Permanent Under Secretary’s Planning Staff paper, ‘British foreign policy: Opportunities and dangers’, 1 December 1975

“North/South relations”. Developing countries “want this trade to be conducted on more favourable terms than at present and, in the last resort, this can only come about of world prosperity as a whole increases of Western consumers put their hands more deeply into one or other of their pockets… By skilful diplomacy, coupled with some readiness to make minor sacrifices on behalf of trade stabilisation, we may be able to keep the atmosphere sweet and prevent a fresh ‘confrontation’, particularly if world trade picks up generally. But third world patience is not inexhaustible… We must try to satisfy the third world without lowering our own standards more than we can afford. If this can be achieved by reasonable concessions, well and good. It would be worth paying a price to secure agreement. But we ought to begin to prepare ourselves for the possibility that, at the end of the day, there may have to be a ‘confrontation’, which will force us either to make really painful concessions or to adopt a more callous attitude. Given our existing economic difficulties, it seems more likely that, when it comes to the point, we shall prefer the latter course. This might necessitate taking the line in public that, though we were keen to create conditions in which the developing countries would share any increase in world prosperity, we were not prepared to redistribute existing wealth dramatically in their favour. The prospect reinforces the case for seeking Community solidarity on North-South questions (the larger members of the Community have a roughly equal dependence on third world products). It may also suggest that the Community should try not to allow this dependence to increase”.

Notes four remaining colonies: Hong Kong, the Falklands, Gibraltar and Belize. “We only remain there because of the wishes of the inhabitants… We could try to get Argentina to recognise the rights of the 1,900 odd Falkland islanders, or we could plan for their resettlement or both”.

National Archives: FCO49/570

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