HC Deb 31 July 1956 vol 557 cc1139-40
36. Major Legge-Bourke

asked the Chancellor of the Exchequer whether, before approving the United Kingdom contribution, he will obtain an assurance that the award of the contract for the building of the Kariba dam granted or to be granted to an Italian consortium would include a penalty clause to provide against incomplete fulfilment together with a bank or State guarantee to assure the carrying out of the terms of such a clause.

Mr. H. Macmillan

The award of contracts for the Kariba project is a matter for the authorities in the Federation, who have naturally satisfied themselves that the contracts contain all necessary safeguards. I understand that there are full safeguards of the kind my hon. and gallant Friend has in mind.

Major Legge-Bourke

While thanking my right hon. Friend for that assurance, may I ask him whether he would agree that this country is making by far the biggest contribution, both by direct contributions and through the guarantee of the World Bank?

Mr. Macmillan

That is the next Question.

37. Mr. Russell

asked the Chancellor of the Exchequer to state the full extent of the commitment of the United Kingdom in the loan of £28 million made by the World Bank for the building of the Kariba dam.

Mr. H. Macmillan

Service of the loan has been guaranteed by the United Kingdom. We have also agreed to the use of up to £10 million from our sterling subscription to the Bank as part of the loan.

Mr. Russell

In view of this very heavy commitment, would my right hon. Friend not agree that it would have been better to have tried to obtain all the money in the Commonwealth, and to have avoided putting the contract out to international tender?

Mr. Macmillan

That raises, of course, important questions. I would point out that the expenditure in the United Kingdom to be financed by the loan will be at least as much as the amount of the loan, the £10 million. If my hon. Friend has in mind that we ought to consider the question of tied loans, that is quite another matter. On the whole, I think it would be to our advantage to continue with the present system.

Mr. H. Wilson

While we are all disappointed that British firms which tendered for this contract were not more competitive, may I ask the right hon. Gentleman whether he will take time off to explain to his hon. Friend that the course which the hon. Gentleman is pressing on him is just the one that all of us of both parties have criticised so bitterly when it has been applied by the American Government against us?

Mr. Macmillan

Yes, but this is a question where advantages or disadvantages have to be weighed. It is, of course, quite true, as the right hon. Gentleman says, that the Import-Export Bank is operated on a tied basis.