COLONIAL DEVELOPMENT CORPORATION

HC Deb 29 May 1951 vol 488 cc44-160

3.52 p.m.

Mr. Walter Fletcher (Bury and Radcliffe)

Since Question Time we have been concerned with matters which affect the present daily lives of a large number of people in this country, with the colliery disaster and the situation in Persia, but now we have to turn to something very different, the question of colonial development, which is essentially a long-term matter.

May I start by offering our congratulations to the Secretary of State for the Colonies on his safe return from a very strenuous trip, which has no doubt been of great interest to him. I was very pleased to see he had a little spare time and that he kicked off at a football match, though I was a little surprised because that must have been done from the centre-forward position, whereas his obvious home would have been on the left-wing—outside left.

In debates on the Colonies in the last few years, it has been very noticeable what an increase there has been in the number of Members who have taken the opportunity during the Recess to travel, as is now possible with air transport, to gain firsthand information of matters within the Commonwealth and Empire. That is all to the good, but nevertheless many of them return imbued too greatly with the idea that colonial history started with their arrival in a Colony or at least with the coming to power of the Labour Government in 1945. I hope to disabuse them of that idea to some extent.

No doubt the Report we are to discuss today is the direct lineal descendant of many similar schemes started before. I am quite certain that every Member of this Committee, in whatever part of the Committee he may sit, will join with me when I say that since we debated the last Report in October last year, the death of Oliver Stanley has occurred and that throughout the whole of this debate everybody who takes part, and those who are unfortunate enough not to be called but who will sit and listen, will have in their minds the fact that he was in many ways the father and protector of colonial development schemes. Today more than ever we shall be deploring his absence.

I do not propose to go very far into the matter which has caught the public eye to the greatest extent in the Colonial Development Corporation's activities—the Gambia egg scheme. We have had a debate on that and there were indications, known to the public, that there might be other debates and stormy ones, not necessarily here. It is much better to wait until the storm is over and the air becomes clear and many new facts have become more visible in better perspective.

It is essential, however, to refer to one matter that arises from knowledge the public now has on this subject, and that is that the Gambia scheme was adopted by the Colonial Development Corporation largely at the instigation of the chairman. The role of chairman of a Corporation of this sort is a very important one. Nowadays it is very much de rigeur for Ministers and heads of other Government organisations to become "far-flung" Ministers and "far-flung" chairmen who appear on an inspection tour locally. That is a very dangerous thing, though great good can come from it. The chairman arrives as a sort of god from the the machine, not "trailing clouds of glory as he comes," but with a whole row of noughts behind him and a pass key to the Treasury. He is immediately surrounded by people with local schemes, some of them, no doubt, good schemes, and he is subjected to the great temptation to appear as "the god from the machine," the man who can cut through red tape and on the spot can make quite clear that he will be able to put such schemes through.

That is extremely wrong in an organisation such as this in which decentralisation is a very important factor. Great emphasis was laid on that by the hon. Member for Swindon (Mr. T. Reid), who mentioned it on the Committee stage of the Bill when the Corporation was set up, and he has long experience of this matter. If the chairman is to appear as fathering any scheme and it is not going through established channels, great difficulty will be experienced.

As chairman of a less important group of companies many years ago, I went out to Singapore and to Malaya and looked at the branches of my business there. On the night when I was leaving I gave a farewell dinner to the British and Asiatic staff. Incidentally, among the Asiatics only those who had 20 children or more were presented to me personally. The others were not considered to have made the grade. I thought I made a reasonable speech thanking everybody and saying things had gone very well. Then my chief executive out there said, "The chairman has been out and has seen exactly what we want him to see and no more. He has not put a foot right since he came and he has learned nothing. All we say to him is, 'God speed, and do not come back.'" He taught me a lesson which might be useful to those touring round at the present time.

One thing which comes out of this Gambia controversy, which is certainly bound to take on size and heat very soon, is that the collective responsibility of the Board must be established. After all, the chairman is only the chairman and the Board are collectively reponsible. That has been brought home in the Companies Act and, more and more, in the Finance Bill of this year. In any Corporation of this sort it is absolutely vital that it should be realised that the responsibility is that of the Board and that the method of bringing various schemes to be considered by the Board should not be vitiated and a whole train of responsibility both locally and at home be interfered with by what may appear at the moment to be a very good thing on the spot, although only the centre at home can judge as between one scheme and the other on balance. That method should be preserved at all costs.

Now let me turn to the Report itself. It is the third of these Reports. Let me say straight away that it is much the best. It is at once shorter, clearer, and earlier; and those are three good things to be said in its favour. It was at the request of my hon. Friend the Member for Mid-Bedfordshire (Mr. Lennox-Boyd) that the accounts were prepared in such a way that the progress of each separate scheme can now be traced, and they are not thrown together.

In fact, the accountants' presentation of these schemes is really very good indeed. That is in considerable contrast to the presentation of certain other Government schemes. Indeed, that of some of them—and I have particularly in mind some of the marketing boards' schemes—is rather on the "Now-you-see-and-now-you-don't-see" principle of accounting, and it is not quite certain from them where those enormous sums have been shifted to. I have a suspicion at times that a firm of accountants is being employed which is famous in other connections though not yet in the commercial world: I refer to Maskelyne and Devant.

As far as this Report is concerned, the accounts are extremely clear, and the wording of the Report bears the imprint of the new Chairman's influence. It is an excellent mixture of Celtic imagination and hard Scots accuracy and devotion to figure; and from that point of view it is a great advance on previous Reports, by the time of which the lessons arising from the failure of the groundnut scheme and of the Gambia scheme had not been learned, and which came out when we were still in the rosy era when we thought, "Everything will turn out well." Even this Report suffers a little from what I may call the "carry through" of the views and influences of those earlier days and which is expressed in the phrase we all know very well in amateur theatricals—"It will be all right on the night." But it is very much better than the previous ones.

There are questions that have to be asked about this Report at this particular stage, after about two years of developments. That is not a very long time in colonial development. However, there are certain questions which have to be asked. I hope that the right hon. Gentleman who is to reply to the debate will perceive that the criticism I am about to offer is in every case constructive, and follows the policy that this party has pursued throughout, for it has given its blessing from the beginning to this endeavour, watching it with a careful but not a hostile eye.

The first question is whether this is the right instrument for colonial development at the present time. Two years can see very great changes, and it is quite clear from the wording of this Report that there are doubts in the minds of those responsible for the Corporation whether this is still the case. A careful perusal of the Report shows that. For instance, in paragraph 9, on page 5, the Report states: The Corporation's potential influence on the Colonies is apt to be exaggerated. In relation to population and to the new investment needed to achieve any considerable improvement in living standards, £100 million is a small sum; the effects of its deployment will not be very obvious. This was always realised; nobody thought that £100 million could do all that was required. What we could buy with £100 million for colonial development two or three years ago was very different from what we can get today, and any hopes that this sum would be sufficient for the job of colonial development on its own have been greatly diminished by the falling value of the £ in relation to other currencies, and by the greatly increased cost of everything, and chiefly the cost of those things most required in colonial development—capital goods.

The next question that arises is this. Has a policy been fully worked out in the mind of the Corporation—of course, in conjunction with the Secretary of State—about what the Colonial Development Corporation is to do? To talk in business terms, is it to be a holding company? That is to say, at the end, when this £100 million has been invested in schemes, good, bad, and indifferent, will the Corporation simply sit there and hope that its good schemes will be able to carry the whole load, including the inevitable bad and indifferent schemes? In other words, will the Corporation's active function then cease, so that it simply becomes a source of revenue to the Government because, on the whole, its schemes are good? Is it to be that? Or is it to be something quite different? Is it to be something like a finance house which takes up schemes and develops them up to a certain point and then hives them off, either by a public issue or by some similar means?

It is very important that the Corporation should make its future clear; and not in vague terms, but in very precise terms. There is good reason to believe that it will undoubtedly take as it choice the second of the alternatives that lie before it. It makes that fairly clear already. But circumstances have very definitely turned against the possibility of carrying out such a policy. The hiving off of these schemes is not going to be easy.

Let me say straight away that I do not propose to go in many cases into particulars. There are many better informed Members who have studied each one of them and, no doubt, will have an opportunity of importing their knowledge into this debate. But £100 million, as is pointed out in the Report itself, is not a very big sum, and if the Corporation is going to hive off a scheme, as it undoubtedly should, as a sort of pilot making room for other investments to come along, then it will mean, first of all, that it will have to make certain rules. I am assuming always that it will adopt the second choice that I have put forward.

First of all, I think it must adopt as an inviolable rule that it will take into partnership the Government of whatever territory it is in which it is going to develop a scheme. It is quite right that there should be close working in the Colonies and here between the Colonial Office and its organisation overseas and the Colonial Development Corporation and the Colonial Governments, but the only way to ensure absolute community of purpose and unity of action is for each Colony or territory concerned to take a direct interest in the development scheme from the very word "go."

Let me say that this principle is one which the Government have already established; and if one goes, as I have frequently gone, to the Government Department which has been created for insurance purposes and asks it for aid in development overseas, and to underwrite the risks, it invariably says, "Oh, you must take 10 per cent. or 20 per cent. of the risk yourself. It is the only way, human nature being what it is, to stop people abusing the principle of using Government insurance," That is the case on one side; and on the other the Colonial Governments, keen to develop their territories, but without very much capital available, will be only too anxious to bring money into their country and to encourage development schemes. It should be absolutely laid down as a principle that these schemes should be based, even if it is only at a 10 per cent. or a 20 per cent. share, on partnership between the territory concerned and the Corporation.

The next question is that of the hiving off itself. The £100 million available has been eaten into considerably already at a fairly early stage of development. At the first possible moment, therefore, the hiving off to which I have referred should take place. That may be very difficult for the Corporation, because it is quite likely that at the moment when the scheme has been got through the pilot stage, and has got to be a bigger scheme, and is ready for what in the City we call issue to the public—is ready for hiving off—it is quite likely that at that moment, synchronising with it, there may be a very nasty accounting taking place; and it may be that many of the schemes, which are risky schemes—we all acknowledge and agree that there is an element of risk in them—may have at that particular moment to be written off.

If at that moment the big revenue earner is given up by floating it off—which is how it ought to be done—we may have to face what very often happens in private enterprise firms, when at a moment when things have been going better a rather disappointed and angry group of shareholders suddenly find what appears to be a check because of the short-term implications being at variance with the long-term. If this Corporation is to play its real part in colonial development, it is very important that the minor risks of a bit of trouble and a lot of questions should be taken. Hiving off will, in itself, be very difficult, and I suggest that as much local capital as possible should be used and represented; and that it should be made as easy as possible for that to be done.

The next thing I would suggest, in the conservation for the purposes for which the original capital of the Corporation was given, is that we should avoid as far as possible putting this money into schemes when the money for those schemes could be obtained elsewhere. This Corporation should not become a public utility holding. This is my own personal view. On page 24 of the Report we see reference to a loan to Malaya of £3,750,000 under the heading "Central Electricity Board." It seems to me that the essence of this scheme is risk capital and investment of capital in schemes which are not really fixed interest bearing, and it should not be undertaken.

It may well be that at that moment in Malaya, when the Communist trouble was starting, there was a very strong special case for this particular thing. I willingly accept that. But this should not be used as a pattern or a precedent. In fact, it should be used as an awful example or a warning. I would have hoped that before now it would have been possible to re-finance the Central Electricity Board venture in Malaya. If it has not been done up to now, it should be undertaken at the first possible moment.

Here I should like to interject a few remarks on the question of risk capital. There is no doubt that the phrase "risk capital" is used very freely, without full understanding of its implications. What we are discussing really has not much to do with risk capital. Usually, risk capital is put up by the public directly and by the board concerned, who are nearly always shareholders in their own right; they run the risk, which is a personal risk to them in their daily lives, and if the business goes wrong it makes all the difference to them personally.

But here, in colonial development, although the loss of £100 million would effect everybody in the country, it would be so drowned in a £4,000 million Budget that it would be difficult to make the public feel that the loss was one affecting them directly, or a risk that they had themselves run. As to the Board, it would not make all that difference to them; their careers would not be blighted; they would not have to move from a nice flat to two back rooms in Camberwell; they would not have to give up a nice large motor car for a second-hand Corgi. This is not risk capital in the full sense of the term, and it should not be referred to with pride by the Government and their supporters as risk capital, because they and their supporters have not undertaken a pennyworth of risk themselves and are not affected.

Let me now return to the question how to get the best possible use out of the capital available to the Corporation at this moment and in the future. We frequently hear it said that a partnership must be formed between private enterprise and the Corporation. That is a very wise thing to wish. But are we quite certain that we shall get it? Let us look at the inducements and the disincentives—to use the present jargon—for private capital, not only in this country, not necessarily from the City of London, but from the United States, from other countries, or from other parts of the Dominions.

Let us try to balance the inducements against the risks and disincentives. There is a poor chance of being able to rely on what has happened in the past—on an almost endless flow of money from the public for colonial development. That seems to be fairly well realised in the Report, because in paragraph 8, on page 4, under the heading "Incentives to investment," the Report says: The risks are obvious; the reluctance of private enterprise understandable. Most colonial governments realise that something has to be done to encourage investment; the problem takes different forms in different Colonies; the measures in mind are various. In the only place in the Report where they have dodged the issue they say "The risks are obvious." I do not think they are so obvious. I think that they need underlining.

What are the risks? A person in this country with £100 to invest in colonial development once had very obvious but limited risks. The Colonies would not have been developed and brought to their present stage if it had not been for that investment. What do we see today? What are the new risks? First of all, there is the change of status in the territory. What is the fate when that happens? Only this afternoon we have been discussing something that arises from that: confiscation. It is perfectly obvious that anybody who invested in, say, Burma 10 or 12 years ago had not before him as a risk the thought that the change of political status would make the investment, if not entirely worthless, no longer that which the man who took the risk intended, even after some compensation has been paid.

There are also currency regulations which act both ways. We in this country have complained bitterly that in territories outside the Empire, such as in South America, gradually through the abuse and unfair administration of currency regulations we have in a most disgraceful way been jockeyed out of the investments we made there. That is a new risk which is still in people's minds. On top of that, in the last year we have seen all sorts of new regulations concerning currency control. At the present time local "freezes" are being discussed in Malaya, where an industry which, after many years of great difficulty and rehabilitation, enjoys a brief period of super prosperity is to be "frozen" by the local government without due compensation, and is not to have its money available. That may appear to be very good policy locally and to put them in funds, but its effect on colonial development as a whole is disastrous. There is Government trading, and denial of access to open markets is a new risk.

Probably the greatest disincentive of all is the Finance Bill this year, under Clauses 28 and 32 of which a man who wishes to develop in a Colony is not to have any freedom of choice about moving capital to the country concerned if he wants to hive off one of these schemes. We have a new form of taxation. We have another very great disincentive, which is also touched upon in the Report, and that is that any development now is taking place at a time of very high prices for the primary products—and a great many of these schemes are concerned with primary products—and, secondarily, for their industrial production. That is a very dangerous thing, and one upon which I can talk with some authority, having had to earn my daily bread at this type of business for the last 25 to 30 years.

Prophecy is, on the whole, the most unwise thing in which a politician can indulge. It is probably much wiser to reserve it for the equine debate to-morrow which will take place not inside this House but in another more open-air place. There we can indulge in prophecy. If we indulge in it here, it nearly always has a fatal effect. But I would venture to prophesy. Two years ago I did so with regard to the shortage of raw materials and about what would happen if stockpiling began, and the undue rise in prices that would then take place. I would say now that, although prices are still very high and seem to be rising and there is a great concern about the shortage of raw materials, those who have to live by what they can smell, just as much as by what they can see and hear, smell on the wind that curious change in markets that is coming along at the moment. We are on the last slope before reaching the top of the water shed.

One thing always happens when we come to the end of shortages and high prices; that is that the general decline when it gets a certain momentum, far outstrips in the sharpness and the magnitude of its fall the cost of manufactured goods where the intake of raw materials does not affect the final outcome in the way of the end product for one or two years. Therefore, if we are going into colonial development projects of any sort at the present moment, we have to face a new and great risk in view of the high cost on which we will have to base our development and the possibility that the raw material upon which we are producing will be in its primary cost too far above what may be the end product market.

If we add all the risks, it is certain that the intake of private enterprise captial, which is laid down as being so desirable, will be very improbable. It is to be hoped that the influence of the Colonial Secretary and some of his colleagues will be brought to bear on the Chancellor of the Exchequer, and that he will be made to realise that what, I think, are ill-thought-out and punitive Clauses in the Finance Act are being used to try to crack a nut, and not a very large nut, with an enormous steel hammer, and that in trying to stop, perfectly legitimately, the evasion of taxation, he is probably drying up at its source the whole of the public's desire for investment overseas, without which the Corporation will, in a very few years, be left high and dry on the beach.

There is no more important point arising from this debate than that particular one. One thing is perfectly clear—that if we cannot get capital from the territories concerned, there is not enough capital in the kitty of the Corporation, nor will there ever be. We are running 48 to 50 schemes at the end of two and a half years. The desk of the Corporation must be piled high with new schemes. Not all of which can be adequately undertaken with the running away of the Corporation's capital at the present rate. The difference in the cost of a pilot scheme and a full-scale scheme is enormous. They will not come to fruition unless the realisation exists that this is a revolving credit of £100 million, and the Corporation, at the first possible moment, have to get rid of their better projects on terms attractive to investors and take in at the other end the new pioneer schemes in order to keep alive. The time has come when that has to be made clear, and I hope that the right hon. Gentleman, when he replies, will emphasise this point.

There is another matter which, I think, is possibly of overwhelming importance. It is a very difficult one to bring forward, but one which, I think, should be made known. Many of us on both sides of the Committee who have a real interest, partly through reading, partly through visiting and partly through living in these territories, have watched with apprehension the speed with which political development and political freedom is being given to those people.

I have not any hostility to the theory of gradually arriving at Dominion status through the various intermediate stages, but if we are to give political autonomy and freedom, which is the strong local desire and one which has been openly and freely expressed, as the Colonial Secretary will have heard, and deserve the warm feeling that we have done the right thing and that we are making a step forward in democracy and in creating a bulwark against Communism—phrases which we all use on various occasions both inside and outside the House—without at the same time making it perfectly certain that the economic progress and economic stability of a particular country will keep pace with its political development, then we shall have achieved exactly the opposite of what we are attempting to do.

I lived for many years in Africa, and for some years in the Far East, and I am not disputing for a moment that a time of great change is with us. There is yeast in the loaf and we have to meet it I would say that there are very few colonial peoples who have a real chance of being able to become economically self-sufficient in a short time. I remember listening to an eloquent speech made by the hon. Member for Devonport (Mr. Foot), delivered with all his power and sincerity, about one of his visits to the West Indies, in putting forward a plea that the Government should take certain action on sugar. Was he not asking the Government to do something which they may not be able to do, and, if so, would there not be left behind bitter disappointment and resentment which would open the door to the insidious propaganda of Communism instead of closing it?

Looking round at the known facts in all the Colonial Territories, it seems to me that the most important thing by a very long way is that we must not fail the difficult side of our responsibilities to the man in the street. We must not listen too much to the siren voices of the very small percentage of loquacious and educated opinion that is able and willing to put forward schemes which are not really backed by the whole population. These people can raise hopes very easily when they do not fully comprehend what they mean, but that is not sufficient to allow economic development to take place.

I know of hardly any territory in Africa which would stand up to this particular test of economic viability. We have been seeing how dangerous political pressure can be without the right economic background. We saw that in the case of cocoa and in the measures taken against the swollen shoot disease, although it did not last long. It is always unpopular to have to say to people that it would be unwise to give political autonomy until we have helped them to establish themselves economically. If we were to push them adrift into the troubled sea of the world today and give them self-government and a ballot box, which appear to be a mixture between a panacea and a cornucopoeia in the eyes of certain people, and say to them, "Let that be your guide and your compass," what would be the result? They would sink.

We have got to take the much less attractive and more difficult course of seeing that this Colonial Development Corporation is an attractive pilot scheme to attract private capital from local and any other sources, and when the schemes are being undertaken they should give good promise of having something like a chance of success. At that moment it will not be justifiable in every sense to give political freedom, unless it be supported by the economic liability of each of the territories in turn.

I am afraid that this plea of mine will not fall on sympathetic ears. Too many promises and too many short cuts to the promised land, have been made, and we are having them flung at us. I think that the idea at the inception of this scheme has been pushed into the background, but whether that is so or not, one thing still remains clear, the need for the Colonial Development Corporation to be a success. It has to be pushed on as fast as possible to assure the bringing in of other new schemes. It has gone through some difficult times and reached some critical points. It has had some stormy history, and it has felt the effects of the storm which raged round its elder brother. The groundnut scheme has been an awful example and one black sheep of some magnitude in the family has been quite sufficient to make this Report, at any rate, try to whitewash it for the future.

There blows through this Report a wind of greater reality, but I do not think that there is quite sufficient realisation of the last point I wish to make. Let us hear from the Minister who is to reply whether it is realised that this is not a holding but something like a financial house, that it is going to hive off a scheme at the first possible moment, so that the scheme is going to make its way through its own endeavours and through what pressure it can bring upon the local governments to attract public capital to its aid. There has to be some reality in the passage from the Report about incentives, which I have already quoted, and which I will quote again: Most colonial governments realise that something has to be done to encourage investment; the problem take different forms in different Colonies; the measures in mind are various. Let them be various, but let us know what they are. Let them be attractive and realistic.

I hope we will hear that this is not to be a public utility corporation; that it is not simply to invest £100 million and then hope for the best, but that it is going to consult other countries which are concerned. After all, France, Belgium and Holland have had colonial development schemes, and in many areas where ours and theirs are continguous it would probably be easier to bring about a Strasbourg understanding in the Colonies than in Europe, because it would be something like a general movement confined to those countries, whose problems are parallel and close. There would be a great opportunity for something like an advance together of the Western Powers, which is not mentioned in this Report but is very important.

This is an encouraging Report and the criticisms that I have ventured to make are not meant to be in any way hostile. It is very difficult to stand here and talk in business terms, because very often the criticism is levelled about the business world being in politics and only looking at these matters from the business point of view. I do not think that that is true. I spent six years in East Africa, three of them in the 1914–18 war, and three of them after it, when I helped in developing a number of schemes, some of which have now reappeared. Like many people who go to Africa and other parts of our Commonwealth, I have come away with a real affection and respect for the native peoples of those countries but with the clear-eyed knowledge of their limitations and the speed with which they can develop in certain directions.

The fact that business and money have to be the handmaid of policy in this matter and have entered so much into what I have said does not mean that we on this side of the Committee fail to realise that it is the future of human lives which are the concern of this Report, and also of tribes and countries with great and legitimate aspirations. We must not be accused, especially as we have so much to do with the origin of this scheme, of being hostile to it when we venture to put forward the type of criticism with which I have taken up so much time this afternoon. I hope that when the Minister replies we shall get some solid material, and though he cannot have all the details at his fingertips, we hope he will give us an assurance that he is really going to consider the major points I have ventured to make.

4.37 p.m.

The Minister of State for Colonial Affairs (Mr. John Dugdale)

This should be an impartial debate and I am exceedingly glad at the tone of the speech of the hon. Member for Bury and Radcliffe (Mr. W. Fletcher). We are not dealing with the sins or even with the virtues of Ministers, though there are rare occasions when we deal with such matters. We are not even dealing with a body set up after any great controversy, such as was the case with the National Coal Board. We are dealing with a body that was set up with the unanimous consent of the House. Whether it would have been set up by the Opposition had they been in power is not for me to say, but, in fact, the Government did set it up and it was done with general agreement.

In the first place I should like to refer to the need for the Corporation. The hon. Member for Bury and Radcliffe has given us many ideas as to the need in different respects for the setting up of such a Corporation. I would say that the need is generally seen in the 50 schemes which so far have been started, most of which would not otherwise have been in existence had it not been for the Corporation. Private enterprise has done a great deal of pioneering work in the Colonies, but it has left some very large gaps.

The fact remains that whatever has been done, there is more to do in the Colonies today than private enterprise can possibly cope with. There is work, too, which involves the sinking of very large sums of money with the hope, not of getting dividends this year or even next year, but the hope that perhaps dividends may accrue in five, 10 or even 15 years' time. That is a thing that does not appeal to private enterprise, though there have been some enterprises which have only received dividends after a considerable period of years. The Corporation is to engage in many such enterprises. I will have something more to say about this later when I deal with the finances of the Corporation.

The second aim of a debate such as this—and an aim to which I am glad the hon. Member referred particularly—is that it should be constructive and should help the Corporation in what, after all, is not a very easy task. The Board, I am certain, will welcome any form of constructive criticism that the Committee can produce this afternoon. As the hon. Member said, the Report is published earlier than last year and is, therefore, more up-to-date. The accounts are complete up to the end of 1950 and the comments on the individual schemes are actually complete right up to the date of signing. That is, up to 10th April.

The last six months has seen a change in the chairmanship of the Corporation. Lord Trefgarne decided, for personal reasons, to resign his position and the Secretary of State has appointed Lord Reith as the new Chairman. Lord Trefgarne's chairmanship has seen the Corporation grow from literally nothing to a body responsible for some 50 enterprises scattered over the entire Colonial Empire—a very great work, and a striking and unique achievement due in very large measure to his drive and initiative. In Lord Reith we have a Chairman whose great and successful experience in the running of public corporations will be of inestimable value to the present Corporation. He has already begun his task with characteristic energy and determination.

There have been one or two other changes in the Board of the Corporation, in conformity with the usual practice of people being appointed for a certain period and, when their period of office comes to an end, being replaced by others. I would like to mention one in particular. For some time we had hoped that it would be possible to associate a leading man of colonial origin with the direction of the affairs of the Corporation. In appointing Professor Arthur Lewis, the well-known West Indian economist from Manchester University, to the Board we have secured the services of a man who will prove not only a valuable counsellor in economic matters, but also—what is of vital importance—a link with the peoples of the Colonies, whom the Corporation has been created to help.

During the past year the Corporation has adopted 22 new projects, bringing the total to 50 with a capital commitment of £31 million. In the current year five new schemes have been adopted with a capital of just under £1,250,000 and capital commitment of the four existing schemes has been increased by a further sum of £2 million. This, rather more than one-third of the sum allocated by Parliament to the Corporation has been committed to schemes already approved. The actual capital advanced is not as great a figure as that; it amounts, in fact, to £11 million.

I have said that this debate should be impartial and I intend to be impartial in my criticism of the Corporation. Overhead expenditure in one year of over £400,000 against a capital expenditure of £11 million may or may not be considered high, but it must be remembered that the Corporation is organised to deal with schemes amounting at present to more than £30 million over a very wide area of the world—practically over the entire world—and is liable to considerable expansion. As the House is aware, the Corporation have a statutory liability to balance its accounts, taking one year with another.

This does not mean that it must never make losses. Obviously, it would be an impossible condition that it should never make losses. In the early years factors such as the high proportion of investigation, development expenditure and the need to venture into comparatively unknown fields are likely to lead both to losses on individual schemes and, indeed, to an overall loss. At the same time we cannot just dismiss losses as being due to teething troubles and, as a Government or a House, just say, "We leave it at that." That is not the right way to do it. The loss for the year is put by the Corporation at £1,330,124. Here again, measured against a total commitment of more than £30 million, and bearing in mind what I have already said about the inevitability of loss in the early years, this may not be considered heavy, but it is more striking when measured against the actual capital advanced during the year of some £11 million.

The major part of the overall loss, as will be seen from the accounts, is attributable to the provision for special losses and depreciation of investment of £776,000. Some £450,000 of that is in respect of the Gambia poultry scheme. As the hon. Member said, this scheme has already been discussed in the House and I do not intend at the moment to say more about it, although I shall have more to say about it later. It has indeed been a most unfortunate venture and there is no need to pretend anything else.

I would mention in passing, however, that private enterprise has sometimes lost money on colonial ventures. A recent publication of the Gold Coast Chamber of Mines, for example, drew attention to the burst of speculation in the gold mining industry in 1901, which was known as the "jungle boom." During this jungle boom some 400 companies were formed, with a nominal capital of nearly £40 million, to exploit concessions in West Africa. But by 1902—only a year after—the boom collapsed and many of the concessions were abandoned and, although many are being worked now by reconstructed companies, not one company has survived in its original form. It is not, therefore, public enterprise alone which suffers losses in the Colonies; private enterprise does also. The point I want to emphasise here is that, in spite of those losses, private enterprise has gone on with its work in our Colonies and in just such a way it is right that the Colonial Development Corporation, in spite of its losses, should also go on with its work in the Colonies.

I should like to emphasise once again that these losses are not just written off, and thus a final charge on the Treasury. The Corporation retains its statutory obligation to balance revenue and expenditure "taking one year with another." Over what period, or under what conditions, they do not attempt to forecast, nor can it be expected at this early stage in their activities that they should do so. It is easy to laugh at this, but when a Corporation of this size is just starting with a number of schemes it cannot be expected at this precise moment to say at what year this, that, or the other account will be balanced. The Government would expect the Corporation, at any time it felt the obligation was ultimately impossible to achieve, to notify it immediately so that the implications could be fully considered.

I would ask the Committee to turn to the question of the type and distribution of the Corporation's activities. If we make an analysis of undertakings such as is made in the first page of the Report, we find that practically two-thirds of the capital so far committed goes to primary production. This classification covers a very large field, including agriculture and mining in every variety. In addition, there is a wide number of projects in other fields, such as finance business, factories, hotels and, more lately, retail shops in outlying areas. This variety is in itself a reflection of the diversity of the problems and conditions which face the Corporation, and it is not surprising when one remembers the enormous area which they cover and which extends to over 20 territories, all with different needs and problems.

The Report reveals that in a number of cases the Corporation have struck unforeseen difficulties, but as I have mentioned, and as the hon. Member for Bury and Radcliffe said himself, it does not attempt to gloss over those cases where errors of judgment and management are the main features in the success or otherwise of a particular project. In none of these, however, except in the Gambia, are the mistakes irremediable, and the Corporation are going ahead with the schemes.

The House has already had an opportunity of discussing the Gambia scheme and, naturally, I do not intend to go over the whole ground again. There is, however, one point of importance to which I should like to turn. Lord Trefgarne, in a personal statement in another place on 11th April, maintained that all the material information was fully reported to the Board. He quoted from various Board documents in support of his contention. Some members of the Board, on the contrary, maintain that they were not fully informed.

The Board, therefore, requested that an inquiry should be held. My right hon. Friend, having consulted Lord Trefgarne, who strongly welcomed this suggestion, has asked the Lord Chancellor to appoint a person with legal experience to conduct an inquiry into the relevant facts in this matter. The name of the person selected will be announced at an early date. I have taken the first opportunity of giving this information to the Committee, and this may do much to clear up certain difficulties and differences of opinion.

Mr. Gammans (Hornsey)

Is the right hon. Gentleman not prepared to accept that part of the Report which says on page 16, so far as the Gambia poultry scheme is concerned, that the Chairman assumed direct charge in July, 1948"?

Mr. Dugdale

That is one of the points which is at issue, and it is because of this difference of opinion that it has been decided that such an inquiry should take place.

It is only fair to look for a moment at one or two of the schemes which have been doing well, because in any discussion such as this it is only natural that the Opposition—I do not blame them for this—are likely to attack those schemes which are going badly and not, perhaps, to say as much as they might do about those schemes which are going well. I should like therefore to take one or two of them. In May, 1950, the Corporation bought a small oil palm estate of some 1,700 acres in Malaya—a place which is of particular interest to the hon. Member for Bury and Radcliffe. They hope eventually to expand the estate to about 10,000 acres. The estate had, for obvious reasons, been badly neglected during the war, and extensive repairs had to be carried out in the factory connected with it. The Corporation have invested just over £130,000 in this enterprise, and in spite of considerable difficulties they have already made a modest profit.

Mr. W. Fletcher

While agreeing entirely with the Minister that we should be pleased at the success of the Corporation, may I point out that the buying of a neglected palm oil estate at the beginning of a period of one of the sharpest rises in price of all colonial material, partakes neither of the pioneer spirit nor of a pilot scheme to any great extent, and is simply a speculation which would produce the same results if it was undertaken in a futures market?

Mr. Dugdale

I am sorry that the hon. Member, who made such an impartial statement earlier, should now get into this kind of controversy. If the Corporation had bought an estate on a falling market and things had gone badly, we should have heard about it at once. The fact is that they bought an estate on a rising market and things have gone better. Surely the Corporation should get reasonable credit for this.

Mr. Beresford Craddock (Spelthorne)

Is the Minister referring to scheme No. 42 on page 23 of the Report?

Mr. Dugdale

I have not the actual page in front of me. It is the oil palm estate at Kulai.

But that is not the only scheme. East Africa Industries, Ltd., which is a partnership between the Corporation and the Kenya Government—the hon. Member for Croydon, North (Mr. Frederic Harris) will be interested in this, because he is interested in East Africa—has an authorised capital of some £750,000, which is quite a large figure and is comparable with that which was put into the Gambia scheme. East Africa Industries, Ltd., is engaged in a variety of activities—manufacturing oil, refractory bricks and chemicals. When the Corporation first took over, it was going through a very bad period, but last year it earned a profit of 6 per cent. The hon. Member for Bury and Radcliffe may say that was due to a rise in prices; but when this venture was taken over it was not making money, whereas now it is earning 6 per cent. That is something on the credit side of the Corporation, and the hon. Member will be glad to hear that plans are now being made for the expansion of the company.

Mr. Frederic Harris (Croydon, North)

Does not the right hon. Gentleman think that if the Government are taking credit for this, he should mention also that they saw that the sulphuric acid plant was closed at that time, when there was a shortage of sulphuric acid?

Mr. Dugdale

We all know about the shortage of sulphur. That is one of the difficulties with which the Corporation have had to compete, but they have competed successfully with it.

The Omo Sawmills in Nigeria is my third example. They have a capital of £126,000 and a concession covering approximately 429,000 square miles. In the seven months ending December, 1950, they sold just under 200,000 cubic feet of wood, including a large percentage for the United Kingdom and also a small amount to America. After allowance had been made for administration and depreciation, they made a small profit of £12,000. These are only three of a number of cases, and I do not wish to labour the point. I mention them only to show that the Corporation have been having some success. I have mentioned only those which have actually made a profit. In many cases the Corporation have been doing well, in spite of the fact that as they are working on a long-term basis it could not be expected that they would make an immediate profit.

The Report mentions some changes that are being made in the Corporation's headquarters organisation. The most important of these is the decision to increase the devolution that can be made to regional organisations. The Corporation were bound, as I think was perfectly right, to concentrate a very large measure of control at the centre during their initial stages. One certainly could not build up a corporation from scratch if devolution had already been made. One must start with control—and very rigid control—at the centre, but it is very important that that control should be relaxed as soon as possible. It would be fatal if it were to become top heavy and if there were insistence on every matter of detail being referred to central headquarters.

A particularly interesting development in this connection is the recent appointment of a special representative whose duty it is to examine the best ways in which colonial peoples can be associated with the projects of the Colonial Development Corporation. He has just come back from a six weeks' tour of duty in West Africa.

Mr. Lennox-Boyd (Mid-Bedfordshire)

Who is he?

Mr. Dugdale

He is a former Member of the House, Mr. Dumpleton, who, I think, was Member for St. Albans.

The Secretary of State for the Colonies (Mr. James Griffiths)

A very good man, too.

Mr. Dugdale

He is doing fine work and I am glad that this appointment has been made. This, I believe, is one of the keys to the success of the Corporation. If it is to succeed it must have not only the benevolent interest but also the enthusiastic co-operation of the people in every Colony in which it is working.

In the past colonial peoples have seen private companies come and settle down in their territories, and, what is called, "open them up." Indeed, while many of them have made considerable profits these have often been achieved at the price of conditions which would not be tolerated in these days and which the Colonial Development Corporation certainly would not tolerate. Colonial peoples are, rather naturally, apt to be afraid that this new organisation is just another large "outside" concern which has come to develop them. What is needed, and what the Corporation is increasingly aware of, is that there should be a spirit of co-operation between it and the peoples of the Colonies.

The best example of such co-operation can be seen in the scheme that the Corporation have started at Mokwa in Nigeria. Here, what is known as the Niger Agricultural Project, has been set up with the idea of blending the traditional skill of the local farmers with modern methods of mechanisation of which previously they were unaware. It plans to develop an area of some 65,000 acres. The Nigerian Government and the Corporation are equal partners, and the local native authority has a representative on the board of the company.

This is an entirely new development and one which points the way to future development which I hope the Colonial Development Corporation may find itself able to make. The land which has been set aside for development is still the property of the native authority, and there are various forms of local advisory council for the farmers and native authorities to determine the best farming methods and, as far as they can, to knit the development into the pattern of normal native life.

I come, lastly, to the fundamental question of the relationship between the Corporation and the Government. It has been stated on numerous occasions that it is not the policy of the Government to intervene in matters of day to day administration. I think the Committee will agree that this should be the responsibility of the Corporation. After all, the Colonial Office is not equipped to undertake the work of a business corporation, for the perfectly obvious reason that it has never been and it is not now our function to engage in business. Indeed, the selection and investigation of schemes is under the Act a matter coming within the direct responsibility of the Corporation. It is not for the Government to decide what schemes it shall or shall not undertake, though the Government must naturally be satisfied, before authorising capital for a scheme that it comes within the purposes prescribed by the Act. That is an essential condition, but it does not mean that there must be perpetual questioning as to the possibility of any new business being a success or not being a success.

There is, however, one outstanding difference between the manner in which private enterprise and the Colonial Development Corporation approach any new business enterprise. Private enterprise asks only one question: will it pay? [HON. MEMBERS: "No."] That is the one thing that matters. [HON. MEMBERS: "No."] If the answer is yes, it is undertaken; if it is no, it is left. There is no question of any need for a Colony to get encouragement and help by the start of a new industry. The manner in which the Colonial Development Corporation may help in regenerating the economy of a Colony without making any large profit out of it is illustrated by their plans in British Honduras.

The Evans Commission considered there was great scope for economic development in that Colony and made recommendations for a number of projects which appeared to have sound commercial possibilities. The decision of the Corporation to establish a stock and dairy farm follows one of the chief recommendations of that commission. The scheme should eventually be of great benefit to local food supplies. The expansion of fruit farming, bananas particularly, which again was recommended by the Evans Commission, and the experimental planting of ramie have also been undertaken by the Colonial Development Corporation, and they should lead to a valuable increase in the export trade of the Colony. The Corporation are also engaged in the difficult task of building what I believe I am correct in saying, though I may be wrong, is the only hotel at Belize, which is certainly a new and important contribution to the tourist trade of the Colony.

This is just a single illustration, though I could give others. The fact is that even those schemes which up to now have lost money are bringing help to the Colonies in which they are established. Some of these Colonies, such as British Honduras and the Gambia, have, unfortunately, been sadly neglected in the past and they welcome the interest which the Corporation is taking in their development. For private enterprise there is no particular need to see that development is reasonably balanced as between different Colonies, yet the Colonial Development Corporation must do this. It cannot have all its enterprises in one area, even if that area happens to be the one which is most likely to pay.

It has, in short, to keep a balance between idealism and the search for profits, and those two things cannot always be balanced with the greatest ease. We must have confidence in the ability of the Corporation to carry out the task which it has been set. That must be based primarily on confidence in the personal qualities of the Board itself. That is the most important thing upon which any confidence must be based. The Board is appointed by the Secretary of State, who is responsible for its personnel and, having appointed them, he must leave them a great measure of freedom. If for no other reason, it would obviously be impossible to secure men of first-class ability to serve on a board if it were to be subject to perpetual criticism and obstruction from the Government.

Recently, as experience has shown it to be useful, frequent and informal meetings are held at staff level between the Colonial Office and the Corporation. There are also regular meetings between the Chairman and myself with senior officials to discuss major matters of policy. These meetings are valuable, but I would emphasise once again that they do not take from the Corporation—and the Corporation does not want them to take it—responsibility for the decision whether to embark or not to embark on any new schemes.

I am not saying this in any way—if I may use the slang expression—to "pass the buck," but simply to show that, having appointed a board, we intend to leave them to do their work and not to wet-nurse them at every stage. The Corporation is like a young child whose parents can run after it and mollycoddle it and see from day to day that it does not get into trouble; or they can leave it to find its own feet, keeping an eye on it from time to time to see that it is all right. It is the second of these alternatives we prefer.

I think the Committee will agree that this is the best method for getting the best out of any great undertaking. I would say, in conclusion, that in spite of all its difficulties and in spite of all the setbacks it has had, the Colonial Development Corporation is a great undertaking. It is an adventure of which, in spite of everything, the House of Commons and the nation can well be proud.

5.9 p.m.

Sir Peter Macdonald (Isle of Wight)

If any remarks that I make in the debate should be considered as not impartial, they are as nothing in comparison to what has already been said in the Report which we are discussing. I regret very much the quarrel which has broken out between the retiring Chairman of the Corporation and his successor, and I hope that it will soon be resolved. I have no hesitation in repeating what I have said in the past about this business. The appointment of Lord Trefgarne as Chairman of the Corporation originally was most unfortunate.

The only qualification that I found he had for the appointment—a very poor one—was that he had abandoned Liberal principles and become a Socialist. He approached his task in the typical Socialist manner. On the typical Socialist pattern he built up an enormous organisation in London, scattered over extensive premises in different parts of the West End, and put in an expensive staff, and spent enormous sums of money travelling about the Empire and the world trying to find schemes to which their energies could be devoted.

The noble Lord found schemes all right. Of the 50 schemes enumerated in the Report some are no doubt admirable and we hope that they will turn up trumps, especially the long-term schemes, but some should not have been embarked upon at all—that is obviously the criticism of the Report—and others should not have been embarked on without proper investigation and without discovering what assets the ventures had and what their prospects were. It is obvious from reading the Report that in many cases that was not done.

In their last Report the Corporation told us that in their financial administration they followed the best methods. The Corporation may have followed the best Socialist methods but they were not the methods which should have been applied, because they were not business methods, and what is really required in the administration of the Corporation are sound business sense and business methods. It is obvious that these were not applied to some of the schemes embarked upon.

Mr. Harrison (Nottingham, East)

Will the hon. Member make his contribution more valuable to everybody by saying a little more precisely what the Corporation ought to have done to get the information to guarantee success?

Sir P. Macdonald

The methods which ought to have been adopted are obvious to anyone who is not a Socialist. The first thing to be done before taking over an undertaking as a going concern is to put in an accountant to look at the books and to see what the trading methods are, what business has been done over a period and what profit or loss has been made.

It is obvious that in some of these schemes that could not possibly have been done. The Report admits that it was not done in the case of the Tanganyika road scheme, and I could mention other instances. I do not think it could have been done in connection with the Bahamas scheme. It certainly was not done in the Gambia scheme. I have known about that project over a number of years, and the price paid for it was obviously more than the amount at which it should have been valued, and that applies to many of the ventures.

That is one side of the Corporation's activities which was sadly neglected. They did not put in their own accountants or employ chartered accountants on the spot or from home to investigate the projects before going into them.

Mr. Rankin (Glasgow, Tradeston)

Is the hon. Member implying that private enterprise swindled the Corporation?

Sir P. Macdonald

Not at all. Optimistic people on the spot might have thought that their ventures were worth the money paid for them, but that is the sort of thing that might happen to anybody. Anyone has his own idea of the value of his business, but that does not mean that the person to whom it is being offered should accept the valuation without investigation. I am not saying that the sellers were swindling the Government, but I consider that the Government were fools to accept their valuation. This is admitted in the Report.

I am glad to hear from the Minister that some changes are taking place in the headquarters staff under Lord Reith. It is obvious that there is room for improvement, for economy and greater efficiency. I have already said that the Corporation should not have embarked upon some of the ventures. I see that the Corporation have gone into the hotel business and that in various places they are building hotels. I cannot see why the Corporation should enter the hotel trade. My experience in travelling round the world is that when a demand for a hotel grows there is always someone willing to meet the demand, and if the building of a hotel is necessary it is the duty of the Colony itself to provide it.

It is not the job of the Corporation to spend British public money in building hotels or running clubs, such as in the Bahamas. The Bahamas is a very rich Colony. The people there consider themselves so wealthy that they do not require any Income Tax. One would think that some of the millionaires who are making it their place of retirement from Income Tax in this and other countries would invest some of their capital there if they considered that hotels and clubs were necessary to make the island a paradise for holidaymakers. I believe that our investments in the Bahamas scheme were very poor ones from our point of view, and they certainly were not essential from our point of view.

There are millions lying in the banks in Nassau, and if the people to whom that money belongs are not prepared to risk some of it on development in the Bahamas I do not believe that it is the duty of the Corporation to use British capital in developing these islands. It is true that some of the islands have been neglected in the past, but it is the duty of the Colony itself and not the Corporation to develop them. The money could have been invested to far better purpose in other Colonies than the Bahamas.

I am glad to hear that under new chairmanship the Corporation is settling down to overhaul the headquarters organisation and, I hope, to decentralise it, and I hope that as a result economies will be made. The overheads are far too high for the amount of money invested. The right hon. Gentleman did not mention that all the money that the Corporation has invested is interest free. If he had added the normal interest charges, the losses would be £400,000 or £500,000 greater. It is also recognised that for the first few years the Corporation would not have to meet interest charges.

I hope that this Corporation, under good management and closer supervision, will prosper. Its establishment was received with general acclaim on all sides of the House, and that feeling is still there, but the Report has been rather a relevation to us. We suspected for some time that certain things were happening, but we could not get the facts. I congratulate the new Chairman upon producing the report promptly to time—the last one was very late. It gives us the information we require and for which we have been asking for a very long time. It puts the cards on the table. That is the policy I would expect from Lord Reith, who has been given this responsible job in charge of this Government Corporation, but that has not always been the case in the past.

For my part I wholeheartedly support the Corporation and I hope that it will prosper. I hope they will adopt better business methods and show more business acumen in the future than they have shown in the past, before they embark upon wild-cat schemes which are put up to them frequently in every Colony. There is wide scope for sound development in the Colonial Empire, but all schemes must have a long-term value in bringing prosperity to the Colonies and encouraging others to invest in the Colonies. Such schemes will always have my support and I believe the support of all hon. Members on this side of the Committee.

I hope that the Corporation will give more encouragement to private enterprise. I have travelled a good deal in the Colonies since this Corporation started and there is a feeling that private enterprise is not given a fair crack of the whip. It is obvious that if the Corporation is to do all that a developing Colony requires it is essential that they should have men on the spot who understand the local realities, such as labour conditions and climatic conditions. Those men can give constant supervision to any undertaking embarked upon. It is obvious also that the Corporation cannot do that from the West End of London. The more scope we give to private enterprise in the Colonies the more chances there are of schemes becoming successful.

I am quite convinced that under the new chairmanship there is every prospect of this Corporation doing very valuable work in the Colonial Empire, and for that reason I wish the Corporation every success.

5.25 p.m.

Mr. Thomas Reid (Swindon)

I was glad when the hon. Member for Bury and Radcliffe (Mr. W. Fletcher) made his speech, in which there was a complete absence of captious criticism. The hon. Member has an enormous knowledge of the Colonial Territories. I would remind the Committee that our Colonial Empire is a colossal and terrifying re-responsibility. Of its 65 million people, the great majority are either on the verge of famine now or will be so in the near future. I see from the Report on the Colombo Plan that the scheme proposes to spend in these areas £2,000 million—not the mere £100 million with which we are dealing here—upon fairly advanced territories in the East.

Those territories are far more advanced than the African Colonies. At the end of the Report the authors calmly say that if the money were spent on the schemes suggested—wealth-producing schemes, not social services schemes, because they recognise that one must produce wealth before distributing it in social services—the new wealth produced could be only sufficient to meet the demands of increased population during the six years taken to complete the schemes. That is the appalling and terrifying problem to which I have referred. It is the problem of saving from famine people who spurn birth control and breed without thought of the future.

All sides of the Committee have approved of this Colonial Development Corporation. One of the things which we have to do is to forestall calamities that might overtake our Colonies. I was glad that the hon. Member for Bury and Radcliffe realised what we are up against. This Development Corporation is trying riskily to place new industries in the Colonies because a lot of the Colonies have put all their eggs into one basket. Let us take the coconut industry, which is very safe and sound, and the coconut Colonies. In times of slump prices fall and then the coconut industry, with a limited supply of land, suitable in its rainfall and otherwise, cannot cope with the enormous increase of population in places where people breed without the slightest regard for future subsistence.

It is necessary to abolish the system of having all the eggs in one basket. The Development Corporation have to undertake the risk of putting in the seeds of new industries, some of which may fall on good ground and some may fail. All the things which we have learned about land in this country in the past are apt to mislead us, because the unpredictable jungle and bush cannot be reckoned with. We realise again that most of these schemes are long-term and we cannot expect profits from the word "go." I can remember when the first rubber seeds were put in. We did not know what would happen or whether the rubber industry would succeed. Luckily, it did succeed.

The hon. Member for Bury and Radcliffe asked whether the Colonial Development Corporation was a sound way of setting about the business. He did not answer the question. But I gather that he thought it was the best way of approaching it. I think it is the best approach we have yet made to this problem. Under the Coalition Government, the late right hon. Gentleman whose absence I personally greatly regret, Mr. Oliver Stanley, brought into being the Colonial Development and Welfare Act.

Millions of pounds in free gifts to Colonies have been poured out to enable them to stand eventually on their own feet. It was necessary at the time, but I much prefer the Colonial Development Corporation system. The Colonial Development and Welfare Act has enabled some Colonies to start programmes for the creation of wealth, but unfortunately, in my opinion, a great deal of the money has been given to social services, which is putting the cart before the horse. Social services will not mean anything permanent unless there is something to maintain them from year to year.

I prefer the Development Corporation because it enables the Corporation, properly appointed and composed of experts, tested by their experience, to take on these schemes, select the right staff and to take responsibility for the results that come from the schemes. The hon. Member for Bury and Radcliffe referred to the need for the whole Board to have responsibility. That seems to be an obvious necessity. If its members are appointed for special knowledge the responsibility for decisions should rest on the whole Board.

Having read the Report, I cannot understand why a pilot scheme was not tried in Gambia, after the experience of the groundnut scheme, where the verdict now must be "More haste less speed." Why was not a pilot scheme to grow cereals to feed the poultry first tried? I wonder whether the Minister can throw any light on the subject when he replies.

The sum with which we are dealing today is paltry compared with the need. It is true, of course, that the idea is that the Corporation should show the people in these territories what can be done and thereby induce them to imitate the Corporation's schemes and themselves help to develop their territory. This £100 million is simply negligible compared with the need; £1,000 million would be negligible compared with the need. I have often said, and I repeat, that this small country of ours, burdened as it now is with war expenditure and other expenditure, cannot pile up the hundreds or thousands of millions necessary to develop the Colonies.

I repeat a suggestion which I have made before, that the only way of finding the capital for rejuvenating the Colonies is by a system of mutual aid as set out in the recent Labour Party programme; namely, that the countries of the world, all of which would gain from the development of the Colonies, must put their hands in their pockets to find capital and risk it. Neither Great Britain nor France alone can do for their respective Colonies what is required in that respect. The only solution is to put the problem before the United Nations and ask them to formulate a huge scheme for developing the backward areas, with enormous capital and all the expertise which can be supplied by the United Nations.

The relationship between the Corporation and private enterprise was referred to in the Report of the Corporation. Countries which, largely for propaganda purposes, previously used to abuse us because our capitalists went out and developed tea, rubber, etc., and took dividends are, now that they are achieving self-government, themselves crying out for capitalists to go in and invest their money. The capitalists are shy of doing so. The political changes referred to by the hon. Member for Bury and Radcliffe have made capitalists shy of investing capital in those countries.

The policy of the Government, and I think of the Opposition, is to encourage not only public investment but private investment in our Colonies. As I have said in a previous debate, if private enterprise is to be induced to invest there it must have safeguards. We have seen what has recently happened in the case of the Anglo-Iranian Oil Company. There, foreseeing trouble, the company obtained an agreement by which, not even by legislation could its business be expropriated other than by the consent of both parties. Yet the Government of Iran have broken their agreement, at least on paper, when they could not, under the terms of the agreement, do so by legislation. That shows the kind of problem which has to be faced if private enterprise is to be induced, as it should, to assist in the necessary development; there must be safeguards for private industries.

The ideal of partnership with the colonial Governments has been mentioned. That is excellent but, unfortunately, the Governments in the African territories at least are very poor and have little capital to invest. Whenever they want capital and decide to take a risk themselves they raise a loan in this country which, for all practical purposes is guaranteed by the British Government. I do not know whether hon. Members have studied these loans, but experience of them in the past has been that enormous sums of money have been borrowed and the British Government have often had to waive repayment and take on the responsibility for loans which the Colonies could not afford to repay.

It is difficult to get partnership in finance with these Governments because they are so poor, but there should be partnership at every stage in the administration of these schemes. As has been referred to by several Members, we may send out from this country the greatest experts and men of the greatest ability, but they must co-ordinate their activities with people on the spot, who have the local knowledge that is invaluable. In that respect I refer especially to the people who are not experts at all but who are the only people, whether they are European or native, who thoroughly understand the Colonies—the administrative service. They spend their lives intimately associated with the people of the country in their economics, agricultural, industrial and social lives. These men are generally of exceptional ability. They, and local experts alike, should, wherever possible, be associated with the carrying out of these schemes.

I have previously referred to what I think has to some extent been the mistake of spending large portions of Colonial Development and Welfare funds on social services. I remember reading in the Report that the Colonial Development Corporation are spending some sums on social services. In my view, social services are the duty and obligation of the colonial Governments. The money of the British taxpayers which is going to those countries ought to be used to build up the wealth of the territories and make permanent social services possible. If the social services are left to the Governments of the Colonies they will have to cut their coat according to the cloth instead of building up social services which in future years they will not be able to finance.

I wish to say a few words about staff. No matter how good one's plans are or how excellent one's general policy is, it is, in the long run, the men who carry out the scheme who count. Therefore, both on the Board of the Corporation, and in the staffs, whether European or local—if suitable local people can be obtained for goodness' sake associate them with the schemes—it is essential to have first-class men. This Corporation is not carrying on a routine scheme. The discharging of its task requires imagination, caution and practical ability, and in a long experience I have found that a combination of imagination with practical experience is confined to very few people. Therefore, it is necessary to have first-class men to make a success of this undertaking.

This idea of setting up a Colonial Development Corporation is a great constructive one. If it fails the result will be disastrous. If it succeeds there is no reckoning the extent of the good it may do. The £100 million can be spent to good advantage and schemes can be handed over in time to local government or other hands, and what is left of the £100 million or accrues to it can be used for other schemes. The capital could also be increased. In my opinion, the present approach to this colonial problem is long overdue. It should have been done years ago. This scheme is the best possible approach ever made to the problem of colonial poverty and colonial undevelopment. I wish it every possible success.

5.41 p.m.

Sir Harold Roper (Cornwall, North)

I am very glad that I have been fortunate in catching your eye, Major Milner, to follow the hon. Member for Swindon (Mr. T. Reid). For many years I have followed his progress in the House of Commons on colonial affairs and I know with what respect his views are held in the House and also the good Press he gets in our Colonial Empire.

The Government are to be congratulated on bringing out this Report earlier than on the last occasion—it is much fresher in our minds—and also on its factual nature. Some of the facts are good and some are bad. The Report records a degree of success in the progress of the Corporation. It is by no means a 100 per cent. success; indeed, we should not expect to find that because as we were told in a recent debate, it is the intention that overall the Colonial Development Corporation has to break even; that is to say, they have within their scope not merely the swings, but also the roundabouts.

The Minister of State reminded us that private enterprise also had its failures. He made particular reference to the large numbers of failures in the early years of the century in the gold mining slump. I felt that those words should have been addressed not to this Committee, but to the Chancellor of the Exchequer, because he was giving us the strongest possible reasons why the Chancellor should have another look at the whole pattern of our taxation in order that private enterprise may be given greater encouragement to take those risks.

One can hardly fail to be impressed by the large proportion of the undertakings covered by the Report which have in one way or another failed to come up to expectations. Although overall one may not be critical, it is our duty as a Committee to try to find the reason for those failures in order that the mistakes, where there have been mistakes, may be remedied next time. In some cases there has clearly been an inadequate degree of preliminary examination and in others an under-estimating of costs. We must ask ourselves if that is because the Corporation has taken on more than it is competent to carry through. Or, again, is it the inevitable result of remote control?

We are all agreed with the necessity for the Colonial Development Corporation to function as supplementary to private enterprise. My own opinion is that the best results will be achieved by stimulating the natural growth of existing industries. We should not try to graft on mammoth growths, but rather point the way to improvement in local industries and the local methods of conducting those industries. That kind of undertaking is better understood by the people of the Colonial Territories. It fits their ways of working and social set-up and is therefore more likley to have an enduring value in those countries.

There is another point which we must always stress, and my hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher) has stressed it; we must avoid going too fast. We must allow the Colonial Territories to absorb and understand what is happening in order that they may be fitted later to take their own part in these schemes. We should therefore pay particular attention to the local type of industry which, in the main, is the small-scale industry. For such industries remote control from this country is quite unsuitable. Local control is very important. When this point was dealt with by the Minister of State, I was not quite sure about what is the new set-up. I hope that the right hon. Gentleman will make that clear in his reply. Reference was made to regional controllers. Are regional controllers taking the place of the regional subsidiary companies we have had hitherto? If so, I presume that, in one way or another, that is giving greater control on the spot, but I would ask the Minister to make it clear.

It has been suggested that perhaps the Corporation has undertaken more schemes than it is competent to perform. I should like the Government to consider whether some of these schemes are not of a type which would better be financed from other sources. In the Report last year, on the concluding page, just above the signature of Lord Trefgarne, it was stated: Here the indispensable foundations of development must be the provision of ports, roads and railways, schools and hospitals. These fall within the sphere of colonial government finance, assisted by the Colonial Development and Welfare Funds. We are all agreed that these matters are essentially the function of the local Government. As the hon. Member for Swindon pointed out, the result will be that the Government undertakes what it is able to carry through and accepts that responsibility.

We must be careful not to relieve the colonial Governments of responsibilities which are rightly theirs. As the Minister said, it is possible to spoil a child by relieving him too much of his proper responsibilities. I would add that we should extend that principle to the political angle. I do not intend to touch on that question but, as may be known to some hon. Members, I feel very strongly about it. If in the political sense we could regard these growing members of the Colonial Empire as our own children, and treat them politically as we would treat our own children, instead of thrusting the vote on them when obviously they are not ready for it, it would be all to the good.

The financing of these social services, as Lord Trefgarne said, is essentially the function of the colonial Governments. I should like to extend the definition of the class of undertaking not to be included in the functions of the Corporation. Personally, I disapprove of the inclusion of power stations and hotels. I do not believe that the financing of hotels is a matter of major importance in the long-term development of our Colonial Territories. It is not a suitable matter for the Corporation to take up. Hon. Members on both sides may disagree with me; but I am expressing a personal view. Nor do I approve of other suggestions of a social kind, such as the development of housing estates. I should prefer that that type of undertaking were financed and managed by other sources, preferably under local control.

Another important question for many Colonial Territories is that of agricultural research. It is not suggested that the Corporation should take part in agri- cultural research, and I should be against such a move. That, again, should be financed from colonial funds, reinforced if necessary by the Colonial Development and Welfare Fund. These are instances where there should definitely be a local responsibility. It is far better that there should be local responsibility and control by someone on the spot. That is the way in which we should regard the Colonial Development Corporation. If we do, I believe that ultimately it will be for the better good of the Colonial Empire.

5.54 p.m.

Mr. McGovern (Glasgow, Shettleston)

I have listened with great interest to this debate. During the Recess I read the Reports for the last two years and, so far as is possible for a person at a great distance from these schemes, I have studied as closely as I could the actions and the work of this Corporation. At the outset, let me say that I welcomed the formation of this Corporation. In the world in which we live today, we are running against the sands of time. It was essential that the neglect of the past should be remedied as speedily as possible in our development of what is called either the Colonial Empire or the Colonial Commonwealth—the terms do not mean a great deal to me.

The Government ought to be congratulated on having embarked upon this large scheme. It is not large from the point of view of what is required to be done, but it is large in the sense of the amount of money which is being placed at their disposal compared with what has been spent on previous occasions for the same purpose. There was a considerable amount of risk in a development of this kind. One knows that if a gamble of this nature had been likely to reap rewards very quickly, private enterprise would have developed along these lines some time ago.

Against that, let me be fair. Private enterprise which may be tempted to embark upon schemes of development in the Colonies sees, as one of my hon. Friends mentioned, what is happening in Persia and all over the world. There has been a rapid repudiation of all kinds of agreements and financial undertakings. In these circumstances, one can readily understand why large finance houses, or private enterprise, would be reluctant to pour money into a country only to find in a short time that everything they had put in had been seized and all the agreements had been repudiated.

The hon. Member for Bury and Radcliffe (Mr. W. Fletcher) said that we had to tell people in this part of the world that there was no short cut to the promised land. That is true. Many of us who went into politics as boys have gradually had that fact impressed upon our minds. The great changes which we foresaw at the first flush have not materialised. I do not blame anyone, because development is extremely slow in the economic and political field. While it may be true that the promised land is not round the corner, there is a short cut to the land of promises. When Communists come into these areas and stir up the native populations, we are faced with the possibility that either there will be bloody revolution and seizure, or one must develop the countries in the most intelligent and businesslike manner in order to afford opportunities for the people to live decent lives.

I am satisfied that the Government approached this subject in that spirit when they set up this Corporation. There have been criticisms and comments not so much on the success as on the failure of certain parts of the scheme. We always tend to hear a lot about the failures but very little about the successes which are achieved. In this spirit—when there was considerable risk and danger, and when the scheme was in the nature of a gamble—what we want to ensure is that the money has been spent in a proper manner, that the development embarked upon had a reasonable chance of success, and that all those who are committed to the experiments were consulted and given every opportunity to express their point of view.

In that respect, there has been a certain suggestion that members of the Board have not been fully consulted. The Minister says that there is to be an inquiry into the matter, and I think it is true to say that Lord Trefgarne has welcomed this development and is anxious that there should be an inquiry in order to establish whether or not responsibility lies only on the shoulders of one person or on the Board collectively. Therefore, we must wait for the result of that inquiry.

There has also been a suggestion by the hon. Member for the Isle of Wight (Sir P. Macdonald) that Lord Trefgarne was a man who should never have been appointed to the job, but he gave us no facts with which to substantiate his theory, apart from the fact that, as he said, Lord Trefgarne was a Liberal who had turned Socialist and had been rewarded for it. That is not in the manner of a statement of fact, nor has it any bearing on the question whether certain people were capable of taking on this development.

From what I knew of Lord Trefgarne when he was a Member of this House, I have always looked upon him as a person who was moderate in politics. I think that people who are moderate are often the most reasonable, and sometimes they become the most practical people. While they may require to be gingered up now and again, I have found that a large number of people who are moderate in their conceptions, who are used to carrying out their duties in a businesslike and studious manner, often achieve useful results. I think that Lord Trefgarne was like that and that he carried out his duties in the most studious, intelligent and painstaking manner. Apart from that, I can express no opinion regarding the actions of the Board, and, if they are to be investigated, it would not be wise for me to go further into the matter at this moment.

In connection with development by the new Corporation, I have read both Reports, and I see that the new Chairman, although he said that the scheme has a reasonable chance of success, is always grudging in his appreciation of both the previous Board and the previous Chairman, and has referred to the efforts which they made in such a grudging manner as should not be used, in my view, by any Chairman on taking over the job. It must be remembered that Lord Reith is in a much better position today than was the Chairman at the beginning of the scheme, because all the pioneering work has been done and all the efforts to lay sound foundation for the scheme have already been carried out. Some of the difficulties have been overcome, while others are still there. Lord Reith is able to profit by any mistakes which have been made in the past, because any weaknesses that existed have already been shown up. He can therefore embark on a plan, pro- fiting from all the experience accumulated and the work done in the past.

Therefore, I say that Lord Reith, who has been in many jobs during my political career in the House but never long enough to prove his capacity in any one of them, will have to prove his capacity in this one, and I am waiting to see some evidence of his capacity. In the other cases, he was always going to make a clean sweep, but finished up in a short space of time and disappeared, with what results we know not. Even the present Leader of the Opposition took part in the correspondence which developed over the autobiography which Lord Reith wrote. At the time of which he was writing, the right hon. Gentleman the Member for Woodford (Mr. Churchill) was Prime Minister and head of the Government of the day, and when he was pressed by Lord Beaverbrook to give Lord Reith higher position, he wrote to Lord Reith to say he was sorry that he could not place him in a higher position, because every time he mentioned his name there was a storm of protest, and everybody said that nobody could work with him successfully. That was the view of the then Prime Minister, now the Leader of the Opposition. I shall wait and see what happens in this case.

I wish success to this great development, and I am sure that every reasonably-minded person in the Committee also wishes it success, because it may be that it will be the means of saving the whole of these territories for what is known as the free world. If they can be saved by putting forward great efforts and by the use of a tremendous amount of wealth—although in these days we talk of millions as being very little—that money and effort may be the means of saving, in the end, thousands of millions spent on wars and in trying to repair throughout the colonial world the damage which such wars could bring about. Therefore, I certainly welcome the scheme in every possible way.

We were told that the Gambia scheme was a loss. I have looked through both these Reports, and I have wondered just whether this scheme would have been a complete and ultimate failure if it had been persisted in. After all, people meet with various setbacks, one of which may be drought. I remember that once, when going up into North Queensland in a train, I went out on the platform during the night and saw cattle hanging on the barbed wire because there had been a drought of five months and three weeks, and the stocks of the cattle proprietors in that part of the country had been completely wiped out in that drought.

In such circumstances, if people meet with drought, or if there is too much rainfall in a territory where they are growing something requiring less rain, the question for them to decide is whether or not that scheme is bound ultimately to end in disaster, or, if persisted in, even in some smaller way, would not be successful. I am wondering whether that might not have happened in this case and the scheme have proved more successful on a smaller scale in this territory. I see that an hon. Member shakes his head; I do not profess to know, but that question was uppermost in my mind, and I should like the Minister to give us some information whether that scheme would have been a complete failure and whether there was no sign of its becoming successful in any shape or form.

We have heard a great deal about the Gambia scheme, and I am not blaming the Opposition for their criticism. It is often the duty of an Opposition to criticise the failures and weaknesses of a Government, and I should be the last in the world to deny them the right to indulge in as much criticism as they desire; but let me remind them that they also are bound up in this scheme to a very great extent, because this is not like an ordinary political manoeuvre, or a propaganda move; this is a scheme which has as its aim the consolidation of all the colonial peoples, giving them a greater opportunity to live a decent life, to develop their health, education, transport, their standard of living and their culture in those territories.

It is part of the heritage of this country to try to set these people on their feet. A great deal has been said about handing over power to the colonial peoples, but I have wondered time and again whether it would not have been wise to have taken them into an all-in Empire scheme for every part of the Empire, no matter how little the proportion of the capital which a particular territory was able to contribute to the scheme. We could have drawn from Canada, New Zealand, Australia and from every part of the Empire representatives who would have interested themselves in this scheme and would have influenced the points of view of their own Governments. They could have discussed it together, and encouraged and inspired this kind of development in the Colonial Territories, until we could have had a complete Empire conference of people interested in and capable and willing to do the job.

I recognise that a job of this kind is not one to be given to a man as a reward for political services, or one for the street-corner orator. It is a job for the man with ability and with as much knowledge as possible of the business world and of trade unionism, because those combined forces could help to develop the Corporation. I hope, therefore, that some action of that kind may be taken in order to make this scheme a success, and eventually to extend it.

Regarding the chairmanship of the Board, I must warn the Government that at this stage in the development that is taking place they must be very careful. My old friend, the late Jimmy Maxton, and I used to discuss these things on occasion. Sir John Reith, as he was then, came into the area I represented. He was appointed by Beardmore's as their chairman. He had been in the Ministry of Information and in the Ministry of Munitions. Within a week or two of taking over such offices, he would present a report condemning every person in the organisation. For instance, in Beardmore's he could find only one man capable of assessing the job that had to be done. I could quote many examples of this sort of thing. The fact that a considerable number of members of the Conservative Party have found that Lord Reith could not work successfully with anyone makes it all the more necessary that we must be very careful not to place somebody on this Board who may sabotage or destroy the efforts of this country.

6.13 p.m.

Mr. Gammans (Hornsey)

Although I agree that the Minister of State who spoke for the Government did not have a very easy task, I must say that in many ways I think he made an unfortunate speech. The truth is that the Colonial Development Corporation and the principles under which it operates have yet to prove themselves. I am afraid I do not share the optimism he expressed with regard to some of the schemes. I thought it particularly unfortunate that he should have dragged in private enterprise, in regard to which he used the following words: Private enterprise has left gaps in colonial development. That, I admit, is quite true, but it is equally certain that as run up to now the Colonial Development Corporation is not showing any signs that it can fill those gaps.

Let us realise, as the hon. Member for Swindon (Mr. T. Reid) pointed out, that the sum of £100 million is not going to take us very far. A far greater sum than that is already invested in each of the great colonial industries of rubber and tin. On this day last week, I happened to be standing in the Haifa Refinery. Incidentally, grass is growing in the streets there due very largely, I believe, to our unfortunate policy in the Middle East. Almost the exact sum of money about which we are talking today would be required to rebuild that refinery elsewhere. Therefore, let us get this £100 million in its proper perspective.

The Minister of State also said that private enterprise had lost money. Of course it has, but at least it was money which people paid out voluntarily with their eyes open, whereas this money was taken out of their pockets whether they willed it or not. I would also venture to point out that if any private enterprise wants to start a business today, it has to get it approved by the Capital Issues Committee. I wonder how many of these enterprises would receive the approval of that committee.

The hon. Gentleman also talked about some of the schemes as if they were already successes. Perhaps they will be, but let me make him a fair offer. If some of these schemes are so wonderful, why does he not recommend his trade union friends to invest their spare funds in them? Why not suggest to the C.W.S. Bank that they do this? After all, the C.W.S. Bank is always looking for something in which to invest its surplus money. The truth is, of course, that hardly one of the schemes mentioned in the Report could be floated in the City of London.

I am afraid I cannot share the optimism of the Minister of State. While it is true that some private enterprise schemes in the Colonies have failed, it is equally true that many have succeeded. Indeed, the whole of our financial position today, satisfactory as it is in so many ways, is due not to what we in this country have done, but to the sale of colonial products at high prices. We should never have filled the dollar gap had we relied entirely on increased exports from the United Kingdom, nor would the pound be able to look the rest of the world in the face as, fortunately, it can today if we had to depend on our own efforts alone. With all its shortcomings, private enterprise in the field of colonial development has succeeded, whereas the Colonial Development Corporation has yet to prove itself.

With all the good will in the world, I do not believe that the present form of set-up in the Corporation or the present principles under which it is working can possibly achieve the results we all desire to see. There is a tendency on the part of the supporters of the Government—I hope that when the right hon. Gentleman comes to reply he will not adopt the same line—to say, whenever we investigate the loss of money through such Government fiascos, "Although it has not been very successful up to now, it will be all right in the end." I remember that the present Secretary of State for War once said, when talking to the Press, that the Groundnut Scheme would be regarded by posterity as the highlight of his political career. Be that as it may, I hope we shall not have the usual reply to the effect that it will be all right in the end. That is not good enough when there is no evidence to prove that to be the case, and when we are dealing with other people's money.

Another line taken by hon. Members opposite is that hinted at by the Minister of State when he said that although we had lost a bit of money, the Colonies had benefited in some mysterious way.

Mr. Harrison

Hear, hear.

Mr. Gammans

Perhaps if the hon. Member is fortunate enough to take part in the debate he will tell the Committee how Gambia has benefited from the money spent on it, or, for that matter, how any other part of the Colonial Empire has benefited up to date. The truth is that no country in the world benefits from an unsuccessful scheme. Indeed, I would go even further. I believe that these failures of the Colonial Development Corporation and of the Overseas Food Corporation have, on balance, done the Colonial Empire immense harm. I will say why. It is because it has given the impression that there is something so appallingly risky about investing money in the Colonies that no one in their right senses will put any money into them.

People will say, "If the British Government, with their great resources and all the wisdom they are supposed to have, and about which we hear in every Sunday speech from the Government, invest money and lose it, what hope is there for the private individual? We had better leave it alone." That is the sort of impression which can do immeasurable harm in the Colonial Empire, and which, in my opinion, is doing harm today. I will say that up to now, on balance, these unsuccessful ventures, however honourably they may have been entered into, have done the Colonial Empire a lot of damage; and that is especially true of Africa, because of all the five continents Africa is the least blest with climate, fertility of soil and the other things needed for a high standard of living. The danger is that people will say that Africa is the investors' graveyard.

Those are the two excuses which are given time after time. I hope that in his reply the Minister will not use either of these two arguments. Be honest about it and say that up to now there have been tragic failures, so far as the Colonial Development Corporation is concerned, and that while we all hope the rest of the ventures will be successful, there is not the slightest proof up to now that they will be.

Why have there been these failures? I do not want to go too much back on the past, but surely we must learn from what we have done. I think there are two reasons. The first is revealed in this Report—and it is sheer incompetence and megalomania. Fantastic things have gone on—so fantastic that I wonder what would have happened to the directors if these schemes had been run by a private company. This Government passed the Companies Act which, quite rightly, has imposed very strict regulations upon the conduct of directors. There are stringent regulations about what they can and cannot do. We have the Capital Issues Committee.

I wonder what would happen to the directors of the Colonial Development Corporation if their actions had had to comply with the regulations laid down by the Companies Act. There have been no pilot schemes, no experiments and in many cases no supervision at all. The truth is that up to now the Colonial Development Corporation have felt themselves quite unable to resist either the flashy or the fantastic. The more fantastic the scheme which came along the more certain it seemed to be that the Colonial Development Corporation would take it up.

Before I leave this question of administration, I feel that I must raise a personal matter of a somewhat delicate nature. Although it is of minor importance in considering the money which we are spending, it raises a question of principle. It is the employment of two ex-members of this House by the Colonial Development Corporation—Mr. Dumpleton and Mr. Skeffington-Lodge. The Minister of State referred to Mr. Dumpleton. Let me say straight away that I have a high personal regard for both these gentlemen. In fact, I think the benches opposite are the poorer because they are not here, and I am sure the Prime Minister would have been pleased to have lost other colleagues than those he did lose in February, 1950.

But I want to deal with the principle, and I would raise it, quite frankly, whether we were dealing with ex-Conservative Members of Parliament or ex-Socialists. [HON. MEMBERS: "No."] Hon. Members opposite may find it difficult to imagine themselves adopting that attitude. There should be something in their minds far above party politics—and that is the reputation of this House of Commons which, to a certain extent, is involved here.

When were these two gentlemen taken on and what salaries were they paid? Were the positions which they occupied advertised in the public Press, and, if so, what Press? In other words, was everything done which should have been done? Am I right in saying that in the first instance Mr. Dumpleton was taken on as the Corporation's printer, but that for some reason he did not occupy that post for very long and now is doing the job which we heard about this afternoon—in some mysterious way co-ordinating with the peoples of the Colonial Empire? I do not know quite what this job is—I admit it is a necessary job—but I shall be pleased to know what qualifications Mr. Dumpleton has for it, or if, before he accepted it he had ever lived in any one of the Colonies of the British Empire. I have no doubt that there is a perfectly good answer, and I shall be glad to know what it is, because nothing will do the Corporation more harm and nothing will do this House more harm than if men are employed who are ex-politicians, whether those ex-politicians be Conservatives or Socialists.

The second reason why we have had these failures up to now is that there has been no clear conception of what the Corporation are supposed to be doing. I should like the Minister to try to tell us on what principles they are working. I have studied these schemes. First of all we have schemes the Corporation finance, schemes which they not only finance but run in the sense that they manage them. In these we have the Gambian eggs, the crawfish tails project, catching sea-lions and sea-elephants in the Falklands, developing a farm and a country club in the Bahamas, and running a hotel in British Honduras. That is the first category. They finance these things and they also directly run them.

Then we have another category of schemes, the schemes which the Corporation finance but do not manage. Here we have the building scheme in Singapore, the power station in Malaya, to which my hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher) has referred, and the rebuilding of St. Lucia in the West Indies. Incidentally, I entirely agree with what my hon. Friend the Member for Bury and Radcliffe said. I cannot see why a wealthy Government like that of the Federation of Malaya cannot finance their own electrical scheme or, if they cannot finance it themselves, float it as an ordinary commercial loan on the City of London. I think the Colonial Development Corporation should get out of this project as quickly as they can, because that money certainly can be used to better advantage.

Then we have the third category of schemes, the schemes which the Corporation only partly finance and do not manage at all. In these we have the timber and the gold mines in British Guiana, the fruit scheme in British Honduras and cement in Northern Rhodesia. I am absolutely convinced that there is one cardinal principle which the Corporation must adopt if they are to succeed. It is that they should be a financing agency and not a managing agency. Save in the most exceptional circumstances their job, I am convinced, is to act as a mortgage corporation—if you like a benevolent mortgage corporation—lending money at low rates of interest, or in some cases for no interest at all, for a limited period but leaving the management to somebody else. Unless private enterprise is prepared to put up some money into a scheme it is a thousand to one that it is a "dud" scheme in which all the money will be lost.

It is in that sort of partnership, where the Corporation put up some money but get the rest of it from private enterprise and leave the management to somebody else, that the only hope of success lies. It is not as though there is no scope in that policy. If I may make one suggestion, it is concerning urban housing. I think there is one direction in which we have lagged behind—in the building of houses in our large colonial cities. These cities have grown very quickly but, on the whole, housing conditions are bad. If this £100 million were spent on that sort of project alone there would be something to show and we should be filling a very real need.

It is the management side of the matter which worries me. If there is one job which Governments cannot do it is managing industries, and this is borne out by the long, dreary record of failures in countries all over the world of the Government in trying to run a show and making a mess of it.

Mr. Follick (Loughborough)

What about the Panama Canal?

Mr. Gammans

I know the hon. Gentleman is a bit of a humourist, but perhaps he will try his humour on the Committee later on.

Mr. Follick

That is not humour.

Mr. Gammans

What analogy that is to the Colonial Development Corporation I cannot imagine. Not only are the Government quite unfitted to manage, but here we are dealing with a variety of enterprises, and it would be impossible for anyone on this earth to manage the sort of things they are trying to do. Imagine one office trying to do the following: running cement, tobacco, rice, saw mills, fibres, building societies, palm oil, cocoa, salt, copper mines, egg farms, cold storage plant, fish, pigs, vegetables, hotels, abattoirs, coalfields and country clubs. That is the job we have given to Lord Reith; we have asked him to manage all this variety of enterprises from one office here in London, and those enterprises are scattered over the whole of the five continents. It is utter fantasy from beginning to end, and this Corporation has no hope of success whatsoever until it gets out of trying to do that sort of job.

To take the motor car industry as an illustration, no motor car manufacturer makes half the parts of a motor car. He does not make his tyres, wheels, lamps, electrical equipment or even the bodies. He puts those out to some other firm because he knows very well that all those enterprises could not be run successfully within one office. But here on the Colonial Development Corporation we load a whole variety of things. I am convinced that until the principle to which I have just alluded is accepted, we shall have a series of dreary reports winding up one venture after another. I welcome this Report, tragic as it is. [Laughter.] We all welcome reality. It may please hon. Members opposite to wander about in cloud cuckoo land—

Mr. Follick

What Colony is that?

Mr. Gammans

—without even one toe on the ground. I shall not be satisfied until the Corporation begins to realise its limitations, to divorce itself from management and to act largely as a finance corporation on the lines I have indicated. Then and only then would it fulfil the hopes that we all have for it.

6.34 p.m.

Mr. Harrison (Nottingham, East)

I should like to take the liberty of pointing out to the Committee the key to the speech of the hon. Member for Hornsey (Mr. Gammans). Sooner or later, among a mixture of generalities and very often personalities which we are accustomed to hear from the hon. Gentleman, he usually reveals the key to what he really means in these colonial debates. I suggest that the key to the hon. Gentleman's speech is to be found in his statement that the Government ought to lend money at low rates of interest to undefined persons.

Mr. Gammans

I did not say anything of the sort. I suggested that one function which the Corporation is now carrying out, the third function, is to provide part of the capital for many colonial enterprises. It is doing it now. I want it largely to confine its activities to that.

Mr. Harrison

I apologise to the hon. Gentleman if I do him an injustice, but I understood him to say, and I assume from what he said, that the major function of this Corporation should be the lending of money at low rates of interest.

Mr. Gammans

If the hon. Gentleman will look at the Report he will see that the Corporation has lent £1,375,000 to the Federal and Colonial Building Society Ltd., of Singapore. That is the sort of thing I mean.

Mr. Harrison

I am not assuming that that is not what the hon. Gentleman means. I am assuming that that is just what he does mean. His complaint seemed to be that there is not sufficient of that in the Report and that there is too much of the other thing.

Mr. Gammans

Quite right.

Mr. Harrison

I want to draw the attention of the hon. Gentleman to one figure; 64 per cent. of the activities of the Corporation are devoted to primary production, which is different from lending money.

Sir P. Macdonald

Like eggs.

Mr. Harrison

I would remind the hon. Member for the Isle of Wight (Sir P. Macdonald) that in his speech he mentioned that we had lost a lot of money. I asked him if he would be a little more precise and say in what scheme we had lost the money. Apart from the Gambia he mentioned hotels as the second category in which we had lost money. But according to the Report I cannot see that we have lost any money at all in hotels.

Sir P. Macdonald

I mentioned that among a number of schemes on which the Corporation should not embark was the running of hotels. In my travels throughout the world I have found that if there was a demand for a hotel it has been provided by the Colony concerned. It is the duty of the Colony itself to provide hotel accommodation or get someone else to do it for them.

Mr. Harrison

The hon. Gentleman used the illustration in an unsatisfactory way because he was discussing those projects in which the Corporation have lost substantial sums of money. I asked him to define the projects and he mentioned hotels. I suggest that no money has been lost in hotels.

To come back to the speech of the hon. Member for Hornsey; he said that none of these schemes listed in the Report would pass the Capital Issues Committee, and then, later, he told us, quite openly and without qualification, that what ought to be done with regard to the Malaya electricity scheme was that we should have loaned the money for the development of that scheme or, better still, ought to have insisted that the Malayan Government should have provided the money themselves or asked for it from the City of London. Yet before that he told us that from the point of view of their financial success none of these schemes was worth backing. I do not understand what that illustration had to do with the theme which the hon. Gentleman was developing at the time. He mentioned that the C.W.S. never invested money in the Colonies. The opposite is the truth.

Mr. Gammans

I did not say that. I do not know if the hon. Gentleman has anything to do with the C.W.S. Bank, but if he has perhaps he would put this to the directors. I ask him if the C.W.S. Bank, which has a lot of surplus funds, would be prepared to put any money into any one of these schemes. If so I should be pleased, and I can assure him that the British taxpayer would be pleased, too.

Mr. Harrison

The hon. Gentleman said that the City of London would be prepared to put a lot of money into these schemes. If the City of London would be prepared to put money into the schemes the C.W.S. would be, and I can assure the Committee of this: that the C.W.S. have considerable investments in our Colonial Territories and I am sure everybody will appreciate that these investments have done considerable good in their development, both industrially and socially.

One of the gems that the hon. Member for Hornsey dropped was that politicians could not possibly manage any of these schemes or could not possibly be proficient on this Corporation. When I look at the benches opposite I usually see politicians sitting there who are most successful business men in developing and exploiting our colonial possessions. I understand exactly what the hon. Member meant when he said private enterprise has been a success. I assume from that that there is no need for the Colonial Development Corporation.

If private enterprise in the Colonies has been such a success what is the good of spending money on enterprises in colonial development? That is the question I put to him. The need for this scheme arises from the fact that private enterprise limited its investments to the very choice departments of economic development in the Colonies. On every possible occasion it has had to be guaranteed substantial profits before it would invest in many of these schemes. I agree that in the search for profits private enterprise has been unsuccessful occasionally.

Sir P. Macdonald

The hon. Member could not have heard the Minister's speech. He started off, in defending Socialism in practice, by pointing out that private enterprise had lost very large sums of money in the past in the development of the Colonies in Africa and other parts of the world.

Mr. Harrison

I agree, but it is difficult for anyone to follow the reasoning of hon. Members opposite. One hon. Member tells us that private enterprise has been an enormous success and we draw certain conclusions from that. Another hon. Member says private enterprise has been a failure in certain cases and we draw certain conclusions from that also. It is very difficult to reconcile the two things. [An HON. MEMBER: "Take an average."] Take the average, and private enterprise sought and obtained its profits.

An hon. Member opposite made the revealing and very true statement that overall there is financially very little to criticise in the Report. That includes Gambia. We all know what the bank manager said to a man who went to borrow some money. He asked, "Have you been in business before?" The man replied, "Yes, in poultry." The manager asked, "Have you made any money?" The man replied, "Yes," and the bank manager said, "You can have as much as you like because a man who makes money in poultry is very good indeed." That was good, of course, in a Conservative sense.

Everybody knows that the development of primary production in a tropical country is a speculative business, but taking into consideration the projects that have lost money I agree entirely with what was said from the benches opposite—that overall there is nothing we can substantially criticise in this year's Report. That, of course, includes the schemes themselves.

I want to draw attention particularly to the schemes for the development of British North Borneo. Taking into consideration the economic condition of British North Borneo, the devastation that was caused during the considerable time it was in Japanese occupation and the terriffic blow suffered by the economy of the Colony as a result, it seems to me we should encourage the Colonial Development Corporation to see whether it is not possible to put more energy into the development of schemes for the revival of the Colony's economy in the future.

The scheme for shipping between Singapore and the islands has not been tackled quite as energetically as it should have been. I am not suggesting that there is going to be a substantial profit in it.

Mr. W. Fletcher

While he is painting this picture would the hon. Member appreciate the fact that two of the major private enterprise houses in that area have opened up in Borneo since the end of the war and, without the possibility of an early profit, have made very considerable progress?

Mr. Harrison

I accept the hon. Member's description of that effort and enterprise. I am not here to damn private enterprise by any means. I am here to rebut unfair and base criticisms that have been levelled at some of these schemes which are not private enterprise, and to rebut the prejudice apparent in every speech from hon. Members opposite against schemes that do not come under the heading of private enterprise. I recognise what is being done in North Borneo to revive what is at present private enterprise. But I suggest that these private developments in North Borneo and similar territories will not make the progress they ought to make unless the Government, through the Colonial Development Corporation, help them more substantially than they have done up to now.

There is room in North Borneo for far more substantial help than they have received up to the present and, through the Minister, I urge on the Corporation the need to examine other possibilities in that area. Mechanised rice growing has been tried, but it has never offered considerable opportunities for large-scale development in my opinion and in the opinion of other people. There are other things worth examination and I hope that some of my words will stimulate interest in that part of the Colonial Empire.

Finally, I want to stress a fact which, although a generality, I think is important. The development of primary production in tropical countries—and most of these schemes involve such a development—of necessity is speculative. Of necessity, private enterprise has neglected it in the past. If we want to see the welfare of the peoples living in our Colonies improve, we have got today to do something that private enterprise will not do—tackle some of these speculative projects with the view of developing the economy and the social well-being of the peoples within those very hot countries.

I should hate to think that the Colonial Development Corporation was to be retarded in its efforts by the hue and cry—and very often the malicious criticism—against it in the British Press. I am for the moment thinking particularly of the Gambia egg scheme. I believe that a lot of that criticism was malicious in design. I hope that the Colonial Development Corporation will not be retarded in its worth-while efforts by such criticisms as that, but that it will continue to do the work that ought to have been done years ago and must be done today.

6.51 p.m.

Mr. Henderson Stewart (Fife, East)

I was specially interested in the speech of the hon. Member for Shettleston (Mr. McGovern)—as I always am in any speech he makes. I have noticed that he rarely participates in a debate without using his claymore against something or somebody. Before the war he used to attack Franco with great gusto. I have heard him since deliver ferocious onslaughts on Stalin. It was almost inevitable that Lord Reith should find himself somewhere in the queue, and today Lord Reith has been the subject of the hon. Member's strong criticism.

Mr. McGovern

Does the hon. Gentleman place Lord Reith in the same category as Franco and Stalin?

Mr. Stewart

I was just suggesting that Lord Reith must be a little pleased that he is in high company, because it is that kind of person that the hon. Gentleman generally does attack. Well, Lord Reith does not need any support of mine; but he is a Scotsman, as, indeed, the hon. Member for Shettleston and I are; and I will say that if he makes as good a job of the Colonies as he made over so long a period of the British broadcasting system then I do not think any one of us will have any particular reason to complain.

I think that the first thing we should do in a debate of this kind—and, indeed, it has been done by hon. Members already—is to congratulate the Corporation on this Report. It is timely; it is frank; it is comprehensive and it is succinct; and it enables us to form—or, at any rate, to hazard—some kind of balanced view of this great problem. It is important that we should try to take a balanced view, because there has been so much exaggeration on both sides—not so much in this Chamber, but outside. There are those who say that this Corporation is doing no good at all, and that none of its schemes will succeed in the long run. I think that that is a foolish view; but it is equally foolish to believe that in this Corporation we have a heaven sent blessing incapable of any failures at all. It is foolish not to recognise the facts.

I think it was a pity, therefore, that the Secretary of State on 13th March, speaking of the Gambia scheme, said: The result of this debate in Gambia and elsewhere will be to high-light the one scheme that has failed…"—[OFFICIAL REPORT, 13th March, 1951; Vol. 485, c. 1345.] That is, of course, not true. It is not true at all that it is the only one scheme that has failed. That is an exaggeration that does nobody any good. Then I find the Under-Secretary of State for the Colonies, speaking in Dundee on 18th March saying this to his bewildered, bamboozled constituents: Don't be frightened by the Gambia egg scheme. Do not let them 'kid' you. It is only a small part of the total schemes coming under the Colonial Development Corporation—3 per cent. Their other schemes are making money hand over fist. Where are these schemes making money hand over fist? That is not what the Minister of State for Colonial Affairs said today. He mentioned three schemes doing well. One was making what he called a "modest profit." One was making 6 per cent. Really, for Ministers—and I include the Secretary of State—to make statements of this kind does nobody any good at all.

Mr. J. Griffiths

I am sure that the hon. Gentleman does not want to read out of context a statement that I made in the debate. I think he should read my statement again. It was the Opposition who wanted to debate one scheme.

Mr. Stewart

Let me read again those words. I stand by those words. I do not make any comment upon them. The right hon. Gentleman said: The result of this debate in Gambia and elsewhere will be to high-light the once scheme that has failed…"—[OFFICIAL REPORT, 13th March, 1951; Vol. 485, c. 1345.] I say it is not true to say that there is only one scheme that has failed. That is all I am saying. Let us try—as I am trying, quite seriously—to form a balanced view about this. Clearly, the exaggerations on both sides are wrong. Where is the balanced, reasonable view, somewhere in the middle?

First, I would say on that that we have to recognise that the Corporation has a remarkably good staff. I have paid tribute to the staff before, because I have made contact with the staff, some of their leading members. In Lord Trefgame's day I had the pleasure of meeting all the leading executives, I think; and I formed a very high opinion of them. We can see a tribute to them in the Report, which states: In the Corporation's service there is zeal and devotion of which any employer might feel proud. I believe that to be true; and that is the first balanced view we should take. We have there good men who, if properly used, and given time to gather wisdom and experience—time; and I am pleading for that specially—will serve this country very well.

The second point, I think, is that there is clearly wide scope throughout the whole of the Colonial Territories for a body such as this Colonial Development Corporation. There is scope for a body which can carry out developments which private enterprise or local governments are not capable or are not willing to do. That is a clearly proved fact which everybody has to accept. I completely accept that view. There is a growing place for an organisation or for organisations—I stress the plural here—of this kind to do this type of work; that is to say, an organisation which brings in new money, which can afford to wait over a period for a return, and which can link, as no other body can, local government and private enterprise. I think that that link is of the greatest importance, that linking of local government and private enterprise, and the operations of our own administration here at home.

One of the chief defects of the terms of reference which the Government first gave to the Colonial Development Corporation was, that they did not make sufficiently clear to the Corporation its duty to seek financial as well as moral support in its operations from the local Governments. Every local Government throughout the Colonies is anxious for schemes to be projected. The Colonial Development Corporation has been bombarded with suggestions from local Governments, naturally; but I do not think it right that the Corporation should have gone so far ahead and so fast when so few of the local authorities provided financial support. It is time that the Government, through the machinery of the Colonial Development and Welfare Organisation, pressed upon local Governments the necessity for sharing—for becoming partners—in any schemes they expect the Colonial Development Corporation to put forward.

I do not think that the Government have yet arrived at a clear distribution of functions between colonial development and welfare work and the Colonial Development Corporation work. Some of us in this Committee have been dealing with this matter for many years, and I think I speak for hon. Members in all parts of the Committee when I say that we are confused and have not yet got a clear definition of functions as between the two funds. Yet it is essential to have it. Let the Secretary of State deal with that problem when he winds up tonight. That is a specific point, and if he answers it he will be meeting the requirements of hon. Members on both sides of the Committee.

Incidentally, and while still talking about terms of reference, I hope that the Government will impress upon the Corporation the necessity for now turning a larger part of its intention towards much smaller schemes. One of the mistakes of the past has been a tendency to run for the big projects. The Colonies will develop, as all other parts of the world have done, by small enterprises gradually growing and developing. I am not here criticising the Corporation. I am criticising their terms of reference; if the Corporation had been guided and encouraged by the Government to look for small, secondary industries which needed help they would have done much better. They should look to the little industries that might want the £5,000 which would make all the difference; that £5,000 might well serve the Commonwealth far more efficiently and quickly than £500,000 invested in something larger and more grandiose. I seriously suggest that greater attention should be paid to these smaller, secondary trades.

But to recognise that there is a large and growing place for a body or organisation of this kind is not necessarily to say that this body and this body alone is able to do what is wanted. As was pointed out earlier, the scope for work of this kind in the Colonial Empire is almost unlimited. As the hon. Member for Hornsey (Mr. Gammans) said, £100 million is a mere drop in the bucket. Is it suggested that this Colonial Development Corporation is competent to undertake that great advance? Nobody would say that. I say, as I have said many times before, that in my view this Corporation already has on its plate more than it is capable of managing. I have expressed that view several times and am now in the position of finding a great many important people supporting that view. I take, for example, "The Times," which said, on 28th April: Its record"— meaning the record of the Corporation— to date suggests no justification for committing further large amounts of public money until time can prove the soundness or otherwise of the judgment with which the earlier investments were made. Time and time again I have pleaded with the Secretary of State for a pause, just as I pleaded two years ago for a pause in the reckless advance of the Overseas Food Corporation. Nobody would listen. They charged ahead, and we all know what happened. A year ago I pleaded for a pause in the rapid development of the Colonial Development Corporation. I plead again tonight, and here I find "The Times" supporting me in that view. Lord Trefgarne expressed a similar view publicly about the time of his resignation, when he said that the time had come for a comprehensive review of the work of the Corporation.

Mr. Harold Davies (Leek)

He meant the work of the new Chairman.

Mr. Stewart

He meant something much wider than that, and the hon. Gentleman, who, no doubt, is in close contact with Lord Trefgarne, knows that he meant something wider than that. In the Report of the Colonial Development Corporation itself I find further support for the view I held, and still hold, for on page 1 I read: To investigate, plan, launch, and manage so many schemes of so many kinds might have strained any organisation, especially one of such recent birth. My plea has always been that on purely personnel grounds the Corporation was being asked to do more than it was fit to do. It could not at this time have gathered the staff with the experience, wisdom and background to handle such a wide variety of schemes. It was asking too much of the best men, and I find proof of that in this Report. On page 14, dealing with one of the schemes, the Report says: Original estimates were incomplete; new ones are now being considered; management has been unsatisfactory; the whole project is being reorganised under new management. That would not have happened if there had been a more gentle approach to the task and a more gradual accumulation of schemes and responsibilities. On page 4 we read: Plans have been proved defective owing to inadequate local knowledge in their drawing; there has not always been the requisite calibre and experience of managerial staff. Almost precisely the words I myself used to the Committee a year ago. It is no wonder, therefore, that the Corporation has met with difficulties.

I am sorry that the Secretary of State has left, because there is one matter I particularly wanted to raise with him. I feel that he has rather let the House down. On 13th March the right hon. Gentleman dealt with this matter in a speech in the House, and I ask hon. Members to bear with me while I read two extracts, because a commitment was entered into; that commitment has not been kept, and I complain of it. The Secretary of State said: We discussed this question in the debate last October, and also the question as to whether the Corporation ought to pause or not. The hon. Member for Fife, East (Mr. Henderson Stewart) was one of the people who continually urged that. I then indicated to the House that, when appointed, the new Chairman would himself want to give early consideration to the future organisation of the Corporation"— and let the Committee note this— first, regarding whether there should be a pause"— for which I had asked— and, secondly, whether the organisation needed to be changed in some way. I had asked for a change. I said that the Corporation was undertaking far more than it was capable of managing and, therefore, asked for a splitting of the organisation into one, two or more parts, either geographically or functionally. The Minister of State for Colonial Affairs knows very well the point I am trying to make. It is not a new one. It has been considered in the Corporation and in the Colonial Office.

I pressed for some reconsideration, and the Secretary of State said that the Chairman would do that. But he went further and said: I know that the new Chairman has been devoting himself to these problems, and, indeed, when he was appointed, I discussed the matter with him…. The Chairman is giving very careful consideration to what changes are required, and what form those changes shall take. He has already indicated to me that he hopes that the consideration which he and other members of the Board are giving to this matter will soon reach a stage that will enable him to give some indication in the Annual Report regarding the changes which they think desirable."—[OFFICIAL REPORT, 13th March, 1951; Vol. 485, c. 1358–9.] I took that to be a promise by the Secretary of State that full consideration would be given to these two problems: first, as to whether the Corporation should now pause in any further development; and, secondly, whether the Corporation should not be completely reorganised. I am very sorry that there is no mention of either of those problems in the Report, despite the fact that these were precisely the problems which the Minister undertook would be covered in the Report. I am not criticising the Chairman or the Corporation. It may well be that there has not been conveyed to the Corporation the strong feeling expressed in the House at that time, or the seriousness of the pledge given by the Secretary of State. I now ask whether we can expect an early announcement upon these two important matters.

In past years the Report of the Corporation has always given an indication of what new schemes were under consideration. Last year—here I speak from memory—there were 28 new schemes under consideration. How many new schemes are under consideration now? What new capital is it now proposed to introduce? It is important that we should consider this, because if the Corporation is being urged on by the Government still further to expand its operations and to take on new and newer schemes in this, that and the other territory, from the far west to the far east and the far south, then an impossible burden is being placed upon the Corporation and it is being driven on to destruction.

This House has had two serious warnings. The Overseas Food Corporation, for precisely the same reason, was in too much of a hurry to take a job, with too little experience, and the Corporation crashed and the credit of the Government and of the whole of Great Britain has suffered in consequence. The Gambia scheme is another example of too much hurry in grasping at a new scheme. These are two serious warnings. We shall, indeed, ignore these warnings at our peril.

I have said, and I repeat, that I believe in the principle of the Colonial Development Corporation. I believe that we have men on the staff of very high quality, but I say that the Corporation, as now organised, is trying to do an impossible job, and unless we face up to the need, without further delay, of breaking it up into two or three parts, either geographically or functionally, we shall land the Development Corporation, like the Overseas Food Corporation, in complete failure. I do not want that to happen. I want the House to have some pride in that Corporation.

I am, therefore, asking, as a practical man, not without experience of the operation of great organisations of this kind throughout the world and with a good deal of knowledge of the principles involved in this kind of thing—the Committee to agree with me that we ought to have from the Government, at the earliest moment, the considered views of the Corporation and the Government on all these matters.

7.12 p.m.

Mr. James Johnson (Rugby)

May I pass a bouquet to the hon. Member for Bury and Radcliffe (Mr. W. Fletcher) for the moderate terms in which he opened the debate and set the tone for later speeches, some of which unfortunately from Members opposite went much deeper into the political dustbin? I have heard adverse comments about the activities of the Corporation and about its recent chairman. Before I came to the House and in the 12 months I have been here, I formed a good impression of the Corporation's activities. When Lord Trefgarne left in October or November of last year, after three-and-a-half years, the Corporation had something like 50 undertakings, and I think that, with few exceptions, they were in good heart and have been passed on to the new tenants in a good condition of well-being. I think that is an impressive testimony to the late members of the Corporation and to the recent Chairman who handed over these matters in a practical way.

My main purpose is not to speak for my party but to comment on the text of the Report. I have carefully analysed the Report, and I am surprised by the conflict between the factual statistics in the main part of the Report and what, I think, is a typical introduction. Hon. Members opposite have been talking about it as "encouraging," and one hon. Member, I think, used the words "Shorter, clearer and earlier." I would add the adjectives "stiff and staccato," because I feel quite sincerely that nowhere in the Introduction does one get any mention concerning the past organisation of the good work of the Corporation and its employees. The Report only in its conclusion contains a sentence in which there are the words "zeal and devotion." They come after compliments worthily given to the colonial governors and expert advisers, and to the Corporation's commercial partners and associates. I feel that they are justified in view of the overwhelming solid work that has been done.

The hon. Member for Fife, East (Mr. Stewart) has spoken about bad schemes and poor schemes, and someone else used the term "wild cat schemes." I have carefully added up the figures of investment given by the new Chairman, and I find that £24 million worth are favourable, £4 million worth are uncertain and only £1¾ million worth were unfavourable. I think that is good going. I think that we might have had a little more warmth in the Introduction instead of the critical text which I find.

May I comment on some of the text in the Introduction and ask a few questions which, I hope, will be answered by whoever is winding up the Debate. Page 1 of the Report refers to the enormous number of new schemes launched, and states at the end of paragraph 2, dealing with "Expansion of Business": To investigate, plan, launch, and manage so many schemes of so many kinds might have strained any organisation, especially one of such recent birth; actual or suspected fractures will be indicated in this Report. Where are these fractures? If one takes out Gambia, there is not so very much that would be of a lethal or deadly nature.

In the first line of the next paragraph, I find the words: clarified and strengthened…an executive management board of chief officers will shortly be in regular operation. What is the difference between this new executive management board and the old Executive Council, which, I think, was referred to on page 60 of last year's Report on the organisation chart? I cannot see very much difference.

On page 2, reference is made to the "commercial aspects of the Corporation's business." There again, in somewhat unkind language we find that all the commercial aspects of the Corporation's business is now the responsibility of a special committee of the Board. I should like to know something about this. Who are on this committee, and is it actually functioning, because I understand that one of the members at least has been overseas for quite a long time, and there have been two resignations in this interim period? Is this special committee functioning, and is it as tough as it is alleged to be?

My next comment, on the same plane, is on the matter of ownership. If we look at paragraph 5, we see what is to me a somewhat sinister sentence: A further and welcome stage will be reached when some schemes can be transferred to local ownership… This is a new one on me. I should have thought that this question of transferring ownership was a matter of policy and not a matter of domestic concern for the Board itself. I would like to ask a leading question. Has the consent of the Secretary of State been given to this? That is a very important issue indeed to me. If we are going to transfer to local ownership in the Colonies there will be some bitter controversy. To whom are these concerns going? Are they going to be public concerns in the Colonial Dependencies or territorial areas, or are they to be given over to particular concerns or particular people? I should like to have an answer to this in the closing speech for the Government.

Mr. Dodds-Parker (Banbury)

Would the hon. Member suggest an answer and give some indication of what he is thinking?

Mr. Johnson

As a layman I am asking for information, and there are hon. Members who are better qualified than I am to answer these queries at a later stage in the debate.

I come now to the next paragraph, which deals with local associations. I spoke at some length upon this in the autumn. I then claimed that it was very important to get in touch with the colonial peoples on the spot, make them think they were part of the show, and encourage them to contribute to its success. This is to be done. I should like to ask what are these associations, and how far we have gone in this connection. I should also like to mention one particular scheme that is being undertaken. It is in Bechuanaland. A lot has been heard in the House about Tshekedi. In North Bechuanaland there is a cattle scheme, and I am told, for what it is worth, that Tshekedi has not been consulted. In this matter of cattle he is the best man in Africa. He has a wonderful stock himself and has been in the game for a long time. I should have thought that he would have been consulted when such a cattle scheme as this was being launched.

I am all in favour of members of the Corporation going to the colonial people, and I hope they will come to us in the House as well. I believe in democracy and Parliamentary accountability, and I should like the new Chairman of the Corporation to speak to Members of Parliament on the subject of the work of the Corporation, when we could ask some questions on what is happening in these colonial matters.

There is one last point I should like to make before I leave this matter of local associations. It may be difficult to get the best people to serve upon such organisations. How are we going to get them? I should like to know what ideas the Minister has in mind? If they are whites, we might find the same thing happening there as happens here with some of our local authorities. We know of cases where builders on housing committees seem to get notice of any developments under town planning schemes. We ought to be careful about those we get on these associations overseas.

If it is a question of the blacks and other indigenous people, we are concerned whether we have got sufficient native people of a sufficiently high calibre to serve. One hears about certain commercial classes in Uganda and East Africa, and we want to be careful about the types we get upon these committees to advise and help the Colonial Development Corporation.

I am watching the clock and shall not be too long, but I should like to follow an earlier speaker and make a little diversion on this matter of public corporations and their liabilities and private businesses, There is a vast organisation of criticism continually spot-lighting and floodlighting the deficiencies and financial difficulties of public corporations, particularly in the House of Commons. The Opposition are well organised, and they have some very able debaters. There is also an equally efficient machine for concealing the deficiencies and defects of businesses outside the House. Let us be careful not to let inordinate criticism inside the House destroy the confidence of people both here and elsewhere. We have had a lot of that in the past. It is well to remember that these public corporations have come to say, whichever party is in power, and that it is necessary to get the best people on to them. It does not do much good to attack the people as they have been attacked in the past in the House.

I could speak quite a while upon the mistakes of big business. It would be most illuminating to have a debate on the subject, particularly if the Opposition played their part in helping us by dealing with the mistakes made by the capitalists. Here is one idea. If Billy Butlin had been Chairman of the Colonial Development Corporation and there was an investigation into his escapades in the Bahamas, we would have a most interesting debate. I do not say this to reflect in any way on Mr. Butlin, but one can visualise certain other things which have happened in the past few months, besides the events in the Gambia and in other parts of the world.

The Opposition have been speaking today with two voices. I should like to know where they stand in this matter of the Colonial Development Corporation. The hon. Member for Mid-Bedfordshire (Mr. Lennox-Boyd), who often leads for the Opposition in this matter and to whom I listen with attention, edification and often real pleasure, said in 1947 that he always felt that a colonial development corporation was the proper method of developing the Empire. That was fair enough, but then I listened to him on 13th March last when he said: …there are 50 other schemes, for that also in our eyes is a great offence."—[OFFICIAL REPORT, 13th March, 1951; Vol. 485, c. 1336.] I may be taking the words out of their context, and I am sorry that the hon. Member is not here, but it is a strange Empire policy for the Opposition to say that 50 schemes are too many. I do not mind if there are 50 schemes if 47 are good and three are bad. I do not mind 100 if the preponderance are good, but it seems to me that we are not going to get the support of the colonial people if we are told by leading Opposition that 50 schemes are too many. I would beg some of them to give us a little less of this partisan vituperation. The hon. Member for Bury and Radcliffe struck a high note in his opening speech and set a fine example.

Mr. Henderson Stewart

I have no right to speak for the hon. Member for Mid-Bedfordshire (Mr. Lennox-Boyd), but I was making a similar point when I said that I believed in the need for 500 schemes; but I tried to point out that it was a very difficult task for a single body like the Colonial Development Corporation to run more than 50 schemes. That, I think, is the point.

Mr. Johnson

That may be, but when I look at the documentary evidence in this Report I find that the figures suggest that such is not the case.

In conclusion, may I put against what was said by the hon. Member for Mid-Bedfordshire what was said by the hon. Member for Guildford (Mr. Nugent), who speaks in most of these debates and has the ear of the party opposite. He said on 13th March last: This big idea of a Colonial Development Corporation, of which we are all in favour, is a new idea…. I do not think it should develop commercial units…let the Corporation develop research stations, and so on,…basic services of water and electricity supplies, and of communications; and…then"— and these are the significant words— let the private traders…go in to develop the land."—[OFFICIAL REPORT, 13th March, 1951; Vol. 485, c. 1366–7.] We heard earlier about "hiving off," and we have heard Members opposite speak of future development in this way. I would not for a moment agree with this. I believe the State has a much bigger job than to go in and acquire land and then come out and allow captains of industry to go in and exploit the land—in a good sense, of course, financially.

In my view the chairman and members have done good work. Without being personal, I would say that the late Chairman is quite tough. He has gone back into industry out of which he came. I understand that at one time he was a member of Barclays Overseas Development Corporation and has played a part in other big industrial concerns. But we cannot always get outsiders to come in who are as tough as he is. Not all our capitalists are perhaps quite so thick in the skin as are politicians. They are made of much gentler stuff sometimes, and if we are to pillory some of these people who do come in, as we have in the past few years, we shall have a job to get the best men to come into the administration of public concerns.

I do not know whether this campaign is only against Socialists, or against all men who come over to public concerns. Outside the House I have met with terms like "Quisling" used about men who come on to the boards of public concerns like the Colonial Development Corporation. It is a sobering thought to me that there has been this campaign against men who have done what in all sincerity they felt was their whack for the public weal, and I hope that hon. Members of the Opposition will bear this sobering thought in mind. It will become increasingly difficult to obtain the services of first-class administrators in public concerns—which will of course be with us, whichever party is in power.

7.32 p.m.

Mr. Beresford Craddock (Spelthorne)

I do not intend to speak at great length and I hope the hon. Member for Rugby (Mr. J. Johnson) will forgive me if I comment on only one or two of the points he raised. He spoke of criticism of public corporations and said that we should be careful not to run them down. As far as we on this side of the Committee are concerned our criticism is launched not so much at the existence of the public corporations that have been set up as at the way they have been run. That, in my view, is a very legitimate cause of complaint.

The hon. Member also said that he did not think these 50 schemes were too much. I agree with the hon. Member for Fife, East (Mr. Stewart), who said that it is virtually impossible for this Development Corporation to cope adequately with the various schemes. Perhaps this will be the first discordant note in this debate, but I am not happy that this type of corporation is the best to develop the Colonies properly. I have been doubtful from the very start. In his opening remarks the Minister of State stressed the need for setting up the Corporation, but I have great doubts whether this is the right way to get the best development for the Colonies.

I agree with the hon. Member for Swindon (Mr. T. Reid) who stressed the advisability of making the fullest use of administrative officers in the various territories. I feel one of the great objections to this Corporation is that it is taking away responsibility for development of the Colonies from the Governors and their staffs in the various Colonies concerned. They are the people who know the local conditions far better than any outsider and they should be primarily responsible, under the Colonial Office, for the economic, social and welfare development of the territories to which they are appointed.

Mr. Dugdale

Does the hon. Member mean that they should run industries, because the Colonial Development Corporation is not so much concerned with welfare in the ordinary sense as with running industries?

Mr. Craddock

I appreciate that, but I shall develop the point later. I feel that the Governors and their staffs in the various territories have a much more intimate knowledge of conditions and that they should primarily be responsible for all development, economic, social and welfare, under the Colonial Office.

There has been some praise and criticism of the present Chairman and the previous Chairman of the Corporation. I am not going to enter into those discussions. I think everyone agrees that from the point of view of a pure Report this is the most informative that we have had since the venture was started. It has been written in very terse and concise language, but one cannot condemn it for that. Surely the real function of the present Chairman, at this moment, having taken over after so short a time—after all, he has only had two or three months in which to compile the Report—is to get information and give as many facts and figures to the Committee as he can at the earliest opportunity. Surely he cannot be blamed if he has not gone into eulogies about the achievements of the previous Chairman.

Having said that, I do not regard this Report as entirely satisfactory. I feel that a Report of this description should contain very much more detail than we have had in past reports or even in this Report. Take, for example, Nyasaland Vipya Tung Estates Scheme. I feel that when the chairman of a board is reporting to the shareholders or, in this case, to the House, we are entitled to know what is the present yield of tung per acre, what was the yield from previous experiments and what they are getting now; what is the price now and sales possibilities and how costs of production in Nyasaland compare with those in other areas. Those are facts and figures which should be in any report, so that we could take a really intelligent interest and make intelligent criticism. From that point of view this Report, like previous reports, falls far short of what I consider it should be.

I wish very briefly to refer to one or two details in the Report and, first, I draw attention to page 1, which says: Business has expanded rapidly…the pace set by urgent needs which the Corporation was set up to meet. Quite frankly, I do not understand that. I believe that one of the great faults has been trying to do too much far too quickly and, as many hon. Members who have lived in the Colonies and have great knowledge of them will agree, in those countries progress is inevitably slow and cannot be hurried. I see no ground for the pace being set by urgent needs, because I do not know what those "urgent needs" are.

Next, I turn to page 4. My hon. Friend the Member for Fife, East, has already drawn attention to the comments in paragraph 6 (3), which says that Plans have been proved defective owing to inadequate local knowledge in their drawing. Here, surely, is justification for my remarks that not nearly enough reliance has been placed initially on the people on the spot, who know far more about these things than do the newcomers in this field. I am surprised also to find it stated in paragraph 9 (4), on page 5, that The Corporation should be able to play a part in the Colombo Plan in the Far East, both as beneficiary of Government investment and as pioneer of commercial investment which should follow. I hope that if the Corporation continue to exist, it will hesitate to start any schemes, not only at present but, indeed, for some time, in the Far East under the Colombo Plan until we are assured that the existing schemes to which the Report refers are going ahead with a reasonable chance of success.

I consider it astonishing that the Corporation should indulge in hotels. Paragraph 16, on page 7, states that There is agreement with the Northern Rhodesian Government for an hotel at Livingstone and with the Tanganyika Government for one at Dar-es-Salaam. I should have thought that it was not the function of the Colonial Development Corporation to run hotels. Hotels in East Africa are very difficult to run at the best of times, and very few of them have ever paid their way. Indeed, as far as I know them from experience, there is no great necessity for such hotels to be built in these areas. The Corporation have now taken over an hotel which has been built by the Uganda Government at Entebbe. As the Minister of State knows, that is only 20 miles from Kampala, which has excellent hotel facilities, and I can see no justification whatever for the Corporation taking over the hotel at Entebbe.

Mr. Dugdale

I am sure that the hon. Member will be glad to know that the hotel is proving a commercial success.

Mr. Craddock

It depends upon what the Minister means by commercial success," because I think that the hotel, to which page 38 of the Report refers, made a profit of only £200 or so on a capital asset of something like £70,000. I should not regard that as being very much of a "commercial success." In any event, I still maintain that a Corporation of this nature is not the right type of body to run such things. As has been pointed out from the very beginning it was never intended that the Corporation should run ventures of this kind.

I shall give the Committee some quotations from the remarks of right hon. Gentlemen opposite when the whole scheme was first discussed in the House. I could go on from page to page where the Report says quite definitely that costs were under-estimated, that it was not realised that insufficient labour was available, and so on. One of the reasons why all this has happened is that it is quite impossible for a Corporation of this description to develop the Colonies on proper lines and as quickly as local Governments could do so.

My hon. Friend the Member for Hornsey (Mr. Gammans) pointed out the dangers of failure in ventures of this kind and gave the example of Africa. He said that failures such as the groundnut and the Gambia schemes were making people chary of putting capital into that vast Continent. But even more important is the effect and disappointment which these failures have upon the Africans. I am delighted to learn that an effort is now to be made more and more to bring the people of the territories concerned into these schemes and for their participation in them.

From these brief remarks, what conclusions do I draw? I agree wholeheartedly with my hon. Friend the Member for Fife, East, in advocating that there should be a pause. I should like to hear that the Colonial Office were instructing the Chairman and the Board of the Corporation to stop any further schemes, in order to give the Chairman an opportunity of investigating those already in existence and of coming back and telling the Colonial Office, and eventually the House, what, in the light of that experience, he thinks should be stopped. Until that is done, I feel very strongly that no further schemes should be embarked upon.

I have said that I would refer to the remarks of various right hon. Gentlemen opposite at the time the colonial scheme was first debated. On 25th June, 1947, the then Colonial Secretary, Mr. Creech Jones, stated that the object of the Colonial Development Corporation will be to establish or assist any enterprise in the Colonies which is designed to increase their general productive capacity. Is the management of hotels, of which I have given examples, designed to increase the general productive capacity? The right hon. Gentleman went on to say: …we do not want the charge for any of this to fall on the Treasury."—[OFFICIAL REPORT, 25th June, 1947; Vol. 439, c. 439, 441.] Next, I should like to point out what the present Secretary of State for War said on 6th November, 1947. Speaking of the Colonial Development Corporation, the right hon. Gentleman said: I think it will tend in general to undertake in Colonial Territories all those schemes which involve the improvement and developing of existing methods of production…. I believe that if the Corporation had in the first instance confined their attention to improving the existing enterprises, which in many ways have been a success so far, and had given them help in research and other similar ways, they would have done much greater good in the development of the Colonies. In the same debate, the then Under-Secretary of State for the Colonies, Mr. Rees-Williams, said: Finally, the object of these corporations is development for the people and more and more by the people. As I have said, I am very glad to know that that policy is now being pursued, but I believe that if there were more local administration of these enterprises there would be much more co-operation and we would be able more and more to bring the local people into the running of these schemes. Finally, Mr. Rees-Williams said: It is only, in fact, Socialism that can develop the Empire."—[OFFICIAL REPORT, 6th November, 1947; Vol 443, c. 2022, 2121.] All I can say is that if this Report is a first-class example of Socialist development, then as far as I am concerned words have lost their meaning. I suggest that the Colonial Secretary should pause and should give the question of further development the most careful thought. If he does so, I am satisfied he will agree that the time has come to call a halt in starting any further schemes and to concentrate on making a success of those which have already been started and which the Chairman, after investigation, considers to have a possibility of reasonable success.

7.50 p.m.

Mr. Rankin (Glasgow, Tradeston)

Usually, when a new chairman of one of our great corporations is appointed, it is customary to offer him congratulations on his appointment and to wish him well. My hon. Friend the Member for Shettleston (Mr. McGovern) this afternoon took a somewhat different course and had some unkind things to say about the new occupant of this high office—

Mr. Kirkwood (Dunbartonshire, East)

A fellow countryman, too!

Mr. Rankin

—even though, as my right hon. Friend the Member for Dunbartonshire, East (Mr. Kirkwood) remarks, he is a fellow countryman.

I shall not intervene in whatever controversy may develop from that. I wish to pass on to the Committee what many friends of mine who are interested in the work of the Colonial Development Corporation, and particularly in our Colonies, have said to me. They have commented on the fact that throughout the Report—naturally, I am ascribing no particular blame to any person over this—there is an undercurrent of criticism of the previous occupant of the chair which, to them at least, was highly distasteful. In view of the expressions used by my hon. Friend the Member for Shettleston, I think that although the new Chairman has started very well indeed, the Report would have been strengthened if that underlying note of criticism had been left out. Of course, it may have been quite unwitting and not a conscious criticism.

I think it can be said that barring one or two speeches from the other side of the Committee today—those of the hon. Members for Spelthorne (Mr. Beresford Craddock) and Hornsey (Mr. Gammans)—there has been moderate and stimulating criticism of the work of the Colonial Development Corporation, and there has been no doubt in all parts of the Committee first, as to the need for the Corporation and, secondly, that its principal function must be to develop the economic resources of the Colonies.

That has been the tenor of most of the speeches so far delivered. I shall not follow along those lines because we all accept that as a primary function of the Corporation. I suggest that it must have another function which has been mentioned but to which a great deal of attention has not been paid today. A second function of the Corporation must be to train the colonial people technically and to encourage their organising capacity.

In that connection I want to refer to a Question which I put in the House in February of this year, namely, the closing of the Kota-Kota Produce and Trading Co-operative Society which operated at Mzuzu in Nyasaland. At that time, in raising matters like this which are not, as I am claiming, a function of the Corporation, we were ruled out of order. All I could get from the Minister was an assurance in reply to my supplementary question that if I wrote to him, he would write to me in return.

Mr. Dodds-Parker

What did he say?

Mr. Rankin

I will give the gist of the reply. Any action I was seeking to take to prevent the closing of that co-operative store was vain. It is now closed. However, the Corporation claimed that they paid £700 for the equipment and the stock. They also claimed, in the reply which the Minister sent to me, that the Society only held a temporary lease. These I presume were two of the operative considerations in closing the society. In the judgment of the Corporation there may have been sound reasons for it taking on this work, but in my opinion, on broad principle the Corporation should not be responsible for the closing down of a co-operative or of any African enterprise, particularly one of which my right hon. Friend had this to say to me in his letter: The store prospered, and was of value to the local community. I think the Colonial Development Corporation should encourage co-operative development wherever possible even if, for the time being, the co-operative is less efficient than the facilities which the Development Corporation can provide. I admit that it is important and necessary that we do all we can to help the African in his economic development—I am not denying that in the least—but it is no less important that we should do nothing to prevent the African from helping himself. Here was a venture which my right hon. Friend had to confess to me, in writing, was a valuable and prosperous little concern in which the Africans were able to manifest that organising ability for which I am pleading. Yet, because of some broader policy of which I know nothing this successful little project was closed. That is wrong, and in my estimation in doing that the Corporation is not performing what ought to be the second function that falls to it.

I should also like to mention that there is a lack of understanding in the Colonial Territories of the functions of the Corporation. In the West Indies, according to my information, owing to poor publicity work, there is an ignorant but understandable attitude which labels the Development Corporation as being just another imperialist enterprise. I hope this assumption is wrong, and that the appointment of Professor Arthur Lewis, on which appointment I congratulate my right hon. Friend, will help to dispel what we all regard as a wrong impression of the functions of the Corporation. I suggest to my right hon. Friend that a far more important way of bringing home the meaning of the Corporation to the colonial peoples would be by a more widespread use of public relations officers, of whom I think there are far too few.

In the "Tanganyika Standard" we find complaints of the secrecy which surrounds the Colonial Development Corporation and, in particular, the difficulty of getting information on the spot, although at the moment there is a warm appreciation of its development work. The setting up of local committees is all-important, and this, I am sorry to say, was completely neglected by the former Chairman of the Corporation, Lord Trefgarne. I welcome the change in policy which has sent a former Member of the House touring the Colonies in connection with this important aspect of the Corporation's work, and I trust that this work will be pressed forward energetically and that in due course the House of Commons will be given a report about this mission. I hope that my right hon. Friend will pay attention to that.

In this connection it is important that the Colonial Development Corporation should integrate its work with that of the 10-year development plans of the Colonies on both a local and a regional basis. There should not be watertight compartments but co-ordinated advance, integrating the plans and the experience of local Governments and stimulating the enthusiastic co-operation of the colonial peoples with the object always in mind that the Colonial Development Corporation, unlike private enterprise, has a double rôle, economic and social, and that that double rôle must always be in keeping with Labour Party policy.

8.3 p.m.

Mr. Dodds-Parker (Banbury)

I welcome the remarks by the hon. Member for Tradeston (Mr. Rankin) because I was trying to do what he succeeded in doing, to get a Question past the Table about the closing down of the co-operative in Nyasaland. I am sorry to hear that there has not been the successful outcome which I understood from other sources had been achieved. I understood that the co-operative had been allowed to continue working, but I understand from the hon. Member that that is not so.

Mr. Rankin

No. That is the information I have, unless I have completely misinterpreted the terms of the letter.

Mr. Dodds-Parker

I agree with what the hon. Member said about encouraging the organising and technical capacities of the people in those territories, but I question whether the Colonial Development Corporation is the right instrument to carry that out. Surely the Colonial Development and Welfare Fund is more the instrument for seeing that people are trained for these tasks?

Mr. Rankin

Even if that were so, would it not want some integration?

Mr. Dodds-Parker

I shall return to that later, but I welcome the point which the hon. Member has raised. He will remember a useful debate which we had—I thought it was out of order at the time, but we were allowed to have the debate—on the Committee stage of the closing down of the groundnuts scheme. On that occasion there was a considerable switch by hon. Members opposite from the idea of public ownership to the idea of ownership by producer co-operatives, which is something of which the Opposition thoroughly approve, because in the case of the producer co-operative it is possible for the land to remain in the ownership of the individual. Those who have studied this question, and particularly the question of agricultural production, find that the most successful ones, in general terms, are those where the owner-occupier is doing the production work.

Mr. Rankin

The hon. Member will keep in mind, of course, that, while producer co-operation does exist, this is only part of the work of the co-operative movement. There is the consumer side also.

Mr. Dodds-Parker

To me, the producer side is the important one. For reasons which the hon. Member will understand, the consumer side is apt to go astray and wander in the fields.

I believe that the Colonial Secretary and his predecessor are to blame for not giving a top overall directive to the Colonial Development Corporation as to what they are to do. If such a directive has been given, the House of Commons has certainly never seen anything which I, if I were the chairman of the Corporation, should regard as a practical directive as to how I should get on with my job. As one who has watched this Government every day that has passed since 1945, the self-styled planners are not planners at all, and, despite the efforts made in the columns of "The Times," there is very little sign of original, top thinking which is required in Socialist circles to put the Colonial Development Corporation in its right perspective.

There is no co-ordination. I could give the Colonial Secretary many examples. One is that of soya beans, a subject that I have raised in the House time and time again, being interested as a producer. The Colonial Products Committee held out hopes of a guaranteed price for soya beans which would be commensurate with the cost of production. But the Ministry of Food then lowered that price. There seems to be no co-operation between the Colonial Office and the Ministry of Food over marketing and prices.

There has been no public directive so far as I can see, as to what amounts of food and raw materials are required by this country, and whence they are to be obtained. I do not blame the Colonial Secretary for this. It should come from the economic advisers to the Government, the Chancellor of the Exchequer, the President of the Board of Trade and the Ministry of Supply. There has never been a top over-all policy directive as to what is required by this country and whence it is to be obtained. There has been no directive in public as to the part that the Commonwealth and Empire have to play, nor the part that free enterprise has to play, and what will be the part of Government agencies, the Colonial Development and Welfare Fund and the Colonial Development Corporation.

As far as I can see, the Government have never called in the existing producers to find out from them what is needed to increase production. The Colonial Development and Welfare Fund or the Colonial Development Corporation can be used directly by the Government. But if the Government went to the producers and asked what they required, the answers they would receive would include tariffs, or preferences, or better transport, or guaranteed prices, or extra capital help or protection from export taxes, which has been a serious disincentive to many producers in overseas territories. Even marketing research is a means by which the Government could give considerable assistance in anticipating future requirements. Through such indirect help, more can be achieved.

The 1949 Report, which we are not discussing today, is apposite. In the section dealing with special factors affecting the costs of colonial development undertakings, including taxation, land tenure and the high cost of essential services, matters of policy are raised which have never been explained to the House of Commons as a whole to enable the whole run of producers, quite apart from the Corporation to have the advantage of Government policy. I ask the Colonial Secretary, if not now, then later in the year when we have a debate, possibly on Colonial economic development, to give some sort of answer to these questions of first importance which were usefully raised by the Colonial Development Corporation in their 1949 Report.

It is not unamusing to some of us to see on page 51, in paragraph 3, that there appears to be a question of principle whereby the Colonial Development Corporation has obtained statutory assistance against the raising of rents in these territories which is diametrically opposed to the development charge which is made on development in Socialist Britain. I put it to the right hon. Gentleman that we must have answers to these questions, because, as I understand it, that is what the function of government should be.

There is still no policy on these three points, though unfortunately, there exists today—and on both sides of the Committee we regret it—a flight of capital from this country. We will be discussing that on Clauses 28 and 32 of the Finance Bill later. As usual, the Government are dealing with symptoms and not causes. We all regret the flight of capital. I think that the Colonial Secretary, with the Chancellor of the Exchequer, could do a lot to assist. As he knows, there is an inquiry going on at the moment into the question of taxation which will affect the Colonial Development Corporation as much as it affects the private producer.

That inquiry is calling for information, and I hope that the right hon. Gentleman will put the point of view of colonial producers, including the Colonial Development Corporation. It can be shown that the Profits Tax in this country is taking money to provide the social services for the people here at the expense of welfare, development, housing and so forth in the territories overseas. That question will come up again next week or the week after, and we shall return to the point then.

The first thing we ask the Government to produce is a top overall plan. When they have done that, they should then fit into that overall plan the place of this Corporation. Despite having no central directive from the Colonial Secretary, the Corporation has gone ahead. It is like building and launching a large ship without a rudder and without a chart. The Chairman and the Board have gone ahead, in my opinion bravely. I certainly would not have gone ahead without some policy directive on these questions of taxation, and so on. But they have gone ahead and have now achieved some 50 projects. However, they state on page 5 of the 1950 Report, in Section 9: There was no ready-made overall plan nor even separate regional plans; a start had to be made and there were useful jobs to be done. I still do not believe that there is an overall plan. I still do not believe that there are regional plans working under the Colonial Development Corporation, the Colonial Development and Welfare Fund and other development plans.

I am critical of the last Chairman and the Board that they should have gone ahead without this directive and without getting down to making an overall plan which would be required to carry this whole conception through to practical, successful conclusions. When looking at the make-up of the Board one would have thought, when we see on page I of the Annual Report for 1950 the eight divisions of activities, that on the Board there would have been one person who had practical, successful management experience in that field. I repeat the words "practical, successful and management experience."

One finds in the City of London an extraordinary breadth of practical experi- ence in every sort of activity all over the world. That is something which in my opinion one can still obtain there at a very low price. It is extraordinary how people will come as part-time directors on a board such as this and give of their experience. I should have expected to find more part-time directors who had successful practical management experience in tropical agriculture, fisheries, hotels, or whatever the particular group of projects might be. I still do not think it is too late to see that such individuals are appointed.

As to the overall effect of this Report, I do not know whether to be sad or angry about it, when we remember the immense good will with which the scheme was launched about three years ago. I am prepared to accept my share of the responsibility for not having made clear at that time exactly the way in which we thought these plans should be carried out. I do not think that on an occasion like this it is necessary to go into detailed criticism of the various projects that have been put up. Again, I am a producer myself of tung, and I cannot believe that a capitalisation of £1,500,000 for tung in Northern Nyasaland is going to be an economic proposition. I believe that development is needed in Nyasaland, but I do not think it should be off-loaded to the Colonial Development Corporation. I think that there is a large welfare element in it and that such a project should be handled by the Colonial Development and Welfare Fund rather than by the Colonial Development Corporation.

One other project is mentioned on page 20, and that is Grand Cayman Cannery, to build and operate a cannery on Grand Cayman Island to process turtles, to be sold primarily in Canada and the United States. I must say that it is difficult to read something like that and not believe that Government Hospitality and No. 2, Park Street, is not going to get a look in on this. In this great democratic world, it is strange to find that we are canning turtles for the free enterprise capitalist market of North America. My brief comment on this would be, "Fair shares my foot!"

I want to make one or two suggestions for the future which I hope will be constructive. We must have an overall plan, and it has got to be worked out, because, without it, we are not going to get that combination of Government money, Government agencies and private capital which I believe the great majority of hon. Members on both sides of the Committee interested in these problems are anxious to see. I would refer the Colonial Secretary to this document, "Partners in Progress," a report produced by the International Development Advisory Board in March, 1951, under Mr. Nelson Rockefeller who is, I believe, one of the significant personalities of the mid-20th century.

This report is now obtainable in this country, and I am glad to say that within less than two months of publication the President of the United States last week took action to accept the centralisation of overseas agencies. The report is supplied with diagrams produced in a way so that we may understand more easily than we are able to read. It has 86 pages and sets forth such an overall policy as, I believe, we must put before those who are required to get on with the job.

I support what my hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher) said in urging that the Colonial Development Corporation should be, primarily, a finance house. I believe it is rash to generalise from the particular, but I always think in terms of the Sudan Plantation Syndicate, in which there is the tripartite combination between Government, private enterprise management and ownership in the hands almost entirely of the people. I believe that the Colonial Development Corporation should take some hints from the Sudan Plantation Syndicate and undertake management, possibly on short term or for an undetermined period, with the idea eventually or handing over to local enterprise.

I would point out, too, that on page 84 of this "Partners in Progress" it advocates a bank for private enterprise. I think that the Colonial Development Corporation is somewhat nearer that—it is a different terminology than we use in this country—than, possibly, the words would have hon. Members opposite believe. I think there is common thinking on those lines which should be very useful to both of us, and if the Colonial Develop- ment Corporation were to become a finance house, avoiding, to a large extent, the detailed management of a lot of these projects, then I think it would be to the benefit of all concerned.

Hon. Members on both sides have advocated decentralisation. We must get the East African High Commission, for example, in some way to be the Colonial Secretary's representative without getting involved in the problems of day to day or even year to year management. I believe, too, that we should stress much more the place of producer co-operatives, because I believe that the Sudan Plantation Syndicate share in this Gezira scheme will proceed along the lines of a gigantic producer co-operative rather than along the lines of what is called a nationalised industry. Hon. Members on both sides have read with great interest the Sudan Hansard which gives a good account of Sudanese thinking along these lines, and from which, I believe, we can learn a great deal.

The last point I wish to make, and one which has already been made by my hon. Friend the Member for Bury and Radcliffe, is that this Corporation should be regarded as a revolving credit. This is where, I think, we part company with the hon. Member for Rugby (Mr. J. Johnson). He raised the interesting point of ownership. The fundamental difference between us is that the Socialists believe in having the means of production, distribution and finance in the hands of the State, while we on this side believe in a property-owning democracy. We have to build up in these territories overseas local capital. A colonial scheme which proves successful should be handed over within some period of time. There are many ways in which it could be done. It might be done through a producer co-operative or by selling shares to individuals on a register kept in the country of which only those who live in the country could be shareholders. Thus, if the project were successful, we could get our money back and use it on another scheme.

It has been said by hon. Members on both sides of the Committee that £100 million is a very small amount of capital, particularly as it is now worth only about two-thirds of what it was worth when authorised for the immense tasks ahead. I think we all feel that with a radical and informed overhaul from top to bottom of the Colonial Development Corporation and with a proper directive from the Colonial Secretary, there is still a very useful part for that agency to play in the great task overseas.

8.24 p.m.

Mr. Hector Hughes (Aberdeen, North)

I have two points to make, but owing to the pressure of time I shall abandon one and communicate it to the Minister by letter. The point which I wish to put before the Committee is on the impact of this colonial development upon the industry of this country and on reciprocity between the Colonies and this country. I must not, however, omit to offer my respectful congratulations to the Minister for his factual, detailed and highly controversial—[Laughter.]—I mean, informative speech, and to the Board for their admirable Report.

I hope the hon. Member for Bury and Radcliffe (Mr. W. Fletcher) will allow me also to congratulate him upon his non-controversial—that is where the word "controversy" comes in—approach to this, which should be a non-party matter. He was quite right to take that line, because the work of this Corporation is a very real and growingly successful attempt to change the Colonies from backward areas into self-respecting and fully productive areas.

The question is: How far will that go and what will be its effect upon industry of this country? The point that I wish to make is this. As these industries grow, there should be maintained as far as possible complete reciprocity and coordination between those industries in the Colonies and our corresponding industries in this country. The importance of that is emphasised by the rapid expansion of the Corporation's work. We do not yet know how far that expansion will go, how far it will grow in influence and whether it will affect the industries in this country.

Look for a moment at the rapid expansion, in two years. On 31st December, 1949, the undertakings in operation were only 28, with an aggregate capital of £14,187,000, while on 10th April, 1951, the undertakings in operation had grown to 50 undertakings with a total capital of £31,354,000. That that expansion is likely to continue at a rapid pace, is evidenced by paragraph 4 (2), which states: Business has expanded rapidly…the pace set by urgent needs which the Corporation was set up to meet. To investigate, plan, launch, and manage so many schemes of so many kinds might have strained any organisation, especially one of such recent birth; actual or suspected fractures will be indicated in this Report. These undertakings are spread over 22 territories and from the very nature of the Corporation they are likely to spread over more territories still. There were only nine of them when it started in 1948, but in 1949 they had grown by 19 and in 1950 they had grown by 22, making a total of 50 today. Not only have they grown in that way, but their functional distribution is impressive, covering agriculture, animal products, factories, fisheries, forestry, hotels, and minerals; and these functional potentialities, I submit, are also likely to increase in number.

I submit that they should be related in some way to the corresponding industries in this country. We do not know how far that will go and I am not going to cover all the industries, or indeed anything like that. I merely wish to touch upon one—the fishing industry, which is a very important aspect of the development, both at home and abroad. Fish oils, vitamin oils, fishmeal, canned and frozen fish are all valuable for consumption in the Colonies and for export. The question is: How far will they be exported? It is very important, in my submission, that the people in these islands, as producers, distributors and consumers, should know how they will be affected by this rapid and varied development in the Colonies.

In the Report for the year ended 31st December, 1949, it was stated that four fisheries projects of a very substantial character had been accepted by the Corporation. There was the Nigerian project with a capital of £337,000, the Nyasaland project with a capital of £100,000, the Falkland Islands project with a capital of £161,500, and the Gibraltar and Atlantic Fisheries with a capital of £263,000. I understand that others have been added to these and that more are likely to be added. The point I am making is this. How will these large and ever-growing diverse undertakings affect similar undertakings in this country?

There are a number of questions I should like the Minister to answer, all arising from that point. They are these: What contribution in actual amount and in percentage do these undertakings make to the food supply of our respective Colonies? What surplus of fish is available for export now, to enrich the finances of the Colonies? What export developments are likely in future? What is being done to develop fish culture in those parts, and to develop the by-products of fish? What research and what experimental fishing are being undertaken? Is there available sufficient powered craft, trained staff and gear of every kind to cope with these developments? What effect are these developments likely to have on our own fish industries in these islands and on our food supplies?

I am sure the Minister will realise that I am putting these questions in a constructive way because, in my submission, it is right that this ever-growing colonial development should be co-ordinated with the corresponding and relevant industries in this country. I have abbreviated my speech very much indeed, Sir Charles, in deference to your suggestion as to time. There are other observations I should like to have made, but I will close as I began by congratulating the Minister on his speech and the Corporation on its admirable Report.

8.32 p.m.

Mr. Frederic Harris (Croydon, North)

I hope the hon. Member for Aberdeen, North (Mr. Hector Hughes), will forgive me if I do not follow him to any great extent in his argument. I think most of us would have been disappointed if he had not touched on the fishing industry, because we assume that that is the industry with which he is most closely concerned. I should like to join with my hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher) in welcoming the Colonial Secretary back from his East African visit. I am sure he must have found it very interesting, and I have no doubt it will do a lot of good so far as the East African Colonies are concerned.

The Minister of State, in answer to a point raised by one of my hon. Friends relating to the Development Corporation taking over the hotel business, interjected to say that the Entebbe hotel was an outstanding commercial success. I do not know whether he knows much about it. I was in Entebbe myself a little while ago. The hotel managed to show £193 profit on £144,000 capital, so I do not think that can really be called an outstanding commercial success. In any case, one can always adjust the figures of income and expenditure so that they may show £193 profit or £193 loss. [HON. MEMBERS: "Oh."] If the Government do not know how to do it I suggest they should study their own groundnut experience, which will give them a good guide as to how to do it in future. All I am instancing is the fact that one cannot possibly say that the Entebbe hotel is an outstanding success.

I know that there has been a good reason for keeping political arguments out of this debate. That is a good thing, but we all have our own views about the Colonial Development Corporation, and it is good that we should have. I subscribe to the views held by many of my colleagues who feel that hotels should not be included in the activities of the Corporation, because colonial development does not lend itself to the hotel business. It is a precarious type of thing which will not bring any real benefits to the Colony concerned. There are always people who are prepared to venture to put up a hotel when the need warrants it. I do not think there is any justification for putting up money through the Colonial Development Corporation for setting up hotels.

Squadron Leader Kinghorn (Yarmouth) rose—

Mr. Harris

Time is very limited and I ask the hon. and gallant Member to be kind enough to forgive me if I do not give way. I also feel that to put money through the Corporation into the development of retail shops is rather wide of the mark. Obviously, each of us will have his own opinion as to what should or should not come under Colonial development schemes, but I suggest the present activities of the Corporation are altogether far too wide. I hope much more definite heads will be laid down of the types of schemes the Corporation will be undertaking in the future.

Tonight is not the time to dwell too much on any detailed project and there is hardly any hon. Member of the Committee who could do that because he would not have sufficient detailed information to make much criticism. There- fore, it is natural for us to speak in generalisations rather than of specific projects. Had there been time to go into detail I would have been more interested in ventures in East Africa than in any other part of our Colonies.

One has to be practical. After all, from the Committee's point of view this is a business matter. We are discussing this Report for 1950 and, just as any shareholder in any company would do, one has to make criticisms where they apply as well as give praise. As most of us know, it is when things go badly that one hears most about them. One seldom hears about the things that go well. That applies in private enterprise as well as in public work.

We have to face it that this Report shows a loss of £1¾ million after bringing in the £750,000 provision for special losses and depreciation and the writing down of investments detailed in the Report. That is a loss of £1¾ million against £11 million advanced so far through the Corporation. I have always contended that Government expenditure of this kind completely ignores any suggestion of interest on money advanced by the Government. Interest on money advanced under these schemes would amount to between £400,000 and £500,000 a year. It seems to me extraordinary that we have fallen into this habit with such public corporations that interest never comes into the reckoning when we study these figures.

By the end of 1950 there were some 50 schemes in operation, covering 22 territories and involving some £31 million. Only 20 of those schemes were either trading or earning interest and profit. Forty per cent. of those were working at a profit but 60 per cent. had a loss. That is a rather disturbing thing and one has to recognise these figures and these facts. I suggest to the Secretary of State for the Colonies that it is rather disturbing that such a large proportion of the projects so far tested obviously have weaknesses, as detailed in this Report, either in the way of failures themselves or of over-capitalisation, possibly through bad purchasing during the initial stages. We must not disguise from hon. Members of this Committee that undoubtedly we shall be likewise facing future capital losses on some of the other schemes still left.

One good point about this Report—as compared particularly with some previous ones connected with the groundnut scheme—is that we have in it the facts and the truth. There is no doubt at all about that, and that is of great concern to many of us who try to take an interest in these reports. It is rather refreshing that we should get the truth at last. On the groundnut ventures we got led all over the garden, and it was most unfair, and it was difficult to come to conclusions about that scheme. But here, I think, we have the facts.

Another good point about this Report—and it has been mentioned already in the debate—is that we have had the facts given to us early enough. The Report has been brought out as quickly as anybody could have expected. Last time, we were waiting until October—or July: but certainly to have had this Report by the end of April is quick. Obviously, the sooner we get information of this sort the better it is in considering our views.

I think there has been a tendency in the debate to agree that too much has been taken on by the Corporation. I myself subscribe to that view. I think the Corporation has got too spread out—that there is too much variety, and that too much has been tackled. I myself feel that some of its activities are not really run on business lines, as many of us would wish them to be. It is rather inevitable that with corporations of this kind there should be a certain amount of waste, particularly in overheads, which an ordinary business normally could not stand.

In touching on this question of overhead expenditure there is one thing which puzzles me. Perhaps the Colonial Secretary may help me about this. I think I am right in saying that the London staff of some 340 is roughly the same in number in 1950 as it was in 1949—that there has been no appreciable difference in the numbers of employees. Yet the cost seems to have gone up by about 40 per cent.—from £200,000 to £280,000. I do find some difficulty in understanding that. As regards the overseas staff, the cost has gone up, but in that case it has gone up in proportion to an increase in the numbers. I have seen some of these offices abroad, and I feel myself that there is a large number of staff that could be gradually curtailed.

I think we get rather extravagant in our views in regard to some of the public corporations and some of their overheads, and I think that some of the overheads could be drastically cut. We have got offices here in London, in Dover Street, Curzon Street and Park Street. Those offices are very spread out. That cannot lead to economy and efficiency. Perhaps the Colonial Secretary may make some reference to that. That spreading out must lead to excessive overheads and excessive costs, and I would suggest that a normal business could not stand such costs, and that it is only public corporations of this kind that are in a position to stand such heavy costs.

I suggest that we have to try to save as much money as we possibly can, and that the Colonial Secretary should suggest that the overheads should be studied, as at this particular time no money should be wasted. I suggest, too, that we should endeavour to consolidate the work that has been done. While, obviously, being in support of colonial schemes of this kind, I think the time has come to stop for a moment and consolidate what we have done.

My suggestion as to future policy, at any rate for a short while ahead, is that we should slow down for the moment, and that we should investigate and consolidate the schemes we have got. I am talking particularly about the larger schemes. I do not think there is one scheme with a capital of under £50,000. The average nominal capital is about £600,000. That is very large. It would not stop smaller projects going forward if at the moment we tried to ensure that we were on sound lines and consolidated what we were undertaking.

Where possible, I should like the best advantage taken of using local money, because it is obviously very beneficial to create local interest. It would ensure local vigilance and would bring with it that local criticism which is so vital to the benefit of these schemes. Also, local legislatures should be brought into the schemes as much as possible.

The Corporation ought not to embark upon schemes such as the £3¾ million Central Electricity Board scheme. Where alternative finance can be found the Corporation should not undertake the financing of such schemes. With both the Federal and Colonial Building Society in Singapore and the Lagos Executive Development Board, there are local municipal bodies of considerable substance and the Colonial Development Corporation need not have been drawn in. Certain Colonies have large surpluses which could be devoted to financing many of these projects instead of Colonial Development Corporation money being used.

I feel that there has been too much confusion about some of the past objectives. Several quotations have been made from the speeches of past and present Socialist Ministers on the plans of the Development Corporation. Each seemed to have a different view about the real objective. It is obvious that the objectives of the Corporation should be clearly laid down so that when a scheme fails people do not fall into the easy error of thinking that there is some hidden benefit from the money going into a Colony to help in the fight against Communism. That was one of the excuses made when the failure of the groundnut scheme became so obvious—that the money going into the Colony would benefit us in the end. When so much of that money goes into the pockets of Asians, who pay no tax, it does not benefit the Colony very much in the long run. There should be no hit or miss policy. The objectives should be clear-cut.

Small projects do not get sufficient consideration, and with three exceptions there are no projects with a capital of under £50,000. In the Colonies there is a great need for the development of secondary industries, so vital to the local economy. I should like the small man to be given the opportunity of acquiring some interest in colonial development. I have visited the Corporation offices abroad and been told, "We could not consider a scheme any smaller than £50,000 or £60,000." That is very bad policy, and I sincerely hope that the Secretary of State will broaden the policy to include the small men, who often do as much as the larger concerns. That would be good psychologically for the people of the Colony, who would then feel that colonial development was not limited to certain people. The broader the policy the sounder will be the results.

I should have liked to mention at some length the Tanganyika roadways scheme. I will content myself by saying that if hon. Members opposite have studied this Report at all and know anything about the scheme, they will know that if the Corporation had taken local advice at the time they would not have gone ahead with the scheme. The Report states: This has been an unhappy experiment…the accounts were grossly inaccurate…. Some of the lorries taken over have had to be scrapped…. Figures were produced purporting to show successful and expanding operations…. I admit that this is frank and truthful, and if the local advice that could have been given in Tanganyika had not been ignored this money would not have been wasted. I understand that the Government are talking about going on with that scheme. I would suggest to the Colonial Secretary that it will be a great waste of money if we go on with it.

These are all matters on which many of us have our own detailed opinions because we know these particular parts of the Colonial Empire ourselves. I wish success to the continued efforts of the Development Corporation on the lines I have indicated, and I make a particular appeal to the Colonial Secretary that the smaller man should be brought into the plans for the future.

8.52 p.m.

Mr. Woods (Droylsden)

The tribute paid by hon. Members opposite to the Government has been unique and rather entertaining. Hon. Members opposite on the whole accept the principle of the Corporation, and they appear to have had to use a magnifying glass to find something at which to quibble. One criticism made by hon. Members opposite was that the activities of the Corporation are too widespread, and the hon. Member for Croydon, North (Mr. Frederic Harris) concluded his speech with an eloquent appeal, which I heartily endorse, that we should make grants to schemes which will involve sums of less than £50,000.

An hon. Member opposite stressed the question of hotels and said that they should not be a function of the Corporation. We should wait, it has been suggested, until presumably the demand makes it profitable for private enterprise to find the accommodation. The fact is that in many of these areas unless there is some hotel accommodation it will be impossible for men of integrity and with technical knowledge capacity to live there and to do the pioneer work required of them. I have seen places in Africa and in North-West China where hotels are vitally necessary before any work can be done by Europeans.

The main complaint to which we have listened is: What is the overall plan; what is the objective? In this matter I think that we come to the vital issue which makes it difficult for many hon. Members opposite to understand the difference between Conservative policy and international Socialist policy. There, we have the crux of the whole problem confronting the administration of the Corporation. The beginning of trade in Africa was the slave trade. It passed through various processes until it reached the stage when it became sheer exploitation of the native resources and of the population, in the interests of profit making.

I have lived long enough to appreciate the falsity of the idea spread by the Press that the Conservative Party were the party that stood for the Empire, and that the Empire was of no concern to the Labour Party. We have lived to see events prove such a statement wrong, and a further demonstration of their personal interest is shown by the fact that in this debate this afternoon the whole concern of the Conservative Party was centred on the idea of doing something for profit.

They ask: Why does the Corporation not show a profit? They should know that at this stage no one with any intelligence would expect the Corporation to show a profit. [Laughter.] They are engaging on pioneering work after many years of neglect by Governments supported by the Conservative Party. Hon. Members opposite have developed the technique that when they can make no response to an argument, or when it touches them on a sore spot, they cover it by laughing. We are seeing some of it now. They know that what I am saying is true. Their concern is still for colonial development that will allow of the investment of the surplus wealth produced by the workers of this country to be invested in the Colonies so as to produce more wealth for them.

The day has arrived when we have a Labour Government and a Corporation financed by public funds, developing the potential and commercial possibilities of those vast areas of the earth's surface for which we are morally responsible. For the first time we are now in a position to debate our responsibilities to these people and to investigate how far we can bring our knowledge, experience, wealth, manpower, and technique to help them maintain and improve their present standard of life.

Mr. Jennings (Sheffield, Hallam)

What about responsibilities to the British taxpayer?

Mr. Woods

The British taxpayer—

Mr. Jennings

—is fed up.

Mr. Woods

They were fed up with hon. Members opposite, but my experience is that the overwhelming majority of the electorate, like hon. Members opposite, have nothing but praise for the performances of the Development Corporation.

Mr. Dodds-Parker

But not the way they are carried out.

Mr. Woods

That is the whole point, and this Committee today has the opportunity of criticising the work of the Corporation. Some of that criticism will be considered by the Secretary of State and by the Development Corporation, but we must keep in mind the major responsibility, which is to raise the standard of living in those countries.

Mention has been made of the cooperative effort of producer and consumer which is going on alongside this other development, and I hope that both developments will link up so that there will be a far greater sense of social and collective responsibility in the interests of the people of the Colonies, the Corporation, the taxpayers' of this country and all others who are interested in increasing the volume of food which is so urgently needed throughout the world, and which will bring relief to the people not only of this country but in every part of the world.

9.0 p.m.

Mr. Lennox-Boyd (Mid-Bedfordshire)

I should like to join with my hon. Friends and others who have welcomed the Colonial Secretary back to the United Kingdom. It is a little early as yet to appraise exactly the consequences of his visit to East Africa. There have been very few telegrams published about it and very few headlines, and in that particular it differs very much from the visit of his colleague the Minister of State for Colonial Affairs. But we are not disturbed at the absence of headlines. I can very well remember what a successful visit his predecessor Mr. Creech Jones made, also in company with Mr. Cohen, to East Africa and what value that was to East Africa and I think, also, to Mr. Creech Jones. I know from personal experience in Malaya what good work the right hon. Gentleman did in the Federation and in Singapore when he visited them recently and I have little doubt that equally good consequences to East Africa will flow from the visit of the right hon. Gentleman.

This is the first debate we have had on the Colonial Development Corporation since Lord Reith became Chairman. As we all know, he brings to his task a formidable reputation and not the least of the gifts he brings to this task is a reputation for candour. I think the Committee and the country will be glad that that should be so. Of his predecessor, Lord Trefgarne, no one would question the vigour with which he plunged into very many schemes and activities and he was certainly always courteous and helpful to those Members of the Opposition, like myself, who wanted information from him. Second thoughts and the experience in Gambia, added to the fears of Eleuthera and the Bahamas and many other things, have caused some doubts as to whether he was altogether the best appointment for the job.

For many years there has been a very worthy tradition that a Member should not use his position in the House to attack a Member in another place, so I hope I shall be allowed to content myself by saying that both as a citizen of the United Kingdom and a taxpayer and as one deeply concerned with colonial development I am delighted that Lord Reith has now taken the place formerly occupied by Lord Trefgarne. A number of hon. Members have said that Lord Reith has inherited a great deal of hard work and experience, but little has been said about the very many embarrassments which the noble Lord has also inherited. Undoubtedly, the Report we are considering today shows vivid illustrations of many of the difficulties with which Lord Reith is confronted, difficulties not of his making and certainly that would not have been of his choosing.

Perhaps many hon. Members will agree that one of the most interesting speeches of all was made by my hon. Friend the Member for Banbury (Mr. Dodds-Parker). He made it quite plain that it is not possible for the Colonial Development Corporation adequately to discharge its task in the absence of a clear Government lead and he showed how there is today very little indication of that lead in the field of Imperial policy and Imperial priorities. We are still very much in the dark as to exactly what raw materials, for example, it is in the interests of the Colonies to develop today, which will be the stable products on which their economies will depend if American stockpiling ceases or world prices collapse.

We feel that many of these activities in which the Colonial Development Corporation are now engaged have been chosen haphazard and at random without any regard for the way in which they would fit into a general picture of Empire development. But we do believe in the Colonial Development Corporation as an instrument for Imperial development, and it may be that it will be a most useful instrument in the hands of other Members of the House who talk a little less about planning but practise it more.

This is also the first debate we have had since the activities of the Overseas Food Corporation have been drastically reduced. We said at the time that the Corporation was reduced in structure and in function that there was no case for not transferring it to the Colonial Office as part of the Colonial Development Corporation. We expressed the fear that as the Overseas Food Corporation in its much reduced form is now more directly the responsibility of the Colonial Secretary than is the Colonial Development Corporation, the Minister might tend to regard the Overseas Food Corporation as a more favoured child. I hope that the right hon. Gentleman will give us an indication that that will not be so. Nothing we have heard today, however, has led us to alter our view that when the ambitious groundnut scheme was wound up some months ago, the remains of the Overseas Food Corporation should have been combined with the Colonial Development Corporation, as their only activities are in the British Colonial Empire.

I join also with my hon. Friends in welcoming the early publication of the Report of the Corporation and the form that it has taken. We congratulate the Chairman and the Board on the speed with which they have produced the Report and the way in which it is presented. In our debate last October, on the Report for 1949, I asked the right hon. Gentleman whether it would not be possible for the House to have the quarterly reports, or at any rate some version of them, that the Chairman of the Board submits to the Secretary of State. Although we welcome the earlier publication of the Report, we would like to be kept more in the picture more frequently than is possible if the only real information comes only once a year. I hope that the right hon. Gentleman will be able to hold out some hope that that policy might be conceded.

We also welcome very warmly indeed the detailed accounts of the undertakings supporting the consolidated balance sheet that Members will have found already in the closing pages of the Report. We now have for the first time a financial picture of each of the separate undertakings. Lord Trefgarne, for reasons that I appreciated at the time, consistently refused to adopt this course, but I am very glad that his successor has found it possible to change the presentation. We recognise that this is a bold move on the part of the Corporation. It will be quite possible for some people to misuse those figures—those people who are not prepared to take an overall picture of the activities of the Corporation in all their various activities. I hope that as the noble Lord and the Board have responded to the request from the Opposition benches to give us these detailed accounts, we shall not misuse them and that we shall recognise the courage that has prompted this form of presentation.

Many hon. Members on both sides will wish, with me, that it was possible for the project forecasts, on which the various schemes have been first decided upon, also to be published. I should very much like to know the exact project forecast on which, for example, the purchase of the Eleuthera Estate in the Bahamas was first decided upon. We welcome the fact that Lord Reith and the Board are now publishing much more comprehensive public statements on the initiation of schemes, and intend to do so, than was done previously; but we should still like to see the project forecasts themselves, and we think that we are entitled to renew that request tonight.

We have also noticed with great pleasure the tribute that has been paid by Lord Reith and the Corporation to the co-operation throughout the year of the Colonial Office. We have always hoped that there would not be too great Departmental control of the activities of the Corporation. We have claimed the right to challenge Ministers on matters that appeared to us to be important, and we have certainly queried the view, for example, of the Minister of State that questions of food production in the Gambia over the poultry scheme were matters of detail and should not be answered in the House of Commons. We have even regretted that in the case of the Gambia scheme the Minister of State, for example, in the debate on the Colonial Development Corporation last July, appeared to take as gospel, without challenging them at all, all the rosy pictures handed to him about the future of the Gambia egg scheme.

None the less, our greater fear was that the Ministry, the Colonial Office or the Treasury might exercise, or try to exercise, too great a day-to-day control over the activities of the Corporation. We are glad to find that this has not been so, and we hope very much that the candour with which Lord Reith and the Corporation have now produced this Report, and the many distasteful disclosures it contains, will not lead to any attempt by anybody to fasten greater Government control on the activities of the Corporation and make it even more difficult for them to operate in a commercial way.

However, I do not think that anybody reading this Report can doubt that the many criticisms which the Opposition have made about the details of various schemes have been abundantly justified. Lord Trefgarne complained of consistent Press criticism and was very angry with certain newspapers when they published information that was coming back to England as long ago as April of last year about the Gambia poultry scheme. Yet surely the Report we are considering today is a complete exoneration not only of those members of the Opposition but of those organs of the Press which, quite rightly, conceive it to be their duty to point out errors where errors exist; and these have not been the sort of errors that might be allowed to be justified or the sort of difficulties into which schemes were almost inevitably bound to fall. They were the sort of errors that showed a complete, utter lack of prudence and planning in the initiation of certain schemes. Miscalculations, lack of foresight, ineffective management, unhappy experiences, grossly inaccurate accounts—these are all phrases not of my own conjuring but from this Report.

Finally, on this subject, I would remind the Committee that the Minister of State was very angry with us during the last debate when we criticised the Eleuthera Estate in the Bahamas—very indignant indeed—but today this most expensive project is summed up by the Report in these words: The value of the Eleuthera Estate as an agricultural proposition and its possibilities for residential or tourist development have yet to be proved. It may be that before this year is over we shall find that this is another one of those hasty enterprises which was not planned carefully but entered into over-enthusiastically and largely on a few individual recommendations.

We have all the greatest sympathy with the present Corporation, and with Lord Reith in particular, for what one of his ministerial colleagues would have called in earlier days the pretty poor bag of assets that he has inherited. When the Minister of Town and Country Planning first used that phrase—"a pretty poor bag of assets"—when he was Chancellor of the Exchequer to describe British Railways, he had a two-fold object in mind. He wanted to justify the payment of inadequate compensation for the railways—[HON. MEMBERS: "Oh!"]—and he also wanted to have a good alibi if, as it happened, the nationalised transport undertakings failed.

The first of these reasons does not apply to the Chairman of the Colonial Development Corporation. I will acquit him of the second reason and only sympathise with him in the bag of assets that he has inherited, one of which he describes as a job lot of assets which was purchased at much too high a price. As I said, we look with confidence to the new Chairman. I hope he will be subjected to no greater ministerial control than his predecessor had. The real solution surely is to choose a good Chairman and if the Chairman fails to do the task adequately, remove him and appoint someone else. However, we welcome the Report very much because it goes straight to the point and tells facts as I fear they really are.

I shall make only one further reference to the Gambia scheme, because we had a very lengthy debate on it some weeks ago. I want to refer to the strange conflict of evidence as to whether or not the Board were fully consulted, which has drawn from the Minister of State today a statement about a forthcoming semi-judicial inquiry. We very much welcome the inquiry that the Minister of State has said that the Lord Chancellor will initiate—

Mr. J. Griffiths

The Lord Chancellor will not initiate it. We are initiating the inquiry. The Lord Chancellor will appoint the members.

Mr. Lennox-Boyd

I hope that it will be satisfactory whoever initiates it. I am delighted to be put right on a constitutional matter by a Member on the Government Front Bench. In another place, Lord Trefgarne referred to what he thought were the political motives behind some of the serious charges that had been made. But the charges were not made by any Conservative Member of Parliament; they were made by the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith). It was he who made the lengthy catalogue of charges about the failure to consult the Board. We noticed with interest that in another place Lord Milverton said that he could not endorse the accuracy of some of the statements made by Lord Trefgarne, but we shall await the result of the inquiry to see which of the noble Lords is right.

In fairness to Lord Milverton I should like to draw to the attention of the Minister of State the fact that during the Gambia debate the suggestion was made that Lord Trefgarne was very largely responsible for the scheme, and, quite rightly, the Minister of State said that the Board as a whole—if the business was done in the right way—also shared the responsibility, and he said that the Board had experts upon it, and he cited in particular Lord Milverton. As Lord Milverton has recently pointed out in the Press—I think it should be repeated in the House where the first statement was made—the Gambia project was approved—if it was approved—by the Board on 20th March, 1948, and Lord Milverton joined the Board on 30th July.

Mr. Dugdale

I appreciate that Lord Milverton was not on the Board when the Gambia scheme was initiated. My point was, and it remains, that he was on the Board throughout the continuation of the Gambia scheme and he was therefore able to criticise it as and when he wanted to do so.

Mr. Lennox-Boyd

No doubt the inquiry will elicit the fact that he did criticise it afterwards. I was concerned about the initiation of the scheme. It is no part of my task to defend Lord Milverton, but I know that he is regarded with particular disfavour by the right hon. Gentleman ever since he said in another place that he joined the Labour Party because he thought that he would be helping to build a brave new world but found that he was taking part in a "Rake's Progress."

I was stressing the various changes in the situation between today and the occasion when we had previous debates on the Colonial Development Corporation. This is the first opportunity we have had to discuss the Corporation's activities since some very important constitutional changes have occurred in the British Colonial Empire. I want to make this suggestion to the right hon. Gentleman. In all these schemes as part of the activities of the Colonial Development and Welfare Fund or the Colonial Development Corporation one thing which is essential is the co-operation and the understanding of the colonial people. It was, indeed, with this in view that my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) said on Empire Day, at a large demonstration in London, that we believed that the time had now come to invite representatives of the Colonial Empire to direct participation in our conferences on matters of trade, preferences and the like.

Whichever party is in power in the United Kingdom, the good will and sympathy of the whole country will be with the new constitution in the Gold Coast. It might, for example, be very appropriate if, at an early date, at future conferences, there were to be a representative African Minister and other Ministers taking part in consultations affecting the livelihood of their own Colonial Territories. We particularly welcome that part of this Report, in paragraph 4 on page 2, which talks about growing "local association." I hope that the right hon. Gentleman will be able to tell us something about the form which he hopes local and regional associations will take.

Finally, I should like to ask myself a question and then suggest an answer to the Committee. Is it still necessary for there to be a Colonial Development Corporation at all? It is my view that there is such a need. That in no way implies endorsement of all the activities of the Corporation. The Blue Book published last year on the Colonial Empire used these words: As existing Government reserves are now more or less committed the time has almost come when finance should be regarded as the major limiting factor in colonial development. There are various ways in which finance can be provided. There is private investment.

Here, I should like to say how astonishing it seems that, at a time when we are trying to attract capital to the British Colonial Empire, we should have included in the Finance Bill a Clause—Clause 32—which will make it impossible for companies in this country to expand their colonial activities and to retain the control of them in London, which is what we want to do. Incidentally, that Clause will have the most serious consequence on those attempts to attract American capital To the Colonial Empire of which my hon. Friend the Member for Banbury spoke and which are so admirably summarised in that book, "Partners in Progress" to which he also referred. I should like to say more about private capital investment, but I promised to let the right hon. Gentleman start his speech in two or three minutes' time. I hope that an opportunity will arise in our discussion of the Finance Bill for some of us to deal more fully with that point.

There are other ways in which capital can be provided. There is the Colonial Development and Welfare Fund, which, though not entirely philanthropic, has got a philanthropic and social bias. There are also the Colonies' own reserve funds, and loans. I agree with my hon. Friend who said that the financing, for example, of Singapore and Malayan enterprises, housing and electricity, are more properly subject for local loans or loans raised in London, though I believe that there were reasons in that case why help should come from the Colonial Development Corporation.

Lastly, we have the Colonial Development Corporation itself. It is our view that its task should be to start businesses in territories where private firms are unwilling or unable to start them, and to attract other capital to those territories. We have from the start taken the view, even in the very earliest days, that the Corporation, once having successfully started a venture, should be prepared to hive that venture off. The hon. Member for Rugby (Mr. J. Johnson) spoke as if that would be, in some way, a betrayal of the purpose of the Corporation, but unless that is done the Corporation will be severely limited in its power to do good and will be unable to undertake any new schemes after a certain period unless, of course, the overall figure is largely increased.

I hope very much that the Corporation will use this review that we are having today, and the appointment of a new Chairman, as an opportunity to take stock, to consolidate, and to work out schemes of close association with local people in the activities in which they are already engaged; and, at the same time, to plan in the future how to arrange, by lease or otherwise, for a growing participation by private enterprise, local and United Kingdom, in all future activities. We shall watch their affairs with particular interest.

May I say, perhaps, personally, that there are two projects in which I am myself deeply interested. One of them is the great Mokwa project in Nigeria. I entirely agree with the Chairman of the Corporation and with the Report that, politically, socially, agriculturally and economically, this is one of the most important projects in the entire Colonial Empire. The others are the long-term schemes in the Protectorates and the High Commission territories, like the Swaziland irrigation scheme, the Usutu forestry scheme in Swaziland and the ranch and abattoir scheme in Bechuanaland. We here have a particular responsibility for the High Commission Territories and their economic welfare, and we trust that these schemes will meet with the success they deserve.

Finally, to all those who are working in the Corporation, whether in London or in the Empire overseas, we send our cordial good wishes for their success, in the knowledge that they will profit by the experience of the last two years, and that, in future, schemes which will not have to be subject to the same Parliamentary scrutiny will become the order of the day.

9.26 p.m.

The Secretary of State for the Colonies (Mr. James Griffiths)

I am grateful to hon. Members who have referred to the fact that I have only just returned from a visit to East Africa. It is perhaps symptomatic of the days in which we live that at half-past seven on Saturday night I was in Nairobi and this evening I am taking part in a debate with hon. Members here in this Committee.

To reply to a debate on colonial problems, whether we are dealing with general problems or political or economic problems, or, as we are today, discussing a report of the Colonial Development Corporation, is not an enviable task, for the simple reason that it is almost impossible in the time at one's disposal to refer as one would like to do to the very many detailed questions that have been raised. If, therefore, in the space of time available to me, I find it impossible to refer to every detailed question that has been asked or to offer a reply to it, I apologise in advance, but I will promise that not only will I do so myself, but I will undertake to see to it that the Corporation gives consideration to any detailed problems that have been raised and will communicate with the hon. Members concerned when they have had an opportunity of investigating them.

I should like to refer very briefly, though I must do so, to the fact that, in the course of the debate, speeches have been made which have contained personal attacks. There was the speech of the hon. Member for the Isle of Wight (Sir P. Macdonald), who attacked the late chairman of the Corporation, Lord Trefgarne. Then there was my hon. Friend the Member for Shettleston (Mr. McGovern), who attacked Lord Reith. I deplore both attacks, because neither of the gentlemen referred to are Members of the House, and I do not like people being attacked when they have no opportunity to reply to those attacks.

Sir P. Macdonald

May I interrupt here?

Mr. Griffiths

No, I cannot give way.

Lord Trefgarne was appointed chairman by my predecessor in 1948. He came to this post to assist in creating the Corporation, and he built it from scratch. Whatever mistakes he and his Corporation may have made, I think that the Colonial Office and this country owe him a debt of gratitude for the work he did in those very difficult initial stages. Lord Reith has been appointed chairman at my invitation, and I have every confidence in him and wish him well in the task he has undertaken. I say, therefore, that I myself have confidence in both of them. When Lord Trefgarne wanted to resign, I tried to persuade him to stay on, because I believed that he had shown himself to be competent in doing the job.

I wish also to refer to another comment made by the hon. Member for Hornsey (Mr. Gammans) in the course of his remarks, in which he referred to the fact that he had heard that two former Members of Parliament—it so happens that they are two former colleagues of ours—had been employed by the Colonial Development Corporation. Let me begin by saying that I hope it will never be laid down that an ex-Member of Parliament is not entitled to seek employment with a public corporation. Why was this question raised this afternoon? If it was raised only for the sake of getting information, I will give the information.

Mr. Tom Skeffington-Lodge, who was a colleague of those of us on this side of the Committee in the last Parliament, was employed as personal assistant by Lord Trefgarne. He resigned earlier this year and is not now in the employ of the Corporation. Mr. Cyril Dumpleton, who was also a colleague of ours in the last Parliament, was and still is employed by the Corporation. He is now undertaking at the invitation of the new chairman, Lord Reith, the very important task of visiting colonial territories in order to bring about what is referred to in the Report as a closer link-up of the Corporation with the people of the territories. Those who know Cyril Dumpleton will agree that no better man could be found for that job.

Mr. Gammans

I have no objection to ex-Members of this House being so employed. The question I asked was whether these positions were advertised in the public Press, and, if so, in what newspapers, what salaries are being paid, and whether it is true that Mr. Dumpleton started off as the printer to the Corporation and has now been given this job of going round the territories.

Mr. Griffiths

As to whether these posts were advertised or not, I will seek that information. Mr. Dumpleton was engaged in the printing trade for 20 years and was engaged with the Corporation in that connection. Quite recently, he was invited to take on this other task, and all of us who know him are convinced, as I have said, that no better man could be found for the job.

I now come to the first question raised by some hon. Members whether there is still any need for the Colonial Development Corporation. I think there is. Indeed, I would say that the need for it now is more urgent than it was when the Corporation was set up three years ago. The need arises from the fact that we have the prime responsibility for these 38 territories and for their 60 million people. The population of these territories live in poverty; life for them is a continual struggle against disease, and their standard of life is extremely low. Whatever may be the advantages which have flowed from private investments in colonial territories in years gone by—and I know there are very many—the fact remains that the native peoples are now faced with the problem that they have all the disadvantages and sometimes a low wage economy which holds them down and prevents their development.

In our view, it is essential therefore that there should be a corporation of this kind which can make its contribution towards raising the standard of life of the people of these colonial territories. That, need is still there. I have just returned from East Africa, and I can tell the Committee that things come home to one with greater force when one sees them for oneself than they do when one reads about them in books. In all these territories we are faced not only with the problem of the present standard of life, which is very low, but with the fact that unless something is done to raise it, it is going to fall lower still owing to the pressure of population. I was told in Uganda and Kenya that the population in the African territories was increasing at rates varying from 2½ to 5 per cent. per annum, which means that in 20, 25 or 30 years' time the population will have doubled.

The fact is that through the marvels of modern medicine and the development of the social and economic services we are saving lives in most of those backward areas, as they are known, at a very much faster rate than we are learning to produce more food and feed more mouths. That is the challenge and I therefore say to hon. Members in all quarters that if we accept the essential responsibility for colonial policy, there is no moral justification for our having the responsibility for any of these Colonial Territories unless we are prepared to make sacrifices, to raise their standard of life and to help them in every way to progress.

I think it will be agreed that at this stage we cannot leave the economic development of these Colonial Territories to private enterprise alone. Does anybody suggest that we can? I invite hon. Members to say whether they think so. Private enterprise and private investment has a place today as much as ever, but no one suggests that private enterprise alone can do this job.

Sir P. Macdonald

May I interrupt?

Mr. Griffiths

I am afraid not.

Sir P. Macdonald

The right hon. Gentleman invited interruptions.

Mr. Griffiths

Very well; if the hon. Gentleman wishes to interrupt I will give way.

Sir P. Macdonald

I know something about Colonial Territories and their governments which come under the Colonial Office and under the right hon. Gentleman. Nobody can start a private enterprise industry without a licence from the Government. Let anybody try to get a licence out of most of the colonial Governments today, and have their applications submitted to the right hon. Gentleman, without wasting two or three years and a lot of money in research—and then probably be unsuccessful.

Mr. Griffiths

I do not think that is relevant to the point I was making. I was saying that if we are to do this job and to do it in time—and I would emphasise the remarks of my hon. Friend the Member for Shettleston, that in all these territories we are fighting against time—and if the free world and the democracies are to save these territories for the free world and for democracy, then we have to meet the challenge which is made to us. And if we are to do that, then there is a place for private investment, but there is also a need for work by a Colonial Development Corporation. I do not think one Colonial Development Corporation can do this task adequately. I do not think one country can do the task adequately. If it is to be done adequately and in time the whole democratic world must pool its resources. But I think the Colonial Development Corporation is needed.

Let me now turn to the second question—is this the right instrument? In the work we are seeking to do to raise the standard of life and improve the conditions of the people in the Colonial Territories we have, as a Government and as a country, developed two instruments in recent years. There is the Colonial Development and Welfare Fund and there is the Colonial Development Corporation. It is interesting to compare how they work. I think it is impossible to lay down a rigid line and to say, "This is the field of the Colonial Development and Welfare Fund and this is the field of the Colonial Development Corporation." But I believe, broadly speaking, that the Colonial Development and Welfare Fund is used to provide social services in the broad sense of the term, and also public services like communications, roads and railways. The Colonial Development Corporation, on the other hand, was intended from the outset to establish economic enterprises with a view to diversifying the economy of all the territories. That is the broad division, and I think that by and large it is right.

If I may, I should like to point out another difference, because I like hon. Members to think about these schemes and to see what my predecessors and the Colonial Development and Welfare Act did, and what I continued. We invited the governments in the Colonial territories to prepare their plans of social development for 10 years ahead. Those plans were prepared and were submitted to the Colonial Office, were discussed by my advisers and the colonial governments and their advisers, and eventually, having been vetted, they were approved.

Generally speaking, the 10-year plans which are assisted by the Colonial Development Welfare Fund are organised on these lines—one-third of the cost is met by the colonial government from its own resources, one-third of the cost is met by a grant from the Colonial Development and Welfare Fund and one-third is raised by loan. Thus, two-thirds of the cost is met by grants from our funds and from the resources of the territory itself and one-third is borne as a loan charge. That is how we work the Colonial Development and Welfare Fund. There is much to be said for the method, for it brings the colonial Governments and the colonial peoples into close association with the working out of the plans and the operating of the schemes.

It is true that when the Colonial Development Corporation began its work three years ago there was no overall plan. There was no regional plan. There was urgent work to do, and there were demands from all the Colonial Territories for schemes to be established and to be operated by the Colonial Development Corporation. As to whether in 1948 it would have been advisable to seek to work out 10-year plans for the Colonial Territories and to seek to bring the Colonial Development Corporation into such a scheme, I do not know. The fact is that in 1948 the need was so urgent that there was no time to sit down and prepare a plan. Therefore, from the very beginning the Corporation started operating schemes as they came along. In 1948 nine schemes were established. Now there are 50 schemes. They vary in character and are widely distributed.

I said in the debate last October that now that the schemes have grown to the present number of 50, widely scattered all over the Colonial Territories and differing widely in character, it is quite clear that these cannot be successfully administered if all the authority and the control is vested in one office in London. I said last October, therefore, that I was sure that when the new chairman was appointed he would consider the work of the Corporation at its present level with its present diversity, and would in due course give consideration to what I regarded and what I am glad to know he regards as the imperative necessity of decentralising and devolving authority.

The new chairman and the Corporation, as they indicate in their Report, are working out a scheme for regional devolution. The scheme is not yet complete. It will involve the appointment in each region of men to whom will be devolved a great deal of authority. Later on I hope I shall have an opportunity to present to the House the scheme of regional devolution when it has been completely worked out and when the appointments have been made. I shall welcome an opportunity in some way of presenting to the House the scheme of regional devolution when it has been completed by the Corporation.

I am certain that at this stage it is essential that there shall be the utmost devolution of authority to the regions, if the schemes already in operation are to get that close supervision without which they cannot be the success we desire them to be.

Mr. W. Fletcher

Will that devolution include the granting of something like block sums of money to the regional controllers so that they they can take on new schemes of a certain magnitude without reference back to London, or will the financial control of new schemes remain in the central office?

Mr. Griffiths

That is precisely the kind of question which at this stage I cannot answer. As the Chairman says in the Report, they are now working on the scheme of regional devolution. Later on, when the scheme is completed, I shall be very glad indeed to convey to the House the scheme, and I will bear in mind the point that the hon. Member has raised.

The second thing I am glad to know the Corporation are doing is associating the people in the territories more closely with these schemes. I think I referred to this in the debate last October. It is provided for in the Act; it was included from the beginning, and I am glad that it is now to be done. One thing that I have learned from my two visits last year to the Far East and more recently to East Africa, is that one of the dangers that the Colonial Development Corporation have got to guard against is becoming regarded by the people in the Colonial Territories as some outside body.

Believe me, this is true of all of us. This is true of private investments and of everything we do. It is one of the biggest problems. These people have now reached the stage when they do not want things done for them, but want to enjoy doing things for themselves. This is of immense importance in everything we do, and also in everything we say about these territories. I found in some cases that the Colonial Development Corporation was regarded rather as being an outside body.

What is the best form in which to associate the people in the localities with the Colonial Development Corporation, and particularly with these local projects? This is a matter to which the Corporation are giving attention and which they are working out now. If I may give my own personal view and advice to the Board, I would say that wherever it is possible to use an existing organisation or association I would use it. I would not create new ones. Where there are no existing organisations which can be used, then they will have to be created, but wherever possible local organisations and particularly local government should be used.

One of the most important developments in Kenya, which I was privileged to visit, is the development in local government. I hope that these local governments which are the beginning of a democratic future will be associated with the Colonial Development Corporation in some way so as to give them a feeling that they are part of these schemes, that it is not a case of someone outside doing something for them but of themselves taking a part.

I now come to something else which is contained in the Report and to which I alluded earlier. Let me admit at once that when one reads this Report and the account of all these schemes, the schemes look as if they were bits and pieces all over the place. I have explained already that at the outset, in 1948, it was impossible to prepare a plan without waiting for a long time. I share the view expressed from more than one side of the committee—and indeed the Corporation say the same thing in the Report—that if these schemes can be incorporated into a plan they will serve a very much better purpose. The Report refers to what has arisen recently out of the conference which produced the Colombo Plan.

We have an overall plan for the territories in the Far East—the Colombo Plan—and therefore it will be possible for the Corporation in examining their own work in these territories to fit their proposals and their schemes into the general operation of that plan. In the years ahead I should like to see similar plans adopted in other parts of the Colonial Empire and, indeed, in all the Colonies and backward countries in the world. I think these schemes will give a very much greater service if they can be fitted into a general operation or plan.

Speaking for myself, and indeed for my party, I should like to urge hon. Members on all sides of the Committee to read the pamphlet my party has just published, "A World Plan for Mutual Aid." It is a study of this problem and has been written by one who has devoted a great deal of her life and brought her fine mind to bear on it—Dr. Rita Hinden. In that scheme all the free world joins together in producing an overall plan to deal in a comprehensive, fundamental way with this challenging problem which confronts us and to establish a standard of life all over the world. I hope, and the Board also hopes, that as the months and years go by that will eventuate and plans will be developed on a regional and perhaps, in the end, on a world basis, and that the Corporation will be able to fit their schemes into a plan of that kind.

Reference has been made to the fact that many of the projects mentioned in the Report are of a kind and character which some hon. Members think ought not to come within the purview of the Colonial Development Corporation. There have been references to hotels. I believe I am right in saying that all the hotels—there are not very many—which the Corporation have taken over, as for example the hotel in Entebbe, have been taken over at the request of the Colonial Governments. It has done that at the request of Colonial Governments when Colonial Governments themselves have found that there is little or no accommodation for visitors who go from other countries to those Colonial Territories.

Sir P. Macdonald rose—

Mr. Griffiths

If the hon. Member will allow me to continue, I would remind him that I have just come back from Uganda and know that the Uganda Government asked the Colonial Development Corporation to take over that hotel.

Sir P. Macdonald

Why did they take it over themselves?

Mr. Griffiths

All I am saying is that the Colonial Development Corporation has been pressed by colonial Governments to take over these hotels. But I would say this, that I hope that the Corporation will not be drawn into this very much more than it is at present. I agree, too, that it ought not to put too much of its money into, for example, the Malayan scheme to which reference was made—though there, too, there was pressure from Malaya, and pressure at a time when Malaya's own resources were so severely taxed by circumstances which we all understand and appreciate.

I would ask hon. Members, when they speak about an hotel here or something else there, to pay some attention to what is said in the Report and see this thing in a balanced way. On the first page of this Report there is an analysis of the 50 schemes that are already in operation, and I think that, if that is carefully examined, it will be found that 50 per cent. of the capital of the Corporation is for land development schemes—agriculture, forestry, animal products—and that 64 per cent. is for primary production in agriculture, animal products, fisheries, forests and minerals.

I am myself on the whole satisfied that the Corporation realises that the main task that confronts it of development in all these Colonial Territories is to help the development of the production of food. That is absolutely essential. Let me take, for example, Tanganyika. In the debate we had the other day it was difficult to develop this, and I know that to mention the name of that country is at once to raise questions about groundnuts; but we have finished with that for the moment.

Look at the problem that confronts us there. There is a territory that is equal in size to France and Germany put together, and it does not feed itself, but has to buy food from outside; and it has a population that is increasing at such a rate that if that rate of increase continues, then in 30 years' time the population will have doubled. If now, with its present population, it has to buy food from outside, and if the population is double what it is now in 30 years, whence is it to buy food? How will it pay for it? Or are its people to starve? That is the problem. I say that if to find an answer to that problem we have to have an occasional "Gambia," then let us have it to find out.

Therefore, I think the Corporation is right in that at this stage it should apportion 64 per cent. of its total capital for investment in schemes designed to raise the primary production of those territories so as to be able to improve food production. Is it doing that? It is true that there are failures. The Corporation is quite frank in its Report. It says that there is achievement and failure; there is encouragement; there is disappointment. Risks have to be taken. Unless the Corporation is to take risks—some risk; calculated risk; thought-out risk—let us put an end to it. If it is to be governed entirely by the same criteria as private enterprise, there is no need for it—there is no justification for it.

The hon. Member for Fife, East (Mr. Stewart), referred to something I said when we had the debate the other day—that hon. Members were "highlighting" the Gambia Scheme. I remember speaking shortly afterwards to a constituent of mine who said, "Well, that is one failure." I replied, "We are discussing one scheme, the Gambia scheme, about which I suppose almost every one in the country has heard. How many people have heard of the other schemes?" That is what the Opposition have done. They have given the country a completely distorted picture of what is being done. They even asked for a special debate on the Gambia Poultry Scheme. [HON. MEMBERS: "Why not?"] Of course, they were perfectly entitled to do so, but I venture to predict that reports of that debate on the Gambia Poultry Scheme occupied five times as much space in the Press as the reports of this debate will occupy tomorrow.

Mr. Lennox-Boyd

Is the right hon. Gentleman not very glad that the Gambia Poultry Scheme was debated, because otherwise we should not have been able to have this debate? If no reference had been made to any of the other schemes the whole of this debate would have been on the Gambia Poultry Scheme.

Mr. Griffiths

I repeat what I have already said, that the effect of it all was to highlight one failure. I believe that that gave our own people a distorted picture, and it does not do us any good in the Colonial Territories. Hon. Members should realise that one of the effects upon the peoples in the Colonial Territories is for them to wonder why, when £750,000 is lost upon the Poultry Scheme in Gambia—for which we have not done much, and for which we have no cause to be proud—depending as it does on only one commodity, there is all this fuss and bother, when in the past so many millions have been taken out of these territories.

Speaking of the debate today, I commend the general approach which has been made, and certainly the speech with which the debate was opened. I hope that the Committee and the country generally will now have a fairer and more balanced picture of what we are seeking to do. Three years ago we set up the Colonial Development Corporation. It has grown very quickly. I realise that it is now time to take stock of the organisation and of the schemes. It is also time for us to realise that there is an important place for this Corporation and an important task to be done. Great work still awaits the Corporation, and a great challenge remains to be faced.

On balance, I think that in the three years of its existence the Corporation has begun a task which was and is of the utmost importance. It still has a very big part to play. I am sure that everyone will wish the Corporation every success in the great task which awaits it.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again,"—[Mr. Sparks]—put, and agreed to.

Committee report Progress; to sit again Tomorrow.