COLONIAL LOANS BILL

HC Deb 14 November 1952 vol 507 cc1257-359

Order for Second Reading read.

11.5 a.m.

The Secretary of State for the Colonies (Mr. Oliver Lyttelton)

I beg to move, "That the Bill be now read a Second time."

Last Friday we were discussing the emergency in Kenya and had to turn our attention to a great many Measures most of which were short-term. I am glad to say that this Friday we have a more encouraging task in considering something constructive and long-term, and I think that some explanation of the wider reasons and background for the introduction of the Bill is called for.

Its main object is to promote borrowing from the International Bank for Reconstruction and Development. Hon. Members will hardly need to be reminded that the Bank was established after the war as a result of the Bretton Woods Agreement, which also brought into existence the International Monetary Fund. One of the objects of the International Bank was to provide finance for reconstruction in countries which had suffered from the war, and it had also the general object of post-war development.

The Bank now comprises more than 50 member countries, including the United Kingdom. The Bank's funds were provided initially by subscriptions from the member countries, but for reasons of postwar financial difficulties—largely the difficulties of conversion across the exchanges—it has come about that the great bulk of the funds at present available to the Bank for lending is in United States dollars.

The first Colonial Loans Act, 1949, which the present Bill amends, enabled the Treasury to guarantee loans raised by colonial Governments from the bank up to a total of £50 million sterling. The Treasury guarantee which those loans carry and which the Act authorised is necessary because the colonial Governments themselves are not members of the Bank in their own right. During the end of the term of office of our predecessors and during our own tenure, the relations between the Bank and the Colonial Office have been steadily maintained and strengthened.

I would remind the House that when the 1948 legislation was introduced, Lord Ogmore, who was at that time Under-Secretary of State for the Colonies, said: We do not anticipate that there will be any immediate request under this Bill, but we have introduced it now, not because there is any pressing need for it at the moment, but so that we shall be in a position to act promptly if it is required."—[OFFICIAL REPORT, 19th November, 1948; Vol. 458, c. 753.] He foreshadowed at that time that there would not be any immediate call upon the International Bank.

At the same time, it is pertinent to ask why no use has yet been made of this source of borrowing. It is true that Southern Rhodesia raised a loan of £10 million from the International Bank earlier this year, but it nevertheless remains true that the colonial Governments within the purview of the Colonial Office have not used this source of borrowing as yet. It is interesting to examine why this is so.

The main reason is that colonial development in the last five years has not been held back by lack of money, nor by the London market being unable to absorb the loans which were necessary for those purposes. The pace of colonial development has been governed by the capacity of each Colony to spend the money upon its development plans. One of the reasons for this difficulty in spending the money—it is nothing to do with the Colonial Office—has been the long delivery dates for capital equipment, and, indeed, for a wide range of goods.

Expressed in other words, money is not always a guide, although it sometimes is, to the size and pace of a programme. A cheque is of very little use to a millionaire if he is cast away upon a desert island. [HON. MEMBERS: "Hear, hear."] I see there is a ready response to that remark. In the same way, it is not much use colonial Goverments commanding funds at a time when they are short of labour, transport, dock or harbour facilities, or sometimes even the skill to use the money or the materials.

It is, I think, just as well to state quite clearly to start with that no lack of loan funds has held back colonial development projects since the war. In short, what money has been required for colonial development up to now has been available by the direct method of borrowing on the London market. However, this phase is, my opinion, coming to an end. The momentum of colonial borrowing has been increasing, and the acceleration has been most marked in the last year or two and is likely to gain still further impetus.

I will give some figures to support this statement. In 1948, loans raised were £3,168,000; in 1949, £10,684,000; in 1950, £17,500,000; in 1951, £24,959,000; and 1952 will show the same upward trend, though, obviously, I cannot give an estimated figure now.

I think it is necessary to explain why, if the London market is available and can absorb colonial loans, that is the method preferred by colonial Governments to raise their money. First—and I do not want to overstress this—the terms upon which they can borrow on the London market are rather more favourable than those under which they can borrow from the International Bank. The International Bank has to charge—and it is a statutory obligation on the bank—a commission of 1 per cent. on the loan. It seems to me to be quite a proper charge, but the rate, including that commission, at which the bank is now lending money is 4¾ per cent.

Secondly, loans from the International Bank, for reasons which I have already explained, require the direct guarantee of the British Government, which is not the case if the colonial Government borrows direct from the London market. I do not propose to go into the very abstruse question of how we estimate the capacity of the London market to absorb colonial borrowings. It would take me very wide of the subject before the House this morning, but colonial loans with a yield which is slightly higher than ordinary British Government securities appeal to a very limited class of institutional borrower.

Moreover, loans of all kinds can be provided, in the end, only out of savings, and where movements of commodities across the seas are concerned we have also to bear in mind the general overall balance of payments. It is quite clear, and I think nobody in the House would dissent from it, that we have neither the available balance of payments nor the necessary volume of savings at home to finance all the projects which would be desirable. Therefore, we have to judge the volume which the London market can absorb.

Furthermore, I must state quite clearly that, provided the terms of any loan do not affect the sovereignty of a colonial Government and provided they are within the capacity of that Government to repay out of development which they stimulate and permit, there can be nothing but good in borrowing from such a source as the International Bank. It is, of course, quite right that fears should be expressed, as they have been in certain quarters, about Colonies borrowing other than from the Mother country. I seem to remember the phrase "new allegiances might be set up."

Of course, in borrowing outside the sterling area, we have to be sure that no interference with the administration of the Colony is involved, and that there are no conditions which hamper unduly its development within the Commonwealth. In short, we do not sell our birthright or the birthright of the Colony for the sake of an immediate loan.

All this is common ground, and I only state it in order to tell the House that we are satisfied that, in borrowing from the International Bank, none of these conditions is violated. I should like to quote the third Report of the International Bank, which says this: In formulating its policies with respect to furnishing advice to its member governments, the Bank has in mind that it must avoid any gratuitous interference in the internal affairs of any country or the assumption of financial or other commitments it cannot fulfil, or too deep an involvement in the details of a particular program. Those seem to me to be very wise words, and we have found that they are the general line of policy followed by the Bank.

It would appear to me, moreover, that we shall wait very long, perhaps I might say for ever, to see an adjustment in the balance of payments between the North American continent and the rest of the world west of the Iron Curtain, unless the creditor countries are going to lend their surpluses, just as we did in the 19th century when we were creditors, to the under-developed countries, who are beginning with increasing momentum to develop themselves. I do not think it is too fanciful a parallel to remind ourselves that when we were a large creditor country we financed much of the railway development in the United States and nearly all the railway development in South America, and yet it would be hardly true to say that the United States had sold its birthright or damaged its inheritance by taking these loans and putting itself to that extent under an obligation to the lender.

I have often said in this House that we can hardly restore a healthy balance between North America and the rest of the world solely in terms of current trade. There must be movements of capital, and the International Bank medium has been provided through which a healthy flow of funds from the creditor nations to the developing countries can be secured. I state quite plainly that I have encouraged by all the means in my power the colonial Governments to look towards the International Bank when they have used the capacity of the London market to the full.

A mission from the Bank visited the Central African territories in the summer for exploratory talks. Negotiations for a railway development loan in these territories has reached an advanced stage, and these talks are likely to be completed in Washington early in the new year. Another mission is in East Africa and it is hoped that the investigations of this mission will lead to a substantal loan early next year either to one of the East African Governments or to the East African High Commission.

Mr. Leslie Hale (Oldham, West)

Would the right hon. Gentleman give us some idea of the general scope of these loans and the general achievements which have resulted from them? I have here the report of the 1948 debate, but it hardly contains that information.

Mr. Lyttelton

Only one loan, that for Southern Rhodesia, has as yet been raised, and I have referred to it. The first negotiations which I mentioned for the Central African territories will, we hope, be successfully completed early in the new year, and when I was interrupted by the hon. Member I was just coming to the other one, which is either for one of these East African Governments or for the East African High Commission, which is permitted to have a loan as such under one of the subsections of this Bill. The possible object of such a loan would be to finance important developments in transport, so that I think I can answer the hon. Member's question by saying that both loans in contemplation are for transport.

Mr. E. Shinwell (Easington)

On the subject of transport, would the right hon. Gentleman answer me this question? I have expressed a keen interest in the matter, as he knows. Is the provision of financial assistance, by way of credit, contemplated for the purpose of developing shipping facilities in the West Indies?

Mr. Lyttelton

I have not any loans in mind at the moment for that specific purpose in the West Indies.

Mr. Shinwell

They are very necessary.

Mr. Lyttelton

There may be matters in a state of negotiation. That is one of the main objects of the Bill. I had better turn for a moment to the means by which these objects are carried out.

Mr. Geoffrey Bing (Hornchurch)

Before the right hon. Gentleman turns to that aspect of the matter would he deal with the type of security which must be given for a loan, particularly by the East African Commission? What assets are mortgaged by colonial governments in order to protect a loan, and how are these secured? I appreciate that we give a guarantee.

Mr. Lyttelton

I cannot give a general answer because the security required will vary in each case. Where loans are against such a thing as the development of the East African Railways they would, in the main, be secured upon the revenues from existing railways and transport facilities, which are fully adequate to service the new loan. Hon. Members know that there are sinking funds, but the International Bank generally requires repayment by six-monthly instalments. This type of loan is generally secured on revenues rather than on assets.

Mr. John Edwards (Brighouse and Spenborough)

It would help the House if we could be given a provisional estimate of the amounts involved under these two heads: What are the loans for the Central African territories and for the East African territories likely to be, in round figures?

Mr. Lyttelton

I will ask my right hon. Friend to look into that point. I have not the figures with me and I will have to check them up. I think they are for a substantial sum.

Perhaps I may now go on to the details of the Bill. Clause 1 (1) makes it clear that guarantees can be given in respect of loans to Governments constituted for two or more Colonial Territories, such as would be the case with a Central African federation. It also provides—and this applies to what I have been saying—that a Governmental authority like the East African High Commission would be classed as a Government for the purposes of borrowing. There are great advantages, on which I need not dilate, in enabling the High Commission to be a direct borrower from the Bank, since they are responsible, for example, for the railways and harbour administration. Under the present state of the law they cannot borrow as such. This change is one of the main objects of this amending Bill. There are consequential Amendments to carry out this object.

Clause 1 (2) raises the amount of money to be guaranteed from £50 million to £100 million. This requires no explanation, in the light of the figures which I have given the House, of the momentum in colonial borrowing. There are some remaining words which call for comment, and which do not stand out very clearly when they are read for the first time. The words are there to protect Her Majesty's Government from committing a legal mistake because of a variation in the rate of exchange. Suppose the whole £100 million was guaranteed when the rate of exchange had been £280 to the dollar. If the sterling exchange fell to £279—

Mr. Ede (South Shields)

When does the right hon. Gentleman think that the rate of exchange will be £280 to the dollar?

Mr. Lyttelton

Did I make a slip of the tongue? A very large part of my life I have spent in adjusting exchanges, so it is quite possible that I did. That rate of exchange would presuppose a state of world inflation which even the right hon. Gentleman would rather deplore. I meant to say "2.80 dollars to the £." If the whole £100 million had been guaranteed at 2.80 dollars to the £ and if the sterling exchange then fell to 2.79 dollars, the British Government would be in a technical breach of their obligations under the Bill. Therefore, words have been added to avoid the possibility of any such breach. On the other hand, any sterling guarantee has to be given at the rate of exchange at the time of the loan.

Clause 1 (3) removes the necessity inherent in Section 1 (3, c) of the 1949 Act for requiring the establishment of sinking funds. I have already mentioned that the International Bank operates not through sinking funds but generally through six-monthly repayments, and the period of their loans varies between 10 and 15 years, Clause 1 (4) removes any doubt about the competence of Her Majesty's Government to guarantee loans in territories with advanced constitutions.

I commend this Measure, which is quite a simple one, to the House. It will be very useful in the changing conditions of development. We have now reached a point where all the figures show that these developments are accelerating, and that the very slow deliveries of capital equipment will also be accelerated. I look forward to the Bill providing a very useful impetus to a movement which I think everybody in the House is glad to see.

11.26 a.m.

Mr. John Dugdale (West Bromwich)

It is a change, after last Friday's debate, to find the House in general agreement on this Measure. We shall have certain Amendments to put forward in the Committee stage but, in general, we give the Bill our support.

I would like to ask why we have the Bill. Some explanations have been given by the Secretary of State, but I would like them to be further elucidated when the Minister of State for Colonial Affairs replies. The argument of the Secretary of State ran as follows: "The Colonies have, in the past, already had all that they have wanted, in the way of loans." He said, too, that the rate of interest asked by the bank was on the high side; and I agree with him there.

The rate of interest is on the high side, and I naturally wish it to be lower, but that is not a matter for Her Majesty's Government. If the Colonies have had enough by way of loans already, and up to today they have not wanted any loans, why is Southern Rhodesia wanting a loan? It seems strange that Southern Rhodesia should be in need of a loan while the Colonies are not.

I would ask the right hon. Gentleman whether any Colonies have tried to get a loan, whether they have made an application and whether Her Majesty's Government have supported the application. It is said in the Report of the International Bank itself that there is a mission now visiting British Guiana and that another mission is visiting Jamaica. Might we know something about the results of those missions? Have they resulted, or are they likely to result, in demands from those countries?

If there are such demands, are the missions reporting in favour of loans being granted? May we see further extension of loans in that direction? If there are to be loans for those parts of the West Indian mainland why not loans for the West Indian islands? I am glad to hear from the right hon. Gentleman that there is likely to be a big loan for East and Central Africa, but those are not the only Colonies which we wish to see have substantial help by way of loans.

We understand that Clause 4 is put in because of some doubt about the power to guarantee loans to Governments of Colonial Territories which enjoy a large measure of responsible government. I find the Clause rather difficult to understand. There may be doubts, but why should there be doubts if, in fact, Southern Rhodesia is in a position to have a loan? Why should there be doubt about Colonies which are going towards freedom, but which have not reached freedom, and yet no doubt whatever about Southern Rhodesia, which has already achieved a far higher degree of freedom than any conceivable Colony?

Mr. Lyttelton

I think the right hon. Gentleman should look at the original Act, Section 1 (7), towards the end of that Section. He will find the object of the present Measure is to clear up any doubts under that subsection.

Mr. Dugdale

Yes, I quite realise there may be doubts, and that if there are it is necessary to clear them up. But it does seem to be curious, in view of the fact that Southern Rhodesia can borrow.

I should like now to come to one point on which we may have some difference of opinion. In Clause 1 it is proposed that the reference to the Government of a colonial territory shall be construed as including a reference to any Government constituted for two or more colonial territories and to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such territories … In general, that may be advisable, but I think it would be unwise for us, without any discussion, to include any form of Government which may be set up, or any group of Colonies which may join together, whatever may be the circumstances. I know that the main reason for this proposal is concerned with Central Africa and I do not intend to engage on a long discussion about Central Africa today.

Mr. Lyttelton

The main object is to enable the East African High Commission to borrow.

Mr. Dugdale

No, that is just the point. If that is the main object we could say that it may be loans to bodies now established; and that body is now established. But this does not only say bodies now established, but those to be established, which is a very different thing. The East African High Commission is established at this moment, but other bodies may be established in the future. Some may be good; some may not be so good; we think it would be unwise to include any body established at any time.

What is the object of this Bill? It is to help the Colonies, and I think it is fitting that we should inquire of ourselves today what the Colonies have done for us and why it is that we should help them. It is not always that we on this side of the House agree with the "Daily Express," but I think the "Daily Express" put the matter as clearly as anybody else has ever done, when they said: The Colonies are the measure of Britain's ability to survive. Without them we should not have survived. Without them we should not survive today. While we had difficulties in meeting our balance of payments the Colonies produced a surplus of no less than 450 million dollars last year, a very considerable contribution to our dollar problem; far in excess of many of the contributions which industry is called on to make by selling goods in the dollar market in America.

Let me take one or two examples. Malaya earned 500 million dollars; the Gold Coast earned 80 million dollars; The West Indies earned 50 million dollars. What can we do in return for them? We have already done a very great deal. The Colonial Development and Welfare Act and the Colonial Development Corporation have together produced funds of over £200 million, funds which the Colonies have been able to use for different forms of development. We must not minimise their importance.

But there may be new enterprises needed which are far beyond the capacity of either of those two bodies with the present amount of money they have got. I would say, in passing, that I think there may well be a case for increasing the amount of money available both for colonial development and welfare and for the Colonial Development Corporation should they need it in the future. I hope the Government, if there is any need for an increase, will ask the House for it, because there are many vitally important enterprises which the Colonies should carry forward.

Take, for example, just two large enterprises. There is the Volta River scheme. I should like to ask the Minister how that is progressing. It is a scheme which will be of immense benefit to the Gold Coast, to this country and to the whole of the sterling area, as it will produce a large amount of aluminium which today costs very substantial sums in dollars.

I should also like to ask for further information about the Owen Falls scheme. Both those I mentioned as being enterprises which involve the spending of a large amount of money. But they are not the only ones. The Colonies want railways, harbours, roads, mines, factories and land improvement. None of these things can they get unless they have sufficient funds.

Mr. Bernard Braine (Billericay)

Surely the right hon. Gentleman is aware that the Owen Falls scheme is so advanced that the first turbine comes into operation next year.

Mr. Dugdale

I am well aware of that, but it is just an example of the way that money is needed. We have been able to provide the money for that scheme, but just because we have been able to do so there is less money left for other schemes. That is why it may be necessary to call on the International Bank to help us with other schemes for which, in the past, we have certainly not been able to lend the money.

Mr. Hale

It may be true that the first turbine comes into operation next year at Owen Falls. We are glad to know it. But the textile factories are not built at all. The textile machines are not there. And textile machine factories in Oldham are closing this week.

Mr. Dugdale

My hon. Friend has put forward an admirable point. It shows that the Owen Falls scheme cannot be taken in isolation. We have to take the whole scope of its development and of other schemes as well. The fact is that in the past we have not been able to lend all the money needed. Ask the Capital Issues Committee if they have not had difficulty in deciding between one proposal and another; for example, since my hon. Friend mentioned Oldham, between a proposal for some desirable development in Oldham or some equally desirable development in some Colony. Of course there have been difficulties in finding the money for both things.

I am delighted to hear from the right hon. Gentleman that he thinks it will be easy to find money in the future—

Mr. Lytteltonrose—

Mr. Dugdale

I am sorry, that is not quite right—

Mr. Lyttelton

That is inaccurate.

Mr. Dugdale

I am puzzled to know how it is that the right hon. Gentleman thinks it has been easy to find money in the past, and that it is going to be difficult to find money now. I think it has been exceedingly difficult to find money in the past. After all, the Colonies are, in fact, lending us money. Today, there is no less than £964 million sterling balances which belong to the Colonies, but which they are not able to spend, and in that particular respect they are lending us money.

I am glad to hear that there is to be development in Kenya. What a difference it would make to Kenya if they could have, say, £50 million or £100 million. We need not enter too deeply into the Kenya controversy, but there is one thing upon which we are all agreed: that the economic conditions no doubt to some extent helped to make for the state of disturbance which exists in Kenya today. If the economic conditions had been better there would have been less chance of any disturbance.

Why should Kenya alone have a loan? Why not other countries less in the limelight? Why not the West Indies? There are many Colonies which could do with a loan. We ourselves need new industries, new houses and new roads, and the Colonies need them just as much as we do. For that reason, they must have all the help that is necessary. If we cannot give that help I hope that the International Bank will give it. It is because we believe this that we think there is a great deal to be said for the Bill. I do not, however, know why there need be a limit of £100 million and why the figure should not go higher if the need exists and if in future the capital issues market will not be able to supply it.

The Labour Party's pamphlet "Towards World Plenty" has a very remarkable statement in its opening. It says: Fifteen hundred million people, two-thirds of the world's population, live in the vast economically under-developed areas of Latin- America, Africa and Asia. Their lives from birth to death are surrounded by squalor and disease, by famines and epidemics, by ignorance and misery. For most of them unceasing and unrewarding labour produces barely enough food for a meagre subsistence. Their lives are a gruelling struggle to exist, relieved only by premature death. Many millions of these people live in the British Colonial Empire, and let us never forget it. It is our duty, and it should be our pleasure, to give them some, at least, of the benefits which we enjoy in this country. We enjoy a far higher standard of living than they do. We enjoy social services. We enjoy better wages and better conditions of work generally. It is our duty to see that we give them these benefits. It is because the International Bank may help us in some measure, but only in some measure, to do this that we support the Bill.

11.42 a.m.

Mr. Douglas Dodds-Parker (Banbury)

The right hon. Gentleman the Member for West Bromwich (Mr. Dugdale) has gone somewhat wider than the actual Clauses in the Bill and, therefore, perhaps I may be allowed to follow one or two of the points that he made. I do not want to be unduly controversial because, as the right hon. Gentleman said, there is general support for the Bill on both sides of the House. It is, therefore, encouraging to many of us to hear him quoting the figures about the earnings of Malaya which he used to try to avoid under the last Administration, when we pointed out continually—

Mr. Dugdale

Nobody on this side ever said that Malaya did not earn large sums of money and was not of immense value in helping our balance of payments position.

Mr. Dodds-Parker

Throughout the six years from 1945 to 1950, hon. Members opposite tried to avoid the idea that anybody outside helped this country and took the line that the prosperity in Britain was entirely due to the unaided efforts of hon. Members opposite. [HON. MEMBERS: "Rubbish."] The right hon. Member said that this Bill should only apply to territories now established, but if that were so, every time that a new regional grouping was set up overseas, the Government of the day would have to come back to the House and would require another Bill in order for the Act to be made applicable—for example, to the West Indian Federation, West Africa or wherever it might be. It is ridiculous, therefore, for the right hon. Member to adopt this attitude.

As far as the terms of the Bill are concerned, much as I should like to refer to the Colonial Development Corporation, which so far has been a minus quantity in helping the territories overseas—

Sir Richard Acland (Gravesend)

Has not the discovery of coal in Tanganyika opened up assets which previously were not possible?

Mr. Dodds-Parker

That had been known of for a long time. Not until recently did it become more accessible. If anybody adds up, as I do not think hon. Members opposite are particularly keen to do, the net balance of the disastrous efforts under the chairmanship of Lord Trefgarne, it will be noted that we have yet to see a net return out of this form of activity. As time goes on, it will be necessary for the Government—

Mr. James Hudson (Ealing, North)

On a point of order. The hon. Member is making considerable incursions into the question of the Colonial Development Corporation and its failure as a reason for the method that is adopted under the Bill. Are we to be allowed to reply on these points, showing how there could be very considerable development in connection with the Colonial Development Corporation along the lines which, it is now suggested, have failed?

Mr. Speaker

The main purpose of the Bill is the facilitating of loans to the Colonies and to be in order speeches must have some relevance to these funds and to their provision. The occasional reference to purposes for which they might be used is permissible but I hope that the hon. Member who is addressing the House and others who follow him will remember that the main purpose of the Bill is as I have said, and that we should not go too much into the detail of Colonial administration.

Mr. George Wigg (Dudley)

Further to that point of order. When the House was debating the Second Reading of the earlier Colonial Loans Bill, no less an authority than the noble Lord, Earl Winterton, put forward the proposition, which Mr. Speaker did not contradict, that it would be in order to discuss the whole question of Colonial development. If it was in order on that occasion, I submit that it must be in order on this.

Mr. Speaker

I have refreshed my memory by reading the debate on the last occasion. Although that passage occurs, as the hon. Member for Dudley (Mr. Wigg) reminds me, it was not said by Mr. Speaker. In fact, the scope of the debate followed the lines that I have suggested to the House.

Mrs. Eirene White (Flint, East)

Surely, Mr. Speaker, we are being asked today to discuss one of several possible methods of financing colonial development. Is it not, therefore, in order to decide whether this method is the most desirable one?

Mr. Speaker

Certainly. That will be perfectly in order.

Sir R. Acland

Further to the point of order. In the other debate we were discussing a Measure of which the Government spokesmen said that he did not expect very much use to be made in a very short time, whereas now we are told that the aggregate amount of loans will expand to possibly £100 million. Confining myself to the speeches only of the Noble Lord to whom reference has been made and to that of the hon. Gentleman who is now the Assistant Postmaster-General, I find that the debate covered the interests of British machinery manufacturers, the cause of the Malayan trouble, the relative part of private and public investment, the dangers of stockpiling and re-armament, the risk of discouraging private investment, the wicked defalcations of Burma, and the political instability of Cyprus. I hope, therefore, that we might discuss some of the general principles for making loans for colonial development.

Mr. Speaker

It is always very unwise to give rulings in advance, and I have no desire unduly to restrict the debate on Second Reading. But I think that hon. Members know what is in my mind on the matter, and if they can relate their speeches to the purpose of the Bill we shall see how we get on.

Mr. Dodds-Parker

I was not proposing to take up too much of the time of the House in answering the points which had been made from the Opposition Front Bench. The Bill is but one facet of the whole problem of investment in the Colonial Empire, in which the Colonial Development Corporation and the Colonial Development and Welfare Fund, which comes up for renewal in the next year or two, must obviously play a prominent part.

I do not claim to be exceptionally knowledgeable in the intricacies of the balance of payments and so forth, but it is quite clear that a Bill like this will be needed largely for buying from the dollar area those capital goods for which otherwise funds might not be available from this country—steel rails and rolling stock for example.

I am sure that all hon Members will be glad that the amount of loans has been raised from £50 to £100 million. I, for one, very much welcome the broadening of the loan to the regional groupings, because I believe that in the future these regional groupings will play an increasingly important part as they broaden the economic basis of any group of territories and thereby will furnish better security for the projects which will be undertaken.

I am not certain what control this House or the Government have over the application of these loans. What general or specific definition, if any, is given to the territories who wish to raise a loan, of the use to be made of it? I hold a strong view that the Government of the day must define the "area" of public investment overseas and I believe that public investment, by and large, should restrict itself to what are sometimes called the utilities—road, railways, ports and hydro-electricity—leaving increasingly to free enterprise the task of undertaking the production schemes.

These include the companies that exist for certain plantation crops, the peasant farmer and the producer co-operatives which we on this side of the House have always so strongly supported. [Interruption.] An hon. Member says "private enterprise." I prefer "free enterprise" to "private enterprise." The lesson from so many of these territories has been that the expansion of existing methods of production would lead to far greater results than any irruption of enormous Government schemes such as the groundnut scheme in West Africa. If the effect in material and personnel had been applied to peasant production in West Africa, far better results would have been secured. Because of the shortage of rolling stock and other facilities in West Africa, it has been difficult to get the crops produced by the peasant to the sea.

I should like to ask the Minister who is to reply to the debate to tell us who judges whether or not a certain project is good. Do the Government have to accept the decision of the local Government, and exactly at what level have the Government to make a decision. I do not expect the House to have control, but I should like to know how the Government seek to see that this money, when it is borrowed outside this country, is properly used. What safeguards are there to ensure the proper control of the United Kingdom taxpayers' money?

After the disasters we have had in certain instances—the Groundnuts Scheme and the Colonial Development Corporation—since the war, because there has not been sufficient control in our opinion, people have gone away with huge sums of money and produced no results. We want to feel that this money which we are to guarantee out of the relatively small forced savings of the taxpayers in this country is properly used in future, because a great deal of it has been wasted under the previous Administration.

Many of us on this side of the House believe that we need a new structure of taxation, for many industries working overseas, to see that such a high proportion of their canning is not taken away, as it is now, from successful producing industries overseas and used by the Government of the day, either here or overseas, for immediate Government-consumer expenditure, so leaving those companies, who do know how to increase production, short of capital. Whether it is public or private money, I believe the same considerations apply. We cannot afford to waste the capital resources of our country.

It is important to look at the taxation structure as it exists now and to attempt to see that such savings as we have in this country or from these productive companies working overseas are more properly used to increase production: without this increase I am sure that all of us are agreed we shall not get the supply of raw materials and, above all, the food to keep not only us in this country but all in the colonial territories supplied in future.

11.54 a.m.

Sir Richard Acland (Gravesend)

I shall comment on some of the points made by the hon. Member for Banbury (Mr. Dodds-Parker), and I shall, in some parts, agree with him in his criticism of the Colonial Development Corporation before I conclude. But at the start I should like to ask about a legal point of interpretation. I wish to read a few selected words from Clause 1: the reference to the Government of a colonial territory shall be construed as including a reference … to any authority established for the purpose of providing or administering services which are common to … two or more such territories … Would those words include such an authority as the West African Cocoa Research Institution? That is an authority providing a common service to two or more territories. I have no reason to believe that the W.A.C.R.I. wants to borrow money, but such an institution might at some time want to borrow. I should like to know whether this Bill would cover them. I hope that it would, and that such an institution, if it felt the need, would be in a position to go to the bank and ask for a loan which the Treasury would be in a position to guarantee. Perhaps I could have an answer later.

Mr. Hale

Not later. We all want to know the answer. Why should we not know now?

Mr. Lyttelton

Perhaps I might help the hon. Baronet by saying that these matters are permissive and not mandatory. The right hon. Gentleman the Member for West Bromwich (Mr. Dugdale) appeared to imply in his speech that we were undertaking obligations. This is permissive, not mandatory.

Sir R. Acland

I appreciate that. Nothing in this Bill could compel the W.A.C.R.I. to borrow money from the bank or the Government to guarantee the loan. But if the W.A.C.R.I. or a similar institution wished to borrow and if the Treasury wished to guarantee the loan, under the wording of this Bill, would they be entitled to do so? If that is not the position, I think that in Committee we might alter the wording of the Bill to make it possible.

I now wish to discuss the question of raising the limit from £50 million to £100 million. Here I may differ from my right hon. Friend the Member for West Bromwich. I am not sure that this is such a desirable thing to do at this stage. After all, up to now, with a limit already in existence of £50 million, only £10 million have been taken up. That leaves £40 million to go. If we take the figures given by the Minister of the increase in colonial borrowing from 1948, 1949, 1950 and 1951 of £3 million, plus £10 million, £17 million and £24 million respectively, that is, curiously enough, an increase at the rate of £7 million each year. That would indicate the probability of a borrowing of £31 million in 1952 and £38 million in 1953.

If the whole of that £38 million came from the International Bank—a very unlikely assumption, but even if the whole came from the Bank—we should still have enough authority under the present limit to finance the whole of 1953. If we wanted to go beyond that, I should have thought that it would not have been a bad idea to come to the House and have another look at how the scheme is working. The present limit gives us plenty of time for expansion to take place without its being necessary to raise the limit now.

If we are to raise this limit now, and therefore to allow for this great extension in the guaranteeing of loans from the International Bank to colonial territories, we should consider some of the basic principles of financing development and some of the uses that can be made of the International Bank. A most serious point is that if we are to make use of the lending powers of this Bank on such an extended scale, would it not be a very good idea at the same time to make use of some of the other most valuable facilities which this Bank has to offer to under-developed countries?

For example, I have here a copy of the speech made by Eugene Black, the President of the Bank, at the annual meeting of the International Fund and Bank in Mexico in September of this year, in which he said: The Bank, of course, does not regard itself merely as a source of financing. … We have therefore continued, at the request of member countries, to send our general survey missions, composed of impartial experts, to help those countries assess their potentialities and to draw up broad programmes which will best channel their own energies and resources into development. I most earnestly hope that the British Colonies will be encouraged and advised to make much more use of these facilities than they have done in the past. This is not a party political point. In so far as any criticism is contained within it, it is clearly criticism not only of the present Administration but of the Administration that went before it.

We have been a little slow in this matter of making use of the facilities. It is only Jamaica which as yet has asked for a general survey mission. It is true that the right hon. Gentleman mentioned two cases in which representatives of the Bank had been asked to go to Central Africa to look at specific projects, but that is rather different from the invitation for a general survey mission.

Mr. Lyttelton

indicated dissent.

Sir R. Acland

The right hon. Gentleman shakes his head, but I have here the statement dated 28th October, 1952, of all of the activities of the Bank, in which the survey mission to Jamaica is mentioned, and there is no mention in it of any survey mission to any other British Colony. These missions are most useful.

A question arises in respect of the mission which has already visited Jamaica—whether the report of the mission is going to be published. I very much hope that it will be, because then not only will the Jamaican and British Governments know what facilities there may be in Jamaica for making use of the loans which this Bank could afford, but also the people of Jamaica and of this country would equally be informed.

Here is the recently issued report of a mission of this Bank to Ceylon, and this is only a part of it. A much larger volume is still in my locker and any hon. Member may look at it if he wishes. It is an extraordinarily valuable document—I should imagine absolutely fascinating to the people of Ceylon; it surveys every aspect of their social and economic and financial problems—and I hope very much that we are going to have the report on Jamaica published and that we shall go forward from there to have International Bank survey missions in a number of other colonial territories.

I have had the advantage and privilege of discussing this question of financial and technical advice and assistance in the last 12 months with two prominent African statesmen, and I do not think it could do any harm if I mentioned their names and if I mentioned one thing which they said about this whole subject. The two African statesmen were Mr. Nwapa of Nigeria, whom I met in this country, and Mr. Nkruma whom I met in his own country. I was discussing the whole question of financial and technical advice, and technical advice in general, and pointing out, as one can without any sense of criticism, that technical advice of this sort cannot come at the present moment, at any rate in sufficient volume, from African technicians.

I ventured the view that there were certain disadvantages to African statesmen in such countries as Nigeria and on the Gold Coast in having technical advice from British technicians, because—this is my suggestion; I am not saying that it is their view—there would always be the faint suspicion that a British technician might subconsciously be coloured by his misunderstanding or jealousy of the advance of the African countries towards independence; but a much more serious objection is that if there were complete personal confidence established between an African Minister and a British adviser, yet if the technical or financial advice turned out to be unpopular, then the African Minister, if he accepted and acted upon it, would be exposing himself to the great risk of being challenged from his own back benchers or the rank and file of his general African supporters with the challenge "Have you, too, sold yourself to the British?"—which is a very serious threat to an African statesman in the present stage of development.

I suggested to Mr. Nkruma and Mr. Nwapa that there might be some point in looking at the services of technical advice which could be rendered by the International Bank for Reconstruction and Development and the somewhat analogous services which can be had through the Technical Assistance Board of the United Nations. The answer which I received from both of these was extremely instructive. They said, "I have never heard of it. What is it? Tell us something about it."

That answer means that these two African statesmen, in constant contact with British officials—and this is under the present Administration and the previous Administration—had never had brought to their attention the facilities which the International Bank and the Technical Advice Board are capable of offering to under-developed countries. That seems to me to be rather a bad mark to the insularity of outlook of many of our own people at the present time.

We look at the rising aspirations of two-thirds of humanity living in these under-developed countries, many of them now under our direct charge. We feel that these rising aspirations are natural and are morally right and that they need to be encouraged, but we are anxious—this can be said of both sides of the House—when these aspirations take a narrow and aggressively nationalistic turn.

If we regret that tendency in the peoples of the under-developed countries, surely we must equally regret any tendency to insularity in our own response to this great and world-wide phenomenon. Surely we must recognise, if we look 50 years ahead, that in West Africa, for instance, the relations cannot always be Britain with the Gold Coast, France with the Ivory Coast, and so on. If there is to be hope of a harmonious future, the relationship must be between the African peoples as a whole and the white Western peoples as a whole. All steps that can be taken towards internationalism in this respect are most warmly to be welcomed and supported.

I very much hope that the Government will give consideration to the question of asking some representatives of the International Bank or of the Technical Assistance Board—it might even be Mr. David Owen—to make a tour through the British Colonial Territories to explore in a very preliminary way all the opportunities there may be for technical assistance or financial loans for the development of these countries. I understand that Sir Gerard Clausen is now in New York working and co-operating with the Technical Assistance Board, and I hope that when he returns to this country he will have many informal opportunities of discussing the possibilities that are open with those in the Colonial Office who were formerly his colleagues.

May I ask this further and more basic question? Here I am making contact, I think, with the interesting speech of the hon. Member for Banbury (Mr. Dodds-Parker). What kind of development do we most wish to promote by the financial assistance which we can get from this Bank or from other sources? Under that question I come to the Colony of Kenya, regretting, of course, that I cannot today make the speech which I should love to have made last week. In speaking of development in Kenya, I should like to make one confession. My confession is that, although it has never been true that we on this side of the House regard all white men living in Africa as being reactionary "blimps" and all the rest of it, yet—perhaps my hon. Friends will disagree with me—at times we may have so spoken as to convey the false impression that that is what we are thinking. If that is so, I should like to correct it.

I am very happy to be able to quote two sentences from a speech by Michael Blundell, reported in the issue of 28th September of "East Africa and Rhodesia" and therefore, I presume, made within a few days of that date. He said: A great body of our African people in this Colony are suffering from frustration. They suffer it because they have to adjust themselves from the regular pattern of their formal tribal life to the complexities of our modern world. We ought then to consider developments in such a way that it will most directly help those people to make that necessary adjustment to this complicated 20th century, and I think it is probable to look back on the recent past and see where some of our attempted development went wrong.

Here I would to some extent join with the hon. Member who last spoke in criticising the Colonial Development Corporation. I was in Gambia just before the Gambia fishing project started. I thought it was going to earn a money profit, but I was mistaken. It did not. But that is not the most profound criticism that can be directed against that project. The most profound criticism is in relation to the attitude we adopted. We thought there were probably fish in the sea and we thought we would take a great factory ship there and employ 100 Africans working on it as wage earners. We thought we could sell the fish it provided here, there and everywhere—that we could send the shark-teeth to America, the fins to China, and so on. We did not do what we should have done, which was to study sympathetically the social life of a Gambian fishing village, so as to ask ourselves how, with our resources, we could help those people to catch and sell their fish better.

The same thing is true of rice. A publicly-owned corporation, very largely staffed by businessmen, have looked at Gambia and have asked themselves, "How can businessmen come into Gambia and grow rice and make a profit?" If we had said, "How can we help the Gambian peasants to grow more rice?" we should have approaching the question in the right way.

Mr. Lyttelton

The hon. Baronet will be exhilarated to know that under the present Administration that is exactly what we are doing. We are encouraging the growing of rice by the peasants, and the use of the other station is very largely experimental.

Sir R. Acland

I frequently make politically controversial speeches on this subject and the Minister can give politically controversial answers; but here I am making a non-political speech and the criticism which I am directing is not against this Administration any more than the previous one. I am criticising the whole British outlook upon this matter and I am delighted to hear what the Minister has said.

The very next point I was going to make was that if anybody wants to know how the peasants can produce rice, the thing to do is to uproot the mangroves. If we pull out mangroves along the Gambia River the peasants can then go in and grow rice. I am delighted to know that the Gambian Government and the Government of Sierra Leone are co-operating in this matter and are investigating the possibility of uprooting the mangroves with a vehicle which I understand is called the "Cuthbertson Duck." I earnestly hope that this is the kind of project which will qualify for help from the Bank and that it will be pressed forward with the utmost vigour to see what can be done.

But a general principle is involved here. There are two completely different methods of developing Colonial Territories. One method is to do it by private enterprise—in the good old 19th century understanding of that term—or through some public corporation which is staffed by businessmen who still do a great deal of thinking in terms of private enterprise. By such means we start, on the European pattern, to establish a mine, a sawmill, or what have you. The method then is to pay wages to African wage earners—remembering that wage earning is not an integral part of the African tribal traditions but something which is entirely foreign to them—and we hope to make profits. Out of the profits we pay taxes and out of the taxes we hope to be able to build schools or hospitals for the Africans. It reminds me of Chapter 15, verse 27, of the Gospel according to St. Matthew, where it says: … the dogs eat of the crumbs which fall from their masters' table. It seems to be a rather long way round to get at the actual job that needs doing. I suggest that we have to approach this matter more directly, by asking how we can best help the Africans—or, as the case may be, the Caribbeans or the Malays—and how we supply them with the missing components—the material and financial resources and the technical skills—to enable them in this complex century to do better the things which they want to do themselves. If we approach the problem in that way, I think we are on the road to a harmonious future.

That is why I am so happy to quote the very next sentence from Mr. Michael Blundell's speech, where he said: I take this opportunity of saying to the Africans that all the help that the European community can give them in making their adjustments and eliminating the tensions which are causing within themselves the frustration is theirs for the asking. I hope that those words will be proved true in relation to the European community in Kenya.

But it is not my business to read moral lectures to the European community in Kenya as to the change in attitudes which will be needed in some of them before the white, the brown, the yellow and the black races can move forward there towards a united and harmonious community. I want to apply Mr. Blundell's words to the white community in Britain and to ask whether we can say that all the help needed for these people to make the necessary adjustments is theirs for the asking.

This brings me to ask what is the relationship between the finance for development which can be vouchsafed under this Bill and the whole cost of the manifold and many-sided development that is necessary. We shall get this thing all wrong if we think that the greater part of the development task can be done in this kind of way. I would beg hon. Members opposite to free themselves—if I may for once use a party political controversial phrase—from the doctrinaire notion that development is mainly a task of creating the conditions in which private enterprise—even if financed from the International Bank—can do the job that needs doing. Private enterprise clearly cannot touch the vast part of the job which consists of health services and education. Even the establishment of industries, as may be shown from the early experience in Puerto Rico, is something which cannot be always started without Government effort, Government enterprise, and Government expenditure of money.

In any case, I am in the position this afternoon of being able to call in aid on this matter no less an authority than Eugene Black himself, the President of the International Bank, who, when speaking on 6th March, 1951, to a meeting of the Economic and Social Council of the United Nations in Santiago, said: Some countries have sufficient resources and credit to enable them to carry out development on the basis of borrowing abroad. I think we should frankly face the fact that others have not. They cannot adequately accelerate the rate of their development if the only capital which they receive is in the form of loans which they are to have a reasonable prospect of repaying. After those words, there is a further paragraph with which I will not weary the House and in which he discussed the relative merits in those circumstances of either direct grants-in-aid or low-interest loans. He said: In my opinion, when a country has a choice between making grants or making fuzzy loans of this description, it pays in the long run to choose grants. This matter is to be considered very shortly, and if we are to give a Second Reading to a Bill so enormously to enlarge the opportunities of financing by borrowing at 4¾ per cent. from the International Bank, at the same time we should ask the Government to give some indication of what their attitude will be to the question of grants-in-aid—which must be a parallel process, and in my contention must be the predominant process, of development in many of those backward countries.

At the last meeting or the last but one of the General Assembly of the United Nations, the Economic and Social Council were instructed that it should be preparing a working paper on the subject of establishing a fund for the purpose of making direct grants to underdeveloped countries. This working paper was prepared by the Secretary-General just before his regretted retirement, and it is suggested on page 10 that, to start the operations of a fund, a minimum of between 200 million dollars and 300 million dollars from at least 15 to 20 contributors might appear to be reasonable. This is suggested as a start on the understanding that that figure would later be increased.

This working paper is to be considered by a special committee of experts which, according to the resolution of the Assembly, is to be convened not later than December, 1952. That Committee is to report in March, 1953, and this matter will then come before the next meeting of the Economic and Social Council, which I presume will be in the summer of 1953.

I think we are entitled to ask what will be the attitude of the Government to this question when it arises. Can we count on right hon. and hon. Gentlemen who represent the Colonial Office and who therefore have the care and responsibility of so many of the peoples who live in the under-developed countries, to see, and to fight against the Treasury to make sure, that the long-term interests of international harmony, of brotherhood, partnership and co-operation between the races, shall prevail over short-term considerations of balance of payments difficulties? For if these long-term views do not prevail, then, as I end my speech, I will dare to quote four words taken from an ancient language of an under-developed territory—and these words are: Mene, mene, tekel, upharsin. If anybody wants to know and does not know what they mean, they are from the 25th verse of the fifth Chapter of the Book of Daniel.

12.25 p.m.

Mr. Bernard Braine (Billericay)

My right hon. Friend the Colonial Secretary will no doubt be greatly fortified by the support he has received this morning from the hon. Baronet the Member for Gravesend (Sir R. Acland). The hon. Baronet has come a long way since the days when hon. Members on the benches opposite believed that Colonial development was a matter of bringing great public corporations, armed with vast reserves of capital and modern ideas, to underdeveloped territories. We are all much the wiser now, and the hon. Baronet has led the way in the process of disillusionment which has spread over the benches opposite.

There was one point in his speech on which I think it would be fitting for me to comment straight away. He complained of the lack of surveys of colonial resources. Surely he is aware that a good deal is being done in that field. It is true that the International Bank has been invited to undertake a survey by only one colonial Government—I refer to the Government of Jamaica—but surely the hon. Baronet is aware that E.C.A. have been conducting all kinds of expert investigation, and that this kind of work has been going on for some time and is gathering momentum.

The second point which I would make is this: the right hon. Member for West Bromwich (Mr. Dugdale) seems to think that the Colonies have had very considerable difficulties in raising loans since the end of the war. Why was it, he asked, that Southern Rhodesia had been successful in securing a loan but not the Governments of Colonial Dependencies? Surely he is aware that in the period from April, 1950, to February, 1952, a large number of colonial Governments, particularly those enjoying more advanced economic and political conditions, raised no fewer than 13 loans on the London market.

Mr. J. Edwards

Is the hon. Gentleman committing himself to the view that colonial Governments were able to raise as much money on the London market as they would have liked to raise?

Mr. Braine

Certainly not, but as the hon. Member knows perfectly well, this is not just a matter of money. As my right hon. Friend pointed out, it is a matter, first, of the resources which money commands and, secondly, of the capacity of the territories themselves to absorb capital. I would not suggest for the moment that the needs of the Colonies have been satisfied. Of course not. They are engaged in a vast programme of development which, I suggest, on the lines undertaken by the present Administration, is more likely to yield fruitful results than under the previous Administration, who had such grandiose ideas of what could be done in this field.

I welcome the Bill for two reasons. First, it is evidence of the increased importance attached by the Government and by international agencies such as the International Bank to the economic development of Colonial Territories. Secondly, I believe that the method of meeting the requirements of the Colonies by means of loans is the best way of encouraging that development—and a little later I will give the House my reasons for saying that. Indeed, it is high time we made up our minds about the best method of providing public money to meet the requirements of the Colonial Territories.

Thus, this Bill deals with loans. But there are grants made under the Colonial Development and Welfare Acts; and there is direct investment under the Colonial Development Corporation. Of course, I recognise straight away that there are many dependencies where, because there is a lack of resources, it is impossible to service a loan out of revenue and the method of grant-in-aid must be continued if we are to fulfil our mission. However, assistance of that kind under the Colonial Development and Welfare Acts comes to an end in three years, and I would reinforce the plea made by the right hon. Gentleman the Member for West Bromwich that early consideration should be given to renewal of aid under that head.

I do not think there is any doubt that there have been very notable results from that kind of assistance. It was designed, in the first place, to help the Colonies to help themselves. It has proved immensely beneficial to them in undertaking long-term development, and balanced development at that. It has had the effect of stimulating economic and social development in the Colonial Territories.

In particular, I hope that the plea I made last Friday, in another debate, that early consideration will be given to making available further funds for the very valuable work done in the field of colonial research, will be given, because the continuance of such research is vital if we are to tackle the problems of disease, pest, and so on, which, at present, stand in the way of expanding colonial productivity. I do hope that early consideration will be given to that particular matter.

I am not so enthusiastic—and here I agree with my hon. Friend the Member for Banbury (Mr. Dodds-Parker)—about asistance given through the medium of the Colonial Development Corporation. I think it is a thoroughly bad principle—and a particularly bad principle for a Conservative Government—that public money should be invested in ordinary commercial enterprise. Public money should be invested in utilities. I said a little earlier that I welcomed this Bill since, as a general principle, the method of financing by loan is more likely to produce the right results than the method of outright grant. I do not believe we can separate economic development from political development. It so happens that this particular Bill is designed to facilitate loans to territories with advanced constitutions and where the pace of political advance has been quickening.

Development, here, however, requires very much more than capital. It requires a sense of responsibility. I disagree with the hon. Baronet when he says that the making of outright grants to territories that can service loans out of their revenues is a good thing. I think our main task is to inculcate as rapidly as possible a sense of responsibility in these territories. We cannot check political progress. We can guide it into responsible channels, but we cannot check it.

Economic progress, on the other hand, as I have said before in this House, is determined by the facts of the situation—by the resources which are available, by the skill inherent in the inhabitants, by the availablity of local capital. Political progress has been outrunning economic progress in the under-developed territories of the world. I do not say for one moment that political progress is not important. To encourage it is in line with our own traditions. There is no question of our discouraging it at all, but I do feel that in the economic development that we undertake we must have all the time in mind the tremendous importance of encouraging a responsible attitude towards economic development.

Sir R. Acland

If the hon. Gentleman says that political development has to be checked, what do we do if the cost of the necessary education—to take one item alone—is far greater than we could possibly raise by taxation of any profits which could possibly be earned on any economical development which may be financed at 4¾ per cent.? What do we do? Let it bust, or what?

Mr. Braine

The hon. Baronet has forgotten what has happened in recent years. In 1945, when Oliver Stanley was the Colonial Secretary and the Colonies were invited to draw up their 10-year development plans, they were asked to preserve a proper balance between investment in economic development and investment in social development—that is to say, investment in resources and investment in people. I do not think that anybody would dispute that very considerable progress has been made in the Colonial Territories in providing increased social services, increased education, and so on; but, of course, at the same time we are nowhere near what we desire to achieve in that particular field. No wonder, for it is a world-wide problem.

Sir R. Acland

True.

Mr. Braine

We have the problem here in our own country, where the situation last autumn was surely one in which a nation with a £6 a week income was living at a £9 a week standard—investing in television sets while ignoring the hole in the roof, and running up bills at the grocer's and the greengrocer's. At any given time in history there are many things to be done and only limited resources available with which to do them.

The problem is the same for the Colonial Territories as it is for us—but with this difference, that the whole object of colonial development and welfare has been to provide assistance from this country which will enable the Colonial Territories to undertake long-term development not only of basic economic services but also of social services, too. I am not complacent about this. As much as anybody else, I have drawn attention to the conditions of poverty which exist—and which, incidentally, have existed from the beginning of time and have been alleviated only under British rule. I am not in the least bit complacent about that, but I do think we are in danger of going a bit too fast.

Obviously, economic development which draws people away from rural communities, uproots them, detribalises them—here I agree with a great deal of what the hon. Baronet said—destroys their loyalties, but does not replace them with new ones—that kind of development is disruptive of the whole social life and, in the long run, with bear little fruit. That is why I say that we must watch very carefully the effect of economic development that we undertake.

Why I welcome this particular Bill is because, first of all, a Colony is likely to acquire a loan only if it can inspire confidence. And second, having acquired the loan, a Colony is under an obligation to see that it meets its obligations. It is a most interesting fact that in the 'twenties and 'thirties the Colonial Territories were always able to get their loans on better terms than the Dominion Governments.

The reason for that was, of course, that the knowledge existed that behind the Colonial Governments there stood the Mother country—who would ensure that obligations were met and honoured. That situation obtains still today, despite political advance. The Colonies who are to derive benefit from such loans, will do so—and I think this should be clearly understood—because they are associated with the Commonwealth.

It is for those reasons that I welcome this Bill. It is a welcome indication of the growing importance which Her Majesty's Government attach to colonial development, and it is an indication of the readiness of international agencies like the International Bank to stimulate the development of backward areas and to help millions of people who do not yet enjoy high standards of life to secure a place in the sun.

12.41 p.m.

Mrs. Eirene White (Flint, East)

I thought the Colonial Secretary made a very narrow speech in introducing this Bill, because it is now approximately four years since the House last discussed this subject, and at that time the International Bank had been concerned almost exclusively with post-war reconstruction in Europe. We had, therefore, had no experience of its working in the field we are discussing today, of financial assistance to under-developed areas. We have now had four years of such experience since our last debate on this matter, and I should have thought that in presenting this Bill the right hon. Gentleman would not only have dealt, as he quite properly did, with the purely financial aspects, but that he would have done at least three other things.

I think that he ought to have given the House—and no doubt whoever replies will make good the deficiency—a somewhat more detailed account of our transactions with the Bank; that he should have indicated the view of Her Majesty's Government on the relationship of this method of financing colonial development with our own domestic funds, C.D.C. and C.D.W.; and also that he should have indicated what Her Majesty's Government think should be the relationship of the financial operations of the International Bank with those of other international, particularly United Nations, agencies.

In dealing with the transactions we have already had, or might have had, with the International Bank, I think we might have been told a little bit more about, for instance, the survey in Jamaica and the proposed survey in British Guiana, which is mentioned in the latest Annual Report of the Bank. I should like to know, for instance, on whose initiative these surveys were made, and how this kind of survey links with the work of the Caribbean Commission. Was it on the initiative of the Caribbean Commission that the suggestion was made that the International Bank should undertake this work, or was it the Government of Jamaica and the Government of British Guiana respectively who decided that, in their private opinion, if I might so put it, the International Bank should be asked to visit those countries rather than other countries in the Caribbean? I think that some little explanation of these facts should be given to the House.

I should also like to inquire whether, when there is a general economic survey of this sort, the entire cost is borne by the Bank. Or do we meet what one might call the local costs of such a survey? Is it a joint enterprise in that sense or not?

With regard to the African visits, there is a little doubt in our minds about whether the visits from representatives of the Bank to Central and East Africa were visits to discuss particular projects only, or whether they were to discuss general economic conditions in the territories, and having had those discussions whether it was, in the opinion of the Bank, desirable to finance particular projects which seemed to them the most important. Or was it simply the projects which seemed to them best to fit in with their particular method of finance? Or are there other projects which we ourselves might prefer but which the Bank might have decided would not fit in with their method of finance? I think we are entitled to have some information on a matter of that sort.

It is also suggested in the latest Annual Report of the Bank that there should be an early visit to West Africa. No mention whatever has yet been made of that. Again, the House is entitled to be told whether that visit is to take place, and if so, on what basis. Who took the initiative? Is it again on the basis of a general survey? Is it on the basis of particular projects, and if so, what? I feel that we are entitled to a good deal more information than we have been given, and I am very sorry that the right hon. Gentleman saw fit to think that he was still, perhaps, back in the City of London rather than at the head of Her Majesty's Colonial Administration. I really do think that we might have had a little more details about these matters.

The Minister of State for Colonial Affairs (Mr. Henry Hopkinson)

I would remind the hon. Lady that these things are quite outside the scope of the Bill before the House this morning. The question of these visits had no relation to loans of the sort we are now debating.

Mrs. White

I can hardly take that from the right hon. Gentleman, but surely if loans are to be made to, for instance, the Government of West Africa, that is a matter which comes within the purview of the Bill, and we are therefore entitled to know on what basis the visits were made prior to the granting of loans.

Mr. Hopkinson

I cannot have made myself clear. The visits to Jamaica and British Guiana and the forthcoming visit to West Africa are not connected with loans. They are going to be on general economic conditions in those territories. We are debating the question of loans from the Bank, which so far have only been discussed in connection with East and Central Africa.

Mrs. White

The right hon. Gentleman is already doing some of what I wish to have done. For example, he has indicated that the visit to West Africa is on the basis of a general economic survey and not by way of investigation of particular projects for particular loans. That, in my submission, was precisely the kind of information which it seemed proper should be placed before the House.

Then it is important for the House to know on what principle Her Majesty's Government advised Colonial Administrations on whether they should try to obtain their finance through the International Bank or not, and for what particular kinds of projects. Electricity is to be the subject of a loan to Southern Rhodesia. The Colonial Development and Welfare Fund also undertakes a certain amount of development work of this kind; electricity and transport are covered by the Colonial Development and Welfare Fund. I should like to know what considerations Her Majesty's Government have in mind in suggesting whether the money should come from the Colonial Development and Welfare Fund, or whether an application should be made to the International Bank. Is it done taking into account merely the internal condition of the territory?

For example, would it be said that Southern Rhodesia is well able to face a loan bearing interest at 4¾ per cent., and therefore she should go to the International Bank? Perhaps I have chosen a poor example there, because, in fact, Southern Rhodesia cannot get a grant from the Colonial Development and Welfare Fund.

But the same line of argument might very well apply to Kenya. Kenya would be eligible for a Colonial Development and Welfare Fund grant. Is it suggested that she should go to the International Bank because, by so doing, she will not come on the Colonial Development and Welfare Fund for money, which would therefore leave more available for other Colonial Territories? In other words, does the Colonial Office take it to be part of its duty to try to distinguish between the position of different Colonial Territories in relation to one another, and not merely to consider the internal financial condition of an individual Colonial Territory?

What is the policy in relation to financing these works? This seems to me a matter on which we might very well have a little more information, more particularly perhaps because we are very much concerned that we should not at some later stage, when we are discussing the future of the Colonial Development and Welfare Fund, have it said that because we are undertaking contingent liabilities under this Bill we shall not, therefore, have as much as we might otherwise have available through C.D.W. I hope the point will be made perfectly clear that, in agreeing to increase the potential liabilities of the Treasury under this Bill, we shall not then be told that there will be less available in other forms, because it is obvious that no other Colonial Territory is in a position to face the interest charges—

Mr. Lyttelton

Nor other propositions.

Mrs. White

I entirely agree—even within a relatively prosperous territory. I feel that we should have some explanation of the attitude of Her Majesty's Government towards the relationship of this method of finance with other methods of finance which are, in fact, available. I noticed in the last debate on this subject that it was suggested that the Colonial Development Corporation might itself be used—

Mr. Lyttelton

Concerning the C.D.C., that fund really exists for development which is not rightly susceptible to the commercial type of finance.

Mrs. White

I am much obliged to the right hon. Gentleman. The point I was making was that we might have borderline cases, and I want to know whether the criterion was purely the financial position of one individual territory or whether the Colonial Office take it to be its duty to consider not only an individual territory or an individual project, but the relationship with other possible claimants on limited funds.

I was about to make a smaller point. In the last debate in this House on the Colonial Development Corporation, it was suggested that the Corporation might itself be one of the bodies to apply for loans through the International Bank. So far as I know, that suggestion has been made and has never been followed up. It may have been decided that it was not in fact suitable. The idea, I understood, was that where we have a number of smaller projects which the International Bank might not wish to look at individually, it might be prepared to take action if the C.D.C. made an application for a loan for a group of projects, each of which by itself would hardly be worthy of the interest of the International Bank. I should like to know whether experience has shown that there is any merit in considering such a method of financing certain types of projects.

I think we are certainly entitled to have from Her Majesty's Government some indication of their view of the rôle of the International Bank as a lending body for colonial finance, compared with the other possible methods of national finance. For instance, in their last Report the International Bank made it clear, as Mr. Eugene Black has said in public on a number of occasions, that, of course, they deal really with only a particular type of project. They do not deal with very long-term projects requiring low rates of interest or which may be more appropriate for grants-in-aid, nor do they deal with ordinary risk capital or equity shares.

As the House knows, there were discussions between the Bank and the United Nations Economic and Social Council on this question of whether another body was desirable in the form of an International Finance Corporation to deal with the rather more risky element, and perhaps doing on an international scale what we ourselves have done, with rather chequered success, in the Colonial Development Corporation.

One would like to know what the attitude of Her Majesty's Government is to this proposal, that there should be an International Finance Corporation, as I understand it privately financed but working in association with the International Bank. Have we taken any part in the preliminary discussions, and if so, with what success? Are we giving instructions to our delegates to the Economic and Social Council? Is it a matter in which we ourselves would not be interested because we have our own methods, or is it something which we feel might perhaps be done on an international basis rather than on a national basis, partly for the reasons mentioned by the hon. Baronet the Member for Gravesend (Sir R. Acland), that there are advantages, in the political situation in Colonies which are only finding their way in politics, in having assistance given from an international body rather than from a body financed through the mother country, which can give rise to psychological difficulties for politicians trying to find their own feet, sometimes in difficult circumstances. I should like to know whether an International Finance Corporation has something to be said for it—that is, for the commercial side of the work through the United Nations agencies.

Then there is the other quite different proposition, which is also before the United Nations Economic and Social Council, for another United Nations agency to do the kind of work which the International Bank finds itself unable to do. I think that I am right in saying that when the International Bank was first mooted at Bretton Woods, it was understood that it would be the one big international finance agency, or at least it was hoped that it would be.

When we read the earlier speeches concerning it, and the earlier reports of the Bank itself, it was clear that the general idea was that it would be one agency which would be able to deal with almost all inter-governmental work. Now it is obvious that that is not so. Therefore, we have this other proposition, and I should like to reinforce what the hon. Baronet the Member for Gravesend asked, that we should know what attitude Her Majesty's Government propose to take to the proposition before the Economic and Social Council for the working out of a plan for a body which, side by side with the International Bank, would deal with the kind of long-term loans for development in territories which cannot possibly meet a charge of 4¾ per cent., or anything near it. Are the Government going to support that, as many of us hope they will, or do they prefer to keep entirely to our own domestic arrangements?

Finally, I should like to have some indication of the relationship between the technical assistance investigations, which precede some of these loans, run by the International Bank, and how they fit in both with our own surveys in this direction and with the other United Nations technical assistance arrangements. Everyone is aware that technical assistance must precede development, and everyone is also aware that the most difficult thing of all in colonial development at the present time is to find the men capable of planning and carrying out these projects. One has the impression that there are rather a large number of agencies concerned with this. We should like to be assured just how the work of the International Bank on that side fits in with our own colonial administration and with the other bodies sponsored by the United Nations.

I mentioned the Caribbean situation, where we have our own colonial development, with the Caribbean Commission, and the International Bank comes in, not to mention one or two organisations run by the United States for American countries. One wonders how far we are satisfied with the organisation sponsored by the Bank, whether it is overlapping the work of the other bodies, and how we should decide on what basis of priorities we should ask the International Bank to intervene. All those points are valid ones to be made in a debate of this kind. There is no dispute between us as to the general desirability of obtaining as much as possible in the way of finance for our colonial enterprises. I agree with the right hon. Gentleman that finance has not been the primary difficulty up to date in colonial development.

I have one final question to put to him. It is suggested in the Report of the International Bank that they have been able to ensure that priority shall be given in supplies of equipment to countries enjoying loans from the Bank. Presumably dollar equipment is intended. If that is one of the reasons why we are suggesting that Colonial Territories should go to the International Bank, it would be interesting to know whether this is partly because we think they will thus be able to get more adequate supplies of plant and equipment, which we ourselves are not able to provide. I hope we shall have satisfactory replies to all these points later in the debate.

1.2 p.m.

Major H. Legge-Bourke (Isle of Ely)

Two of the oldest principles in this House are, first, grievances before supply, and, second, no taxation without representation. I sometimes think there should be a third, no payment without accountability, for it is certainly one which we ought to follow, and it has been very apparent today that one of the reasons why the Bill is drafted the way it is is that we do follow it.

In so far as the Bill represents the desire of Her Majesty's Government to further the development of our Colonial Empire I welcome it wholeheartedly, but in so far as the Bill, and also the Colonial Loans Act, 1949, represent the terrible price we have had to pay for winning victory in the Second World War, I bewail the necessity for it. All we have heard today about the International Bank has only been said because we are now in such a parlous condition in relation to putting capital anywhere, even in our own country, that we have to rely upon some international body to provide something for us.

Mr. Hale

Why does the hon. and gallant Gentleman suggest that the Bank was set up by all the nations of the world?

Major Legge-Bourke

If the hon. Member will allow me to complete what I have to say, it will be perfectly clear. I was saying that it is a sorry reflection of the terrible price which we have had to pay to win victory in the Second World War that we now have to go to an international organisation such as the Bank to get enough capital to put right our own Colonial Empire. There is nothing shameful to this country about that. All I am saying is that it is a sorry and sad reflection. I am sorry that the hon. Member for Oldham, West, whom we are glad to see back safely, wishes to misunderstand me. I am not trying to make any reflections against my own country or other countries. I am merely saying how sad it is that we now have not enough capital to invest in our Colonial Empire and must go to an international body to get it.

The range of the debate has been very wide so far. I now wish to direct attention to Clause 1 of the Bill. With reference to subsection (1) I wish to make an observation on the power which is now given to authorise the Treasury to guarantee loans made to any authority for administering services which are common to two or more Colonial Territories. One of my excuses for entering the debate at all is that since the war I have played a very small part in trying to develop certain natural resources in another part of the Commonwealth, which is certainly not covered by the Bill. I have learnt one lesson as a result of having done that, and that is that there tends to be a parochialism in economic outlook which we ought always to have in mind, and if we can eliminate or reduce that we shall probably be doing the right thing.

The right hon. Gentleman the Member for West Bromwich (Mr. Dugdale) took exception to the idea of pledging the Treasury in advance to underwrite a loan made to an authority to cover activities in two Colonial Territories, on the grounds that we do not know what those authorities may turn out to be. On the contrary, I consider that the Bill is to be commended on that very point. It is because the Bill enables two territories to get together and perhaps form a single authority in order to manage some economic development that it will in itself be an encouragement to get the economic co-operation which is essential between Colonies just as it is in the whole Commonwealth and also in the world. For that reason I should have thought that, instead of the subsection being offensive to the right hon. Gentleman, its advantages would very much have outweighed any objection, and I welcome it most sincerely.

The hon. Baronet the Member for Gravesend (Sir R. Acland) called attention to the surveys which have been carried out on behalf of the International Bank. I cannot help sometimes wondering how much of the money which this country has contributed to running the Bank is spent on obtaining information which is already available somewhere else. I find it very hard to believe that there is very much about our Colonial Empire which is not already known and documented somewhere at the Colonial Office or in each Colony, and yet it is apparently necessary for international bodies to go whizzing round the world investigating other people's countries, perhaps with the best of intentions but, in my opinion, excessively inquisitively and probably over-expensively.

I am not suggesting that individual members of the Bank are not very high-minded people who are trying to do their best for their fellow men, but I believe-that there is an overlapping of expenditure between international bodies. The United Nations itself is very guilty of it, and the International Bank certainly is spending money unnecessarily in this respect. Since 1945 all of us have been anxious to see our Colonial Empire develop as fast as possible, but, especially in the light of what I have said about the shortage of capital in this country, it seems to me little short of scandalous that we should allow any organisation to which we have to contribute finance to indulge in work which is unnecessary because the facts which are sought are already known.

This country is very short of money, and the Colonial Empire is crying out for money, as is the whole Commonwealth. This is a method of getting money to them, but I should have thought that the important thing was that the international bodies whom we call in aid on such matters as these and to whom we contribute finance, should be spending their money as wisely as possible. I am not at all satisfied that they are. Certainly I feel that there is little alternative to the International Bank at the moment, but I was most gratified to hear my right hon. Friend speak this morning about looking upon the Bank rather as the last resort. That should always be so.

What I have always hoped to see in the future is the Commonwealth hiving off into regions for economic development, with the Dominion in a particular region the head of the colonial development in that area. I realise that the Commonwealth is at present even shorter of capital—certainly it is so in Australia and New Zealand—than we are here at home, and that makes it quite impossible to follow the line I have in mind. What we have to visualise is that the Dominions and the Colonies will become more and more closely engaged in developing the underdeveloped territories in the regions for which they are responsible.

I hope that this Bill may be a very small step towards that. It is very remote from what the ideal ought to be. When I overhear any hon. Member on the opposite side refer to me or my friends as being "Blimps" I always look upon it as the greatest compliment they could pay us. I think I am right in saying that the hon. Member for Gravesend (Sir R. Acland) this morning referred to the fact that some speeches of his hon. Friends might give the impression that they consider that every European who lives in Kenya was automatically a "Blimp." He need not apologise for it. The term "Blimp" I think was invented by a Communist cartoonist.

Sir R. Acland

That is not true.

Major Legge-Bourke

Certainly it is.

Mr. John Strachey (Dundee, West)

Is the hon. and gallant Member saying that Mr. David Low is a Communist?

Major Legge-Bourke

I always understood that he was.

Sir R. Acland

It is absolute nonsense. Cannot we get away from these smear campaigns?

Mr. Hale

Mr. Deputy-Speaker, can we permit a foul and vicious attack upon a distinguished public man by name in debate without any reprobation from the Chair or a demand for its withdrawal? Is it right for a remark, which if it were made outside would be an actionable libel, to be made here against a public man without any justification?

Mr. Deputy-Speaker (Sir Charles MacAndrew)

We are privileged here in what we say, and we can say anything we like.

Mr. Hale

Would it be in order for me to say that it is a most disgraceful and contemptible use of the privilege?

Mr. Deputy-Speaker

That is a matter of opinion. I would not express any opinion on it, but what has been said is quite in order.

Major Legge-Bourke

It is extraordinary how often the use of the word "Communist" when applied to individuals upsets some people, but I have never heard it suggested that the use of the term was a libel. If I had done the particular cartoonist any injustice—

Mr. Hale

When it comes from a Fascist it is worse.

Major Legge-Bourke

I was not intending to libel that cartoonist or anything of that sort. All I said was what I believed to be the gentleman's political convictions.

Sir R. Acland

Has the hon. and gallant Gentleman seen the innumerable cartoons in which David Low castigates, under the title of "Plimb," a character which is the exact reverse of "Blimp," and in fact a fellow traveller of the Communists? The hon. and gallant Gentleman's suggestion that Low is a Communist is absolutely unfounded.

Mr. Deputy-Speaker

If we pursue this any further we shall be getting away from this Bill, which deals with loans.

Sir R. Acland

But we must step on McCarthyism when it starts to raise its head. It is a dangerous and beastly thing.

Mr. Deputy-Speaker

I think we should keep quiet and we shall get on better.

Mr. Strachey

It is a very serious charge.

Major Legge-Bourke

This would not have happened but for the hon. Member for Gravesend having referred to the fact that certain of his hon. Friends might, in their speeches, have given the impression that they regarded every European living in Kenya as a "Blimp." I was only showing that I was proud of the term and that the hon. Member need not apologise for it, because I always recollect that the people who were responsible for keeping morale going in the First World War, which was much more unpleasant than the recent one, were those people who were later classed as "Colonel Blimps." I look upon it as a great compliment when that expression is used by hon. Members opposite and applied to me and my friends.

A great change has taken place in hon. Members opposite on this subject of colonial development. I feel they mean what they say when they want to see our Colonies developed and remaining Colonies, later becoming Dominions. That is not what they always thought, but this is a welcome change, and the fact that they have agreed to the Bill demonstrates that. I am sorry if anything I have said makes it more difficult for them to agree with the principle.

If we in this House are united in general principles we shall develop our Colonies as fast as possible. Let us hope that this Bill brings nearer the day when we shall be in a position to give aid to our Colonies both from the private lender as well as the State lender, and that we shall not have to go to international bodies to get the necessary money. The urgency is there now, and for that reason I welcome my right hon. Friend's Bill.

1.16 p.m.

Mr. Leslie Hale (Oldham, West)

The House is discussing a matter of very great importance, and I do not propose to be deterred from the lines which I have set myself, which is not too highly controversial, by the somewhat contemptible speech of the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) to which I have just listened. When I speak of his speech in those rather strong terms I feel I am being unusually moderate in view of what has been said. The hon. and gallant Gentleman started off by criticising international co-operation.

Mr. Lyttelton

No, he did not.

Mr. Hale

The right hon. Gentleman almost makes himself the batman of the gallant major.

The hon. and gallant Gentleman started off by saying that it was regrettable that we should have to seek the services of the International Bank, an organisation which we have helped to form—an act of statesmanship in which we participated—[Interruption.] My hon. Friend the Member for Nottingham, South (Mr. Norman Smith) seems to be rather distressed.

Mr. Lyttelton

Surely nothing is more natural than for any of us to wish to finance the Colonies ourselves.

Mr. Hale

It may be natural to the Tory mind, but I would not have thought that at all. I would have thought that this was one world and that all the peoples in the world are interested in the world. The common brotherhood of man would make us work together in the interests of everybody. That is a matter which I will develop in a different form some other time.

For the moment the sotto voce remarks of my hon. Friend the Member for Nottingham, South are somewhat distracting. As to his objections to banking or the fundamental difference on principle, I say that I belong to the "keep calm" group and to the "Middle of the roaders." In other words, I do not feel myself sufficiently informed on the situation to be able to express a perfectly clear view.

I want now to raise one or two issues on which I think the Secretary of State has not fully informed us; or, to put it another way, I have not been sufficiently receptive as to find myself fully informed as to the sort of project that this Bill will permit and the sort of project to which it will not apply.

If I may, I should like to make a personal explanation as to why I have not been present throughout the whole of the debate. I left East Africa some two days ago with the good wishes of the entire population, and since then I have had to concentrate more on the affairs of the body because of a slight infection which I have had. It was for that reason that I was not able to be present throughout the debate. [Interruption.] I am sorry I did not catch the interjection of the right hon. Gentleman; I am most anxious not to miss anything that is being said.

I should now like to deal with the speech of the hon. Member for Banbury (Mr. Dodds-Parker). He introduced the old bogy of private enterprise and of national and international planning. I should have thought there was full agreement on both sides of the House that there are some essential projects of colonial or under-developed territory development which cannot be done by private enterprise.

No one really suggests that private enterprise would undertake desert irrigation and that the vast problem of soil erosion can be dealt with on the basis of private enterprise. Indeed, if we wish to put a party argument, we on this side would say if we had had national control the problem of soil erosion would never have occurred.

Had there been a national planning—[Interruption.] I do not understand whether the sotto voce observations of the Secretary of State for the Colonies are supposed to be heard by me, and whether I am supposed to reply to them or to ignore them; or whether they are airy nothings that he is breathing out. I shall be very happy to reply to them, if he wishes me to do so.

In Canada today, the timber forests have to be under national control in order to provide for the replanting of trees. Had that been done in years gone by we should not have had the whole world laid waste for timber. Here we have a single, fundamental problem in which we have to correlate a sort of background development that is unremunerative with industrial projects which can be developed only on the basis of that background development. In other words, if we wish to develop mining in Tanganyika and Kenya, we find it necessary to provide the railways necessary for that purpose.

A classic example is that which arises in the way referred to by the hon. and gallant Member for the Isle of Ely, who spoke of the Dominions and Colonies and the need to develop the native standard of life in them. What about Australia, a friendly country for which I have a very great personal admiration? What about the "White Australia" policy? What about that vast area of West Australia with its great wealth of minerals which is debarred to 75 per cent. of the population of the world because none of them are entitled to enter it?

What is the good of talking time after time about our desire to serve the interests of the natives when we know that law after law is being passed and extended to whole areas intended to depress the standard of life of half the world? What is the use of talking in those terms?

A day or two ago my right hon. Friend the Member for Easington (Mr. Shinwell) made an interjection in debate about shipping in the West Indies. It is a classic example of private enterprise under national planning. Everybody knows that this is one of the vital problems of the West Indies to which my hon. Friend the Member for Warrington (Dr. Morgan) has referred from time to time in the course of our debates. Everybody knows that we cannot have any effective development of resources or of amenities there without improving the shipping facilities. Most people realise that it cannot be done on the basis of a paying concern. That is always the problem.

I accept that we cannot go on indefinitely pouring out wealth without any hopes of return, and that in this country we are all much more highly taxed than the Colonies are. We pay a disproportionate part of the burden compared, for example, with the European settles in Kenya. We are still under obligations. The obligation of trying to see that the interest of the native in the Colonies is paramount is an obligation that we have formally accepted and that we are due to try to carry out.

I propose to make reference to one or two schemes, as it may clarify the purpose of the Bill, in my mind at any rate, and I hope in the minds of other hon. Members who are in some doubt as to the ambit of the Bill. Some hon. Members would regard the Owen Falls scheme as a classic one, of vital importance to a vast area of East Africa. Originally, the Owen Falls scheme involved a continuing plan of the irrigation of the Blue Nile, and the reclamation of vast marshes. The size of the project was almost incredible, and meant bringing a vast area of land under cultivation.

That is the one really effective method of adding to the standard of living of the people. There is a theory that by building railways, sinking mines and building factories you necessarily add to the standard of living, but it does not work out in practice. I believe that it ultimately will do so, but the introduction of industries without trade unions can sometimes depress the standard of life. It is only by increased productivity of the soil that we can get the immediate means of giving somebody a real advance.

The Owen Falls scheme is well on the way to completion, so far as the dam in Uganda is concerned. The Sudan, the area which should principally benefit, will shortly cease to be a Condominium and will have self-government, something which we on this side of the House greatly welcome. I hope hon. Gentlemen on all sides of the House welcome it, too.

How will that change affect the continuation of the activities of the Colonial Development Corporation? So far as I can see, the Bill applies only to two Crown territories or two Colonies adjoining, and not to a Colony adjoining an independent territory. I hope it will be possible to put down a suitable Amendment to the Bill in Committee, because I am certain that it is the wish of every hon. Member that we should work with the Sudan to carry on this vast plan of irrigation.

There was a plan to have canals on the Mountains of the Moon, some 250 miles from Entebbe, to help the irrigation of that very vast area. This is not only a romantic proposition but a very important one. Two days ago I flew in a little Auster 'plane nearly to the Mountains of the Moon on the borders of the Belgian Congo, and I saw the Tufmac scheme there, the organised fishing scheme which has been developed under the auspices of the Colonial Development Corporation. It is a vast project which it was exceedingly fascinating to see developing, with precisely those problems of nationalisation side by side with private enterprise and with the vested interests of the peasants, such as provide very often the clash of debate in this House.

The peasants there had enjoyed the free right of fishing in the lake. The fish had added very materially to their diet, which consists very largely of Matoka, or mashed bananas. Under the national scheme they have been deprived of their fishing rights. There was a considerable sense of grievance among the peasants there. Problems similar to those in our white fish industry presented themselves. For example, the producer was getting 25 cents for the fish while the retailer, 200 miles away in Kampala, was getting 1s. and 25 cents. There were precisely the same problems of cost of distribution and of administration. Nevertheless, I thought that this was a sensible, useful and well-developed enterprise which did credit to those who had organised it.

I ask the right hon. Gentleman sincerely if he can help Governors of Colonies to have a better information service, in order to get the facts over to the natives. If the district officer were inclined to be a little less uncommunicative, a little less purely directive, a little less concerned with giving orders and a little more concerned about giving information, some good would result.

There is a proposal in the East African area to construct and to allocate a huge national park as a very large animal reserve. It is causing very grave disquiet among the peasants. It is a matter of misunderstanding, and a little explanation would be desirable, although the displacement of African peasants to make a national park is one which, in any circumstances, needs a lot of consideration and tact.

A national park may be a very good thing and may add to the amenities of the country. Certainly, the national park in Nairobi is a very great national asset. It is well-conducted and well-organised and I believe it brings very great revenue to the Kenya authorities. How far is this regarded as a matter of colonial development and subject to grant? How far would the expense of construction and maintenance be a subject for the Colonial Development Corporation?

I apprehend that some people think I am going outside the normal ambit of colonial development when I suggest that a national park may come within it. May I remind them that the first enterprise in Uganda of the Colonial Development Board was the construction of a highly prosperous and elaborate hotel in Entebbe itself? If we can build hotels—I do not suggest it may not be needed or that it may not be a sensible way to get people there and to get them accommodation—

Mr. Glenvil Hall (Colne Valley)

There is a bathroom for every bedroom.

Mr. Hale

My right hon. Friend tells me there is a bathroom for every bedroom. I did not live in the hotel, so I did not know that. I was staying in Kampala.

But surely the House ought to be told something about the sort of scheme envisaged in the Bill; the sort of scheme which will be probable and which we are guaranteeing. It is important that we should know this, because the noble Lord who was Under-Secretary of State for the Colonies, and, I think, a former hon. Member for Croydon, and who opened the discussion on the debate on the Bill of 1948, made it quite clear what he thought the Bill was intended to do. He said: It may be said there are four objectives in the economic policy in relation to the Colonies. The first is to restore and improve the capital equipment of the territories so as to provide a firm basis for future development. May I just take that point for a moment, because the Minister made some reference to this and I did make an interjection about it? It is very important. Perhaps one of the most important things in the whole of Africa is the provision of decent roads and railways, but no one can say they can ever pay. It is much better frankly to recognise that fact, and to say that this is a duty to a very large section of mankind; that the expansion of the industrial revolution in Western Europe has placed the burden for this upon us and we had better accept it. The second is to promote those types of economic activity, whether primary or industrial production, in which the territories are best fitted to engage, having regard to the balance of their economies, and the advantages of their external trade."—[OFFICIAL REPORT, 19th November, 1948; Vol. 458, c. 750.] Before I go on to the others, I want to deal with that, the promotion of primary activities. This is the fundamental proposition of colonial government. I believe that the greatest single contribution that can be made to Africa at the moment is to have a vast extension of co-operative farming; co-operative in ownership, co-operative in the utilisation of land, in the planning of crops, in the supply of materials and tractors and of all agricultural machines.

The Governor of Uganda, who enjoys a surprisingly great measure of the confidence of the African people, considering the comparatively short time that he has been there, is keenly interested and highly informed. The new Governor of Kenya has had considerable personal experience of this in Basutoland. It is not an easy problem to plan co-operative farming. There is more than one difficulty. One great difficulty is the resistance of the Africans themselves, the tribal inhibitions, the tribal rules, which make participation of this kind difficult. In the Kikuyu Reserve, in Kenya, there is still the old-established custom on death of splitting up the land among foul or five sons—indeed, it is not unusual to have 15 sons—in small, uneconomic plots which cannot be developed. There is also tribal resistance to cattle inoculation, and so on.

The Civil Service in Kenya—which I regard as a singularly able one for a Colony which has not a very large white population, and which is not able to offer tremendous inducements to civil servants—has been conducting, on the whole, a very able and well-informed campaign to try to break down these tribal inhibitions. I am very glad to say that we have the complete assurance of the present officers of the Kenya African Union—I do not propose to say one word of the past officers whom I did not know, and who are in circumstances in which they could not reply to any suggestion I made—that they will do their utmost to co-operate in this scheme and try to develop agriculture production and improve the standard of African production, and so on.

Let us dismiss from our mind the theory that the African is a naturally lazy man, who has to be made to work. I remember that some years ago I used to talk on political platforms about affairs in this country 100 years ago; of the workers being idle and lazy, which they were according to most of the political speeches in this House; that the workers had to be kept at work for 14 hours a day to keep them disciplined; that it was a mistake to give them too much to eat, because they might get out of hand; that education might lead them astray, and make them think they should have a larger share in the affairs of the world and more right to a few hours in the sun than they were entitled to—[Interruption.] I am very sorry. I wish the right hon. Gentleman would share his joke with us; it seems to amuse him so much—

Mr. Lyttelton

I was merely saying that I wondered whether the hon. Member would go back to the Norman Conquest.

Mr. Hale

I am so sorry if the right hon. Gentleman did not follow the analogy I was making. But I can understand it, because it is only a day or two since he received members of the Kenya African Union, in that dignified silence of which he is such a master, for half-an-hour without making a statement of any kind; and then made a statement to the European Members in which he said—[Interruption.] I was only try to deal with the intervention, but surely it was a European member who interrupted the right hon. Gentleman to make to him the point I am now trying to make. We are now considering economics. Whether or not we were last week we are now, because this is surely an economic problem which we are discussing.

If the right hon. Gentleman did not understand what I am saying I would like to give him a modern analogy. What was happening last week in Kenya was just this. The Government issued a wages scale, and a blue book in which they gave particulars of wages and incomes in Kenya Colony. They gave it in this form—[Interruption.]—perhaps if I made a bargain with the right hon. Gentleman to give way once every five minutes he would then collectivise his interruptions, They say, of the scale for European public servants, "figures not available." I find that difficult to understand, but I would not for a moment comment on it. The figures are: Europeans—Private industry scale. Group 1: under £600 a year, 2,069. Group 2: £600 to £1,200 a year, 3,210. We are now talking about loans from the International Bank to which Indians are contributors. It may well be a question of whether we can grant loans in circumstances in which a colour bar is applied to the wages and salaries paid for carrying out schemes.

The Asians in industrial service are then given. In the under £180 a year group, there are 3,516 and in the £180 to £360 group there are 8,682. Between £360 and £540 there are 3,796, and I think I am right in saying that there is no one on that scale who is as high as the lowest European. I may be wrong, but at least these figures by themselves are sufficient. The number of Africans in private industry under 480s. a year is 28,441. That is, under £24 a year, or under 9s. a week.

I am prepared to concede—it does not say so, but I do not want to be unfair in any figures that I give—that that is subject to a cost-of-living increase; and if it is, the cost-of-living increase is 55 per cent., I am told; it may also be subject to some small house allowance. I want to give the benefit in all these things. As I have said, under £24 a year, there are 28,441 Africans; from £24 to £36 a year, another 34,000—that is, in private industry. In the public service there are 17,700 Africans at under £24 a year and 31,000 more at under £36 a year.

I wish the House really would consider these figures. It is often said that working conditions out there are quite different and that food is cheap. The standard staple food of the African in Kenya is posho, which is a maize meal. In 1939, it cost 7s. 6d. for a 200-lb. bag. Today, it costs 56s. under a Government controlled Maize Board. I ask any hon. Member opposite, or even on both sides of the House—I am not trying to be controversial; we tried not to be in Kenya, and I believe that we succeeded—to try to work out how much maize meal a man and his wife and family of, say, three children would eat when a 200 lb. bag costs 56s. and the minimum wage in industry is scheduled at 56s. a month, which means that he can buy one 200 lb. bag a month. It would be found that he, his wife and family would eat the whole of the 200 lb. if they ate nothing else. I am told that sometimes a goat is killed and there is a bit of flesh, but, in the main, the African lives on posho.

When the European settlers came to us, as they did—they were courteous, and we were receptive and understanding—they said that all Africans are dishonest, idle, unreliable and lazy. That is precisely what they said; I am quoting them with the greatest care. [Interruption.] I did not hear the right hon. Gentleman's interjection, but I am quoting with complete accuracy.

Mr. Lyttelton

I ask the hon. Member exactly what Europeans he is referring to and to lay on the Table and give some proof of the allegations he is now making.

Mr. Hale

I am giving a precise account of an interview I went to at the request of European settlers from an area 20 miles from Nairobi. I will supply the right hon. Gentleman with the information, which is at present in the possession of my hon. Friend the Member for Eton and Slough (Mr. Fenner Brockway). I was present when these things were said.

The right hon. Gentleman ought to know that this is what was said in election speeches in Kenya time after time at the last election. There was a gentleman called Mr. Vigars, who went much further than that. I do not suggest that that represents enlightened opinion in Kenya. I have made it quite clear that there is a first-class Civil Service, and the members of "Legco" obviously detest this sort of thing. I am not trying to add one word to the fuel of controversy.

Mr. Archer Baldwin (Leominster)rose—

Mr. Hale

Let me tell the Minister—I say it with passionate sincerity—that we are getting near the state when every African in Africa is beginning to hate all Europeans, and that is a dreadful situation.

Mr. Lytteltonrose—

Mr. Deputy-Speaker (Mr. Hopkin Morris)

I do not want to interrupt the discussion, but it seems to me to be a little remote from the provisions of the Bill.

Mr. Bing

Surely the issue which we are discussing is whether or not we should increase a loan guarantee by the Treasury from £50 to £100 million. I should have thought that what was highly material to that question was the security for the loan which is guaranteed by this country. If a situation develops in which the colonial territory concerned is not able to repay, or to meet the repayments of, that loan, it will fall on the British taxpayer.

Mr. Deputy-Speaker

The discussion is perfectly in order as long as it is related to the loan and does not go too far from it.

Mr. Hale

I am obliged, Mr. Deputy-Speaker, and I am sorry—

Mr. Baldwin

I am sure that the hon. Member wants to be fair—

Mr. Deputy-Speaker

It would be much better for hon. Members to conduct the debate by speeches rather than by dialogue.

Mr. Hale

I appreciate what you say, Mr. Deputy-Speaker, but it would help me if the hon. Member for Leominster (Mr. Baldwin), who has been kind enough to wait for some minutes for me to give way, would now tell me what is on his mind. It may be that I said something that he did not understand.

Mr. Baldwin

I am sure that the hon. Member wants to be quite fair on the question of wages and to give the right figures. I think he should also agree that in the matter of the Asian wages, generally speaking the lower range of wages are those paid by the Asian employers themselves, and the higher range of Asian wages are paid by the Europeans in banks and in Government service.

Mr. Hale

I am much obliged. That may be true—I do not know. I am trying to be quite fair, but I have been a little provoked by the right hon. Gentleman because I tried to speak very temperately about this. There has been a good deal of heckling, and even my mildest observation was received with some expression of dissent. I was most anxious not to say a word to incite controversy.

If I may go out of order for two sentences to clear matters up, I am confident that there is great good will in Kenya. I am confident that there are chances of racial co-operation, that the members of "L.E.G.C.O.", in the main, now want to see that happen. It may very well be that from among the unofficial members there will be a comprehensive statement of economic reforms to aim at which will be designed to win confidence.

I want, however, to say this, and I say it seriously because I dread this happening. There is coming a time when the Africans' resentment will be turned against all Europeans. It is as well to remember that. If that time comes, we shall have very little defence in view of the economic circumstances in which we have allowed the African to live.

Mr. Shinwell

And, therefore, the loans will be of no use.

Mr. Hale

The loans will be of no use.

I was trying to talk about the question of co-operative farming. Let me give one classic example, which I hope the right hon. Gentleman will consider quite sympathetically. In Uganda, two and a half years ago, co-operative farming was abandoned; the organisation was condemned and proscribed. The Governor was in London, and the present Chief Secretary of Kenya, Mr. Stephen Potter, was in command. There were disturbances here and there. Ignatius Musazi, the leader of the Farmers' Co-operative, was deported, not from the country, but to a distant part of the Colony. Many of the farmers' leaders were in the Bush and the whole organisation was in chaos.

It is fair to remember, in view of the ungenerous criticism of my hon. Friend the Member for Eton and Slough, whose record in questions of humanity can com- pare very favourably with that of any other Member of the House, that it was his visit there and the co-operation of my right hon. Friend the former Secretary of State for the Colonies which resulted in the appointment of Sir Andrew Cohen and in the restoration of co-operative farming and of confidence to the people. Had the right hon. Gentleman visited Uganda, he would have been at once impressed by the amazing contrast between the confidence of the Africans in Uganda in the Administration and the disaffection which undoubtedly exists in Kenya.

Mr. Lyttelton

In parts.

Mr. Hale

I accept that the violence has occurred only in parts of Kenya, very largely in the Kikuyu Reserves—all our information is to that effect. Do not think that disaffection does not exist. If we are to judge the question of disaffection, may I tell one short story of what happened a week ago?

Mr. C. J. M. Alport (Colchester)

On a point of order. While we are interested in the hon. Member's remarks, is this in order in dealing with the subject matter of the Bill? If so, will hon. Members on this side be able to reply?

Mr. Bing

Yes, of course.

Mr. Deputy-Speaker

What is in order, as I have pointed out, is something which is related to the loans. If it is not related to the loans, it is not in order.

Mr. Bing

Surely, anything which deals with the amount of security which this country—

Mr. Deputy-Speaker

I have already ruled with regard to that.

Mr. Hale

I am much obliged, Mr. Deputy-Speaker. I remind the hon. Member for Colchester (Mr. Alport) that we have not got emergency legislation here yet and we still have freedom of speech.

Mr. Bing

Hear, hear.

Mr. Alport

Further to that point of order. This matter was discussed at some length on a previous occasion, when I believe the hon. Member was absent. There was plenty of discussion of that subject then.

Mr. Deputy-Speaker

Order. This is a question for the Chair.

Mr. Hale

I even seem to remember the hon. Member for Colchester (Mr. Alport) making a speech on that occasion. It may be that he thinks that he said all there is to be said on the subject. I am merely trying to recount something which has happened since that debate and which, therefore, could not have been mentioned then.

We went to the Wukamba Reserve where there has been no crime at all. We asked to see the chief. We wandered some distance into the Reserve and, finally, we were introduced to a gentleman who we were told was the chief. He was the chief of a reservation of about 100,000 tribesmen. We asked him whether he would like to tell us about the economic conditions of the Reserve. He said, with obvious nervousness, "Have you seen the district officer?" We replied that we had not, and he said that he did not think that he ought to speak to us without the permission of the district officer.

We said, "Very well. Get into the car and we will take you to the district officer. "We found the district officer and we said that the chief did not think that he ought to talk to us except in the presence of the district officer. The district officer said, "Quite right, too," from his point of view. This was the chief of about 100,000 people nominated by the Government; yet in the whole of that interview the district officer conducted the conversation and only twice was the chief called upon to confirm a statement, when he stood to attention and said. "Yes, sir."

How are we to talk about representation and improving the agricultural amenities or the production of a great tribe of people, or restoring confidence, when we have a system in which their rulers are appointed like this—rulers in whom they have no confidence, rulers who are not allowed to speak and who have to refer to a rather brash young district officer?

Mr. Lyttelton

Is it in order to refer to a civil servant—who has no opportunity to defend himself—as a rather brash young district officer? I think that the expression is contemptible and should be withdrawn.

Mr. Deputy-Speaker

It certainly is not in order to discuss these points on this Bill. The question under discussion is that of these loans and how they can be applied.

Mr. Lyttelton

My point of order was on a more limited question of whether it is in order for the hon. Member to refer to a member of the Colonial Civil Service as a rather brash young district officer. The hon. Member took great exception to some remarks made by one of my hon. Friends. I take great exception to this.

Mr. Hale

I willingly withdraw. I would not wish to say another word. I am sorry. The reason I said it was that he asked me not to misquote him at the end of the interview.

Mr. Alport

Hear, hear.

Mr. Hale

The hon. Member for Colchester—

Mr. Lyttelton

I hope the hon. Gentleman will allow me to say that I accept his very generous withdrawal. May I also express the hope that he will carry it no further?

Mr. Hale

I am much obliged. I will not carry it any further. I was trying really anxiously not to get into any controversy. I wish I had not said it. But it was a somewhat surpising position to be told by a young district officer that the chief was quite right in not talking to us. But I will not carry it any further. I wish to discuss one or two fundamental problems.

Mr. Shinwell

I thought that the word "brash" was mild.

Mr. Hale

In my conception it is a little milder than the word "Communist."

I wish to discuss one or two main problems which must be faced if we are to inaugurate and to help to finance in the Colonies schemes of extensive development which I believe that we should support. Indeed, my whole approach to this matter—if I might make an interpolation in my own speech—would be to say that the whole plan is ridiculously inadequate and that we ought to be thinking in terms of the United Nations Underdeveloped Areas Committee on which Professor Arthur Lewis, a distinguished man of colour and a great economist, played a notable part.

We ought to be thinking in terms of participating in the suggested expenditure of £5,000 million a year which even then is calculated to raise the standard of life of the under-developed areas by only 2 per cent. That is the sort of scheme that the Parliaments of the world ought to be considering—a scheme bringing life, help and construction, instead of planning destruction and for war or at least concentrating on making the instruments of war. That would have been my approach to the question.

But, for the moment, we are concerned primarily with the more limited proposal. We are entitled to ask on what conditions these schemes are to be carried out. Do we make conditions? Can we make conditions? What safeguards can we give? The first essential that the Colonies need is trade unions on the British model which can gradually protect and expand the standard of life of the people. Are we to say that we will allow great mines to be constructed without any trade union representation and that we will allow to continue the present disgraceful rate of wages which do not even give a subsistence level to the worker; or are we to try to implement the promises we made that the interests of the native will be paramount and to apply something of our own conception of democracy to the Colonial territories?

The next great problem of the Colonial Territories is the colour bar. This matter becomes most relevant when we discuss the International Bank on which India is represented. It will be within the recollection of the House that Mr. Nehru has made some most appropriate statements about events in Kenya in the last few days. Certainly, as far as this question is concerned, the whole of the Asian and African population are at one. It is true that there are many liberal-minded Europeans anxious to break down the colour bar by degrees. It is true that many people realise the very great evil of the colour bar and the disastrous results of it.

Educated Africans become frustrated and gradually embittered, and possibly even in the end vicious. I should not be surprised if the trouble had come from Africans who had become embittered and, out of that bitterness, had been preaching hostility to Europeans, thus helping to stir up the troubles. I do not discount that possibility. One can understand that it can happen. It is a fact that even in the public service there are completely different scales of pay in Kenya for men of the same technical qualifications and the same professional status, be they European, Asian or African.

It is abominable that that should continue, and it is right to say that I think that the Europeans recognise that. I think that that may be the first constructive step. There are many problems with which I should like to deal. One of the fundamental problems that affects many of the African territories, both East and West is the problem of the Boards—the Cotton Board, the Coffee Board and the Cocoa Board.

I speak from memory about figures in connection with the Cotton Board of East Africa when I say that their stabilisation reserve figure is £20 million and that they have a great deal more money than that. It is difficult here for us to visualise the vital problems that confront the farmer in Uganda and Kenya. We went out to look at the new Co-operative Farmers' Federation which has been developed in Uganda since the visit of my hon. Friend the Member for Eton and Slough two and a half years ago. I cannot understand why this seems to create some jocularity on the benches opposite. Perhaps hon. Members will share their joy with us on these benches and tell us what the joke is all about.

One young American and a young Englishman, who was a Labour candidate at Burton-on-Trent at the last Election, went out to give advice on this scheme. I think they have taken on too much. It is amazing to realise that they have 50,000 African farmer members of the organisation, with scarcely a penny to do anything with, a few broken-down lorries, an African board of directors, a mass of enthusiasm, tremendous energy and a real desire to get things done. But they have no money and not much help coming in.

I should have thought that that was the sort of thing to receive assistance from the Colonial Development Board or to receive a guarantee from the International Bank, for the first thing is to get down to the comparatively small expenditure of providing reasonable facilities for a co-operative farmers' scheme of that kind. The sort of things they want are, first, a cotton ginnery—I am not talking about spirituous liquors—in the remote areas to which the farmers can take their cotton and have it ginned under their own auspices. They want hulleries for their coffee; they want a coffee-curing station so that they can process it.

The problems are quite vital because the whole question of revenue arises from this: there were until recently, and I believe there still are, different prices for coffee produced by African farmers from the prices paid to the European farmers because there are different coffee boards. I do not deny that it is partly due to the fact that small farms produce an inferior type of coffee. I do not suggest any victimisation there. In Uganda I saw none of it, and also there is no colour bar there. I think it is a remarkable tribute to the difference between Uganda and Kenya.

These are matters of comparatively small expense. But people with an income of 30s. a month cannot put down £20,000 for a ginnery, and yet these things should be paid for. A little help to a great scheme of that kind could revolutionise the life of 100,000 people, and this is the way the money should be spent to the best advantage. Everybody knows that if efforts were really made in Kenya, in the Kikuyu Reserve, to produce that sort of idea it would make the biggest single contribution to the establishment of peace in Kenya.

I profoundly disagree with the right hon. Gentleman when he said, or implied, that economic conditions were not connected with this problem. He said they were not directly connected with it. I agree that once there are economic grievances they can be whipped up to political motives, but it is the economic grievances which are the main cause. The Maize Control Board in Kenya is a Civil Service controlled organisation. I am not suggesting that there is anything wrong with it, but prices of posho constitute the greatest possible single hardship in Kenya. A subsidy on the price of posho would be the first immediate contribution to the welfare of the 10,000 homeless and distressed to whom reference was made by the Member for Law and Order in the debate in July in the Kenya Legislative Assembly.

I went to look at the Africans' houses. The first house measured 10 feet by 12 feet; there were three married couples living in it; there was no heating and there was outside water. I admit that that was the old form of housing. They are building much better ones now. They have a first-class housing scheme, a very substantial one, but the vital problem of trying to pay for great development with a small European population and a large and stricken African population is a problem much more for this House than for them. We ought to be doing more. There is a limit to what they can possibly do.

I have mentioned trade unions. I have mentioned co-operative farming and consumer co-operatives, all of which are absolutely vital. We should be concerned with applying in colonial development fair wages clauses of the type that we apply here. There is no reason why we should subsidise cheap labour organisations even in the development of the Colonies. We should try to ensure a gradually developing standard of life in the Colonies, which alone is the one single way in which racial co-operation, understanding and tolerance can be developed.

I have mentioned the colour bar, and I hope that Her Majesty's Government will give very real consideration to making substantial alterations in that position in Kenya. We cannot afford to begin to lose the friendship of India and Pakistan because of the attitude of only 2,000 or 3,000 people in Kenya Colony. We see what is happening in South Africa as a warning—a warning to Colony-owning Powers everywhere. That warning is one that we have to take to heart. I hope this House will begin to take a much more increasing concern in the lives and aspirations, and in our desire for co-operation with, the people of the African territories.

It is said that the African is lazy and that he works only two or three hours a day. Every dietetic expert who has been to the Colonies says that the African does not get enough calories to enable him to work any longer. This was the truth about the English population 100 years ago when the expectation of life from birth in Manchester was about 28 years. I was perhaps diverted by the running commentary that was being delivered by the Secretary of State when I mentioned that subject previously, and, therefore, did not conclude the point that I wanted to make. Everybody knows that it is not possible to live a healthy life on a single diet. Everybody who has read the book by Professor de Castro, the Chairman of the World Health Organisation, knows that it is necessary to have a balanced diet and good animal proteins. We have to have our amino acids in order to be able to face and life and develop fully.

Everyone knows that all these restrictions in diet involve restrictions in physical health, physical well being and mental development. We cannot hope to build up the African to our standard unless we relax the restrictions upon him and the economic fetters in which he has lived too long. Everyone knows that one only has to go to Africa and see its vast undeveloped resources, its wonderful agricultural land, the great range of vegetables and fruits that can be grown there, to realise that with a little intelligent development it could be made a place of great wealth and riches, and it is our responsibility to see that that is done.

Perhaps I have taken more than the few minutes that I had intended to speak. However, I want to refer to one or two other matters. The questions of world health and of animal health are today recognised as matters with which mankind is bound to concern itself. It is ridiculous to talk about Colonial development unless we talk about the development of the Colonial himself, too. It is no use talking about development projects unless we are developing health.

I am very happy to say that we saw in Kenya a most able director of medical research who was obviously keen on his subject and was obviously master of his job, and with limited resources was trying to do all he could. But, of course, the amount available for expenditure on health in the whole of Kenya, with its 5 million or 6 million population, is less than we spend on a single London hospital. It is much less. I have no doubt they spend their money very wisely. They were infinitely proud of the fact that in Kenya they had located the breeding place of the insect which creates blindness. They found it on the back of a crab on a river bed in the west of the Colony.

They have done a great deal of medical and veterinary research. But in the last few years the World Health Organisation have conducted vital experiments which tend to show that the 300 million sufferers from malaria throughout the world could be brought within range of cure at very much less expense than ever was involved in the atomic bomb or on a battleship. The experiments in controlling the tsetse fly—

Mr. Deputy-Speaker

Order. The hon. Member is in order in part of his argument, but he should not take it to the world level.

Mr. Hale

I am a modest man and I will be satisfied with a single Continent—Africa.

I want to mention one organisation about which I am sure the Minister of State for Colonial Affairs will be concerned. There is an organisation in Britain called the Royal Empire Society for the Blind, who have embarked on a very noble work in dealing with blindness in Africa and, I hope, in other parts of the world. I think it started with observations in Tanganyika where patients waited for eight days at a time for the British doctor to come. Given a little help and a little more money their work could be doubled and trebled. In spite of the generous help which they have had from many private donors their work is proceeding all too slowly.

These works of welfare are not merely a Christian duty which should be embarked upon simply because they are a Christian duty, but because at this point in the turning of affairs in Africa they are a vital part of the work of reconciliation and the creation of understanding, the tide of which has ebbed dangerously far already. We should concentrate on co-operating in developing—not merely in our own territories but throughout the world—a genuine attempt, without fear or favour and without question of race, colour or creed, to harness the vast and in many cases almost untapped resources of modern science to the development of the economic resources and the advancement of the material and spiritual needs of the peoples throughout the Empire.

If the world started to do that I believe it would be starting on a course which would change the history of mankind immeasurably for the better, so that the people of the Continent of Africa—white, black and yellow, and whatever their colour or creed—could live in common understanding and happiness and build up a measure of co-operation which would enhance world understanding, world economic strength and world peace in the future.

2.14 p.m.

Mr. Archer Baldwin (Leominster)

When this debate started, I understood that it was to be on a very narrow front. I did not come here to make a speech but, having found that the debate has now ranged to the Colonies and is very largely a debate on Kenya, I am tempted to say a few words. I was in Kenya two months ago and I spent a month there. I can therefore claim to have at least a fairly recent knowledge of the position there, although it may not be quite so recent a knowledge as that of the hon. Member for Oldham, West (Mr. Hale).

I want to refer to what the hon. Member said, which I think is quite irrelevant to the debate, but, it having been mentioned by one side of the House, I claim to be entitled to mention it from this side.

Mr. Deputy-Speaker

No. I called the hon. Member for Oldham, West (Mr. Hale) to order and reminded him that he must relate his remarks to the part of this Bill dealing with the provision of loans. The hon. Member for Leominster (Mr. Baldwin) must direct his remarks to those provisions of the Bill.

Mr. Baldwin

I shall endeavour to relate my remarks to the point raised by the hon. Member for Oldham, West when he said that his remarks were related to the Bill in that what he had to say was dealing with the bringing of good will into these countries so that they would be safe borrowers of money. I think I am entitled to say a few words with regard to a statement made by the hon. Member in connection with his visit to Machachos, where he implied that the district officer was a dictator. I spent two days in that Reserve and I think the name of the district officer to whom he referred is Thorpe.

Mr. Hale

There are two Wakamba Reserves near Machachos. I am not quite sure of the officer's name. One officer is a district officer and the other is a district commissioner. I was referring to the district officer.

Mr. Baldwin

Whoever was the officer whom the hon. Member saw, I want to say that I made a very long journey through the Reserve in the company of the officer concerned. He was greeted with friendliness during the whole of that journey. He knew the situation and he took me to see what had been done in that Reserve during the six years that had elapsed between my first and second visits. The House should know that the European officers in these native Reserves are doing a tremendous job of work for which they get very little credit in this House.

Mr. Hale

I am sorry I did not make myself clear in my speech. There is no question but that the agricultural productivity is higher, and it is a great tribute to the district officer. He took a genuine pride in his job. I did not criticise him except in regard to one word, which I immediately withdrew. I said that the attitude of the chief was that he should not talk to me without the consent of the district officer.

Mr. Baldwin

The impression which the hon. Member gave was that the chief was a man who dared not say a word without referring to the district officer. My experience of district officers is that their relationship with the natives is very cordial. The district officer is father and mother to the people and without him I do not know what would have happened in the Machachos Reserve. I have seen a tremendous development in six years.

I do not know whether the hon. Member went to Makueni, where there is a resettlement scheme, where the district officer is living completely in the blue, under primitive conditions, and where land is being reclaimed which has been hitherto unoccupied except for the tsetse fly. The Wakamba are being resettled in this area and they appreciate the fact. Although there was some difficulty in getting the natives to go to that resettlement area at first, at the present time there is a long queue of Africans waiting to go there. It does no good either to the Africans or to people in this country to make derogatory remarks about what the Europeans have done in Kenya in the last 50 years.

We all know what is wanted in these districts. We all know what the natives want, but that is dictated by the amount of capital which is available to them. Let it be remembered that between the wars the Europeans in Kenya were in very much the same state of finance as the primary producers of the world. It is only since the primary produce of Kenya rose in price that all these improvements have been possible. The economy is entirely agricultural and they can only do that for which they have money available.

We want to see an improvement in the life of the native. There is no question about that. The movement of European opinion towards the African native in the last 20 years has been extraordinary and if as much improvement comes about in the next 20 years it will bring the African much better conditions of life. Therefore we should not be too impatient. Let us hope that the advance which has taken place in the last 20 years will continue in the next 20 years and that conditions will be entirely different.

Perhaps I had better get back to the Bill. I welcome the Bill, primarily because it will make available to the Colonial Empire, if I dare use the word "Empire," money for the development of their own countries. I am not a believer in the Colonial Development Corporation and I hope that it will shortly be wound up. It has been the means of wasting colossal sums of the taxpayers' money—the taxpayers of this country. It was ill conceived, in that the Corporation went out for primary production. That should be left in the hands of local people. What the Corporation should have done was to develop transport resources so that the local people could develop the primary industries.

For instance, instead of spending a vast sum of money on groundnuts at Kongwa, they should have spent their money in putting a double railway line through Nigeria. Had they done so, many more groundnuts would have resulted. I hope no more money will be spent through the Development Corporation but that money will be made available through the International Bank.

Sir Leslie Plummer (Deptford)

Is the hon. Gentleman aware that the Overseas Food Corporation had no powers to build railways in Nigeria? They were under instruction of this House and were instructed to operate in the East African territories and to apply themselves to a single job.

Mr. Baldwin

I know that the hon. Gentleman had some experience of this, but I cannot conceive that this House passed the Act in order that the Corporation should build hotels or undertake all sorts of fanciful projects which have wasted the taxpayers' money. Nine out of every 10 of the schemes which came out of the Corporation have been complete failures, and that is why I welcome this Bill which will make money available to those on the spot, who will take good care that they do not start these madcap schemes but that they borrow money only to expend it in sound economical ways.

Mr. James Johnson (Rugby)

The hon. Gentleman said nine out of 10 of the Overseas Development Corporation's schemes had been failures. It is within the recollection of the House that we had a debate upon the Colonial Development Corporation a few months ago, during which it was stated that, out of 52 schemes, only four were adjudged failures, about five were doubtful and the remainder were going concerns. That was stated in Lord Reith's Annual Report as Chairman of the Development Corporation.

Mr. Baldwin

No doubt the hon. Gentleman and I can expand that point in the next debate. If it is not nine out of 10 of the schemes, it is at least nine-tenths of the money. It may be that I am a little high in my figure; it may be that 75 per cent. of the money was wasted. Time will show. Some of the schemes which then were doubtful are doubtful no longer; they are certain failures. I am glad that the money is being made available in this way under the Bill, because in my opinion that is the right way in which money should be made available to those countries which cannot provide it themselves.

In opening the debate, my right hon. Friend said that not only would the money be borrowed by these countries, but that we in this country would make quite sure that the borrowing countries did not sell their birthright. I think that is important. We want to see that if certain Colonial territories need to borrow money in order to develop their resources, no strings are attached to the borrowing of that money. I have a very strong feeling that the mineral wealth of a country should, as far as possible, be utilised for the benefit of that country, and I am not one of those who believe that such mineral wealth should be extracted for the benefit of all the countries of the world and that the country of origin should not get the benefit from it to a great extent.

It is time that the people of this country were made fully aware that their present standard of living is not a standard which they themselves are creating. It depends to a very large extent upon the wealth of our Colonial Empire, and the sooner they realise that the better. The Welfare State, and all that goes with it, could not exist if we could not depend very largely on the mineral wealth of the Colonial Empire.

I want to say a few words about Africa. Throughout the centre of Africa there is immense mineral wealth, and there is an ever-growing population, which is doubled every 25 years. It is quite wrong that we should extract that wealth from Central Africa in order to bring it here, or take it to America or other parts of the world, when it could be processed on the spot; and I want to see the industrial people of this country go out to Africa, which is a white man's country as much as a black man's country, and as far as they can develop the secondary industries from the mineral wealth which lies on the spot.

We have accepted the responsibility of civilising the African. We have brought him a long way along the road. We have abolished the slave trade and created health and opportunity for him, with the result that the population is doubling every 25 years. But what will happen to that ever-increasing population if more industries are not started on the spot? I feel that Her Majesty's Government must take a very intelligent interest in migration—not only the migration of people but the migration of industries.

That is where this Bill and the International Bank can help those countries which desire to develop their industries and can attract to those countries the European with his knowledge and leadership, who can employ the African to provide the labour. I know that in due course the African will not remain as a labourer; he has advanced a long way and, in my opinion, will go further. I hope that great interest will be taken in these under-populated, underdeveloped parts of the world to which many people in this country, where the population is too thick on the ground, could go in order to help along the Colonial Territories where this mineral wealth exists.

Bearing in mind the need for the development of industries in the Colonies, I am convinced that the present system of taxation should be reviewed. It is quite wrong that we in this country should reap the benefit of an Income Tax obtained from wealth created overseas. Instead of being taken in taxation for this country, that wealth should be left in the country where it was developed so that it can be ploughed back into the industry. That is a point which needs consideration. If we want to develop those countries, it can be done by using the profits made on the spot instead of their being taxed out of existence. If that were done, they would not need to do so much borrowing but could plough back their own money. I hope the House will welcome the Bill and that it will be improved in Committee.

2.29 p.m.

Mr. Norman Smith (Nottingham, South)

It was perhaps inevitable that the speech of my hon. Friend the Member for Oldham, West (Mr. Hale) should have provoked the hon. Member for Leominster (Mr. Baldwin) into a kind of retaliatory effort in which the doctrinaire aspect tended to come to the fore. I will make only one comment on the speech of the hon. Member for Leominster. His last point about taxation will not stand up to close examination if by it he means that the white settlers overseas, enjoying the benefit of the protection of the Armed Forces of the British Crown, should not pay their share towards the cost of that protection.

I want to come back to a little document I have in my hand. It is headed, "Colonial Loans Bill," and I am sure, Mr. Deputy-Speaker, I shall have your approbation in doing that. I see we have the great advantage of the presence on the Front Bench of the Minister of State for Colonial Affairs, whose approach to financial problems, with which I propose to deal, will, I am sure, be all the fresher and all the more profound and all the better informed because he has come new to this sphere of life from another sphere in which he served his country with very great distinction over a long period. I want to invite his attention to certain aspects of this Bill.

Many hon. Members have said in the debate, particularly the hon. and gallant Gentleman the Member for the Isle of Ely (Major Legge-Bourke), that one does not quite like the idea of going to the International Bank for financing colonial development in British Colonies. I do not either, and I cannot share the enthusiasm of my hon. Friend the Member for Oldham, West for a colonial policy which might conceivably bear on its prospectus the title "The Brotherhood of Man on the Basis of a Guaranteed Inscribed 4¾ per cent. Stock," particularly when that stock is put up from the International Bank.

I should very much prefer that we were able to finance colonial development from this country, from our own resources. By that I do not mean in the least the money market of the City of London. I mean the factory capacity and the labour and the skill and, above all, the technological supremacy of the people of these isles. I wish we could do that.

Everybody knows that the reason for introducing this Bill at all is to enable certain Colonial Territories carefully specified to be able to have access to dollar goods. That is what it comes to—capital goods from the dollar area—and the precise point to which I would invite the attention of the Minister of State is this. There is a guarantee of a loan from the International Bank. It is clear from the wording of Clause 1 (2) that the Government—the Treasury—envisage that that guarantee may in certain circumstances one day have to be met, and in another currency than sterling. That is quite clear from the wording of subsection (2). Very well, I want to ask the Minister of State if he will be good enough to tell the House, when he replies to this debate, whether it is the policy of the Government in guaranteeing loans under this Bill, if and when the Bill becomes an Act, to have regard to certain probabilities.

For example, if a project is going to be guaranteed, it must be the assumption underlying the guarantee that the result of the loan and of the operation of the project will be to enable that particular Colonial Territory to export to the dollar area. Otherwise, how is the service of the loan in terms of dollars going to be met? I want to ask the right hon. Gentleman precisely whether that aspect will receive very careful consideration in respect of each and every guaranteed project. Otherwise this guarantee business may get us into very considerable trouble in the future.

Goodness knows, the balance of payments problem is serious enough without this borrowing, a headache and even a nightmare for right hon. and hon. Gentlemen who are for the time being the incumbents of the Treasury Bench, and it seems to me that unless there is to be a very great deal of consideration given to each and every item guaranteed under this Bill when it is an Act, we are going to have our balance of overseas payments problem made worse, because we shall find ourselves under an obligation to pay out of some hard currency, when nothing will have happened in consequence of the project, unless I get the answer I want, to provide us with dollars.

I am sure that the Minister of State is seized of the nature of the problem, and as he has signified assent in the usual manner, I do not propose to pursue that side of it further, but I want to come on rather to what else we are to do if we are not to have further recourse to the International Bank. There is no doubt at all, of course, if we had the resources in the country, if we had the factory capacity to spare and the labour to spare, and we could have access to the raw materials, what we should do. We should carry out an expensive programme of colonial development for two purposes, as I see them.

The first is the sort of purpose which has been pleaded so eloquently today by my hon. Friend the Member for Gravesend (Sir R. Acland). The first purpose of colonial development is, and surely must always be, to raise the populations of these Colonies to a level which approximates to our own. Either one does believe or one does not believe that the human race is one. One either believes in human brotherhood or not. I gathered from the speech of the hon. Gentleman the Member for Leominster—he was emphatic and there was no qualification whatever about it: what he said could not be interpreted in any other way—that eventually, although there might be some difference of emphasis as to the time concerned, all these peoples had to be brought up to our own level.

We have to remember this about the export of capital—because that is what this Bill is about: the export of capital. The Colonial Secretary, in his opening speech, reminded the House that this country in times gone by had financed railways on the North American Continent. That happens to be very true. We all know it. But let the House remember this. In order that the people of New England in the eighteen forties might have railroads, my great grandfather in England in the eighteen forties, and hundreds of thousands of other English working men, had to put up with a very low standard of living. The wealth of this country was sent out to America so that they might have those railroads, and because of the export of capital in those days the stock from which I came—which happened to be very poverty-stricken stock—had to endure a degree of poverty that otherwise it would not have had to endure.

If we are to maintain this policy of colonial development—and we must do it not only for humanitarian reasons and reasons which one may associate with Christianity, but also for other reasons—it means, and must mean to the extent that it is financed from this country, that we shall be at home to that extent poorer because of this development. I think the time has come—and I am myself already carrying it out in the kind of speeches I make on Labour platforms—when throughout this country any honest politician, particularly any honest Labour politician, has got to tell his audiences that, though we will strive to maintain to the full the standard of living of our people in this country at a level not lower than it is now, we do not promise to raise that standard of living very substantially in the future.

And the reason we cannot promise a higher standard of living in this country in the future is precisely this reason of colonial development; because it has got to be our policy in future—not only Great Britain's policy, I imagine, but the policy of all the technologically advanced white countries of the West—to give away to these backward countries, and all these coloured peoples, the technological equipment upon which a high standard of living and, in the long run, culture and civilisation, depend. For my part, I have done with that sort of electioneering which consists of saying, "Vote for me, and you will be much better off." I go no further than, "Vote for me and keep the other party out or you will be worse off." Further than that I am not disposed to go.

Therefore, we are confronted with this Bill. I do not see how we can vote against it. My right hon. Friend the Member for West Bromwich (Mr. Dugdale) said it would have the support of the party on this side of the House. I suppose it must have, but one laments and deplores the necessity for doing that. One would far sooner not go to the people across the Atlantic and get them to put up the money. One would sooner not do that because always one has the fear that when their dollars come into the British Empire it will not be long before their flag comes in, too. Knowing those people and seeing the way in which that country across the Atlantic has become so wealthy in our own time. I feel very uneasy about the whole thing.

I should like now to come back to the Minister of State on the question of the financial obligations which may arise out of this Bill. They will not necessarily arise. It may conceivably never be necessary to implement the guarantee. It may be that the resources of these Colonies will be developed sufficiently quickly so that the Colonies will, out of their own resources, be able to service the dollar part of the loan. I rather doubt that; I do not quite see how it can be so, for this reason.

I used to be on an Estimates Sub-Committee of this House which investigated colonial development a few years ago, and very conservative-minded but practical experienced men of high integrity from the United Africa Company, and organisations of that sort, when cross-examined by us upstairs, used to emphasise that when financing capital development in the Colonies, either from America or here, it makes no difference, one is introducing a certain inflationary element because money is being spent inside that Colony. We may take the machinery there from this country or America, but wages must be paid out to the wage earners in those Colonies to install the equipment. That will be the direct economic consequence of this Bill to the extent that loans in fact materialise. Those witnesses used to emphasise that there is that problem of inflation.

My hon. Friend the Member for Oldham, West helped me from one point of view when he emphasised the necessity for consumer co-operation among these native people, which would avoid some of the evils to which the United Africa Company and other witnesses used to draw our attention—the evils of exploitation in the retail trade. But if there is that sort of thing, there must always be, pari passu with the capital development of these Colonies, a planned arrangement for the flow of consumer goods which get into the Colony at the time the capital expenditure is having its economic effect, in order to avoid inflation and in order to provide an incentive for the Africans to continue to work.

I have not been in Africa, and I do not want to go there. I am very fond of my own country. I like North-West Europe, and I do not want to go anywhere else. But we have heard some statements today about the alleged willingness or unwillingness of the African to work for wages. Well, I am unwilling, and always have been unwilling, all my life, to work for wages. I have only done so out of economic necessity, and if I had not a wife and family to keep I should have been happy to spend my time gardening and fishing down in Wiltshire; I should not have worked if I had had no incentive. If there is to be an incentive the Minister of State and his Department must see that there is a planning of the flow of consumer goods, otherwise this economic development will be one-sided.

I have no doubt that this Bill will be passed. I gather that we are not going to divide the House against it, and I see no reason why we should. I want to make a last appeal to my hon. and right hon. Friends. The time has come for our party to think very seriously in these terms. There will not be a peaceful world until all the members of the human race have something approximating the same standard of life. I know that it is not easy. I have sometimes found it a little difficult to accept coloured peoples as my social equals. I am a bit ashamed of that, but I am sure I am not the only hon. Member who has felt like that. I do not forget that 100 years ago the ancestors of some hon. Members opposite would not have accepted my great-grandfather as a social equal. Indeed, he was several times put in gaol for poaching in Worcestershire. This question is with us and will stay with us for the rest of the life-time of the youngest Member of this House, and we must make up our minds that the time has come when none of us can promise an increasingly high standard of life for those who send us to this House.

There are those who are determined that what we have we hold, but beyond that I do not see any possibility of doing this. I feel that it would be better to finance this colonial development from our own country, because we want our Colonial Empire—or the Commonwealth now—to be sufficiently self-contained in order that we can build our Welfare State on a broader foundation than it is at present.

There is no future for Socialism in this country so long as we have to depend upon international banking, an international Gold Standard and international free trade. There must be a much wider and more nearly self-contained area to continue what we have, let alone to expand and improve it. First things must come first. All must have courage about this. My own experience in recent months of the reaction of my audiences has been what one would expect from decent, well-informed, good-hearted English people.

2.45 p.m.

Mr. C. J. M. Alport (Colchester)

I am sure the House appreciated the glimpses of his character and background which the hon. Member for Nottingham, South (Mr. Norman Smith) gave us. We would feel in great sympathy with many of the sentiments he expressed, but I might be tempted to correct him, because I am sure that his great grandfather who was a poacher would have been a strong supporter, not of the party opposite, but of the party on this side of the House, because he would realise, as poachers of all sorts have done, that unless there were the protection of game by the Tory squires there would be no chance of continuing the occupation they enjoy.

We listened in an earlier speech, from the hon. Member for Oldham, West (Mr. Hale), to something which I frankly hoped would not happen at this stage. His was a speech which, I believe, could not be more finely calculated to depress the hopes which we all have of a tranquil, peaceful and prosperous future for Africa. No speech could have been better designed to destroy those hopes. He said that he did not come to the House to be controversial, but it was quite clear that he came to say precisely what he did say, because he took the trouble to equip himself with the facts and figures on paper in order to enable him to develop his argument.

I wish to protest against that speech, and I do so not only on behalf of the Europeans, but on behalf of the Africans in Africa, because I think it is equally against the interests of all races that a speech of that sort should be made. The hon. Member, who has been in Africa for a week or 10 days, said at one point that he realised there was a desire among the European community there for racial co-operation now. I particularly noted his use of the word "now," because he was implying that until there had been violence in East Africa there had been no desire on the part of the Europeans there for racial harmony and co-operation. Nothing could be further from the fact. Nothing could be a greater slander of those who have their homes and live their lives in the difficult environment which Africa must and always does provide for the European.

He next said that we had allowed the African to sink into the present economic status which he occupies. He clearly has no conception of the background.

Mr. R. T. Paget (Northampton)rose—

Mr. Alport

The hon. and learned Gentleman must allow me to continue. I did warn the hon. Member for Oldham, West that I intended to reply to some of his remarks, and if he is not here himself. I do not think anybody else can interrupt on his behalf.

He said that we allowed the African to sink to the economic status which he now occupies. The truth of the matter is, as was said in our last debate—and I do not want to repeat the argument—that poverty has been the characteristic of the life of the African ever since the beginning of time, and it is a gross slander for an hon. Member to give the impression in this House that the economic and social difficulties with which African peoples throughout that Continent are faced today are as a result of the action of the European communities who have their homes there, or of the European Governments which are responsible for their administration.

What is going to happen? As a result of the argument which the hon. Gentleman the Member for Oldham, West put forward, he is going to make many not particularly well-educated, not particularly experienced Africans believe that there is an easy and simple solution to their economic and social problems, and he should know, in all honesty, that that is not the case.

He should know, in all honesty, that even the provision of an extra £50 million, a total of £100 million as this Bill provides, is going to go a very short way indeed to help with the great economic and social problems of the Colonial Empire. It is not going to be more than perhaps 6d. or 1s. per head, and yet, in the way in which he framed his argument earlier in the debate, he gave to anyone who listened, or who will read his speech tomorrow, the impression that it is possible to sweep away, almost over night, these economic difficulties that are not only the legacy of Africa, although they are predominantly there, but are also the legacy and difficulties of mankind all over the world.

Mr. Halerose—

Mr. Alport

I am glad that the hon. Gentleman has come back to the Chamber. He has misled by his speech Africans who, it is true, are frustrated and suffering great difficulties at the present time, and who, as a result, will be even more inclined to be misled by the same sort of people who have produced the same sort of arguments as the hon. Gentleman has produced, and which have led to outbreaks of violence in many parts of Africa.

Mr. Hale

Now that the hon. Gentleman has finished his observations by making the most amazing statement of all, and that is that the presentation of facts to this House leads to outbreaks of violence in the Colonies, will he tell the House why he has made a serious accusation against me? In fact, I understand that he has made two accusations against me. One was that I came to this House armed with a mass of controversial figures. I came here with one sheet of notepaper, which is a copy of the official document of the Kenya Government in 1951 showing the terms of wages and labour in the Colony. That is the only document that I brought. It is the only note that I have. It is there for investigation by anyone, and if that is an improper document, then censorship here is going to a greater stage than it has ever gone anywhere.

The hon. Gentleman made a second suggestion. He said that I had misled the Africans by saying that this expenditure can bring about very great reforms. In fact, I said that the United Nations Committee had estimated an expenditure of £5,000 million a year was needed to bring about even a two per cent. increase in the standard of living. I never mind being attacked by the hon. Member for Colchester (Mr. Alport); I always regard it as an honour to be attacked by him; but I hope that, for the sake of his own reputation, he will withdraw the accusations made against me, which are absolutely without foundation.

Mr. Alport

I have no intention of withdrawing the accusation. The whole tenor of the hon. Gentleman's remarks today—and he spoke with his usual facility—was to prove two thing; one that the economic problems which we hope this Bill will help in some part to solve, or at any rate to advance towards a solution, were a result largely of the policies pursued by the Administration in Kenya and more particularly by the European settlers there.

Mr. Hale

An hon. Member is being attacked and statements made which have no authority at all. I pay the most lavish tribute to the Civil Service in Kenya and to the great work being done with limited funds, and I said it was our responsibility here to see that they would have more funds. I also pay a special tribute to the medical services. The only remedy that I have when accusations are made like this without foundation is to leave the Chamber at once and let them be made in my absence in order to show the hon. Member the contempt which I have for statements made without foundation and which he is not prepared to support by a single quotation.

Mr. Alport

I am fully prepared to support it. Before the hon. Gentleman came in, I gave an example—that the way in which he had used emphasis for the particular word "now" gave the impression to us that all of a sudden, as a result of an outbreak of violence, it had brought about a different attitude to race relations in East Africa, and that, in my view, is a most improper form of misrepresentation, in spite of the fact that the hon. Gentleman has done his best at various points throughout his speech to cover his tracks.

Mr. Paget

On a point of order. Is it in order, Mr. Speaker, to say of an hon. Member that, whilst he makes a speech saying one thing, he in fact means another and is doing his best to cover his tracks. Does that not amount to an accusation against the hon. Member of dishonesty and lying?

Mr. Speaker

I do not think that is a point of order. It may be a question of veracity, but nothing that I have heard is out of order so far.

Mr. Alport

I was turning to another argument which had been raised by the right hon. Gentleman the Member for West Bromwich (Mr. Dugdale) and which is more strictly relevant to the matter which we were discussing this morning and which seemed to introduce a most vicious principle. So far as I could understand his argument, the right hon. Gentleman said this: that while he was prepared to see this Bill extend facilities for a loan for the advantage of the East Africa High Commission, he would not be prepared to see this Bill used to provide the same advantages in respect of, say, the Central African federation, and he would have preferred to have seen the Central African federation, or indeed any of these other similar organisations, excluded from the operations of the Bill.

I may be misinterpreting the point, and I hope that whoever winds up for the Opposition will explain the argument. But, as I understood it, the point meant that because the party opposite have political objections to a project such as Central African federation, they would be prepared, in the event of that federation not working out in accordance with their political prejudices, to deny the federation the advantages which could be obtained through the operation of the Bill for the economic development of the territories concerned.

If that is the motive behind the argument, then all that we on this side of the House can conclude is that the right hon. Gentleman the Member for West Bromwich, who originated the point, and other right hon. and hon. Gentlemen opposite are more interested in pressing upon Africa their own ideas of political development than they are of according facilities for essential economic development of which the whole of the continent so urgently stands in need.

One of the great advantages and arguments in favour of the Bill, and why my hon. Friends and I welcome it wholeheartedly, is that it extends essential facilities for financing economic development to new forms of political organisation which we hope will come into being not only in Africa but also in other parts of the Commonwealth and Empire. I hope that when the former Financial Secretary replies, he will give us an explanation of the point made by his right hon. Friend.

We should not be under any misapprehension about the object of the Bill. It is to make available for the Colonial territories greater resources of American dollar capital than are available in existing circumstances. I say without hesitation that I should welcome that development very much indeed. It would give an additional impetus to the improvement of economic conditions in the Colonies and to the fulfilment of projects of primary development which are so essential, because the money would be available and, what is even more important, the resources of American production including steel, would be available at an earlier date than they probably would be from any other source.

We must also avoid making a mistake which has been made previously in history. We know the exclusive economic policy of the medieval Spanish Empire. There is a tendency in this country—it is not exclusive to one side of the House—to believe that we can develop the Commonwealth and Empire without the assistance of other nations. It would be nice in theory if we could do it all with our own resources, but clearly we cannot do that. What we want, above all, is the help of those countries, and particularly of the United States, which have surplus capital production available, which we have not got here, to assist in carrying out primary development.

An hon. Member opposite asked what would be the type of development to which the money would be devoted. I have it clearly in my mind, whether I am right or wrong, that the money should be devoted, as far as Africa is concerned—I think it applies to other under-developed countries—to four main headings: better distribution of water supplies; improvement of communications, particularly rail communications; provision of additional sources of power; and research into ways of dealing with the many problems of disease to men and to animals. For, unless we can solve these particular obstacles, with which we are faced at the moment when trying to alleviate conditions of life in Colonial territories and tropical countries generally, our major social and economic problems will never be solved.

If we can get the proper division of function between the type of public investment with which the Bill deals and the subsequent secondary development which can best be carried out by private investment, we shall not only get a better understanding in American circles of the way in which the Colonial Empire can be developed but we shall be applying—this is vitally important—the resources which are available to the projects which are most urgently required and upon which all subsequent development will depend in the long run.

I began my remarks, in a debate in which I had not intended to take part, by protesting against a speech from the other side of the House. I should merely like to end in this way. Most hon. Members on both sides have a definite objective in their policy with regard to the Colonies and with regard to the Commonwealth as well. It is to do everything that is within their power to facilitate improved standards of living for the people of all races who dwell therein. In so far as the Bill will make a contribution to that, I am certain that it will have the fullest support of all hon. Members of good will.

3.5 p.m.

Mr. James Hudson (Ealing, North)

I realise that the Front Benches must have some further say in the debate, and, therefore, I must make my contribution brief. I wish to speak because my mind travels back more than 20 years to the time when, as a Member of this House, I was appointed to sit on the East Africa Committee, which was dealing with the problems of the unification of the East African territories. We used to discuss the problems of securing grants, as they were then known, for colonial development.

We cannot for the moment oppose this Bill, although I agree to a certain extent with my hon. Friend the Member for Nottingham, South (Mr. Norman Smith) that in a capitalist world there are great defects in this process of seeking loans, and thus more than ever putting oneself in the grip of capitalism in the process. Unfortunately, we live in a capitalist world and we have to make the best of that situation until we get a better world. While I am with my hon. Friend in his advocacy of early efforts to secure a better world, at present we have to rely upon private capital supplies and publicly organised capital supplies to meet the problems with which we still will be confronted in the future in these great Colonial Territories.

I do not desire to create too much controversy, but I must say that the International Bank will, on the whole, prove a very conservative organisation for making decisions about the many complex issues that now have to be faced. The matter of security for the money advanced will be a main consideration in the mind of the International Bank, and I do not think that that is the ideal way to deal with the kind of problem which we are trying to face by this Bill.

For a few moments I want to refer to a very small part of this problem, namely, the advancing prosperity of the people of Africa since the days when I sat on the East Africa Committee without assistance of loans such as this Bill pro- poses. I have in mind the work that is being done in Tanganyika, especially the work of the Kilimanjaro Native Co-operative Union, which in a short time has created a revolution in the lives of the African people of that area. That Native Co-operative Union is a conjunction of several individual co-operative societies working on the slopes of Kilimanjaro, one of the few places where it was easy to work because good profits were to be earned at an early date and that has secured a great improvement in the prosperity of the people of that area.

The Chagga people have increased since 1919 and they were then about 100,000. They have benefited by this co-operative effort, and today they number over a quarter of a million. That is just one example of the development of the civilising influence that has gone on among the people of that area, and it is estimated that three out of four of them can now both read and write. It is not black, savage Africa about which we are talking any more. The co-operative efforts, little backed by loans of this sort but developed largely by enthusiasm and inspiration from the co-operative effort in this country, produced, in a favourable medium and dealing with a favourable commodity, I agree, the remarkably good results of which I have spoken.

Now we talk about the International Bank making loans available in further areas. My hon. Friend the Member for Oldham, West (Mr. Hale) pointed out the great need for this sort of work in Uganda, and the likelihood in a short period, and not in 20 years' time, of radical alterations in the conditions of life of the people. It is important that the International Bank should be persuaded—and the Government whose loans are to be guaranteed by the processes we have arranged should be made aware of the fact—that in addition to roads, railways, water schemes and the other things mentioned at the conclusion of the speech of the hon. Member for Colchester (Mr. Alport), a co-operative organisation based on the living conditions and impulses of the people themselves should receive greater attention.

If I am told in any reply that is made—and I hope some reply can be offered to what I am now saying—that a loan is not, in the long run, a suitable way of dealing with the problem I am putting, I would accept that criticism; but what is the way, if it is not through a loan? If it is by grant, or by encouragement from the Colonial Office to the co-operative movement in this country to provide their own loans and invest their own money in developing the wonderful possibilities abroad, that is worth considering, and I agree that it should come forward as a reply to the point I am making.

We ought not to settle down in this House to accepting the picture as if it were only as presented in the concluding words of the hon. Member for Colchester: the organisation of railways, roads, water supplies, power stations, and the rest of it, and that is the end of it. I do not believe that that is even the beginning of it. The beginning in the modern world will always be with the people themselves on behalf of whom these proposals are supposed to be put forward. If the people themselves can be brought into a new and better type of life by the co-operative efforts that it is now proved can help them, all our financial proposals, including those in the Bill, should be directed to finding how best we can assist them.

Remembering my promise, although there is much more that could be said, I will conclude. Perhaps I shall get an opportunity to say it at some other time. It is along the lines I have mentioned that the House has to think a great deal more, when dealing with the problems of the Colonies.

3.15 p.m.

Mr. John Edwards (Brighouse and Spenborough)

In the short time during which I shall address the House I wish to deal in more detail than anyone has done so far with the working of the International Bank. But before I do so, perhaps I might refer to what the hon. Member for Colchester (Mr. Alport) had to say about the interpretation to be placed on the remarks of my right hon. Friend regarding Clause 1 (1) of the Bill. I am not absolutely clear from that subsection, which says constituted for two or more colonial territories and then, later on. to any authority established for the purpose whether the two words "constituted" and "established" mean constituted now and established now, or whether they include bodies to be established hereafter or to be constituted hereafter.

All my right hon. Friend was saying was that if the words are to be construed to include bodies to be created in the future then we would reserve our position, not unreasonably I think, because quite clearly whether one guarantees a loan to anybody depends upon what one thinks of the body in question.

We have, however, for the most part been concerned with the raising of money for the development of the Colonies. This year we have not had the benefit of the presence of the Assistant Postmaster-General who, in the debate in 1948, gave us a very queer reason why people should lend money for colonial development. It may be recollected that on that occasion he said he supported the Bill with a good deal of cynicism; and he went on to attribute the success of the Trinidad Loan to the desire of people to get their money out of the country. No one has suggested that reason this time.

I hope that in his reply the Minister will give me the figures for which I asked. After all, the main point of the Bill is to raise the limit of the money for which Treasury guarantee is to be forthcoming and as the Explanatory Memorandum says that this is necessary in the light of the expected volume of lending to the Governments of colonial territories by the International Bank. So far, it has amounted to £10 million sterling. Under this Bill there will be power to guarantee £100 million sterling.

I think it not unreasonable to ask what is the present estimate of the loan necessary to cover the two schemes or two groups of schemes referred to by the Secretary of State. We are really in no position to form any judgment at all unless we have some real estimate. If the amount is £15 million there is no need for the Bill. If it is to be £75 million it may be that the Bill or the figures in it are inadequate. I ask for these figures, because I consider them important.

I would draw the attention of the House to the fact that the International Bank operates on a relatively small scale in the total of work done in the under-developed areas. Its work should not be considered as trivial, but it is marginal. The estimate of a number of bodies, including P.E.P., is that the total amount of loans in the under-developed areas in 1950 amounted to about 1,500 million dollars.

In that year, taking the Bank's own definition of under-developed areas, which includes countries we do not normally include when we talk about under-developed areas, the loans to them were only just over 58 million dollars, contrasting with the 1,500 million dollars in total. The total loans up to the end of 1951 by the International Bank for reconstruction and development in under-developed areas comes to only 182 million dollars, so that its scale of operations is very small indeed.

It is true to say that the Import-Export Bank of Washington, which has many features in common with the International Bank in respect of these activities, does about double the amount of business annually in respect of the under-developed areas by comparison with the International Bank. I am not blaming the Bank for this in any way. The Bank has a charter to which it has to work. We are parties to that charter. We assist in the government of the Bank.

We cannot blame an institution for being what it was intended to be or for doing what it was intended to do. Its job can be put very simply as the job of channeling loan capital into what in strictly financial terms can be regarded as creditworthy enterprises; and that is a limited field. We cannot complain about the Bank not going outside that field when, obviously, it could not do so without infringing its charter.

The Bank was never intended to finance all or any large majority of development projects, but was intended to be a spur and a stimulus to private investment. It was thought that if the Bank's funds were put here or there in the right place, it might help forward private investment.

There are, however, questions about the resources of the Bank which are important, and there is one in particular that I wish to ask the Minister. As I understand it, only 20 per cent. of the capital of the Bank is paid up. As for the United Kingdom's contribution, 2 per cent. is in gold and 18 per cent. is in sterling, in local currency.

What I should like to know from the Minister is to what extent the 18 per cent. has been used by the Bank for international lending or whether the position is as it was when I last knew anything about it—namely, that the sanction of our Government here had not been given to the general use of these sums and that no effective call had been made on the 18 per cent. for lending. It is important to know this in view of the fact that the Bank sometimes complains that it is held up because of this. Certainly, the President of the Bank has said so on more than one occasion.

There is the point, too, of the interest that is charged on the capital. Since it is a requirement of the Bank that it should charge the 1 per cent. commission, and since for the most part the Bank must raise the money itself before it can lend it, we are in the position where the interest rate, including the commission, is bound to be something of the order of the 4¾ per cent. at present.

The effect of that, as I understand it—I am not blaming the Bank—is that the kind of development that it can finance is almost inevitably the development in the more advanced of the under-developed countries—that is inescapable and quite inevitable. It is significant that of the Bank's lending to under-developed countries, something like two-thirds has gone, or had gone by the end of June, 1951, to Latin-America, where the countries, although regarded by the Bank as under-developed, were in our terms much more advanced in economic development than, for example, the territories for which the Secretary of State is responsible.

Mr. Lyttelton

Not all of them—Malaya and Rhodesia, for instance.

Mr. Edwards

Exactly, That illustrates the point I am making, that the terms under which the loans are forthcoming from the Bank mean that a large part of the Colonial territories cannot at present use it because they have not progressed far enough. It means that we must find other ways by which those bodies can be financed.

I also wanted to ask about the regulations issued by the Bank in its lending policy. I understand that the Bank requires borrowers to give a pledge that they will give the Bank equal terms with all subsequent creditors. In other words, in cases like this the Government must pledge the receipts of any of their agencies who may borrow from the Bank. I do not know whether that kind of condition makes people more reluctant to go to the Bank for loans. I am not complaining of the Bank exercising the closest scrutiny. That clearly is its duty.

It will, however, be within the recollection of some hon. and right hon. Gentlemen that negotiations took place when the Colonial Development Corporation went to the International Bank for a loan of, I think 5 million dollars. It was said that the Bank wished to make the loan conditional upon the Bank being able to exercise a documentary supervision over the numerous undertakings in which some part of the equipment purchased might at some time be used. I do not know all the history of the negotiations for that loan, but that is a fairly onerous condition.

There is the type of scheme contemplated by my hon. Friend the Member for Flint, East (Mrs. White) in which she hoped it would be possible, through these Bank loans, to get down to relatively small production units where the capital was badly needed. In that event, this kind of condition would be a real barrier. I invite the Minister of State for Colonial Affairs to tell us something about that. The Bank is limited enough in all conscience by its Charter. We do not want it to be limited any more than it need be by any administrative action.

There is a further point with which the Minister will be familiar as a result of his days at the Board of Trade. Inevitably, many of the technicians who are used in surveys and in advising the borrowing territory are American. The Import-Export Bank of Washington is an American body and naturally, its finances are used to help forward American trade. I often get complaints from people in industry—and certainly the Board of Trade and the Treasury are aware of this—who say that the effect of the work of many of the agencies, including the International Bank, is that American technicians are advising American products or laying down specifications which can apply only to American manufacturers.

Sir R. Acland

The Minister pointed at me as if there was no answer to that question. Surely the answer is that we should try to make sure that British technicians in greater numbers are forthcoming to join in the international work that is being done.

Mr. Edwards

I am most grateful to my hon. Friend, but there is another point. It will be recollected that in 1948 the then Under-Secretary of State for the Colonies, in his opening speech on the Bill of that year, said that dollar loans were only available for purchases from dollar sources. The right hon. Gentleman who is now Minister of State for Economic Affairs interrupted and said that this was not true and that it was contrary to the Charter. When we came to the Committee stage some months later whoever was then speaking for the Government agreed that there were no such terms laid down. I accept that I have no reason to suppose that the position has changed, but I am anxious that we should see that wherever possible there is a completely fair field.

The hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) showed as great an ignorance of the survey work of the Bank as he did of the political affiliations of Mr. David Low. To pour scorn on the survey work of the International Bank is, for the hon. and gallant Gentleman, to show that he has not the first idea about the business at all. Anyone who knows the work of the Bank, would, I am sure, confirm my view that perhaps the best thing the International Bank for Reconstruction and Development has done has been in the field of its economic surveys and the advice it has given to territories who come to it for a loan.

It is absolutely stupid to suppose that any agency can really go into this field of lending if it has not got a proper system of ascertaining all the facts. That is what I believe the Bank has been doing.

Major Legge-Bourke

I am grateful to the hon. Gentleman for giving way. May I assure him that I am not suggesting for a moment that the loans from the Bank should be given before they are fully acquainted with the facts. What I am saying is that I believe that their way of ascertaining the facts could be done far more economically than it is done at the moment.

Mr. Edwards

I think the hon. and gallant Gentleman would be well advised not to make statements unless he has some evidence. He has not produced a single bit of evidence on the point at all, and his judgment would not be confirmed by anybody who knows this field. I have here an article in the "Three Banks Review" by Paul Bareau, who says this: One of the most useful of the initiatives launched by the International Bank has been its detailed studies of economic conditions in the countries in which it is venturing its resources. I have no doubt that the Minister of State for Colonial Affairs would confirm that view. I am sure that Her Majesty's Government do not hold the view that these surveys consist largely of getting together what is known already.

May I turn, in conclusion, to the broader question of how we are to finance our overseas development? I think it is clear from the very many speeches which have been made today that we recognise that this Bill is concerned only with a very small part of the whole business. I think we agree that there is a place for loans and a place for grants. What I do not think has been sufficiently appreciated is that whether the money is in the form of loan or grant, whether it is raised by colonial Governments in the City or by private firms, whether it comes from the Colonial Development Corporation or from the Colonial Development and Welfare Fund, whether it is used directly by the Colony or indirectly, if it means anything at all it means in the end the diversion of a certain amount of British products.

It means the diversion of a certain number of British personnel. The only way in which we can ever help these under-developed areas is by allocating, whatever the financial device may be, part of our output here to go to Colonies overseas. It means going without here in order that goods may go there. Even if we get something back in the end through the interest rate, the immediate price that has to be paid is going without what we could otherwise have here.

It is equally important that we should understand that development work cannot be done properly unless we are prepared to divert not only output but professional and technical skill. A good deal of work in the Colonies is being held up at the moment because we have not enough technicians and professional men out there on the job. People often talk as though there were an identity of economic interests between the country that is lending and the country that is borrowing. I think there is a good deal of nonsense talked about that.

May I quote a few sentences from "The Strategy of World Development," a P.E.P. pamphlet published in April, 1951, which contains an interesting suggection? At the end it says: It would be an aid to judgment if advanced countries were to consider any use of their resources in backward areas which is intended for their own economic benefit as falling into the same category as domestic investment. This would prevent exaggerated ideas of the costs they are incurring for the promotion of altruistic. There is not always an identity of economic interest. Whether we get anything out of it or not—and quite often we shall not—we have a clear duty to do what we can to help those who, in many parts of the world, are so very, very much worse off than we are.

3.35 p.m.

The Minister of State for Colonial Affairs (Mr. Henry Hopkinson)

We have had a very useful debate today on this most important Measure. It has been largely non-controversial—at any rate from a party point of view—and most of it it has been related to the Bill itself—though not all. We shall have taken five hours on this amending Bill to an Act which was originally discussed only for 1½ hours. That is probably a tribute to the greater interest in colonial affairs which is shown today than was shown in 1948, when the previous Measure was discussed.

This Bill is one further step in the great economic development of our overseas territories which, as I recently had occasion to point out to the Fourth Committee of the United Nations General Assembly, is the prior step towards the evolution of the system of social security and social services which in itself must lead up to political self-government and political development. Unfortunately, in that Committee there are people who think mainly of political matters, and we are handicapped in that Committee because we are precluded from comparing the achievements we have made in these various fields with those of neighbouring territories with comparable problems who are so often our most violent critics and detractors.

I shall reply first to the question put to me by the hon. Member for Brighouse and Spenborough (Mr. J. Edwards) in regard to the amount of loans which are now under contemplation. I cannot give precise details while the negotiations are going on, but I can say that, covering Central and East Africa together, we expect the loans to be in the order of £15 million. We also expect that there will be further loans to be negotiated later on in respect of other matters.

The right hon. Member for West Bromwich (Mr. Dugdale) asked me if he could be informed of the future loans which Her Majesty's Government or the Colonial Governments had in mind. There again, I could not particularise. But it might be helpful to him if I were to outline briefly the principles on which such applications would be based. In the first place, we should naturally want to choose projects which are not only of direct economic value but are also calculated, directly or indirectly, to improve the balance of payments in the sterling area.

Secondly, the International Bank prefers to finance recognisable projects rather than general programmes of development, and we should certainly try to meet them in that way. Finally, there is an advantage in seeking to concentrate on undertakings which are fundamental to the whole development of a large area.

From all those points of view, transport development in an area such as East and Central Africa is obviously particularly attractive. The loan to Northern Rhodesia which is under discussion with the Bank and which we hope will be settled early next year refers, as my right hon. Friend said, to the Rhodesian railways. Similarly, one of the matters which is under investigation by the International Bank mission which is at present in East Africa concerns the development of the East African railways and harbours.

Another type which is eminently suitable is the development of power, whether hydro-electric or otherwise. The right hon. Member for West Bromwich asked what loans had in fact been made up to date. Except for the loan to Southern Rhodesia, which was £10 million for general development purposes, there are none.

Mr. Dugdale

Surely the right hon. Gentleman must have some idea of the figures of loans. He has given a general prospectus of what may happen, but surely he must have some idea of the figures.

Mr. Hopkinson

I have given the right hon. Gentleman the figure of £15 million. That is the only figure which I can give the House at the moment.

Sir R. Acland

Is that the total figure?

Mr. Hopkinson

Yes, it is the total. No applications have been refused by the International Bank, nor have any applications been turned down by the Treasury on the ground that they were not prepared to give a guarantee.

The right hon. Gentleman asked why it was necessary to amend the definition of the expression "Colonial territory" in Section 1 (7) of the 1949 Act. He will know that Southern Rhodesia and Malta, which at that time had attained a high degree of self-government, were referred to specifically and separately; and it might be argued, as indeed it was argued by the hon. Member for Maldon (Mr. Driberg) in the debate of 19th November, 1948, that a territory such as Jamaica could not properly be included in the definition under subsection (7, a) as a colony not possessing responsible government. Considerable further progress has been made on the road towards self-government in several areas, such as the Gold Coast and Nigeria, since that time, and we felt that the previous description was not accurate and that it was better to simplify it so as to cover any Colony, British Protectorate or protected State or a Trust Territory.

The right hon. Gentleman asked for information about the missions which the Bank are sending to British Guiana and Jamaica. The mission to Jamaica, which took place earlier this year, was at the request of the Jamaican Government and was from the technical assistance side of the Bank, which is quite separate and distinct from the loan-making side. One of the services which the Bank undertakes is to send these economic missions on request, and they carry no implication whatever that the country concerned will subsequently receive an International Bank loan. Naturally, there is nothing to prevent the country from asking for such a loan at a later date.

The purpose of the mission in this case was to advise the Jamaican Government on their long-term planning of agricultural development and industrialisation, and the report is expected to be available shortly.

Sir R. Acland

Will it be published?

Mr. Hopkinson

I cannot say. It does not concern ourselves alone. The Bank also have to agree to publication. The same situation applies in connection with the mission to British Guiana, which has not yet taken place and which will have the same objects and the same terms of reference.

The right hon. Gentleman also asked about the future of Colonial development and welfare assistance. As he knows, the present provision is £140 million, which extends to 31st March, 1956, and he may perhaps recall that, in closing the debate in the House on 17th July, I said, Her Majesty's Government recognise that the need which gave rise to colonial development and welfare arrangements will still exist after 1956, and they will in good time consider in the light of past experience how the continuing need can best be met."—[OFFICIAL REPORT, 17th July, 1952; Vol. 503, c. 2461.] He asked me to give some explanation of Clause I, about the extension of the provisions of the previous Bill to one or more territories. The position is perfectly clear. It is intended to refer to territories which exist at the moment and also to territories which may be established in the future or to authorities which may similarly be established. It is purely permissive. It is up to the Secretary of State and to the Treasury to decide in each case whether or not they will guarantee a loan. I think that is a most important point.

In the second place, some action is necessary to deal with the position of those complex territories which may include a Colony, a Protectorate and a Trust Territory, all administered as one, as in the case of the Gold Coast and Nigeria. There would also be the High Commission Territories in East Africa and whatever may emerge in the form of federation in Central Africa. We believe it is important that these contingencies should be covered, bearing in mind that the right of the Government to decide whether to guarantee a loan or not is entirely permissive.

I was also asked about the Volta River scheme and the Owen Falls scheme. As regards the very important Volta River scheme, that matter is under the very closest consideration at the present time by the Government, and my right hon. Friend hopes to be able to make a statement in the near future. I think it would be wisest if I did not attempt to go into any details of that today.

As regards the Owen Falls scheme, there have been one or two minor setbacks, but, generally speaking, the work of constructing the dam and the power station has gone forward very satisfactorily. If the present rate of progress is maintained, the first generating set, with a production of 15,000 kilowatts, will come into operation in October, 1953, and then a year from that date the station should be producing a total of 60,000 kilowatts.

I do not think I need go into any further details of that scheme, which is well known to hon. and right hon. Gentlemen, except, perhaps, to say one word about the financing. The position at the moment is that £9 million have been found towards a scheme which will ultimately cost £25 million. The Egyptian Parliament has voted about £4,500,000. largely to deal with compensation, and there are consequently roughly another £10 million to be found, and that may be found on the London market, as money has been hitherto, or I should see no reason why it could not be made the subject of a loan under the Bill, if it were thought desirable by the Government.

Then the right hon. Gentleman asked me why there was any limit put to this Bill. That seems to be a slightly controversial matter among hon. Members opposite, some of whom favoured unlimited help, and others thought there was too much, while others seemed to take both points of view. My feeling is that really it is about right—what we have suggested here. It is quite possible that we may find ourselves involved in loans up to £25 million in Central and East Africa in the next few years, which would take a large chunk out of even £100 million, and I think, having regard to the fact that we have been raising money in the last few years on the London market at a rate of £25 million a year, that this amount is not excessive.

My hon. Friend the Member for Banbury (Mr. Dodds-Parker) asked me a question about what control there was over these loans. Of course, the initial loan is subject to the approval of the Treasury and of my right hon. Friend, though, of course, once it is made it is in the hands of the government of the territory in question.

The hon. Baronet the Member for Gravesend (Sir R. Acland), in an interesting speech, put a number of question to me. He asked, in particular, whether the West African Cocoa Research Institute would be entitled to ask for a loan under this Bill. The answer is "Technically, yes," but I think it would in practice not arise. I do not think it would be quite the sort of scheme which the Bank would probably want to consider. He asked me whether there were any other plans for missions, in particular—not so much loans—elsewhere. I had occasion to mention in an intervention that an International Bank expert is leaving immediately for the Gold Coast for preliminary talks, and he is then going on to Nigeria.

The hon. Baronet also referred to the Economic and Social Council ad hoc committee on under-developed areas. We are represented there, and the matter is at present before the committee. We shall see the results in due course, but meanwhile I cannot say anything further on behalf of the Government.

My hon. Friend the Member for Billericay (Mr. Braine) made various comments on the different forms of financing Colonial Territories. I agreed with most of his views, but I think he was a little hard on the Colonial Development Corporation who, from my own knowledge, are doing good work in parts of the Colonial Empire.

I should like to refer here to a remark made by the hon. Member for Nottingham, South (Mr. Norman Smith), who commented on the fact that a loan of this sort would produce inflationary consequences in those territories where it was to be applied, and he asked for an increased flow of consumer goods into those territories. I strongly agree with that. As a matter of fact, this summer I saw operating in Northern Nyasaland a scheme called the Vipya Trading Scheme, which is a small subsidiary of the Colonial Development Corporation. That is doing excellent work by importing more consumer goods into that area—textiles from this country, and all sorts of modern things which the Africans want, like Biro pens, zip fasteners, things they are keen to have, and which encourage them to earn more. That is something which a small subsection of the C.D.C. has taken on and is running very well.

Mr. Glenvil Hall

Why only Northern Nyasaland? My recollection is that there are far more people in the Southern Province of Nyasaland, and I should have thought that these consumer goods would have gone just as well, if not better, there than in the Northern Province. All down below Zomba, where they grow cotton, there is surely a great demand.

Mr. Hopkinson

I was simply giving an example of the territories where these consumer goods are particularly badly needed, and to which they are now finding their way. Of course, we want to encourage this throughout the whole of the Colonial Territories. I am sure it would be of tremendous help to the textile industry of this country if we could develop these exports of consumer goods as well as capital goods to our Colonial Territories.

The hon. Member for Flint, East (Mrs. White) asked three questions. First, she wanted a more detailed account of the transaction than had been given. I do not know that there is very much that I can tell her about that. The International Bank missions have visited different countries and have been in touch with the different Governments concerned. She also wanted some estimate of the advantages of this method of financing our Colonial Territories compared with other methods. Well, all these things have to be considered together, and they are so considered, not only by Her Majesty's Government when the time comes to approve of a loan or not, but also by the Governments of the territories themselves when they initiate projects or loans.

Then the hon. Lady asked some questions about the Under-Developed Areas Committee of the Economic and Social Council of the United Nations, and about the International Finance Corporation. The purpose of this was outlined by Mr. Black at the Economic and Social Council of the United Nations, where we are represented. He was invited to pursue his studies, and we can say nothing more until we know the result of his investigations.

I do not propose to say any more about the speech of the hon. Member for Oldham, West (Mr. Hale), which I thought was in many respects rather wide of this Bill, and which was very adequately dealt with by my hon. Friend the Member for Colchester (Mr. Alport). There was one point on which I wanted to reply to him. He asked me how this proposal would affect the Sudan. I think that is a question very difficult to answer now. We shall not know for at least two years what the future of the Sudan is to be, and I do not think that we can attempt to put anything into this Bill which can cover the Sudan, although I understand the motive of the hon. Gentleman's question.

Mr. Hale

I have taken the trouble to read my speech which will appear in HANSARD, and I should be grateful to the hon. Gentleman if he would suggest any words which I used which would justify the statement made by the hon. Member for Colchester (Mr. Alport). I have gone through every word of my speech, and should be very grateful if the hon. Gentleman could suggest even the barest reference to anything which I said as being highly controversial, or which would justify a single statement made by the hon. Member for Colchester.

Mr. Hopkinson

I have not the time to go into that now. I do not think that the speech made by the hon. Gentleman the Member for Oldham, West was helpful. I have no doubt that it is a speech which will be repeated again in this House on some other occasion and to which we shall have an opportunity of replying, but I do not think that I can do so on this particular Bill.

I also want to correct one further remark in the hon. Gentleman's speech. That was when he referred to the interests of what he described as the natives being paramount, and that we have an international obligation in that respect. He was, I think, referring to the Charter of the United Nations.

Mr. Hale

Yes, I was.

Mr. Hopkinson

The hon. Gentleman used the word "natives." The actual word used is "inhabitants," not natives, and in the word "inhabitants" we have always made it clear that Her Majesty's Government regard those who live in any territory, not merely Africans but whoever they may be, as "inhabitants" of that territory. That point has been made clear before in the United Nations, and I wish to make it clear in the House today.

I have not the time to deal with the numerous other points which were raised and with which I should like to deal today, but I shall be very glad to send answers to hon. Members on points which I have not already covered.

Mr. Hale

The hon. Gentleman has made no attempt to reply to the whole basis of my speech, relating to co-operative farming. [HON. MEMBERS: "Hear, hear."] I ask the House to remember that many of the army of people who are criticising my speech and saying "hear, hear" never heard a word of it. I made a sincere appeal, in full detail, to know how far co-operative farming could be encouraged by grants from this fund. That surely is a matter of sufficient importance for the Minister to try to advise on it, instead of making highly-controversial comments.

3.59 p.m.

Mr. Geoffrey Bing (Hornchurch)

I do not intend to delay the House on this matter. I am only occupying the moment or so that remains to reply to the disgraceful speech which fell from the Minister of State for Colonial Affairs. I have to watch the time because I do not want to cut the Bill short, and I want to make certain that we have the Bill. But really, when my hon. Friend the Member for Oldham, West (Mr. Hale) makes a speech of the nature which he did, after visiting the country, and to which no answer at all was given by the hon. Member for Colchester (Mr. Alport), it is entirely wrong that those arguments should be adopted by the Minister of State for Colonial Affairs, and that he should refuse to justify them in any particular whatever.

The Parliamentary Secretary to the Treasury (Mr. P. G. T. Buchan-Hepburn)

rose in his place and claimed to move, "That the Question be now put."

Question, "That the Question be now put," put, and agreed to.

Question put accordingly, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. T. G. D. Galbraith.]

Committee upon Monday next.