Speeches, etc.

Margaret Thatcher

HC Stmnt: [Paris G7 Summit]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [157/21-35]
Editorial comments: 1530-1612.
Importance ranking: Major
Word count: 8217
Themes: Agriculture, Autobiographical comments, British Constitution (general discussions), Civil liberties, Conservatism, Economic policy - theory and process, Monetary policy, Privatized & state industries, Energy, Environment, Trade, European Union (general), Foreign policy - theory and process, Foreign policy (Asia), Foreign policy (Central & Eastern Europe), Foreign policy (development, aid, etc), Foreign policy (International organizations), Foreign policy (USSR & successor states), Foreign policy (Western Europe - non-EU), Law & order, Leadership, Science & technology, Terrorism
[column 21]

Economic Summit (Paris)


The Prime Minister (Mrs. Margaret Thatcher)

With Permission, Mr. Speaker, I shall make a statement on the economic summit held in Paris from 14 to 16 July, which I attended with my right hon. and Learned Friend Sir Geoffrey Howethe Foreign Secretary and my right hon. Friend Nigel Lawsonthe Foreign Secretary and my right hon. Friend the Chancellor of the Exchequer.

The texts of the various declarations issued at the summit have been placed in the Library of the House. As the main declaration recalls, the seven-year round of summits beginning in 1982 has been one of the longest periods of sustained growth since the second world war. These summits have permitted effective consultations and offered the opportunity to launch initiatives and to strengthen international co-operation.

This summit dealt with four main issues: economic matters, including Third world debt; the environment; drugs; and international relations.

The economic declaration reaffirms the sound economic policies which have brought greater prosperity to all our countries. It stresses our common commitment to bring down inflation. It underlines the need for further progress in reducing external imbalances. It emphasises the importance of structural reforms—that is, improving economic efficiency and getting rid of subsidies and restrictions.

The declaration also confirms our determination to fight protectionism in all its forms and to avoid any policies which would undermine the prospects for the successful completion of the Uruguay round of multilateral trade negotiations by the end of next year.

The declaration reaffirms the case-by-case approach to debt problems, and welcomes the recent decisions taken by the IMF and the World bank to encourage debt and debt service reduction for middle-income countries. It notes that the measures agreed at the last economic summit to help the poorest countries are being successfully implemented. It confirms that the most effective way to deal with the problems of the developing countries is through the existing international financial institutions, rather than by creating new bodies or structures.

The declaration gives particular weight to the problems of the global environment, and especially the ozone layer and the greenhouse effect. These are matters of deep and growing concern, because of the accumulating weight of scientific evidence.

The summit endorsed the United Kingdom's call for a United Nations framework convention on global climate change, similar to that which we already have for the ozone layer. It also underlined the need to make sure that our policies on environmental protection are both scientifically and economically sound. It pointed out that clear assessments of the costs, benefits, and resource implications of environmental protection help Governments to take the necessary decisions. There is no incompatibility between economic growth and environmental protection—indeed, the former is essential to create the wealth to finance measures to protect our environment.

The declaration calls for the strengthening of existing international bodies dealing with the environment, particularly the United Nations Environmental Programme, rather than the creation of new ones. [column 22]

It also gives strong support to the international effort to preserve the world's tropical forests, while recognising the sensitivities and the sovereignty of the developing countries for whom these forests are an important natural resource.

The declaration signals the very strong determination of all seven Governments to tackle the drugs problem, which has reached such devastating proportions, particularly with the growing threat of crack. We agreed on a number of measures, in particular. The first was greater help for efforts to counter illegal production of drugs. The second was action to reduce demand for drugs; here, I was able to draw attention to the international conference which Britain will host next year on demand reduction for drugs and cocaine in particular. The third was the establishment of a financial action task force from summit countries and others to investigate, and recommend measures to prevent, money laundering. The fourth was the conclusion of further bilateral agreements for the tracing, freezing and confiscation of the proceeds of drug trafficking and crime. These problems can be solved only by growing international co-operation.

In our discussion of political and regional issues, and in particular of East-West relations, we agreed to provide practical support for political and economic reform in eastern Europe and especially in Poland and Hungary. We also agreed to help meet Poland's urgent need for food. For this purpose, we asked the European Commission to co-ordinate the necessary arrangements.

We issued a strong condemnation of repression in China. Our statement also underlined the common interest of all seven summit countries in a stable and prosperous future for Hong Kong; and confirmed the importance of support from the international community to maintain the confidence of Hong Kong's people, which has been badly shaken by recent events.

We issued a strong denunciation of terrorism, referring in particular to the Lockerbie disaster, and reaffirmed the policy of making no concessions to terrorists. We called on those holding hostages to release them immediately and unconditionally.

This was an exceptionally friendly and worthwhile summit—[Laughter.]—an exceptionally friendly and worthwhile summit. Much credit is due to the skilful chairmanship of President Mitterrand. The desire to work together to resolve the problems of the world economy, the environment and drugs was very marked, and the United Kingdom is making a major and positive contribution to this. I am sure that the results of the summit will be warmly welcomed in all the seven summit countries and more widely.

Mr. Neil Kinnock (Islwyn)

May I thank the Prime Minister for her statement, and welcome especially the proposals for combined international action against the production, distribution of and trafficking of illegal drugs? Will the Prime Minister tell us what reply she would wish to make to Mr. Gorbachev 's letter to the summit, which was rightly welcomed by President Bush as a

“fascinating manifestation of the exciting changes under way in eastern Europe” ?

On a matter which is not unrelated, does the Prime Minister agree that, while co-ordinated and urgent food aid to Poland is certainly necessary, both Poland and Hungary also need a considerable programme of technical and economic assistance to ensure that their steps towards [column 23]democracy are both protected and strengthened? What will be Britain's contribution to the European Community's co-ordinated effort in this respect?

In her statement, the Prime Minister reported the group of seven's reaffirmation in its economic declaration of what she described as

“the common commitments to … reducing external imbalances”


“to bring down inflation.”

As the result of the Government's policies is that Britain now has the largest proportionate current account deficit and the highest inflation rate of all G7 countries, was not the right hon. Lady's authority on these matters something less than convincing at the meeting in Paris?

When the Prime Minister commented in Paris that in countries where inflation had not risen, it was because sound policies had been rigidly adhered to, which country did she have in mind as having most clearly failed to pursue sound policies?

Does the Prime Minister accept that the Group of Seven's preference for allocating prime responsibility for dealing with Third-world debt problems to the private banking system will simply ensure that the problem remains a persistent drag on the world economy for many years to come—not only perpetuating poverty in the South of the world, but seriously impeding policies to protect the global environment? Before the next summit, will the Prime Minister come forward with proposals for action by Governments that will help to deal more speedily and effectively with the Third-world debt problem?

On the vital question of the global environment, to which the summit rightly paid so much attention, does the right hon. Lady agree that, while exhortation has its place, the highest priority must be given to effective action? With that in mind, why, under her Government, will expenditure on research into global warming this year be only one quarter of 1 per cent. of all research funded by the Government? Why are the resources that the Government subscribe to the intergovernmental panel on climatic change, referred to in the communiqué, simply money being reallocated from research into clean coal techniques?

The Prime Minister endorsed the section of the summit communique that condemned the indiscriminate use of oceans as dumping grounds for polluting waste. How does she explain the inconsistency between that position and the fact that Britain, is now the only country dumping sewage sludge into the North sea, with no plans to make changes?

The summit communiqué urges action on energy conservation. Why have the Government cut, and why do they intend further to cut, spending on energy efficiency? Why do the Government still propose to block the all-party amendment that would impose an obligation on the British electricity industry to give conservation and efficiency the highest priority?

The summit appeared to show full understanding of the need to assist Third-world countries in their efforts to protect the environment. How does the right hon. Lady justify the fact that, during her time in office, development aid as a proportion of gross domestic product has been cut in half? How does she excuse her enthusiastic support for International Monetary Fund regimes that require many countries to put compliance with imposed economic programmes far above environmental security? [column 24]

I applaud the right hon. Lady for giving credit to what she called

“the skilful chairmanship of President Mitterrand.”

That quality of the president was exceeded only by the skill that he showed in making seating arrangements.

The Prime Minister

On the right hon. Gentleman's last point, he would do well to take some lessons in courtesy and skill from President Mitterrand. With regard to the more serious questions that he asked, I can tell him that Mr. Gorbachev 's letter was sent to the president of the summit, President Mitterrand, and he will respond to it. We all have copies of the letter, which essentially calls for more interdependence in global economics—a call to which we shall gladly respond. As Mr. Gorbachev says, it will require perestroika to be satisfactory before the Soviet Union can play a full part in that global co-operation.

On the question of food aid for Poland, we first called for that at the Madrid summit, and the actions that Britain agreed to take were announced when General Jaruzelski was here. They consist of agreeing to reschedule the debt for 1989 due this year to the Paris Club without awaiting IMF reform. That is a considerable amount, and we have agreed to a five-year period of grace, after which the debt must start to be repaid. We also agreed to ask the European Community—and have done so—to get rid of some of the quotas on Poland's trade with the Community. If Poland is to pull out of its problems, it must be able to trade more with the Community. We further agreed to provide £5 million per year for five years for management training, and to send my hon. Friend Alan Clarkthe Minister for Trade to Poland, with a group of industrialists, to investigate joint ventures.

The rest of the improvement will come, as with other countries, after proper agreement is reached with the International Monetary Fund. We do not feel that it would be right to open more credits now. In the past, much credit was wasted and turned to debt that Poland must now repay. We want to be certain that there is a different economic reform programme before more aid is given.

The external imbalances refer mainly to Germany and Japan, which do not always open their markets to our goods as easily as we open our markets to theirs. They operate a number of artificial trade barriers that we do not have. Our membership of the Community helps to bring down Germany's artificial barriers by majority voting on some directives. That means that Germany must get rid of some of the barriers that it would otherwise gladly maintain. Germany also operates greater subsidies than we do, and the Community will bring those down too, to ensure fair competition.

Last year, under the initiative of my right hon. Friend Nigel Lawsonthe Chancellor, we agreed to write off the debts of the poorest sub-Saharan countries. We have now done that, and so has France. Before this year's summit, under Mr. Brady 's proposal, we agreed to help countries with middle-income debt. As a result of those two measures, £20 billion-worth of dollars have been rescheduled in the Paris Club since we met in Toronto last year. Some of the debt was, of course, written off. Those were two very good initiatives.

Much of the debt is the responsibility of the commercial banks that lent it. Government may become involved to the extent that, if the loans turn into bad debts, or bad debts in part, a provision can be made against the banks' profits for tax purposes. By that combination, the [column 25]commercial banks meet part of the debt and the taxpayers meet another part. We think that such debts must be dealt with case by case. We met many Heads of Government at the summit, and some pointed out that countries which are conscientious and did not borrow more than they are able to repay would take it very hard if the debts of profligate countries were written off wholesale. That would make it very difficult for the Heads of State of conscientious countries to continue their wise policies.

On the subject of global climate change, this country has one of the world's four climate research stations, because we have some excellent meteorologists. Twenty per cent. more is spent in real terms on basic research now than when we first took office. How that money is spent is a matter for the Advisory Board for the Research Councils to decide, in dividing it between the various research councils. At present, there is not a great demand for more money to be spent in that respect, so we spend a great deal more on research in the Antarctic, which gives the first warning of global climate changes.

At the recent North sea conference, we agreed on a number of measures to reduce pollution. The right hon. Gentleman referred to the dumping of sewage sludge. According to the OECD, 84 per cent. of the United Kingdom's population is served by waste treatment plants, but the percentage is lower in Finland, France—where it is only 50 per cent.—and Spain—where it is only 29 per cent.—and elsewhere. Some countries are better than we are in that respect, but many are worse. Our country has sufficient growth and increasing prosperity to be able to spend far more on improving the situation than was ever the case under the last Labour Government.

The Electricity Bill will require electricity supply companies for the first time to provide their customers with guidance about efficient use of electricity: that will be a licence condition which the director general can enforce.

The right hon. Gentleman referred to the amount spent on energy efficiency. It is interesting to note that he always equates efficiency with the amount of money spent. That is not correct. In 1986, Energy Efficiency Year, expenditure was heightened because of the awareness programmes that were launched. This year we are spending £15 million on energy efficiency—about six times as much as was spent in 1979. We are spending only about 0.32 per cent. of GNP on development aid, but our spending under the second heading—private flows to developed countries—is among the best, and well above target.

The right hon. Gentleman's last question—referring to economic reform being placed before the environment—suggests that he cannot have listened. A successful economy is essential if we are to be able to spend money on environmental protection. That is why the east European Communist countries, whose system he admires so much, are not able to spend money on it.

Several Hon. Members


Mr. Speaker

Order. I ask the House for brief questions. I shall give some priority to those who were unable to be called following the Prime Minister's last statement.

Mr. Terence Higgins (Worthing)

Is my right hon. Friend aware that her clear statement that economic growth and a solution to environmental problems can go together is very much to be welcomed as a balanced appraisal, in contrast with the view expressed by others [column 26]that, if the environment is to be protected, economic growth must be stopped? Does she agree that there is a clear link between aid to Third-world countries and the environment—in the context of Brazil, for example—and can she tell us whether any progress has been made in that regard?

The Prime Minister

I entirely agree with my right hon. Friend. The western countries are now prosperous enough to make special provision to ensure that the environment is protected—both its global and its local aspects—unlike some of the east European countries, which pour so much into the rivers that run into the German bight in the North sea.

We were particularly aware of the importance of keeping the tropical forests going and not allowing them to be cut down at the same rate. As my right hon. Friend knows, we have signed the first agreement with Brazil on the maintenance of tropical forests and research into how their ecologies can be maintained, the pharmaceuticals that can be obtained from the trees and their effect on climatic change. That is another first for Britain: we have led the way.

In the environmental statement, we expressed particular concern that the work should continue and that further measures should be sought to maintain the forests. We were very much aware that we must handle the matter carefully and keep in view the sovereignty sensitivities of the countries involved. We are doing this to try to help, and we can put some of our research and our aid in that direction. We have given a lead. We have also given an extra £40 million to India to help it to protect some of its tropical forests.

Mr. Paddy Ashdown (Yeovil)

May I congratulate the Prime Minister and other heads of the Group of Seven on placing the environment so high on their agenda? We must now hope that what was a collection of words will become a collection of effective actions.

On a different topic, I note that the Prime Minister said that the summit had

“confirmed the importance of support from the international community to maintain the confidence of Hong Kong's people” .

Will she tell us, in specific, practical terms, what that means and how it will benefit the people of Hong Kong?

The Prime Minister

I think that it will be obvious to the right hon. Gentleman that Hong Kong is a very prosperous centre, and that it must retain that prosperity. To do so it must also retain the confidence and support of the international community. I think that it is extremely good that, whether at a European or an economic summit, we all think sufficiently highly of Hong Kong, and are concerned enough about her to mention the matter in every communiqué. This one is no exception, and I hope that it will bring forth practical action. If we say that we are going to support Hong Kong and enable it to remain prosperous, it means that we are concerned to retain that prosperity.

Mr. Ivan Lawrence (Burton)

Is my right hon. Friend aware that the recognition by the major economic powers of the singular importance of Hong Kong and the need to maintain its survival will be a substantial reassurance to the people of Hong Kong? Will she commit herself to trying to get the free nations of the world, particularly the European Economic Community and the [column 27]Commonwealth, to back her in her positive attempts to ensure the survival and protection of the colony for the future?

The Prime Minister

Yes, of course, we know exactly how the people of Hong Kong feel after the events in China. Whatever international forum we are in—we shall raise the matter again in the Commonwealth forum in October—we seek the support of all nations for the problems of Hong Kong. The communiqué was very good, as it said:

“We recognize that the continuing support of the international community will be an important element in the maintenance of confidence in Hong Kong.”

We shall continue to seek further such support from the international community.

Mr. Dennis Skinner (Bolsover)

Does the Prime Minister agree that, as a result of the economic summit and the one that preceded it, attempts by adults at organised happiness at these parties and binges always result in tears and recriminations because somebody turns up to spoil fun? Will she reveal to the House whether she intends to go to all the economic summits right up until the general election?

The Prime Minister

I do not see why the hon. Gentleman should so limit his question in time.

Mr. Norman Tebbit (Chingford)

Does not my hon. Friend agree that the principal imbalance in the economies of eastern Europe is between the excesses of Socialism and a lack of capitalism? Will she therefore take the greatest care before offering any further credit to Socialist countries, which inevitably dissipate it, until they reform their ways and follow the capitalist path, as Mr. Gorbachev is now tentatively suggesting? Secondly— [Hon. Members: “Briefly.” ]—I shall be perfectly brief when I can be heard above the noise opposite. Will my right hon. Friend say whether any progress was made on determination—[Interruption.]

Mr. Speaker

Order. Mr. Tebbit.

Mr. Tebbit

I am not prepared to shout above the rabble, so I may take a long time. Was there any renewed determination to deal with the problems of agricultural subsidies, which are a principal cause of the risk of an outbreak of protectionism in the world?

The Prime Minister

I thank my right hon. Friend and agree with him that political freedom cannot persist unless it is backed by economic freedom, which means having the overwhelming majority of the property in the hands of people. It is interesting that the French “Declaration of the Rights of Man” , contains a right to private property. Without that economic reform, and much more responsibility, initiative and personal effort political reform will not persist; nor will Communist countries achieve greater prosperity.

The Communist countries produce neither liberty nor prosperity. Now that they are achieving greater political liberty, we are not prepared to give them substantial assistance until they have agreed a programme of economic reform with the International Monetary Fund. Many of them may welcome that, as it is evident that they do not now how to set about producing economic reform [column 28]or free enterprise. Under the aegis of the IMF, they should have a very much better idea of that, and the World bank and other international institutions will then provide extra credit and grants to help them.

Mr. Speaker

Mr. Molyneaux.

The Prime Minister

On my right hon. Friend's next point—[Hon. Members: “Briefly.” ] The Leader of the Opposition asked about 10 questions and I answered them. My right hon. Friend asked but two, and they are far more perceptive than the 10.

Agricultural subsidies also have to come before the GATT in the Uruguay round. We started the process at the Toronto summit last year and have agreed again this year that agricultural subsidies must be brought down. The place to do that is between the three blocs within the summit nations—Japan, the United States and Canada, and the Europeans—through the mechanism of the Uruguay round.

Mr. James Molyneaux (Lagan Valley)

Does not the Prime Minister agree that aid to Poland and Hungary without too many strings attached could pave the way for the reunification of that wider European family, which would be very different from and wider than the Delors vision or nightmare of the European Community?

The Prime Minister

The aid to Poland and Hungary is by way of a special position there. They are the two countries in eastern Europe which are changing from their former totally centralised political control to something far more akin to democracy. In making the political change and in having much more political freedom, we wanted to help them to go further before the International Monetary Fund has come in and fully agred programmes of reform. As I have said, we are giving a certain amount of immediate aid for that.

In both cases, it involves negotiating with the European Community more exports from those two countries to the Community and dropping some of the quotas they have already. We have achieved that with Hungary through a fairly long negotiation and we shall achieve that with Poland. We shall, of course, always look carefully at the politics of the situation, but at present we feel, rightly, that every enlargement of liberty in those countries is to the advantage not only of the people there, but of mankind as a whole.

Mr. Hugh Dykes (Harrow, East)

Would my right hon. Friend express warm congratulations to the French authorities on the combination of a highly successful festival—the 200th anniversary—and an extremely successful summit?

Mr. Tony Banks (Newham, North-West)

What was it the anniversary of?

Mr. Dykes

Does that not emphasise the fact that relations between Britain and France are extremely cordial, despite what the press has been saying, and does it not presage a good period of co-operation between the two countries for the EC presidency?

The Prime Minister

Yes, relations are good. The summit was very successful and augurs very well for the future. The European Community was there, with M. Delors, Mr. Christophersen and Mr. Andriessen, and it took a full part in all the discussions. There was more [column 29]agreement on that occasion than ever before, perhaps because we have been meeting for quite a long time and have come to know the right economic recipes. We do not need to dwell on them long and we can go on to other measures, including political co-operation.

Mr. Harry Ewing (Falkirk, East)

When is the Prime Minister going to learn to behave herself when she goes to Paris? Is she aware that the press and television in this country gave us a good picture of her behaving like a party pooper? Does she understand that, when she conducts herself in that way, she damages the standing of this country abroad? When will she apologise to the people of France for her conduct towards them, and to the people of this country for damaging our standing in Europe?

The Prime Minister

The hon. Gentleman is totally and utterly wrong, as he knows. I do not even recognise the expression that he uses, or know its meaning. We had a very dignified summit, with excellent discussions and excellent arguments coming to a very good communiqué. It is interesting that, when the seven summit countries and the whole of the European Community have had a good and constructive summit and are united, somehow the Opposition think that they know better.

Dame Jill Knight (Birmingham, Edgbaston)

Is my right hon. Friend aware that a major problem of tackling drug abuse is the ease with which drug dealers can launder their profits through the banking system? As that matter was discussed at the summit, were any steps suggested to deal with that matter?

The Prime Minister

My hon. Friend is absolutely right. As she knows, a United Nations convention was signed in 1988, requiring all countries to make provisions in their criminal codes for those dealing in drugs; to trace where the assets went; and to include sentences for money laundering. We were ahead of that convention in our statute in 1986. We have also signed reciprocal agreements with other countries to trace assets. It is interesting to note that, since the Drug Trafficking Offences Act 1986 came into effect, over £8 million of drug-related financial assets have been confiscated by the courts under that Act, with a similar amount under restraint. In addition, we are getting increased co-operation with other countries through the reciprocal agreement. That is our effort.

However, the summit countries still felt that we did not know enough about how the money was laundered and through what channels. Therefore, in addition to the United Nations convention, which most of the signatories have ratified and some are putting into effect, we are seeking the help of the international financial institutions to set up a task force to see whether we can find out more about the channels through which the money is laundered, because if we know more about it, we can stop it.

Mr. Eric S. Heffer (Liverpool, Walton)

Would the right hon. Lady explain why she consistently comes here to talk such utter nonsense about the free market, as if all countries with a free market have political democracy? She must be aware of the fact, but we know that her history is not very good, so I shall try to explain to the right hon. Lady—[Interruption.]——

Mr. Speaker


Mr. Heffer

—that throughout the world many Fascist and military dictatorships have totally accepted the free [column 30]market economy but, nevertheless, have no democracy. Therefore, should not the right hon. Lady begin to learn some history and to understand that, before the 1688 revolution in this country, we had the 1640 revolution, when we cut off a king's head and established Parliament as the basis of democracy in our country?

The Prime Minister

The hon. Gentleman is going back on arguments that we used to have many years ago in the House. They can be summed up in this way. Every free country is a capitalist country—[Interruption.] Wait a moment, wait a moment. Capitalism is a necessary but not a sufficient condition of liberty, but every free country has to be a capitalist country. Of course, the free market operates within a framework of law. That is why we have rules to keep competition; it is why we have rules against monopoly; and why we have rules about health and safety. We have set up a framework of law, agreed in this House, and free enterprise is left to prosper to the benefit of a rate of growth and prosperity in this country that we never had when the Labour party was in power.

Mr. Tim Rathbone (Lewes)

Does my right hon. Friend accept that everybody concerned with drug misuse will commend this Government's international lead in such matters? Will she reassure the House that, with the advent of crack and the horrors associated with it, this Government, from their economic strength, will make sufficient extra sums available to fight that battle, especially among the young in this country?

The Prime Minister

I agree with my hon. Friend that it is absolutely vital to fight that battle. That drug has not hit this country to anything like the same extent as in the United States. We are taking action to try to see that it does not. We have called an international conference for next year—my right hon. Friend Douglas Hurdthe Home Secretary announced it some time ago—to warn young people about the approaches that they may receive and about the dangers of the drug. It is a conference on demand reduction. It addresses specific problems related to heroin, cocaine and its derivatives, marijuana and amphetamines, as well as methods of reducing demand, education, treatment and rehabilitation, law enforcement and the extent of the problem. We believe that we must tackle the problem at both ends. We must warn people and reduce the demand at this end and also stop the supply. We believe that we are most likely to stop the supply by stopping the money.

Mr. Alex Salmond (Banff and Buchan)

On the subject of energy efficiency, did the Prime Minister take the opportunity to explain to the other G7 leaders why the cuts in the United Kingdom's energy efficiency budget this year are such that the budget is only marginally greater than the funds devoted to refurbishing the Department of Energy's new offices opposite Buckingham palace? Will we see a change in the spending priorities as a result of the summit?

The Prime Minister

The hon. Gentleman always thinks that energy efficiency is dependent upon the amount of propaganda which the Government put out. That is just not so. Since 1973, energy usage in the United Kingdom has fallen by 4 per cent., although we have had a 26 per cent. increase in gross domestic product. Also, for the last four years for which figures are available, the United Kingdom's ratio of energy use to GDP growth has been [column 31]improving at twice the Community average. Of course, the private sector is spending an enormous amount on improving energy efficiency. That is vital to keep costs down and that is where the improvement comes from.

Mr. David Sumberg (Bury, South)

My right hon. Friend will be aware that, in the past, the economic summits have been derided as capitalist clubs. Now that Mr. Gorbachev wants to join, how long will it be before the Opposition recognise that only free-market capitalism effectively guarantees personal prosperity and personal freedom?

The Prime Minister

I totally agree with my hon. Friend. It is amazing, after our success in this country in freeing up the economy, with tax incentives and putting into private enterprise industries which should never have been in the hands of Government, how many other countries now wish to follow the same path—and that includes Communist countries—because they have seen the success of a Government who have had the courage to do the right thing.

Mr. Tony Banks

May I come back to the Prime Minister's style at the summit? Did she set out deliberately to be offensive to the French people with her ill-informed comments about the French revolution and the “Declaration of the Rights of Man” ? Was she in any way surprised that she was abused on the streets of Paris, or did that make her feel at home?

The Prime Minister

May I remind the hon. Gentleman that the French “Declaration of the Rights of Man” lists freedom of speech, opinion and expression? May I also remind him that President Mitterrand agreed with me at the end of the summit that there were other accounts of human rights which started long before the French revolution? May I remind him that is a matter of history that that is so? There were very few people on the streets of Paris who were against me—[Interruption.] Opposition Members were not there. The overwhelming majority were cheering and saying, “Madame Thatcher, Madame Thatcher!”

Mr. Derek Conway (Shrewsbury and Atcham)

Despite some of the cheap gibes from Opposition Members about the French celebrations, will my right hon. Friend the Prime Minister not be deflected from her determination to uphold Britain's interests as a world leader in tackling drugs, world debt and the environment—a position which will be opposed and gibed at by the mean-mouthed Members on the Opposition Benches?

The Prime Minister

Yes, we have taken the lead, as I have said, in getting the legislation through and in tracing the assets of those who traffick in drugs. We took the lead before the United Nations convention and we shall give the lead through the new international conference as we did with the ozone layer. My hon. Friend should not worry very much about the Opposition: I do not.

Mr. Jeremy Corbyn (Islington, North)

Is the Prime Minister aware that last year there was a net outflow of capital from the poorest countries in the world to the richest? This year there will be an even greater net outflow of capital from the poorest to the richest countries. In that context, could she tell us what the Group of Seven [column 32]proposes to do to increase the living standards of people in the poorest countries, to protect their environment and to increase the real prices that they get for the commodities that they are forced to sell?

The Prime Minister

They are not forced to sell commodities—what nonsense. Those countries wish to grow more to sell, and they also wish to diversify. For that they must have an investment code, because people will not invest in those countries if they cannot get a reasonable return of profit or if their investment will be nationalised. More and more, those countries are realising that, and more and more private flows of capital and expertise will go to those countries, which will help them to build up their prosperity as we built up ours. One cannot build the strength of a country just by giving it constant grants. One must also see improvement in the whole economic programme at the same time.

Mr. Robin Squire (Hornchurch)

Will my right hon. Friend confirm that the summit reasserted the important role of nuclear power in energy generation? Does not this endorsement of the Government's current position stand in stark contrast to the muddled policies of the Opposition parties, which will be bad for energy generation and bad environmentally in terms of global warming?

The Prime Minister

Yes, I agree with my hon. Friend. Of course nuclear power is one of the very important ways to reduce global warming. The summit statement said:

“We are committed to maintaining the highest safety standards for nuclear power plants and to strengthening international cooperation in safe operation of power plants and waste management, and we recognise that nuclear power also plays an important role in limiting output of greenhouse gases.”

That was signed by all the countries which were represented.

Mr. Brian Wilson (Cunninghame, North)

Does not the Prime Minister realise that the 90 per cent. that she claims were cheering in the streets of Paris were cheering the 10 per cent. who were booing her? If a foreign statesman came to this country for a summit set to coincide with a great national celebration and gratuitously set about denigrating that national celebration, would she regard him as an influential and skilful diplomat or as a self-satisfied ignoramus?

The Prime Minister

I assure the hon. Gentleman that he is incorrect about many people in the streets of Paris. I am very happy that he and his fellow Members are reduced to such pathetic, small-minded comments. That is just what the Opposition are like. They cannot criticise the results of the summit countries so they show their true small-mindedness. [Interruption.]

Mr. Speaker


The Prime Minister

As for human rights, one was asked the simple question as to whether one believed that human rights started in 1789 with the French declaration of human rights. The simple answer in historical terms is no.

Mr. Jeremy Hanley (Richmond and Barnes)

The whole House should congratulate my right hon. Friend on her contribution to this excellent summit. May I also congratulate her on putting the drug issue at the top of the agenda? She spoke earlier about how to reduce the [column 33]demand for drugs and on laundering. Could she say what international steps should be taken to reduce the supply of drugs, especially in producer countries?

The Prime Minister

My hon. Friend has lit upon what is perhaps the most difficult thing. We know where the drugs are grown and the extent to which they are grown. They are grown in sovereign countries and we are not able, except by exhortation or by getting at the money which those drugs fetch on the international market, to reduce the amount that is sold. Of course there are United Nations programmes for substitute crops, but they bring in but a small income compared to the amount that people get for drugs; it is difficult to get at the problem in that way. Therefore, we have decided that the best way to do it is to try to track down the money, to see if we can find out where it is being laundered so that we can confiscate it and stop the traffic by that means.

Several Hon. Members


Mr. Speaker

Order. We have a very heavy day ahead of us. I shall allow three more questions from each side, then we must move on.

Mr. David Winnick (Walsall, North)

Was it recognised, particularly by President Bush, that if the countries of eastern Europe are to be able to go their own way, which I certainly support, the same should apply equally to countries in central and south America? One thinks of what happened in Chile in 1973, and the United States involvement there. Could the Prime Minister simply answer this question—why is it that, of all those Heads of Government who went to the summit, she was the only one who considered it appropriate to denigrate the events of 1789 and to act in such an impertinent way when she was asked questions on French television?

The Prime Minister

The hon. Member likes freedom of speech for himself but not for anyone else. I was asked a straight question—did I think that human rights began with 1789 in France? The honest answer can only be no. Surely the hon. Member is not saying yes.

Mr. Nicholas Baker (Dorset, North)

Does my hon. Friend accept that she is entitled to some sympathy in having to attend events that commemorate bloodshed and terror which led to the suppression of freedom and to one of the worst tyrannies that Europe has ever known, by comparison with which what the Chinese Government did to their own citizens in Peking recently would appear trivial? Does my right hon. Friend agree that the assurances given by the economic nations to the people of Hong Kong are worth very much more than the Yeovil plan to allow 3.25 million people to have the right of residence here?

The Prime Minister

Tyranny does not vary very much from country to country where it is practised; that is what comes out of all the history books. With regard to Hong Kong, yes, we understand precisely the lack of confidence which people there feel because of events which have taken place in China, which is why we constantly raise the matter in every international forum. We have to try to bring back some confidence to the people of Hong Kong and to make sure that the agreement which we honourably entered into is honoured when it comes to 1997 so that the way of life of the people of Hong Kong can continue to be maintained. The best chance of that is for Hong Kong to [column 34]continue to be prosperous and to have its way of life as now, although we shall obviously increase the amount of democracy there. We have full international support for that. I hope that the financial institutions will continue to give their full international support for that. I hope that the financial institutions will continue to give their full international support to Hong Kong.

Mr. Alan W. Williams (Carmarthen)

In discussions on global warming, did anyone agree with the Prime Minister's rather eccentric view that nuclear power is the answer to the greenhouse effect, or was there a wider consensus that energy conservation, insulation and efficient use of energy are the answer?

The Prime Minister

Obviously, a great deal can be got from energy efficiency, as I have already said.

We are now producing a quarter more gross domestic product using less energy than we were in 1973. That shows the much greater efficiency we have now, and that efficiency has been stepped up in the past four years for which figures exist

With regard to nuclear energy, I said that paragraph 4.1 of the communiqué—I will not read out the whole paragraph again—stated:

“We recognize that nuclear power also plays an important role in limiting output of greenhouse gases” .

We are not suggesting that we rely totally on nuclear power, but I doubt very much whether we shall be able to get the output of greenhouse gases down sufficiently without the use of nuclear power. Of course, France is the lead country in the proportion of electricity generated from nuclear power.

Mr. Jacques Arnold (Gravesham)

Does my right hon. Friend agree that, in coping with Third-world debt, the principle of fairness is extremely important? Should all Third-world countries that have an equal state of development not be treated equally, whatever the state of their external debt? I am thinking particularly of Chile, which has an excellent record of repayment and servicing of debt.

The Prime Minister

My hon. Friend is aware of what has been done about the debts of the very poorest countries in sub-Saharan Africa. Under the leadership of my right hon. Friend Nigel Lawsonthe Chancellor, we agreed to write off their debts, because they were never going to have a chance to get out of their great difficulties. For the middle-income countries, we have the special Brady plan. Beyond that, much of the debt is, of course, debt from commercial banks and must be dealt with on a case-by-case basis between the commercial banks and the countries concerned. My hon. Friend is aware that some negotiations are going on at present. Otherwise, I agree that it must be on a basis of fairness. We should recall, too, those many countries which have borrowed not more than they could afford but smaller amounts, and have never failed to repay and service their debts on time.

Mr. Rhodri Morgan (Cardiff, West)

The Prime Minister's views of the French revolution can perhaps be best summed up by saying that there is no vinism like chauvinism. In contrasting her ozone-friendly words with her pollution-infected deeds, can she tell the House whether this week she intends to provide some back-up action to those brave declarations by telling her Energy Secretary that he should accept the spirit of the cross-party amendment to bring in an obligation to consider energy efficiency and conservation on Thursday, when we will [column 35]consider the Lords amendments to the Electricity Bill? Or are we to assume that, when the Prime Minister says that she intends to fight for protectionism in all its forms, she includes environmental protectionism as well?

The Prime Minister

If the hon. Gentleman looks at all the facts and figures, he will be aware that this country's record on environmental protection is better than it was under any previous Government and is going ahead fast—whether it is in taking out the sulphur dioxide from our coal, which is costing some £2 billion, in the vast amount of more than £1 billion that we are investing this year to provide better water supplies or in energy efficiency. The Electricity Bill will for the first time require electricity supply companies to provide guidance to their customers about the efficient use of electricity, which will be a licence condition that the director can enforce. The trouble with the Opposition is that they canot hold a candle to the excellent record of the Government, whether it be in economic growth or in providing environmental protection.

Mr. Keith Raffan (Delyn)

I join in welcoming the setting up of the financial action task force to attack the laundering of illicit profits from the drug trade. Will my right hon. Friend tell the House whether the international conference on drugs next year will have as one of its main objectives a multilateral agreement to back up that task force, so as to ensure that the Drug Trafficking Offences Act 1986 can be implemented even more effectively?

The Prime Minister

We shall do that. The conference is to reduce the demand for drugs. We are not waiting for an international conference to try to get more bilateral agreement so that we can trace the profits of the drug peddlers. That will continue to be the case.

The international task force is due to report to us in April 1990, so that we can consider its proposals in the next economic summit.