1978.

Does the right hon. Gentleman agree that investment will not be satisfactory as long as our interest rates are 10 per cent. more than those in countries such as Germany and when individual incentive is completely lacking? What are the Government doing to rectify this situation?

We are bringing down interest rates—a matter for which we get little credit from the Opposition—and beginning to attain the increases in investment that both sides of the House wish to see. Last year there was a 5 per cent. increase in investment in the fourth quarter of the year compared with the first quarter. This year the Department anticipates an increase of between 6 per cent. and 10 per cent., with an increase of as much as 20 per cent. next year. According to the CBI, we shall see an increase of 10 per cent. to 15 per cent. between mid-1977 and mid-1978. All these examples show the right trend. If our estimates are accurate, we shall attain a level of investment as high as that of 1970, which was a peak year that was never equalled by the Opposition when they were last in power.

Is my right hon. Friend aware that investment levels in Germany, France, Japan and Italy are far higher than in this country and that the main banks and insurance companies, which have been the principal sources of investment in those countries, are publicly owned?

I doubt whether public ownership is necessarily a major factor. We must look at the history of the development of financial institutions in all countries. My right hon. Friend the Member for Huyton (Sir H. Wilson) is heading a survey into the rôle of the financial institutions in this country. It is worth stressing that in our private sector about two-thirds of all investment is self-generated, and that is why we regard profitability as important.

Are not price controls and a tendency to overmanning as well as inflation and a low level of real profits relevant to levels of investment?

Price control may be relevant when it, rather than the market, is the major inhibition, but the major constraint on industry in recent years has been the market situation. Price con- straint is a necessary requirement if we are to achieve the victory over inflation, and it is equally important for industry and future investment programmes. Of course we want to avoid overmanning, and that is why we have sector working parties involved in about 40 considerations of ways to improve productivity in important parts of our industry.

Is not the truth of the matter that in the past 12 months company profits, at least for the last quarter, have increased by about 40 per cent., that the banks have money to burn and the profits of the four major clearing banks are up by 67 per cent., and that most major private companies are paying little or no corporation tax and pay tax only to overseas Governments? In this period of Labour Government has not as much as £10,000 million been provided by the taxpayer through means such as relief on stock and deferred taxation, and is it not clear that private enterprise is failing and that it is costing us too much money to keep continually propping it up?

I understand the vehemence of my hon. Friend's interjection. However, despite what he has said, it is worth bearing in mind that the private sector still needs profits in order to invest. It is a fact, whether my hon. Friend likes it or not, that on a historic basis profitability is at a very low level in British industry at present. Therefore, we must generate more profitability if the Government are not to find all the finance that is necessary.

Rhodesia (Sanctions)


asked the Attorney-General if he will publish in the Official Report the number of cases of alleged contravention of the Rhodesian Sanctions Orders which have been investigated by the Director of Public Prosecutions and the number of cases in which prosecutions have been initiated; and if he will make a statement on the effectiveness of the Rhodesia Sanctions Orders.

Yes, Sir. I shall arrange for the information requested to be so published. The effectiveness of the Rhodesia Sanctions Order is essentially a matter for my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs.

May I congratulate my right hon. and learned Friend on his appointment to the Privy Council? Is he aware that to the layman the decision taken by the Director of Public Prosecutions not to proceed to prosecute in certain sanctions cases defies any rational understanding? Since the DPP gives no reason for not prosecuting, is it not my right hon. and learned Friend's duty and that of his Department to monitor the decisions and to advise the Foreign and Commonwealth Office to strengthen the sanctions orders? Will he undertake to monitor these arrangements?

I am most grateful to my hon. Friend for his references to me personally. In relation to any specific decision by the DPP, when it can properly be done we are always prepared to discuss reasons in the House. My hon. Friend will be aware that in the case of Dovaston, in which the court held that there was no case to answer, serious consideration is being given to a reference to the Court of Appeal. The question of whether conduct not at present prohibited under the orders ought to be prohibited is a matter for my right hon. and learned Friend and ultimately for the House.

Can the Solicitor-General tell the House, since he is to publish the information, roughly how many of the allegations turned out to be the subject of prosecutions?

I am in a difficulty. I am happy to answer, but I should not earn the gratitude of the House if I were to reel off statistics. There have been five prosecutions in relation to the orders. In addition, the Director of Public Prosecutions has prosecuted in a further five cases. Her Majesty's Commissioners of Customs and Excise have initiated proceedings in 17 cases.

Why was the former Derbyshire man, who fought for this country in the war and who is now an MP in Rhodesia, refused entry into this country when he was coming here purely for a compassionate reason to visit his 85-year-old mother? Is not that sinking to the lowest depths of spite and malice, even for this Government?

Even if that supplementary question arose from the original Question, it would be a matter for my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs.

Consolidation Legislation


asked the Attorney-General what steps have been taken to implement recommendations 48, 49 and 53 of the Renton Report on the preparation of legislation dealing with consolidation.

Draftsmen with the necessary aptitudes though without previous experience in the drafting of current legislation in the United Kingdom have been and continue to be employed on consolidation work. Their output has included some of the consolidation Acts passed in 1975 and 1976, as well as some consolidation Bills yet to be introduced.

With regard to recommendation 49, I understand that the Joint Committee on Consolidation Bills is ready and able to sit in two divisions should the need arise. Recently, however, the volume of consolidation legislation has not necessitated this.

On the general progress of consolidation work—recommendation 53—the Government accept in principle that the pace of consolidation should be accelerated. But the scope for such acceleration is limited by competing demands on draftsmen and lawyers in Government Departments. The need for economies in public expenditure necessarily affects recruitment of draftsmen by the Law Commission and the Parliamentary Counsel Office. It has, however, been possible this Session for draftsmen in the Parliamentary Counsel Office to give additional help in the preparation of consolidation Bills.

Is the Solicitor-General aware that it is now two years since the Renton Committee reported and that it is not immediately obvious that the pace of consolidation of statutes has increased markedly? I thank the right hon. and learned Gentleman for indicating that there has been some small increase in consolidation, but is it not important that the rate of consolidation should be substantially increased? If it means that more parliamentary draftsmen should be employed, should not the Government give important priority consideration to that?

That accords ill with some of the comments that we have heard from the Opposition about the limitation on public expenditure. Another limiting factor is parliamentary time.

Questions To Ministers

On a point of order, Mr. Speaker. Mine is the only Question on the Order Paper that has not been reached today. If Ministers had answered Questions instead of making speeches I should have been able to point out that it cost £3 million——

Grunwick Processing Laboratories Limited

On a point of order, Mr. Speaker. It was my intention to raise with you, under Standing Order No. 9, the question of the arrest of pickets this morning at the premises of Grunwick Processing Laboratories Limited arising out of a long industrial dispute. Since then I have received a note from your Secretary which indicates that men have been charged and that the matter is, therefore, sub judice.

As I take the view that a serious situation has been precipitated by the action of the police this morning and that the only way in which that matter will be ameliorated is by some action in the House, can you tell me whether your ruling applies also to putting down a Private Notice Question tomorrow or to a statement by the Home Secretary to indicate why it was that the police intervened in the way that they did?

I understand that the people concerned have already been charged and will have to appear in court. The matter clearly is sub judice and cannot be discussed here as long as those people are waiting for their cases to be heard.

Further to that point of order, Mr. Speaker. It is with some diffi- culty that I have just arrived here from the factory in question. I understand your ruling perfectly clearly, but can you give further advice on this matter? On television last night background cases were discussed and, therefore, whilst this matter is sub judice, there is an explosive situation in my constituency. Would it be in order for me to see you or your Office privately to find out what protection the House can give in this kind of situation where, for the rest of this week, there are likely to be further problems in my constituency?

The hon. Member knows—as does the House—that I am always willing to see hon. Members to discuss their difficulties, but it is clear to me that this matter is sub judice, and I therefore cannot allow it to be discussed.

Further to that point of order, Mr. Speaker. Will you confirm that in 1972 the House amended its sub judice rule in such a way as to make it clear that where a matter of grave national importance existed it was within your discretion to allow matters which would otherwise not be discussed in this House to be raised even though they were technically sub judice? I am making the plea that when you have these little meetings with people today or tomorrow you will bear that possibility in mind, because on a first reading of the resolution passed by the House I should have thought that that gave you a certain latitude in this case.

Further to that point of order, Mr. Speaker. You will recall that one of your predecessors established a precedent for this. During a strike in the coal industry, when I and others received information on the telephone, in some cases from places as far as 160 miles from London, it was ruled that we could raise matters with the Home Secretary of the day on that very afternoon concerning certain incidents that had occurred. The right hon. Gentleman who was then the Home Secretary is now sitting on the Opposition Front Bench. I submit that between today and tomorrow you should respectfully and carefully consider whether, under this precedent, we should be entitled to raise questions tomorrow on this dispute.

I shall, of course, give careful attention to what both hon. Members have said, but my ruling for today must stand.


On a point of order. I seek your advice, Mr. Speaker—and I do not want to raise again points of order with which you have already dealt. Can you advise me on the general situation in any part of the country where the police may have prevented lawful picketing but where there happens to be a case in point? What way have I of raising the general point? Is this a matter of interpretation of the law which I should raise with the appropriate Law Officers or are there some other means whereby the general point relating to interference with peaceful picketing, wherever it may be in the country, can be raised in this Chamber?

The hon. Gentleman has long experience in the House. He knows as much as I do about the various means open to him. However, what I am sure of is that we cannot discuss a matter which is sub judice.

Power Plant Manufacturing Industry

I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,

"the decision of the Secretary of State for Industry to announce his new policy for the future of the power plant manufacturing industry to the Confederation of Shipbuilding and Engineering Unions on 2nd June during the recess, his failure to make a statement to the House on this important matter today, to clarify the status of a letter written to him by Lord Ryder on 4th May and to explain the reasons for the nature of his Press briefing on 9th June after his subsequent meeting with the CSEU."
This matter is specific. It relates to two meetings held between the Secretary of State for Industry and the CSEU on 2nd and 9th June. It relates also to a letter produced at those meetings from Lord Ryder, the Chairman of the National Enterprise Board, and to Press briefings given by the Department of Industry after those meetings.

It is important because the future of a major British industry, the British power plant and turbo-generator industry, is at stake, because the Secretary of State announced the new policy of the Government during the recess, and because it is vital to 15,000 people in the North-East of England and about 10,000 people in Scotland who work in or supply the turbo-generator industry.

The matter is urgent because it is right that this House should expect the Secretary of State, at the first opportunity after such major and dramatic developments, to report them to the House. It is urgent also that conflicting reports about two matters are resolved speedily. The first is the question of Lord Ryder's letter of 4th May, which purports to argue that GEC should be allowed to take over C. A. Parsons Ltd. in my constituency and that that is the policy of the National Enterprise Board, when senior trade union members of the NEB have said that it has no such policy and that they dissociate themselves from Lord Ryder's letter.

It is also important that the nature of the briefing given to the Press by the Department after the meeting of 9th June with the CSEU be cleared up, for two reasons. First of all, some newspapers reported after the meeting that the Confederation had agreed to a GEC takeover of C. A. Parsons Ltd., when—this is the second reason—the following day and in statements after that meeting that very night, Confederation spokesmen specifically denied that that was the case and made it clear that they had entered into no such agreement with the Secretary of State.

On those grounds—that the matter is specific and vital and that it is urgent that the House hears from the Secretary of State at the earliest possible moment; 3.30 this afternoon was his first and proper opportunity—I believe that we should debate the matter, so that the Secretary of State will have to tell the House exactly what he is up to.

The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he believes should have urgent consideration, namely,

"the decision of the Secretary of State for Industry to announce his new policy for the future of the power plant manufacturing industry to the Confederation of Shipbuilding and Engineering Unions on 2nd June during the recess, his failure to make a statement to the House on this important matter today, to clarify the status of a letter written to him by Lord Ryder on 4th May and to explain the reasons for the nature of his Press briefing on 9th June after his subsequent meeting with the CSEU."
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Standing Order but to give no reasons for my decision. I have given careful consideration to the representations of the hon. Member, but I have to rule that his submission does not fall within the provisions of the Standing Order and that therefore I cannot submit his application to the House.

Administration Of Justice Bill Lords


That the Administration of Justice Bill [ Lords] be referred to a Second Reading Committee.—[ Mr. Coleman.]

Orders Of The Day


[21ST ALLOTTED DAY]— considered

Overseas Development

[ Commission documents: Aid to Non-Associated Developing Countries (5/327/77), Financial/Technical Aid to Non-Associated Countries (5/438/76), Skimmed Milk Powder Food Aid (5/968/76 and R/534/76), Report of development co-operation policies (5/1218/76), Trade co-operation with developing countries (5/1553/76), Community generalised preferences 1977 (R/1676/76), 1977 Cereals Food Aid and Sahels Reserves (R/2542/76) and Report on Community Food Aid Programme for Cereals (1974-75) and Dairy Products (1975) (Unnumbered).]

3.45 p.m.

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.

My hon. Friend is generalising somewhat and I suppose that that is necessary. Before he leaves the subject of commodity agreements, can he say specifically what he thinks should happen in relation to, for example, the commodity of tea? What does he see his present remarks meaning in the context of that commodity?

I would be happy, not merely to discuss that, but to discuss the whole range of commodities produced in Third World countries. To do that would take up the time of the House for the next hour. There are other members of the Select Committee who wish to contribute to the discussion and who will take up that point. My hon. Friend need not wave a disparaging hand. I am perfectly capable of answering his question. If he has not the wit and understanding to realise that countries whose income per capita is desperately low, whose people stand on the edge of starvation most of the time, are seriously limited in their capacity to buy British exports, he does not begin to understand the nature of the problem.

Let me finish. What I am arguing here is the interdependence of interest. We have unused capacity in this country and massive unemployment and massive deprivation overseas. If my hon. Friend has a better way of solving the problem, no doubt he will contribute to the debate.

Even supposing that all of the generalisations that my hon. Friend has just given us were accurate, and that is a big supposition, can he say whether, in the context of tea, he favours a commodity agreement that would raise the price still higher or whether he would control production? What would he do?

I would be perfectly prepared to argue this point in the greatest possible detail with my hon. Friend. To do so now would take up some time. Yes, I am in favour of commodity agreements. Yes, I would be in favour of an agreement governing tea. But, at the end of the day, that is not what matters. What matters is continuity of supply to those who require the commodity at a price they are capable of paying and at a price which is fair for the producer.

The best illustration I can give of that is the Commonwealth Sugar Agreement. If my hon. Friend does not have any knowledge or experience of that, I do not intend to educate him this afternoon The advantage of that and similar commodity agreements was that they gave the producer the assurance that he would get a remunerative price for the product negotiated for a period of years. It enabled him to maintain his production and it enabled the British housewife as a result to buy sugar, for instance, at a reasonable price with continuity of supply over a long period. I should have thought that the example I have given in regard to sugar gives the hon. Gentleman the answer to his question about tea.

I think that the general purpose which people have in mind in achieving commodity agreements, conceivably within the context of a common fund, is that there should be a stability of price that will benefit both the developing countries and the consumers in the industrialised countries. I do not know to what exent the hon. Gentleman is aware that the index of price fluctuations for key commodities which we import from the developing countries—it therefore affects our consumers, and it includes tea—ranges from 8 per cent, to 23 per cent. That is not a very good basis either for our own efforts to deal with our own inflation or for the developing countries' efforts to have stability of income.

The right hon. Lady has expressed the point perfectly. One of the more hopeful signs in the past few years has been the readiness, if I may make a positive point, of the oil-rich countries to play a large and even magnanimous rôle in making an impact on world poverty. We who have a very long experience—some of it very dearly bought—have an opportunity to share with them in fashioning the joint programmes to aid the poorest countries. I hope that the right hon. Lady will say something about that today and indicate whether any initiatives are planned in that context.

The second problem is how to ensure that Britain and the British people benefit from the growth in the import capacity of the developing countries. To ignore this aspect would be less than realistic and would play false by those in this country who make their living by supply- ing, efficiently and competitively, the needs of developing countries. The whole of British industry has a part to play in this, and the Select Committee warmly welcomes the recent speech by the right hon. Lady in which she said:
"We must create an understanding within our trade unions and within the management of industry that a blinkered view of export prospects, a traditional and outdated concept of expansion only into the over-competitive markets of the Western world, will not serve the interests of the British people."
That is absolutely right, and we also endorse what she went on to say:
"The moment is ripe, and not yet too late, for a clearer definition of our own enlightened self-interest, and for the integration, the link between our industrial and overseas policies."
That is what I have been trying to say up to now, and we shall listen with great interest to what the right hon. Lady may say further on this subject today.

Let me conclude by saying that this will inevitably be a continuing debate. The Select Committee is currently surveying a very wide range of policies and institutions in this and related areas and will make appropriate recommendations from time to time. But, as I have tried to show, we have already come to one conclusion which demands the urgent attention of Government and industry.

The conclusion is this. Aid alone can achieve little, even for the very poor in the poorest of countries. Trade alone can do more, but will chiefly benefit those who are already on their way to improving their ability to raise the living standards of their people.

Only if aid and trade policies can be properly integrated—jointly conceived to reinforce each other, not aid to reinforce trade for Britain's sole benefit—can the necessary dynamism be created to enable us to make a real and lasting impact on world poverty.

4.16 p.m.

First may I say how very much one welcomes this debate and how grateful one is to the Select Committee not only for its own work and reports but for providing us with this very rare opportunity of debating these issues in the House, and particularly for the opportunity to discuss the proper issues which the hon. Member for Essex, South-East (Sir B. Braine) has set before us as coming from the Select Committee.

The hon. Gentleman will not be surprised to know, nor will the other members of the Select Committee, that there is very little in what he said with which I want to disagree, other than perhaps the odd point here and there, to which I shall turn later.

Looking carefully around the Chamber at those who are present today, I would say that there is a certain camaraderie among us, in that most of us have evidenced our concern about these matters. We are a rather rare breed, I am afraid, in the House of Commons, and that is a great pity, but we have that identity of interest.

My hon. Friend the Under-Secretary of State for Trade will wind up our debate on those aspects of it which specifically concern the issues of UNCTAD, the common fund, and specific matters of trade, although I shall have a word to say about the matters that the hon. Member for Essex, South-East has raised.

We are all aware that we are holding our debate at a time of considerable significance. There is proceeding at the moment the meeting of the Heads of Government of the Commonwealth, which will be discussing this week those very economic and developmental issues which the hon. Gentleman has mentioned this afternoon and which we shall be discussing during the debate. Our debate is also held against the background of the final results of the Conference on International Economic Co-operation, issued 10 days ago.

I should like first to say a rather general word on the state of the North-South dialogue as it emerged from Paris 10 days ago, although my hon. Friend will no doubt wish to add further substance to this when he replies to the debate.

We must not deceive ourselves. A great deal of effort and time were put into the CIEC meetings in Paris, but the results, we have to confess, have been in general a disappointment. It may be that this was almost inevitable. It may be that the frame of reference for CIEC was the wrong frame of reference to begin with. It was trying to tackle a very wide range of issues, some of which are very complex and very technical. The countries which were taking part, the G19 and the G8 countries, had very different interests. It may be that the beginning and the middle of CIEC were responsible for the fact that the end of it was not as good as we might have hoped.

It has been a great problem of the last year or two that there have been so many different arenas for the debate on the various issues of the North-South dialogue. There has been CIEC in Paris. There have been the dialogues in Washington. There has been the discussion in UNCTAD. I remember the Secretary- General of UNCTAD saying to me about a year ago. when I was discussing with him the dialogue in Paris and the UNCTAD issues which were coming for- ward, that "The dialogue is UNCTAD and UNCTAD is the dialogue ". I think he may have been right. It may be that if we are tackling the very technical issues raised in CIEC, the best way to do it is within the committee structure of a United Nations institution which can get down to the detail. I am not sure about that, but it is worth bearing in mind.

But let us be fair, as we always are in the House of Commons. CIEC avoided confrontation, and co-operation continues in seeking solutions. It is worth putting very briefly on record what was achieved and what was not achieved. I think that fair tribute should be paid here to our own Government for the part they played in this respect. CIEC agreed that a common fund should be established
"as a new entity to serve as a key instrument in attaining the agreed objectives of the integrated programme for commodities as embodied in the UNCTAD resolution".
These important discussions will go on at the negotiating conference in November, but a common fund has been agreed, and that is a big advance on the position of a few months ago. A great deal of the credit for achieving it—this should be said frankly, particularly since we have the presidency of the EEC—lies with our own Government. We have played quite a big part in achieving this step forward.

Concerning aid, the developed countries agreed to take special action to make available $1 billion to help meet the needs of individual low-income countries which are facing general and very acute economic problems at the moment. It is to be provided as far as possible in rapidly spending forms, quickly disbursing forms, through multilateral channels, and on highly concessional terms. The EEC will make a contribution to it, in which we have a considerable share, and the United States, subject to Congressional approval, will be contributing quite a substantial amount through additional funding in it bilateral programmes. The rest of the $1 billion will be provided through the other industrialised members.

The hon. Member for Essex, South-East quite correctly asks me what is likely to be the element of additionality involved in this. That is a question that I, also, am asking at present. It is certainly clear that over the last few months the aid programme has been undertaking a number of new and quite major commitments arising out of the North-South Dialogue. I think that it will be my task to see that this is taken full account of when we come, as we shall during the next two or three months, to assess the size of the aid programme for next year and subsequent years. But it is a very valid point that the hon. Member raises.

I shall not go into the questions of food and agriculture and of industrialisation, but on those, too, in CIEC a considerable advance was made. But I am afraid that the North-South issues that are engaging CIEC, UNCTAD, the Commonwealth and United Nations will be resolved only when the rich industrialised countries, such as ourselves—because however grave are our own economic problems, in comparative terms we are rich—manage to reach a genuine understanding of the interdependence of the world economy and of the effects of generations, of centuries, of colonialism and neo-colonialism on the Third World countries and of the inequalities in the distribution of the world's wealth, which in fact have motivated the Third World countries to formulate their demands for a new international economic order.

I am grateful to the right hon. Lady for her mentioning this matter. I think that it is "the" new international economic order, and not "a" new international economic order, which the Third World has propounded, and perhaps most forcibly and explicitly through President Nyerere. Does the right hon. Lady share and support the definition that President Nyerere has put forward?

The hon. Gentleman is a little mistaken if he identifies "the" or "a" new international economic order with President Nyerere. President Nyerere is one of the Third World leaders who have agreed together, in the Committee of 77—which is now, of course, some 112 countries—in successive of their own conferences, to formulate the request that they make and are making now to the industrialised countries. The hon. Gentleman would be very mistaken to personalise this. The demands being made and the content of the formulation of the new international economic order come equally from—perhaps putting the matter in terms that the hon. Gentleman will most appreciate—Right-wing developing countries as from Socialist developing countries.

I did not actually impart any particular political slant into what I asked. I associated President Nyerere with my remarks only for the sake of convenience. However, as the right hon. Lady is refining my question, will she still answer it? Is she entirely on the side of the proponents of the new international economic order?

I am not on the side of any proponents of anything. What I believe is that the proposals put forward by the Third World countries in general, as a clearly formulated agreed definition of their needs, in what they call the new international economic order, and the demands formulated in that, are worthy of more understanding and consideration than the rich industralised countries have so far been able to give them. There are certain of their requests and demands that raise obvious and very clear difficulties for industrialised countries. There are others that raise fewer difficulties. These are the ones that tend to have found solutions in the forums up to now. The question that arises—I shall turn to it later if the hon. Gentleman is prepared to stay and listen—is how far we identify our own interests with their interests, in being flexible and understanding, in resolving the issues that are the key issues of dispute.

A moment ago the right hon. Lady referred to the rôle of the colonial Powers in the development of many former colonies. I feel sure that she will want to correct any mis-interpretation that the House may have made of that remark and, in fact, confirm that some colonial activities—indeed, many activities of the previous colonial régimes—have been extremely helpful in helping many of these countries to achieve the levels of development and the progress that they have made so far. There were certainly disadvantageous aspects of colonial rule, but I feel sure that, for the record, the right hon. Lady would like to make clear that it is very much a case of on the one hand, one thing, and on the other hand, the other thing.

I would clarify what I said by saying that the system of British colonialism, in terms of the way in which we governed the colonies, certainly gave great advantages and a great deal to a number of Commonwealth countries. In fact, we were far better colonialists than almost any other empire—I think far better than any other empire. One can say that, certainly, but it is not saying a great deal at times.

What I was talking about was the economic system by which we took for granted that we could have cheap raw materials and use cheap labour. It was in that sense that I was talking of colonialism and neo-colonialism.

I come now to one or two detailed points. The hon. Member for Essex, South-East mentioned the Central Policy Review Staff review. The CPRS report is now being printed. It is expected to cover all aspects of the country's over-seas representation, including aid administration. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs hopes to receive it very soon. It is his intention to publish as much of the report as possible and to do so as soon as he can. But, of course, he cannot take any final decision on this until he has had a chance to see the report itself. As to the question how far we can discuss it in the House, I hope that there will be a very full opportunity to do so, but the question of a debate on the subject is for my right hon. Friend the Lord President.

I turn now to the general question of aid and trade strategy. Perhaps I may say to the hon. Member for Essex, South-East that from what he said this afternoon, I think he and very possibly the Select Committee—I am not sure—seem to be in the very slight danger of falling into a trap, which I hope they would avoid. There has been a continuing argument over the last few years about which was more important—aid or trade. The argument has swung one way and the other. There have been people who argued that aid in itself was neo-colonialist. There have been very strong, extremist Left-wing opinions to that effect. At the same time, there have been people who have said that the trade aspects are really much less important than aid.

I hope, and certainly I would present it as my own point of view, that in emphasising the importance of the trading aspects of relationships with the developing countries, one should not thereby underrate the continuing importance of the aid relationship. In my view they are of equal importance. One should not fall into the trap of emphasising one rather than the other. But I am quite certain that the hon. Member does not really do that.

It follows, of course, that one must, as the hon. Gentleman says, have a co-ordinated strategy, and one must get the emphasis right. I should like to take a moment to talk about aid strategy, because it is so rarely that one is allowed an opportunity in the House to do so.

As the House knows, Britain's poverty-orientated aid strategy—which I know has the general support of the House—was set out in the White Paper of 1975. Since then, interestingly enough, others have moved in the same direction—notably the Government of the Netherlands and the World Bank. Sometimes it is called a poverty-orientated policy; sometimes it is called a "basic needs" policy. For us, it means that we are trying to increase the proportion of our aid which goes to the poorest countries. By the poorest countries, one means those with per capita incomes below $200 a year. I should add that that figure derives from 1972 and now probably needs slight revision, but it was the 1972 base line.

We should try to increase the emphasis in our aid programme on the poorest people, and this leads to greater emphasis, obviously, on rural development, because the mass of the world's poor live on the land and if we are to help them, development assistance must be directed to the countryside.

In the past two years, we have made a good start in implementing our policies, and I shall briefly give one or two figures. In 1976 about 66 per cent, of our gross bilateral aid was spent on countries with per capita incomes below $200, compared with 57 per cent, in the previous year. That is an encouraging trend. The proportion of our bilateral aid committed to projects wholly benefiting the rural poor is also increasing—from 28 per cent. in 1974 to nearly 37 per cent, in 1975, the latest year for which I have figures available. We expect this trend to continue.

I should add that the largest element of our bilateral aid. to the International Development Association programme of the World Bank, is now far more povertyorientated and concerned with rural development than it was a few years ago, because of the Bank's own changing emphasis. This means that in both multilateral and bilateral aid we are moving slowly, but quite effectively, I think, towards implementation of the aid strategy. I gave the Select Committee one or two examples of our rural development projects. I have one or two more examples here, but I shall not trouble the House with them today.

However, I should emphasise that this is not an easy matter. For those who organise and administer the aid programme, it is far easier to build a steel mill than it is to define and finance a rural development project. Yet—I am sure that the House will appreciate this: we must not be too narrow in our definition of what constitutes assistance to rural development. My own intention when the White Paper was under preparation was to define it quite broadly.

On the one hand, there are the clearly narrower agricultural components; the inputs of expertise directed towards improvements in agricultural production, livestock, fisheries and forestry production. On the other hand, in very many of the poorer parts of the world a first essential in the effective development of the potential of the land is the availability of power and irrigation; a second is access to and from the markets, which the building of feeder roads can provide; and a third is the development of processing industries—industrial development, not rural development—which can enable a developing country to keep for itself the value-added element which has traditionally been the prerogative of the industrialised countries but by which it can immensely increase its own income.

There is a further dimension to the emphasis of a poverty-orientated aid strategy. I was not myself able to explain this to the House at the time of publication of the White Paper, but it is this, if I may, so to speak, give a brief thumbnail sketch: the dominant economic theory of the 1960s was that a concentration on key points of industrial development would provide take-off for the Third World, and the increased prosperity from industrial development would—I quote the expression—"trickle down" to the poor. This was a theory which manifestly did not work.

I am glad to have the hon. Gentleman's agreement, because what I am about to say is, I believe, in conflict with the Milton Friedmanite economic views, which, I suspect, he probably supports. However, I hope that he will listen. In my view, the economic rationale for a poverty-orientated strategy is centred upon the need for increased incomes among the majority of the people of a country, in order to provide a surplus to basic needs which can become the basis for self-generated economic growth. This is the fundamental economic rationale, although I do not believe that it was spelled out completely in the White Paper. Only if people have the purchasing power will a Third World economy have the ability to develop its own potential.

I have no desire to bring in Professor Friedman. I think that I can take on the right hon. Lady on my own. Since she appears to believe in the thesis of self-sustaining growth, can she explain why we do not have it here?

:I could suggest that the answer may be related to the maldistribution of our own income and wealth. However, in terms of the Third World there are other factors involved, and they are factors which no industrialized country through its own aid programme can affect. For example, a major barrier in many countries is the system of land tenure—whether it concentrates ownership in large farms and latifundia or whether it diffuses ownership and tenure in plots of land which are far too small to be viable in the support of a family, however intensively they are cultivated, But what happens to change such a system can be only a matter of political will for the country itself. Nevertheless, we can ourselves do our best to support those projects which are associated with social and institutional changes which benefit the poor.

Will my right hon. Friend refer to what I regard as the most vicious feature of the matters covered in this section of her speech, that is, the footloose nature of the population in the bush? Unless we can do something about that, we shall see shanty town after shanty town on the edges of cities to which men move, leaving the land and leaving the bush, sometimes even leaving their families behind them when they go there. I regard this as the most filthy and vicious feature of African society—the shanty towns on the edges of, for example, the Copper Belt, Lagos and elsewhere.

There are two aspects to that. I came across an interesting example the other day, of which I can give details to my hon. Friend, of an aid project in which nomads of an agricultural area of Africa are being assisted, without changing the whole structure of their life. They can still be nomadic, but they will have a basic infrastructure which enables them no longer to be on the edge of subsistence. Second, if one makes a rural area viable, there is less need for people to move into the towns. Moreover, if the processing industries are built so that what people produce on the land can be processed, again one helps those who would otherwise drift to the cities.

I turn now to a matter which the hon. Member for Essex, South-East did not raise but about which, I believe, the House would wish to hear a brief word. I refer to the question of human rights and the relationship of aid policy to human rights.

I am sorry to interrupt my right hon. Friend again, since she has been interrupted a good deal already, but I have a question to put on a matter to which she has already referred, that is, the welcome though somewhat belated orientation towards rural development. In that context, could my right hon. Friend say to what extent there has been an orientation towards reafforestation? Some of us regard that as one of the most important though necessarily long-term ways by which we can provide assistance.

I hope that my hon. Friend does not really think that our move towards a poverty-orientated aid strategy directed to rural areas is belated. In fact, we were one of the first to make this move. We have a number of such projects. For example, I can give my hon. Friend details of one in the Sudan which is related to reafforestation. We have a close interest in a number of projects in that context.

I turn now to the question of human rights and the relationship between aid policy and human rights. As the House knows, I regard this, and have always regarded it, as a matter of fundamental importance. It is not a new subject for me. Nor is it new for the Government or, if I may say so, for the Labour Party. There tends to be a view held by a number of people, ranging from Mr. Bernard Levin to certain right hon. and hon. Members, that the Labour Party is capable of applying double standards. I wish to put on record what both the Labour Party and the Labour Government have done. This has frequently been unreported by a Press which is some-what attached to selective reporting and comment, and I wish now to give a purely factual report.

I will summarise briefly what the Government have done for refugees from many countries. We have made a number of contributions to the United Nations High Commissioner for Refugees. We have made a special contribution to the United Nations High Commissioner for Refugees for Rhodesian refugees in countries near Rhodesia and for Rhodesian refugees in Mozambique. Recently I announced, but it may have escaped the attention of some hon. Members, a special contribution of £250,000 to the United Nations High Commissioner for Refugees for Kampuchean refugees—that is, Cambodian refugees—in South-East Asia. I found myself in complete sympathy with the motion on the Order Paper in which a number of hon. Members have expressed their concern about refugees mainly in Thailand, but in other countries as well, coming from Cambodia.

We have within Britain assistance for Rhodesian and Chilean students and for Namibians, outside Namibia, not just in Britain, but in Lusaka. We have other programmes, both bilateral and multilateral, which include Cyprus, Vietnam, Cambodia, Southern Africa and others, with the United Nations High Commissioner for Refugees. The total, taking the money spent in this country and in other countries, is about £11 million. I think that the House will agree that those programmes are not politically oriented. They concern themselves with refugees suffering as a result of the infringement of human rights.

I should like to mention the Labour Party's activities. These matters are not very well known, because they have not been reported. Therefore, I should like to put them on record in this House.

As early as 1973 the National Executive of the Labour Party made a statement on dissidents in the Soviet Union and sent a deputation to the Soviet ambassador on the subject. A more recent statement was made at the time of the visit of Vladimir Bukovsy referring to the position of dissidents in the Soviet Union and Czechoslovakia. A resolution on the questions of Charter 77 dissidents in Czechoslovakia was passed unanimously. We also made representations on Brazil, Indonesia, India and Chile.

On a point of order, Mr. Deputy Speaker. Is the substance of this part of the right hon. Lady's speech in order?

It is a matter for the Minister, if she is developing her argument.

I have completed that passage. I wanted to get it on record in Hansard. I think that the House will agree that there can be no justified accusation of double standards against either the Government or the Labour Party.

Having put that clearly on record, I should like to indicate the problemsinvolved in making judgments on aid administration. It must always be a question of reaching a balance of judgment. Sometimes the issue is clear. It may become impossible to adminster aid. Such was the case in Uganda several years ago. Sometimes there may be a clear expression of public opinion. Such was the case in Chile.

In other cases we must try to answer certain questions. First, is the country concerned a persistent violator of human rights? Secondly, will what we do in our aid policy persuade it to give greater respect to human rights? Thirdly, how do we best co-ordinate with other aid donors?

Six weeks ago I had talks in Washington with the Carter Administration people—in particular about the President's appointment of someone to deal specifically with human rights. We found ourselves in a large measure of agreement. But how do we co-ordinate with other aid donors?

Fourthly, if we can carefully direct our aid to the poorest people in countries which persecute many of their citizens—this can be difficult—are we helping to create conditions which will promote political advance in the area of human rights or are we hindering them? It is not a simple matter. Of course, some choices are clear, but others are not.

Finally, I turn to the major theme of the Select Committee's Report: where lies our own self-interest? What is the relationship between the development of Third World countries and our own economic prospects? I shall take it wider than aid, as did the hon. Member for Essex, South-East. It would be wrong to limit our concern to aid. It is a question of the whole complex of policies which either do or do not promote the development of Third World countries. Therefore, what is the relationship between the development of Third World countries and our own economic prospects? What can we do which will more effectively co-ordinate the link between the two? The hon. Gentleman and I, and therefore the Select Committee and I, are in complete agreement that there is an important link here.

I worked out some figures a year ago—I was not then in the Ministry—which showed that if from 1980 to 1985 we were to assume a 5 per cent, rate of growth in developing countries—that was a rate of growth which they achieved in the 1960s before the oil crisis hit them—and were to take the present base line of doing only our present proportion of trade with the developing countries as being valid—I am basing myself on the 1974 statistics, which I think the Select Committee also did—according to my figures there would be a 65 per cent. increase in exports to the developing countries which would mean a 19·3 per cent, increase in United Kingdom total exports. That is quite a large figure.

If we were to assume that the whole complex of international policies towards the Third World were to be such as to promote a higher rate of growth, which was not held to be inconceivable in the 1960s because people talked about them achieving a 7 per cent, or 8 per cent. rate of growth, then an 8 per cent, rate of growth in Third World countries between 1980 and 1985, still holding the same proportion of British trade with them, would, according to my figures, mean a 31 per cent, increase in total United Kingdom exports.

That presents a number of challenges. First, how do we achieve that degree of economic growth in the Third World? Here we come back to the North-South dialogue and all the elements which are contained in this continuing debate between the developing and the industrialised countries. We come back to the maximising contribution that the United Kingdom and the Commonwealth can make. I believe that discussion within the Commonwealth on these issues can be and this week has been immensely valuable to resolving these issues.

We come back to a correct definition of self-interest. To the extent that Third World countries can grow and to the extent that there can be an increase in purchasing power among their people, there is a direct relationship with jobs and industry in this country. But it means that industry must be geared to producing more of the items that the Third World needs. It means that, one way or another, we must be more geared to selling our industrial products in the Third World.

At the same time, it means that this must be a reciprocal effort. As the Select Committee stated, we must look carefully at how we can help Third World countries to market the goods that they need to export to us which do not necessarily conflict with our own industry, production and employment. It becomes a complicated question.

I am certain that the Select Committee is right in saying that this requires more co-ordinated attention within White-hall. Although I cannot say much about this matter, I can indicate that there may now be the beginning of a greater degree of co-ordination, or at least a new look at the subject of trying to analyse what needs to be done and what could be done. I am certain that the Select Committee has performed an invaluable service in raising these issues.

I hope that I have not taken too long. There is a great temptation for Chairmen or acting Chairmen of Select Committees and Ministers on these occasions to speak for far too long. That is because the House allows us the opportunity to do so only once every 18 months. Therefore, I hope that the House will forgive us.

I hope that the effort which the Select Committee will put into its next report will be given even greater attention by the House, because I know that it is continuing this whole theme of in some way linking our own self-interest with the interests of the Third World. In my third incarnation at the Ministry, that is my own major theme. There is a tremendous vacuum to be filled by intelligent thinking, analysis and action, and I hope that together we can do it.

4.50 p.m.

I do not want to follow either of the previous speakers in the broad generalities of development policy. I should like to address myself particularly to one of the papers before us this afternoon—the First Special Report from the Select Committee on Overseas Development—which is the right hon. Lady's reply to our earlier report on aid to and trade with the Caribbean. I would specifically comment on one or two of the recommendations that we made to the Minister and on her reply to them.

I first turn to Recommendation No. 2 on page vi. The Committee recommended that
"The Department of Trade should take immediate steps to develop a fully managed market for bananas in which the return to the grower is properly protected."
I believe that the Committee made that recommendation because it was perhaps more conscious than many hon. Members of the extent to which many of the single one-crop economies, particularly in the Caribbean, are entirely dependent on the income they derive from the export of bananas to the United Kingdom for their overseas earnings and, indeed, for their survival. I note with interest that the Minister has said that a "fully managed market" would be difficult. Indeed, I think she suspects that it may be impossible for all kinds of reasons concerned with the harvesting, transport and preparation of bananas for the domestic market.

The right hon. Lady goes on to say in the final sentence that this is a subject which is
"under active consideration in the European Economic Community and in FAO and UNCTAD."
I hope that when winding up the debate the Minister can report on the form that these discussions have taken and what assurance there can be in future that the small West Indian banana producers will be able to look forward to an expanded market for bananas not only in the United Kingdom but also throughout the Community as well. In truth, perhaps the best answer to their immediate economic problems is for them to have the certainty of a growing market for their products not only in the United Kingdom but also in Europe.

Secondly, I turn to Recommendation No. 10 on Page x of the report where we made comments on the amount of assistance that the Department is giving to the University of the West Indies and the School of Agriculture in particular. We were concerned on our visit to the West Indies that the School of Agriculture, and the University of the West Indies situated in Trinidad, has regrettably run down considerably over the years. This is partly because the Trinidad economy has abruptly changed direction as a result of the discovery of oil so that although some years ago Trinidad was Self-sufficient in agriculture this new wealth has weaned Trinidad away from that agrarian path to progress. Indeed, they are gradually becoming more dependent on other countries in the West Indies, and on the United States as well, for their supplies of food. In these circumstances, because this is a direct result of the Trinidad Government's policy, I think we ought to be careful about policing any British funds which are going to support that university when much of the findings will not, in fact, relate to the Trinidad economy and, indeed, much of the existing knowledge in the university is not being extended out into the rural areas. As guardians of the British taxpayers' money we should ensure that small amounts going for relatively minor purposes of that kind should be subject to careful scrutiny by the Minister.

The university's agricultural department of which my hon. Friend is speaking has an honourable record in past years of serving the whole of the Commonwealth. I would certainly have thought that before withdrawing support from that university an attempt ought to be made to relate this work more closely to the new needs of the developing countries rather than to blot out something that has done so well in the past.

I am grateful to my hon. Friend for that intervention. I do not really disagree with him. I was simply pointing out in the context of this debate that funds are being spent some of which, in my judgment at least, may not have been spent in the most beneficial way. That constructive suggestion is something that I hope that the right hon. Lady will take up.

I turn to Recommendation No. 16. The Select Committee recommended that
"The Department of Trade should invite the financial institutions to consider what practical assistance they can give and in what ways existing channels of communication need to be improved to ensure that such opportunities for common advantage are not neglected in the future."
Arising partly out of the Select Committee's visit to the West Indies, and in particular to Trinidad, we had the opportunity of discussing some of the financial problems of the countries at the very highest level. I am a little dismayed that in her reply in paragraph 29 the Minister said:
"Barclays … see no evidence that the Government of Trinidad needs or seeks a more sophisticated money market".
It is quite extraordinary that a Department of State should rely on what Barclays thinks about this matter. It is true that Barclays is the single major bank on the island. Of course it does not see any need for any improved financial arrangements! I should have hoped that in her reply the Minister would indicate that the Government had not been prepared to take Barclays' opinion on trust. That is not to say that I suspect Barclays in any way. It is a fine bank which operates with great efficiency throughout the developing world. But before the Minister says there is no need for improved financial institutions throughout the West Indies it would perhaps have been wiser had she gone to her own sources to discover whether that was so.

The Committee's understanding was that there was a great need for additional financial expertise, particularly in Trinidad, in view of the very good balance of payments situation there, in view of the local surplus of funds for investment and in view of the limited experience locally of how to manage things such as new issues and how to channel this money into the most profitable kind of investment. I hope that when the Minister replies he will refer to this and assure the House and the Committee that their sources of information are spread a little more widely than the right hon. Lady's reply seemed to indicate.

I refer to recommendation Nos. 19 and 20, which form the the nub of this particular report on our work in the West Indies. As my hon. Friend the Member for Essex, South-East (Sir B. Braine) has already said, it was our considered judgment, when studying the West Indies as a pilot for a much larger study, that there is considerable lack of co-ordination between the Ministries involved.

I may say that I am especially glad to see the Under-Secretary of State for Foreign and Commonwealth Affairs here to reply to this debate because one of the great difficulties, which we understand, is that the Minister has been replying for her own Department and many of the replies that she might has liked to give she has not been able to give because they trespassed on areas of responsibility of several of her colleagues.

This raises a very important matter. I was encouraged to hear the right hon. Lady admit that it was worth while looking again at the co-ordination between Departments in Whitehall. I hope very much that she will undertake with her colleagues at the Department of Trade and at the Foreign Office to see whether there is not a better way whereby, when the Government make replies to Select Committee Reports, information can be incorporated from all the Departments referred to in those reports. This is of especial importance in the context of today's discussion.

If I may refer to the idea for a trade development agency, I may say that this has arisen after a great deal of study and a great deal of evidence being given to the committee by different Departments in Whitehall suggesting, out of their own mouths and unintentionally, that there is a considerable lack of co-ordination. I was especially disappointed to find that in her reply to our recommendations in that section the right hon. Lady, for reasons which I may have just briefly covered, has not answered the main thrust of our report.

In paragraph 97 of our report, we made the point very strongly that aid, trade and investment were not entirely separate activities which could be neatly compartmentalised. We went on to make a number of specific criticisms of aspects of Government policy. They can be summarised briefly by saying that some of them were organisational criticisms in that we criticised the organisation between the Departments, and that others of them were criticisms, as it were, of aid policy in that very often when we talk about aid we refer to the developing world as one entity whereas there are some 68 or 70 countries to which we give aid.

It seems to me and to many of my colleagues who serve on the Committee that little effort has been given to trying to categorise the recipients of our aid. Some countries receive aid for some reasons and some for other reasons. For example, many countries receive aid because it enables them to increase their trade with us. Some receive aid because we are anxious that alien Governments shall not achieve untoward influence in those countries, and so on. Some small countries are incapable of engaging in any trade and need aid to keep body and soul together for vast numbers of the rural poor especially.

In looking at aid policy, we seldom attempt to have a proper philosophy to back up our reasons for giving aid in particular circumstances. Why do we allow local costs in some countries but not in others? Why do we give vast sums of aid to countries with which we have vast balance of payments deficits?

The third reason is trade policy itself. Is sufficient effort given in the Department of Trade to trying to define and discover the scope that there is for British exports to Third World countries and, especially important, for British imports from Third World countries?

If I might back up a point which my hon. Friend the Member for Essex, South-East made earlier relating to the declining figures of our trade with the Third World, the House will be interested to know these figures. In 1970, 16·7 per cent. of our exports were to non-oil-producing developing countries. By 1976, this proportion had dropped from 16·7 per cent. to only 13 per cent. Clearly, we are doing less well in these non-oil-producing developing countries now than we were five or six years ago. Equally we find that the United Kingdom share of total world trade with non-oil-producing developing countries dropped between 1970 and 1975 from 74 per cent. to 5·1 per cent. These figures show a significant decrease in our trade with the Third World.

I was interested to see in The Guardian of 9th June a very fine article by Harford Thomas in which he raised this very problem of defining the extent of our markets in the Third World. I hope that not only as a result of that article, but as a result of deep thought by and consultation between all the appropriate Departments in Whitehall, the Minister will be able to assure me and my colleagues that the Department of Trade, together with the Foreign Office and the right hon. Lady's Department, intend to look at the disastrous rate at which our trade with the non-oil-producing Third World has declined and come forward with positive proposals to deal with it. It is not in our interests, and I suspect that it is not in the interests of those countries, either. Mr. Thomas is seeking answers to these questions, and I should be grateful if we could have some answers today.

I am not all that hopeful, however, because I recall what arose during the course of the Select Committee taking evidence. On 23rd March, representatives of the Foreign and Commonwealth Office appeared before us. I could not believe it when I heard their answer, and re-read it later, to a question which we said was exercising our minds. We asked whether the structure and organisation at regional level was sufficiently adequate to enable individuals on posts and British industry to have the best chance of increasing our exports to developing countries. To my astonistment, the reply was:
"I think that Members of the Committee have spoken on that with the West Indies Committee …. It is really they who formulate our policy for the Caribbean area."
I thought that that was an astonishing reply and, since we are talking narrowly about the Caribbean today, I hope that the right hon. Lady and her colleagues will get together and make sure that it is not the West Indies Committee which formulates the Government's policy on the Caribbean. We hope very much that it is the Government who do that.

These are some of the problems which have come out of our work over the past year. As my hon. Friend the Member for Essex, South-East said, the Committee is going on working and looking at the inter-relationship between aid, trade and investment in the developing world over the whole of the developing world. I am grateful to the right hon. Lady for having confirmed that the Berrill Report will be largely published, and soon, and that we shall have an opportunity—I hope in Government time—to discuss this in the very near future.

It is my belief that, unless we begin to get it together and to get these three Departments working together, not only shall be lose out to Japan, France, Germany and many other countries in what have been our traditional markets but, much more important, we shall not be able to play the part which we all want to play in enabling many of these developing countries to increase their levels of trade with our country and to improve their standards of living.

5.10 p.m.

Somewhere in the Treasury there is a file, F/18003/010/1, dealing with the international control of raw materials. Paragraph 3 of the memorandum in the file contains the following words:

"Apart from the adverse effect on trade stability of the truly frightful fluctuations which we have learned to accept as normal, they also impose obstacles to the holding of an adequate quantity of stocks, the eventual effects of which are not less injurious."
Paragraph 4 says:
"For many years the orthodoxy of laissez-faire has stood in the way of effective action to fill this outstanding gap in the organisation of production. Nevertheless there are today many signs that the world is ripe for a change. Assuredly nothing can be more inefficient than the present system by which the price is always too high or too low. Is not centralised international action capable of effecting a vast improvement of system, at any rate in the case of the great staple materials, most of which can be readily stored without serious deterioration?
The memorandum goes on to produce what it calls the outline of a plan:
"An international body would be set up called the Commod Control on which the governments of the leading producing and consuming countries would be represented. The management would be independent and expert, and the interests of consumers equally represented with those of producers. Its object would be to stabilise the price of that part of world output which enters into international trade, and to maintain stocks adequate to cover fluctuations of supply and demand in the world market."
That was written by John Maynard Keynes on 14th April 1942. It would be no bad idea if somebody in the Department of Trade, and probably one or two other Departments, knocked the dust off that file, looked it up and took some of those arguments seriously, because it is unfortunately true that the criticisms in the Second Report from the Select Committee for 1976–77 are very much justified. It said at paragraph 8:
"Your Committee have been puzzled and greatly concerned by the extraordinary reluctance of the Departmental witnesses it has examined to take the longer view, to grasp the broader vision, to adopt a creative stance that recognises difficulties as obstacles to be overcome rather than as excuses for inertia—even when our own national interests are so clearly involved."
One of the things that have puzzled me is the apparent reluctance—I can hardly say "inability"—of the Government Departments concerned to grasp how important it is for the economy of this country to deal with commodity problems, to bring some element of stability into commodity prices and to make arrangements which will be fair to both producers and consumers along the lines of the proposals put forward by the UNCTAD Secretariat.

There is the additional issue not only of the economic interests of this country but of our standing and political influence in the Third World. As the Select Committee says at paragraph 11:
"Your Committee are critical of HMG's attitude which compares unfavourably with many other donor nations and are fearful for the credibility of its good faith in the eyes of the Third World."
That is a very fair criticism.

The problems involved in commodity agreements, the common fund, stabilisation of prices and supply and demand are enormously intricate and difficult. But the Select Committee criticism that I would endorse—I am not a member of that Committee—is of the failure so far of the Government and the Departments concerned to grasp the basic importance and political significance of the common fund proposal in particular and of some of the related proposals for commodity agreements.

The Government's reply, which is contained in the Second Special Report of the Select Committee—and which the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler) wrongly attributed to my right hon. Friend the Minister of State for Overseas Development, for it is from my right hon. Friend the Secretary of State for Trade—I find unsatisfactory and not particularly forthcoming. It is very half-hearted about the common fund, and falls back on the EEC agreement made in Rome in March, when it says:
"it was agreed that there should be commodity price stabilisation agreements, where appropriate, and that there should be a common fund."
But it goes on to make all sorts of objections to the common fund idea as put forward by the UNCTAD secretariat.

The Government's reply also makes it clear that they are still obsessed by individual commodity agreements and a product-by-product calculation rather than the sort of integrated programme which the UNCTAD secretariat had worked out. The Government's reply is also unsatisfactory on the question of indexation, although here we are in a rather tricky area, because I believe that there is a genuine danger that automatic systems of indexation can exacerbate inflation. That aspect must be watched.

May I tell the hon. Gentleman that I was not wrong in my attribution of the report from which I quoted. I was quoting from the First Special Report, which comes from the right hon. Lady. It is the Second Special Report that comes from the Secretary of State for Trade.

I am sorry. I had understood the hon. Gentleman to be referring to the report on trade, not aid. I accept the correction.

On the question of indexation, the Government's reply says:
"the United Kingdom, like the great majority of other developed countries, has consistently argued that schemes to raise international commodity prices artificially, or to set the terms of trade at some predetermined level, by reference to external criteria like the prices of manufactured imports have a disruptive effect on world trade."
That may or may not be so, but what has an infinitely greater destructive effect on world trade is the unilateral jacking-up of important commodity prices, such as we have seen in the case of oil. That will occur as the producers of raw materials become more sophisticated and organise themselves more effectively, unless we can show that there is a fair and reasonable relationship in world trade between the prices of the manufactured goods that they have to import and the prices of the raw materials by which they earn their living. If we do not come half-way in some respects on the indexation principle, without perhaps accepting it as an automatic system, a trend towards unilateral action such as we have seen in oil, or perhaps a trend towards the violent restriction of supply, will occur over the next decade.

What is wanted is a genuine acceptance by the industrial world of the problems of countries which rely so heavily on individual commodities for their international trading, and some recognition and acceptance of a system by which their earnings can be geared, at any rate in a general way, to the price of the manufactured goods which the Western industrial world exports.

The whole aid debate is taking on a new dimension. It is now bringing in the totality of relations between the rich and the poor nations. It is not merely a question of aid. It is bringing in questions of trade, economics, monetary arrangements and even—as my right hon. Friend said in her speech—questions of human rights, which are a complicating factor that I do not want to go into this afternoon.

The fact that the aid discussion and questions of relations between the rich and poor are extending over so many fields and becoming so complicated emphasises the importance of the great international organisations that exist as the forum in which these matters are to be discussed.

I refer to bodies such as UNCTAD, the World Bank, IDA, the World Food Council and the IMF. We must accustom ourselves to using these bodies and in joining in the discussions within them. We must disabuse ourselves of the notion that special smaller ad hoc groupings can be created to deal with the particular problems.

I always thought that the Conference on Industrial and Economic Co-operation was somewhat misconceived. It seemed, to some extent, to be an attempt to take discussion out of UNCTAD and to try to refine it down to a face-to-face argument between a relatively small group of Western industrial countries and a small group of Third World countries with OPEC somewhere in the middle. I am not entirely surprised that, although some limited agreement and advance was achieved in those discussions, the final outcome was discouraging.

The Downing Street Summit—a useful exercise in Western co-operation—came out with some fine principles that have largely been belied by the actual behaviour of the richest countries during the past two or three years. Our own Government will cut overseas aid by £50 million this year and £50 million next year. However, it must be said, in fairness, that two of the richest countries in the world—Germany and Japan—have an even worse aid record, in percentage terms, than the United Kingdom.

The pattern of discussions on aid arrangements during the next five to six years will be roughly as follows. Clearly, UNCTAD will be the place where the great arguments about commodities will be worked out. Such matters as the common fund—which will undoubtedly come about in due time—and stabilisation of prices, compensatory financing and so on, will be worked out in UNCTAD. The problem of debt—which has not been mentioned in the debate yet although it looms large in the thinking of the developing countries—could best be dealt with through the IMF.

I am not sure that people have recognised the importance of the IMF as an instrument of aid during the past two or three years, nor is its considerable potential recognised—although some reorganisation would be needed to release that potential to the full. There has been an oil facility to help countries with special difficulties with their balance of payments because of the increasing oil prices. The IMF has also operated a compensatory financing scheme, although it has been modest so far, that has been of some help to some poorer countries. There has been a creation of the trust fund to assist developing countries through the sale of some of the IMF's gold reserves. The IMF is also quite an important body for training and technical assistance to developing countries on fiscal, monetary, banking and Government finance matters. I am sure that the IMF could and should play a key rôle in the whole problem of dealing with the debts of developing countries—a matter of increasing concern to not only the poorer countries themselves but to the wealthy western world.

The rôle of the World Bank and the IDA in supplying aid or finance should be expanded. I endorse the impassioned plea that has been made by Mr. McNamara during the last three months for an immense strengthening of the reserves of the World Bank so that it can fulfil the rôle that it was intended to fulfil and in which it is now being limited because of the lack of resources from the richer world.

I want finally to touch on a point that is somewhat more difficult but not unimportant. During the last 20 years there have been changes in fashion in the thinking about the problems of relations between the rich world and the poor. Various systems and ideas have been put forward about the importance of industrialisation and agriculture, and about the problems of population and education. Currently, the stress seems to be upon agricultural development and upon what is called "appropriate technology". The emphasis is on the small scale and on the grass roots business of raising the standard of living in the poorer countries. It is an attempt to come to grips with the problem. Some aid—although perhaps the extent of it has been exaggerated in the past—has tended to make the rich richer in the developing world while leaving the poor still very poor.

The green revolution, as it was called, which was the considerable scientific advances in the development of new strains of rice and wheat, was hailed as a gigantic step forward at one time. However, it has produced cynicism and disappointment—although that has been over-emphasised. I cannot believe that important strides forward in the scientific cultivation of crops can be entirely bad under any circumstances, but it has nevertheless produced disappointment. There is now a tendency to switch and to see whether the small farmer can be given more direct help than in the past.

I am greatly indebted to an extremely interesting article in the New Scientist of 9th June concerning the work of the International Centre for Tropical Agriculture in Colombia which has been doing much work with non-cereal crops such as beans, cassava and tropical pasture crops. I should like to quote from the article on page 575 of the publication. It says:
"CIAT's aim has been to concentrate on the needs of rural and urban low income groups, somewhat neglected by the first, cereal centred phase of the Green Revolution. This means coming up with low-cost technology that takes into account the small farmer's shortage of capital and access to credit. As the present director of CIAT, John Nickel, pointed out in his inaugural address in 1974: 'If the income of small farmers is increased … unit costs of production will be lower and there will be more food available at reasonable prices to the urban population. Similarly, the small fanners will be more likely than more affluent segments of society to spend their additional income on the types of products which can be produced in local labour intensive industries, rather than imported goods, thus increasing the opportunities for what the urban poor need most: jobs. Following this chain of events, when the urban poor are employed and their income improves, urban markets for agricultural products are expanded for the small farmer thus completing the circle'."
I hope that that theory may prove to be more correct than the theories that we had about the green revolution. There is certainly a need to see that the aid given and economic arrangements made penetrated right down to the poorest people and that they really strengthen the economies of the poorer countries. That process is certainly not something that can be imposed or even injected from outside. If that message is correct—and it may well be—then somewhere along the line that thinking must penetrate the governments and the societies of the developing countries themselves. Even given the technical advice of bodies such as the centre in Colombia, only those countries will be able to create locally the social and economic conditions to carry out that sort of change, agriculturally and socially.

The British Government will need greater co-ordination between Departments. The Treasury, the Department of Trade, the Ministry of Overseas Development, the Department of Industry, the Ministry of Agriculture and the Department of Education and Science will increasingly be drawn into various aspects of the relationship between this country and the Third World. Apart from the organisational and administrative problems that this will involve, we undoubtedly need a far greater political commitment to help in the global task of raising the standard of living of the billion people in the Third World who are still, sadly, deprived. This means that the cuts must be restored, there must be no discrimination against overseas students, and more of our resources must be explicitly and realistically devoted to helping the poorest people in the world.

5.32 p.m.

I wish to welcome the Second Report of the Select Committee and to say how much some of us have appreciated the sustained hard work and skill that the members of the Committee have brought to their task. I should particularly like to pay tribute to my hon. Friend the Member for Essex, South-East (Sir B. Braine) for the amount of work and experience that he has put into this task.

I am glad that the Committee concentrated on just one small area of the world for a short time. That has enabled it to consider matters in greater depth, with more consultation on the spot and closer examination. That is, perhaps, why it has made more practical recommendations than are often made by Select Committees that range over wider fields.

It is right for the House to debate this subject now even though our resources are being so severely restricted. I make no political point about the causes of the restrictions. The problems of developing countries, especially the poorest of those countries, are increasing and the gaps between their economies and standards of living and those of industrial countries are widening. We and other industrial countries have a common interest with those nations. If we neglect it, we too shall suffer. The debate is practical in terms of our own prosperity and good name.

We have old and close links with many of the developing countries, and they must not be forgotten. Some of our prosperity has been derived from those links and our return to prosperity is partly dependent on expanding our trade with those countries.

Perhaps the debate is particularly timely since the Heads of Commonwealth countries are currently meeting in London and, over the weekend, in Scotland.

My remarks will be closely focused on a small but increasingly important element in our aid policy, namely the need to foster small-scale, appropriate, low-cost technologies that are often called intermediate technologies. Recommendation 11 of the Committee's report is:
"Your Committee recommend, with increasing emphasis, that greater priority should be given to the search for so-called 'appropriate technologies' in agriculture and related rural industries."
Though I believe that this could also apply to the periphery of urban areas in developing countries, we should be grateful for the Select Committee's strong endorsement of the need for intermediate technologies.

The Minister's comment in her memorandum was:
"We fully accept that the search for technologies appropriate to the Caribbean region—which will not always be those which have been adopted elsewhere—must be prosecuted with vigour."
I hope that this will come about. The Minister continues:
"The Development Division is, as the Committee has observed, exploring possibilities of small scale sugar production and it is already active in other related fields. We are also assisting in developing bottled, canned and packeted foodstuffs, new techniques in low cost house and road construction and local small scale spinning and weaving of sea island cotton. Although the Division is redoubling its efforts, there is often local resistance to small scale technology."
I welcome the Committee's recommendations and the Minister's encouraging comments. As, indeed, I should; for I have an interest to declare. As a Vice-President of the Intermediate Technology Development Group for the past 11 years, I have enjoyed the stimulus of working with Dr. Fritz Schumacher and his dedicated team. I have witnessed the spread of his ideas first to developing countries and, more recently, to some of the greatest industrial countries, including our own.

One of the means by which governments of developing countries can help their own people to improve their standards of living and to enjoy more regular and rewarding employment is by encouraging and assisting them to develop and improve in their own localities existing low-cost technologies and to adapt new ones to their needs.

Recently, President Carter said, in effect, that human rights were basic to his whole policy, but that without the fundamental human right to work for one's family, the other rights were empty of content. One of the major world problems is underused human resources, often in the form of sustained unemployment. This is common both to the industrialised world and to developing countries and the Select Committee has drawn sharp attention to it in the Caribbean. Intermediate or appropriate technologies can make a contribution to the fuller use of manpower, to the development of indigenous skills and to the introduction of new ones.

We who are working for the intermediate technology ideas are seeking, in each country, to interest the best brains in the universities and technical colleges, as well as in industry, in helping to develop low cost technologies and skills which will help the grass-roots workers in rural and urban areas to make better use of opportunities of useful and profitable work in their own localities. Moreover, we are seeking to help spread across national borders knowledge of techniques developed elsewhere in case this may be of use in other situations.

Our aim is to establish centres of study and action in appropriate technologies spread widely around the world. We hope that these centres will communicate with each other about their problems and about their successes in solving them.

We are greatly encouraged that one country after another, stimulated by the peripatetic lectures of Dr. Schumacher, the guru and chairman of intermediate technology, by his book "Small is Beautiful" and by the supporting work of his much-travelling team, has set up or is in the process of setting, up such national centres. These are widespread in Asia and Africa. Indeed, only a short time ago Mrs. Indira Gandhi, then Prime Minister of India, invited our Chairman to help her Government devise a programme for appropriate technology to meet India's present needs.

Only two months ago President Cartel asked our Chairman, who had just completed a programme of many lectures in the United States, to consult with American centres for such studies to see how these ideas might be more widely and more rapidly put into practice in areas of the United States that are badly affected by unemployment.

Nigeria was one of the first countries to make good practical use of these ideas. That great country will have much successful experience to share with other countries, if they seek help. The country where these ideas are perhaps running fastest is Canada—especially in the maritime and some of the central Provinces.

I am told that the European Economic Community, somewhat disillusioned with the results of aid under the Lomé Agreement, wishes to place more emphasis on aiming to achieve advance through appropriate technologies. The World Bank has been one of the first international organisations to see the need to stimulate intermediate technology.

Our own Government have in the last few years—and I make that proviso—begun to support this movement in several practical ways. This was after the group had gone through eight years of hard struggle to get its ideas accepted. For support in that crucial period the group owes deep thanks to the generosity of a number of companies based in the United Kingdom and to trusts here, in the United States and in Canada.

I am glad that not only the Government through the Ministry for Overseas Development, but voluntary agencies such as Christian Aid and Oxfam, are helping the group, not only with projects but more recently with the financing of the central organisation which is responsible for the worldwide dissemination of ideas, knowledge and experience of appropriate technologies.

I shall not go into detail of the many practical advances—in terms of improved earnings and greater satisfaction in work—that have sprung in many developing countries directly from these ideas. But in the area which the Select Committee has just examined I am hoping that new technologies for the local processing of sugar cane with low-cost equipment will be of real assistance.

In her comments on the Select Committee's Report the Minister found that there was often local resistance to small-scale technology. This is not an uncommon reaction to the first impact of these ideas. But when people can see such ideas translated locally into successful action, such resistance normally disappears. In dispelling such resistance it may be helpful to make more widely known the need of some of the most industrially advanced and richest countries to make wider use of small-scale technologies.

In response to a lively home demand, the group has found it necessary to set up a United Kingdom division. As groups are springing up all over the country, some of our largest and most successful industrial companies—I shall not name them here—are encouraging this movement. Intermediate technology is working closely with those groups in the United Kingdom that are helping to re-establish small groups of our own craftsmen. One of the most notable is that in Clerkenwell—an ancient London centre of crafts which I visited two weeks ago. I went there intending to spend only one and a half hours but I stayed five hours. It was one of the most fascinating human experiments that I have seen for many a year. I commend the Minister to visit that centre. Under the stimulus of Mr. Michael Murray are gathered about 75 small groups of craftsmen, each of which has a separate workshop in an old warehouse that might have been demolished and redeveloped if there were not already so many spare spaces in that part of London.

Similar groups are being established elsewhere in London and outside. They are certainly creating new small enterprises and employment. They are also giving many people—young and old—inCreased satisfaction in their work. There arc young people from the art schools and old people who are retired from other work or who left larger organisations to work on their own as craftsmen.

We share the problems of underemployment with the developing countries. In seeking to help them to solve their problems, we seem to have stumbled on a means of helping ourselves.

I hope that the Minister will be bold in encouraging the work of our own Intermediate Technological Development Group which was the originator of these ideas. In doing so, I believe that the Government will be helping many developing countries to help themselves and will at the same time be helping our own people both in the inner cities and in the country areas.

Would my hon. Friend care to answer the question that was posed by the Minister earlier? She said that there was often local resistance to small-scale technology. Indeed there is. Should, and how could, the Government assist recipient Governments of aid to spread small-scale technology particularly in the rural areas? Should they do that? If they should, how can they?

I am delighted to be allowed to conclude my speech with an explanation of this because it is at the heart of the work that the Intermediate Technology Group has undertaken. That is to spread knowledge as widely as possible through all possible channels—Government, voluntary agencies and industries—of low-cost technologies that are already in existence and being practised successfully in one part of the world and might have relevance in another part.

The first task undertaken by the group was to publish a catalogue of low-cost equipment available throughout the world—much of it manufactured in this country. The catalogue was called "Tools for Progress", and was sponsored by the group and its industrial supporters. I am not sure how many times it has been reprinted. The demand for it is almost insatiable, but we have gone on from there to disseminate the experience gained by various countries in putting these techniques into practice and making them available to interested groups—often the development ministries in the other countries.

The interest has grown from there following the successes that other countries and ourselves have been able to achieve—because we have carried out some of the experimental projects to prove that ideas could be put into action successfully—and it has also been carried forward by lectures which the group has sponsored all over the world and which have been listened to by informed and enthusiastic groups. They have taken it from there and begun to set up their own centres, which have then been in communication with us. Ideas are being fertilised and spread by continual cross-communication. I hope that that answers my hon. Friend.

I am grateful to my hon. Friend for that reply, but he did not answer my question. I asked how Her Majesty's Government could assist in this process.

Her Majesty's Government have been giving support to the Intermediate Technology Group by supporting its expenditure on projects that appeal to the Government as being productive. We hope that in time we may have greater support for the central organisation of intermediate technology because this is essentially a centre for the dissemination and sharing of ideas. It is not a two-way traffic. It is almost a "Spaghetti Junction" of ideas—ideas coming in from all directions, intermingling, crossing and going out again.

If we are to give these ideas full range over the world we need the means to maintain the staff to meet the demands of other countries for talks, for help with their projects, and for visits and evaluations. It is not always as satisfying to give to a central organisation such as this as it is, perhaps, to give to identifiable projects, but it is essential to have such support if we are to continue to serve as a centre for disseminating ideas and proving that they can be put into action.

5.55 p.m.

Some extremely kind words have been expressed about the work of the Select Committee on Overseas Development of which I am happy and proud to be a member, but I think that the House will forgive me if I suggest that one or two hon. Members might treat this degree of praise with a certain amount of cynicism.

The work of Select Committees is hopelessly hampered by the low regard that the House as a whole has for the undoubted vast amount of valuable work that is done within such Committees. The Committee deserves commendation on this occasion for having triggered off only the second debate on overseas development in the past three years. Nevertheless, many of us recognise that the fact that that has happened is related less to the quality of the report and the demand for answers from the Government and the force with which that has been expressed and rather more to wider political considerations and the Government's legislative programme.

I maintain that this will not do. We shall not get Select Committees that are able and proficient at their work unless we recognise that, at the least, the Government's response to such reports, and the reports themselves, merit full-scale debates such as this with a degree of practicability and certainty so that our work can be geared to that end.

I very much endorse the contributions thus far from members of the Committee, including the introduction by the hon. Member for Essex, South-East (Sir B. Braine), the acting Chairman, and also the other contributions to which our report has given rise, but I still think that there is an element of embarrassment about debating these two reports at this time. In many respects I regard both these reports as being rather a minor part of a larger exercise, and I think it would be unfortunate if we were to have a fullscale debate upon the interim judgment of our work and find that when we have completed our intensive investigations we are denied a full-scale debate on that occasion.

This is illustrative of the difficulties of a Select Committee. I think that all hon. Members will agree that the Committee has been admirably served by the professional expertise that we have enjoyed, but we have done so on the basis of exiguous resources and of exploiting those professional advisers in a way that is scarcely pardonable. We have also sought to scrutinise Government policy in an intensive way on the basis of professional resources that are wholly inadequate to the task.

Against the background of those difficulties I do not underestimate the value of the work that we have done so far, but I maintain that this debate reflects the difficulties under which Select Committees operate, and it is somewhat of a triumph that the reports have generated both this debate and the extent of the Government's responses to them.

An even more important report of the Committee on the impact of oil price rises on the developing world, when we completed in a short period and which was in many respects a more substantial report than the two under discussion, did not make any debate in the House. We have not had the opportunity of discussing that crucial issue for the developing world and I am grateful that on this occasion the hon. Member for Essex, South-East put this debate in the context of the extent to which the gaps between the richer and the poorer nations have widened as a result of oil price rises over the past few years.

We ought to recognise that the context of the Committee's work is within the framework of the growing realisation that the aid debate and the Third World debate has entered into a new dimension. First, there is the straight political identification of the extent to which the Third World is no longer prepared to support a growing disparity of incomes between the rich and the poor. Secondly, there is the realisation that at least one section, namely, the oil-producing countries, has been able to demonstrate greater power in seeking the redistribution of resources.

I have been impressed by the fact that Third World countries which have not benefited by the rise in oil prices have shown little criticism of that development, although it has harmed their economies. I was at a conference attended by many Third World delegates in September 1974 when the first brutal onslaught of the oil price rise began to affect such countries, yet scarcely anyone criticised the oil States. Instead, they recognised that it pointed the way to a revolution in the economic order, or, as they have defined it, the economic disorder, which could bring significant changes.

The hon. Member for Woking (Mr. Onslow), who has unfortunately left us, raised an important point about the new economic order when he asked the very sharp question—where did we all stand in regard to commodity agreements and what were the implications of any suggestion about a common fund and changes in commodity prices? We must recognise that the argument is that stability of supply must be matched against a progressive rise in prices. We should not argue that case only in terms of crude self-interest, which most hon. Members seem to feel is the only argument that will gain wide support. Perhaps we should do our constituents more justice.

For instance, only two years ago, there was a great wave of public indignation at the low level of tea prices which reflected the exploitation of tea workers on British estates—identified particularly by a television programme about Sri Lanka. None of our constituents is eager for price rises, but that shows their awareness that if human conditions in the Third World are to improve, they are partially prepared to pay the cost and that there are other costs which have led to the rocketing of commodity prices which have nothing to do with the improvement in the living conditions of such people.

In the two years since that substantial public debate, tea prices have virtually doubled—so, because of the crude determinants of the economic market, have the prices of substitutes such as coffee—but this has not been reflected in rising living standards for those producing the tea. We do ourselves a disservice if we underestimate the concern about these issues and the extent to which many of the public are prepared to engage in voluntary and charitable efforts to increase living standards. They rely on their political decision-takers to buttress this trend with resource allocation.

The Second Report of the Select Committee, on UNCTAD, was prompted by what many of us detected to be a weakening of the Government's commitment to a common fund. After all, the British Government had blazed the trail with the Kingston initiative. We had expected that, as the debate moved into other international circles, the British Government would show leadership. But we identified wide-ranging reservations in the Government's position at Nairobi in 1976.

The report therefore expresses the dangers of a weakening of this commitment. Perhaps I might be forgiven for indulging in a little more mild cynicism. I feel that the Government were waiting for a clear statement from the new American Administration. That may be unfair, since Ministers were playing their part in the EEC, but the Second Report is certainly directed at a worthwhile target. Many of us still feel that the Government's response is less than wholehearted and frank.

For instance, in one crucial statement in the Government's response, we read that worries about the Common Fund are based on the fact that the distribution of costs and benefits would be "arbitrary and inequitable". That is certainly so, but the existing economic order, if one can call it that, is equally arbitrary and inequitable, and it is wholly unpredictable. These points in favour of a common fund should be stressed in the Government's negotiating position.

Recommendation 13 in the First Report drew from the Government a limited acceptance of establishing best practice among British firms as an example in industrial relations in the developing world. The Government's response, however, is that that is better promoted through international co-operation. But so are all these issues. The more countries which think with like mind the better, but the Government's response seems to be to hide behind a cloak of international co-operation and to be prepared to move forward only with others. That does not befit the Government's commitment to Third World issues. It does not follow the approach of the Swedes, the Dutch and the Canadians to initiatives in aid and trade.

I am worried at the continual suggestion that the only initiatives we can take are joint ones. That is the approach taken to slush money—that our competitive position should not be harmed and that these problems can be solved only if all agree. That is true in one sense, but if one country does not act, no one will. If no one takes an initiative, there is complete inactivity. Just as this Government are rightly under pressure to ensure that British industry which receives Government funds has a clean record on slush funds, equally British industry should demonstrate good practice in industrial relations and related issues in the third world.

The hon. Gentleman is making a most interesting and valuable contribution, and I agree with him. Is there not another reason why some initiative should be taken by the British Government? Is it not that there is no advanced industrialised nation which does a higher proportion of its trade with developing countries than Britain does? Is it not therefore a major interest of our country that the purchasing power of the developing nations—the poor nations today but tomorrow perhaps the richer nations—should be improved? Is that alone not a cause for the British Government to take a lead and not wait for others?