HC Deb 03 May 1957 vol 569 cc505-98

11.5 a.m.

Mr. J. Langford-Holt (Shrewsbury)

I beg to move,

That this House, believing that the development of the natural resources required for the economic and social progress of the Commonwealth and Empire depends largely on the provision of adequate capital and technical skill, and not being satisfied that the needs of the Commonwealth and Empire in these respects are being met adequately at present, presses Majesty's Government to consider as a matter of urgency, in consultation with other members of the Commonwealth, how best these aims can be achieved.

Until today, I have always regarded myself as being supremely unlucky in all forms of hazard and ballot. In twelve years of membership of this House, this is the first time that I have ever been lucky in such a ballot. It is stranger still to find that I am lucky two weeks running— with, indeed, the same number. I never before believed that lightning could possibly strike twice in the same place. On 17th May I hope, if the House tires of drawing attention to the activities or inactivities of the Press, to be able once again to raise the question of Commonwealth migration. This is part of the subject which I am raising today, but I will not deal with it to any extent now, in the forlorn hope that I shall get a further opportunity.

My subject today is not a new one. It has been raised in this House time and time again, and I hope that, if necessary, it will be raised many times more. I do not think that it loses any-thing by being repeated in very nearly the same form on each occasion. There is nothing new in the subject, but it is a very vital one, and I think that it should and can bear to be repeated many times.

I have put down this Motion because circumstances have altered slightly since the matter was last discussed, when it appeared that probably the greatest barrier to any form of increased provision from this country was the immense defence burden we were bearing. That burden has been lightened, and I hope that my right hon. Friend will be able to point out that the lightening of that burden can, and will have some influence on the development of the natural resources of the British Commonwealth and Empire.

In the first lesson in economics that I ever had, I was told that to produce something, three things were needed— raw materials, capital and labour. I have put those not in order of importance, but in the order in which they arrive on the scene. My hon. Friend the Member for Harrow, West (Sir A. Braithwaite) will be dealing with some of the practical aspects of this question, of which he has experience second to none, and also with such matters as the activities of the Colonial Development Corporation.

The Government have pointed out many times before that it is this provision of capital for the development of the Commonwealth's natural resources that has been—and I take their word for it—the barrier to any further and greater participation by this country. It has been said by more than one Chancellor and I have no doubt that it has been said at some time by my right hon. Friend himself—that the need for capital has been recognised on all sides, not only here but in the Empire. It has been recognised, I think, in British Guiana by Dr. Jagan himself.

The colonial Governments themselves recognise that it is important, when trying to attract capital, that the capital should be given a sense of security, and I think that we do well to pay a tribute to Dr. Nkrumah, who has set out to do just that thing. I hope that his wisdom may prove of immense value to the State of Ghana and, perhaps. he an example to others.

The United Kingdom Government have on numerous occasions admitted special responsibility in the provision of capital for the development of the natural resources of the Commonwealth and Empire. At the Commonwealth Economic Conference, in November, 1952, the then Prime Minister made this statement: The United Kingdom is the traditional source of external capital for Commonwealth investment, and has special responsibilities towards the Colonies. The United Kingdom is determined that the flow of capital from London for sound development throughout the Commonwealth shall be maintained and increased. When that statement was made, the estimate of the annual requirements for development was £300 million a year. Since that time, and over the last six years, I think I am right in saying, we have achieved—and it is an achievement, inadequate, nevertheless—of £100 million a year. We can explain this in two ways. Either we have fallen short of what we set out to do, or, to take the more charitable view, we are failing to fulfil the needs of the Empire and Commonwealth.

The first of these two propositions speaks for itself, but I should like to examine the second for a moment or two. Clearly, the development of all these immense natural resources of these areas of the world is in our interests and in the interests of the people who live there as well. I am quite sure that if my right hon. Friend the Economic Secretary to the Treasury could, so to speak, wave a wand and have all these resources developed overnight, he would fall with exhaustion from waving that wand in all directions at the same time. We know that to do so would raise these living standards not only at home but in the Colonial Territories and Commonwealth countries, and also have the undoubted advantage of increasing the rate of social progress in all these countries.

We should, however, remember this. Time is running out, and if we do not do it somebody else will. We cannot complain if an offer comes from somebody else. We cannot be surprised if what we call welcome dollar investment turns, perhaps quite beneficently, into a dollar empire, with the American way of life. We cannot complain and we cannot be surprised. Let there he no doubt in our minds that the Americans would like an increasing stake in the Commonwealth and Empire. After all, the United States has for many years regarded an Empire as being fundamentally immoral, and, anyhow, we cannot blame that country is it should take such an interest, both financial and cultural.

It is worth remembering that, since we last discussed this subject in the House, the Vice-President of the United States has done what, for a Vice-President of the United States, is an unprecedented thing. He has gone on a "Cook's tour" of the African Continent, expressing on every occasion possible the importance which the American Government and people attach to that Continent not only as a bastion against Communism, but as a ground for industrial and economic development. It is something very new for a Vice-President of the United States to do, but United States investment may be without strings.

Of course, it has as its object, understandably, an endeavour to increase the influence of the United States. and I should like to quote one sentence which Vice-President Nixon used: The most worthwhile projects are the libraries and reading rooms which we have established in a number of centres overseas. The funds for these programmes should be substantially increased. It may surprise us in this House that the American does, in fact, believe in the American way of life. It is a way which, in the absence of any alternative put forward by ourselves, will have a great attraction for the territories overseas for which we at present have responsibilities.

Before I leave the question of capital, I wonder whether my right hon. Friend would consider this point. My mind has been turning over the last few months to a suggestion which I cannot believe is new. We have at times, of necessity and when the times required, been able to acquire money from the people of this country in the form of War Loans, National Savings Certificates and Premium Bonds. Is there any sound and good reason why we should not have an Empire or Colonial Development Loan? It would not be adequate, in my view, to have a development loan carrying with it the promise that it will be redeemed at par in the year 2,000. I think that that would be inadequate. We have to devise, and it is new ideas that we want, a method by which this form of borrowing can offer the lender success with an assurance of success for the project for which the money is lent.

The second question concerns the matter of labour. Technical skill is also wanted in these territories, and we in this country should be in a position to provide it. The White Paper on Technical Education, issued last year, does not cover the question of technical education for colonial purposes or for colonial students, as such. We have only to look at the advertisements which appear in The Times and other newspapers day after day to realise that we are not providing sufficient qualified technical people for our own needs. We see advertisements for engineers, irrigation engineers, road engineers and housing experts in the newspapers day after day. In the White Paper, the Government took a step in the right direction.

Colonial students come over to this country, but what do they study? I find that 15½ per cent. study law, for a start, so that we get a high percentage of barristers. With all due respect to them, I shudder to think what would happen if 15½ per cent. of the population of this country consisted of lawyers. That 15½ per cent. is represented by 1,555 people—which is the figure for 1955, the latest one I have, although I have no reason to suppose that the figures have varied very much. At the same time, 132 students studied agriculture, which is quite astonishing and frightening, 233 studied economics and 58 studied building. This is a strange balance and basis on which to build a sound and steady economy.

Today, we have a situation in which a Colony like Ghana has now come into a state of nationhood, but not yet, in some respects, quite fully equipped to maintain that status. Hitherto, any requests for technical assistance have always gone to the Commonwealth Relations Office, but I question whether the Commonwealth Relations Office is suitably equipped to receive such requests from such newly independent countries as Ghana and others which will be following. This matter should be dealt with either by the Colonial Office or probably by some joint machinery between the Colonial Office and the Commonwealth Relations Office.

May I deal with what is probably the key to the whole situation? It is an old tag in this country that where there is a will there is a way. I hasten to assure my right hon. Friend that I am aware of all the immense financial, population and labour problems, but there is urgency in this matter.

About a month ago I put a Question to my right hon. Friend the President of the Board of Trade, and in reply, the Minister of State, Board of Trade, told me that whereas trade in the last five years with non-Commonwealth countries had increased by 21 per cent., trade with the Commonwealth and Empire had increased by only 16 per cent.— 5 per cent. less.

Only yesterday I asked the President of the Board of Trade in view of the fact that since 1952 the percentage of total trade with Commonwealth countries has fallen from 46.3 per cent. of United Kingdom trade to 44.9 per cent. of United Kingdom trade in 1956, what action he proposes to take in this connection. The President of the Board of Trade replied—and the right hon. Member for Easington (Mr. Shinwell) took him up on this—that Our trade has increased considerably since 1952 with Commonwealth countries as well as with the rest of the world… and in these circumstances small changes in This is the bit which frightened me— the pattern and proportions of the trade are to be expected."—[OFFICIAL REPORT, 2nd May, 1957; Vol. 569, c. 359.]

This indicates perhaps not complacency but satisfaction with the trend of events, which I myself cannot accept. The general attitude is that we are doing fairly well within the limits of our resources. but this is one fire which, if we do not stoke up, will go out quickly.

The meeting of Commonwealth Prime Ministers is due to take place in a few weeks. This is an important meeting, and I hope that the question of the development of Commonwealth resources. including political and material development, will be put very high on the agenda of that meeting. I have a feeling that these meetings, although being very friendly and important discussion groups, lack a sense of urgency in some respects. In many cases. the reports which are issued at the end of these meetings might well have been issued at the beginning.

Mr. James Johnson (Rugby)

Or not at all.

Mr. Langford-Holt

I wonder whether a suitable subject for discussion would be the initiation of a total survey of our resources within the Commonwealth. The right hon. Member for Easington has dealt with this matter in the past. The War Office does not know what resources it has in the country. I am sure that we have not got a clue as to what resources there are at our disposal in the British Commonwealth and Empire.

I should like to think that the Government will, at this meeting, propose such a survey to determine, first, those natural resources, including population; secondly, how they can best be used in the interests not only of this country but of all the peoples in the Commonwealth as well; thirdly, how much capital is required; and, finally, how to get that money.

I do not say that nothing has been done in this matter of colonial development— that would be an idiotic suggestion—but I submit that this is a more urgent problem than appears to be recognised. In the Commonwealth and Empire we have an opportunity which no one has ever had before and which, I am sure, we shall never have again. If with this great gift that Providence has given us we create something in a material sense in addition to what we have already achieved in the spiritual sphere, we shall ensure a higher standard of life for all the peoples of the Commonwealth and Empire and we shall earn the thanks of generations to come.

Should we fail in this purpose, surely our inheritance will dribble through our fingers and we shall go down in history, as others have before us, having been weighed in the balance and found wanting.

11.27 a.m.

Sir Albert Braithwaite (Harrow, West)

I beg to second the Motion.

I congratulate my hon. Friend the Member for Shrewsbury (Mr. Langford-Holt) on having chosen this subject for discussion. I do not think any of us can have any misgivings about the number of occasions on which we have debated this subject in the House. This is probably the most vital and important of any of the subjects with which we deal.

The world is passing through an entirely new phase. I have been studying for some weeks the Paley Report which has just been published in the United States. It is a most voluminous document, and anybody who studies it needs many hours to wade through the various complicated details contained in it, but it gives a very broad summary of the world's requirements in the future. The real upshot of it is that in the next ten years the demand for raw materials in the world will double.

We at home are engaged on a gigantic plan of expansion. We are putting into our home industries well over £2,000 million a year in order to increase production and to maintain the Welfare State and our standard of life. We can get all the machinery we need; we can re-equip all the factories; we can make them physically capable of dealing with this job; but unless we have the raw materials the whole of the money that we put in will be wasted.

I regard this problem of the supply of raw materials as fundamentally the most difficult and urgent problem that the Government have to face, and I am not satisfied that the Government are facing the task fairly and squarely. Too many Departments are engaged in it. There seems to be no unified control or action in any Department to get on with the job and ascertain what we really need.

My hon. Friend the Member for Shrewsbury asked why we do not know what we have to develop. Of course, we have broad ideas on the subject, but no physical survey has been carried out in any part of the British Commonwealth. That is really amazing. I am referring to a full physical and geological survey which will tell us where these materials are. It will cost a lot of money to get that done, but it will be worth while. If we are to play our part in the world development of raw materials we must have it.

Mr. J. Johnson

Is the hon. Gentleman speaking about a geological survey or a geophysical survey? We have surveyed a number of Colonies geologically, including Kenya.

Sir A. Braithwaite

Those surveys have to be followed up and we have to prove what the geologists tell us may be present. That has not been done.

In addition, half the resources we have are inaccessible. We cannot get at them to bring them away. There are commodities which require transport in large volume and such facilities are necessary. Those are undertakings which we cannot expect private investment to carry out at this time. With the burden of taxation in this country there are few companies or individuals who can afford, at a low rate of interest, to go in for these great long-term projects, which have to be funded over long periods. Essentially it is a job which Governments have to undertake.

I am sure that industry will follow when these projects are opened up, but we must have some plan for getting materials to the parts of the world that need them. We must ensure that we can move them economically and reasonably so that people can go to those areas and not feel that they are isolated in the middle of a desert with no social amenities of any kind. We need a great plan for the expansion of railways, ports, roads and power facilities which will enable industry to deal with these tasks.

In the next ten years the quantity of iron ore needed in the world will rise, and the requirements of this country particularly will be doubled. From where are we to obtain it? Have the Government any plan? Have they any ideas about where we are to find it and how we are to get it? I can assure them that if this iron ore is not obtained, it is no use building more steel works because we shall not have the raw material to use in them. Those are the sort of matters that Governments will have to consider. I should like to see more consideration given to them on a Commonwealth basis and not intrinsically from this island alone.

It is important that the Commonwealth countries should work together in this matter for their mutual prosperity. The Commonwealth countries must remember that they have the greatest market in the world for the things they produce, and that if we in this country are not successful in our efforts, the Commonwealth countries will suffer as well. In this country over generations we have poured vast sums of money into areas which needed development, and I believe that the time has come when the Commonwealth countries should help us.

In the Motion which I moved in November last in the House I asked for an inquiry to be made into how far the Commonwealth countries were prepared to go. We have had no official information, but I understand that the inquiries have not been very successful. I want this matter to be put on a higher level. I want the Prime Minister, with his drive and energy, to bring this matter forward vigorously at the forthcoming Commonwealth conference, and to put plainly to the representatives of Commonwealth countries that if we are to maintain the solidarity of the Commonwealth, we must try to help one another a little more than is at present the case.

I have tried to make a rough estimate of the amount of money necessary, not for developing industry or producing raw materials, but for the essential services needed to get them. I think that we must face an expenditure of not less than £300 million a year for ten years. That is a vast sum of money and, encumbered as we are with a large volume of debt and the huge defence programme which this country has undertaken— not only for our own defence but for the defence of the Commonwealth as well—we are entitled to ask the Commonwealth countries to see whether they can come into the team with us and raise this money on reasonable terms.

I do not mind whose money comes into the Commonwealth so long as it is controlled by the Commonwealth. If American money is available, or if European money is available, I do not mind if it comes into the Commonwealth and is invested there, so long as it is under Commonwealth control. But if the advent of capital from other countries is to be done "on the side", and there is a consequential weakening of Commonwealth ties, then I am strongly against it.

I have prepared a plan of finance which I know is rough and crude, but which I think might cover this situation. I am looking for £300 million a year for the next ten years, on a long-term basis and with a low rate of interest. To obtain it, I think that we must expand the Colonial Development Corporation into a Commonwealth Development Corporation with its own bank on which it can raise loans from anywhere and which would be guaranteed by the Commonwealth so that investors would have security. I think that from a plan such as I wish to outline to the House now something material may result.

I want a contribution from the whole Commonwealth of £30 million a year for twenty years. It is not a vast sum of money. That money would go into the bank. It is not money to be used for capital development, it is the money guaranteed to the Corporation which is entitled to carry out this work and give a guarantee for interest and redemption. These long-term projects take probably twenty years to amortise, and if we had this money coming in for twenty years by that time the projects would have been put upon a reasonably paying basis and the money could go back into the central bank.

I know that this country should contribute the major part of this finance, but surely, if we can get a contribution in dollars from Canada. it would help us with the purchase of the necessary machinery from the dollar area. Countries like Australia could participate in a plan of this kind without damage to their economy. Some countries are already doing this work through the Colombo Plan. The contribution which Ghana is making to the Colombo Plan is substantial for a small country. I believe that this idea could be worked out, but we have to get the Commonwealth thinking and talking about it. Therefore, I beg that when the Commonwealth Conference starts, this matter will be put fairly high on the agenda. Let us have a really prolonged discussion on it to see whether it would work out.

I do not claim that this would be the be-all and end-all in this matter. Of course it would not, There may be other and better plans. But if we have something in which the whole Commonwealth can take an interest, it will weld us more strongly together and build up the whole character of the life of the British Commonwealth into a homogeneous whole. We have given to the Commonwealth countries their system of law. We want them to benefit from the traditions which this country has built up over many generations. We want to put these advantages into their hands, so that they may improve their lot in life.

If we could but lift the native populations in those countries on to an industrial plane what a volume of trade there would be for everyone. I have no hesitation in saying that if we could promise a plan of this sort for the Commonwealth we should do more to dispel what I will call the rumours of breakaways from the Commonwealth than anything else we could possibly do. We are regarded now as being incapable of rendering the services for which we were formerly renowned. Let us in this House give a lead to show how these things can be done, if other people will play their part with us. I ask the Government really seriously to consider the establishment of some appropriate central organisation for dealing with both the emergent territories and the Colonial Empire together.

We have in the C.D.C. a team built up already. I think that everybody in the House is grateful to it for the work it has done. The members of that team have rescued that venture from a parlous condition and converted it into one which is bringing in revenue now. They are administering very successfully in many parts of the Colonial Empire, liquidating all the silly errors of the early stages, and have made of that venture a sound conception. I think it is time for the Corporation to expand.

Why should an emergent territory such as my hon. Friend talked of, such as Ghana, be excluded from the work which the Corporation is doing? Incidentally, the Corporation has done a great deal of work in Ghana already and has the confidence of the Government there and of the people who are running affairs there.

Mr. James Callaghan (Cardiff, South-East)

They want it to go on.

Sir A. Braithwaite

They want it to go on, and quite rightly; and it could go on if more provision were made for it. As my right hon. Friend knows perfectly well, it has exhausted all the money it had for that purpose, and no provision has been made to give it any more. The schemes to which it is committed now will outrun its charter.

We were told some time ago that there was to be a Bill to revise the Corporation's charter, but nothing has been forthcoming. There is stagnation at present. There is no action by the Government. I hope that more effort will be made to correct these inadequacies. We cannot allow this venture to run down. If we do we shall lose all the good men whom we have gathered into that team. We must put the Corporation into a position in which it can carry on its work. If we do not want it let us disband it and form some other organisation. Do not let us leave it to die a lingering death because the House does not—as it should—tackle the problem of revising its charter and giving it a new lease of life.

I cannot speak too strongly of these matters. It is my belief that the essence of the life both of this country and of the Commonwealth depends upon what action will be taken in the next one or two years. That action cannot be delayed year after year.

There is coming into the Commonwealth an influx of capital which has no relation to this country. It is pouring into countries such as Australia. The biggest works now being undertaken there are being done by the Americans, and the whole Australian people are turning to the Americans as the people to look to for their country's future development. A country which has a population of only 11 million or 12 million is, naturally, very fearful about undertaking large projects alone, for it has not the reserves of population or of other resources to face economic difficulties with ease.

I for one do not feel at all inclined to support a Common Market in Europe until we have settled this problem of raw materials. I think that it will he dangerous for us to go into the Common Market in Europe unless we are sure that we are the purveyors of the bulk of the raw materials required for the European Continent. If we go in without that assurance we shall do ourselves irreparable damage and may bring heavy unemployment to this country before we know what we are really doing.

Surely out of the sums which we spend on development we can earmark, at all events, a sufficient amount to carry out this modest programme of forward work which I have set before the House this morning. if we do that we shall be making a stride forward. Industry will follow progress in this direction. but industry will not sit in the middle of a desert without communications, without power, without proper opportunities of being able to educate its labour.

I commend this Motion to the House. and I am grateful to my hon. Friend the Member for Shrewsbury for moving it. I hope we shall hear at least some words of encouragement from the Government today, telling us that they intend to do something about this matter and will no longer allow it to drift on and on without any finality. The inadequacy of what we have done during the past few years is patent for everybody in the world to see, and everybody in the world sees it. Let us put that matter right. Let us make good that inadequacy, even if it means some sacrifice here. We ought to make that sacrifice to carry out our obligations and to deal with those projects which are essential to the future development and welfare of the British Commonwealth.

11.47 a.m.

Mr. E. Shinwell (Easington)

Hon. Members will agree that we have listened to two excellent speeches from the two hon. Members opposite, the hon. Member for Shrewsbury (Mr. Langford-Holt) and the hon. Baronet the Member for Harrow, West (Sir A. Braithwaite). They deserve our congratulations both for the content and the delivery of those speeches. It seems to me that we are escaping from the sentiments ordinarily associated with debates on Commonwealth affairs. We are now making a realistic approach and obviously doing so with a sense of urgency.

I cannot speak officially for my party, but I believe that I can interpret the views of my hon. Friends, and I would say that we on these benches approach this subject of Commonwealth economic integration in no party spirit. I recall the debates on Commonwealth and colonial affairs before the last war. Occasionally, they were conducted in an acrimonious spirit. I think we have departed from that. Of course, there are temptations. When I hear the two hon. Gentlemen opposite indulging—shall I say?—in mild criticism of Her Majesty's Government then, clearly, no one can complain if we follow that line.

To take an example, the hon. Member for Harrow, West stated explicitly that the comprehensive scheme he has outlined would require not private enterprise at the outset but comprehensive Government action. Therefore, we are tempted to suggest that when private enterprise finds itself in some difficulty it usually has recourse to the State; but I dismiss the thought.

Let us concentrate on those matters upon which we are in agreement. If there is one subject upon which it appears to me there must be unanimity in all quarters of the House, it is on the need for developing the resources of the Commonwealth. It includes, of course, the United Kingdom, not superior to the others but equal in status and the rest, as regards the need for technical ability, high quality in craftsmanship, good will and an understanding of what is required in relation to the development of the Commonwealth, and in particular, as regards the development of resources in varying form which are available to all the countries of the Commonwealth. There must be agreement on these issues.

The question is how we are to approach this problem and, having approached it, find a solution. Clearly, the solution does not lie in the hands of private enterprise. It requires Government action. Let us see how far the Government have acted in the past. Yesterday, we had an example. I described it as complacency but, having thought about it afterwards, I regard it more as a misunderstanding of the Commonwealth position. It occurred when the President of the Board of Trade replied to Questions put by the hon. Member for Shrewsbury and myself. In reply to my supplementary question, the right hon. Gentleman suggested that one of the difficulties about promoting increased trade in the Commonwealth was the decision of the Australian Government to curtail their imports, If I may say so, that is an orthodox interpretation. It is quite irrelevant to the situation in which we find ourselves.

We are concerned about co-ordinating our resources and ascertaining why it is that Australia, New Zealand, or the United Kingdom require from time to time to curtail imports, which, obviously, has an effect on our exports. Why is this necessary? There ought to be a clearing house to enable us to find out the nature of the problem and how we can tackle it and find a solution. But I do not want to complain unduly about the President of the Board of Trade.

Now I come to the question of the Prime Ministers' conference. If I may say so, the hon. Member for Shrewsbury and the hon. Member for Harrow, West are unduly optimistic. I should not be surprised if I am the only Member present who has attended Prime Ministers' conferences. I have never come away from those conferences with any degree of enthusiasm. I have heard a great deal of eloquence and many generalisations, but seldom anything realistic or concrete. It may be different, of course, at the next Prime Ministers' conference, but I do not think it likely, unless we can stimulate Her Majesty's Government, in the absence of proposals by the other representatives of the Commonwealth, to press forward with this idea of the development of the Commonwealth in resources, raw materials, manpower, technical ability and the like.

Indeed, this ought to be the first item on the conference agenda. It probably will not be. I can imagine that at the first conference the Prime Ministers will begin to discuss strategy. They always do. They regard war strategy or peace strategy as the most important issues that they can consider, but the fact is that unless we can develop all sections of the Commonwealth and raise the standard of living throughout the Commonwealth and utilise all our raw materials and resources, as we can do if we have the will, all the war strategy considered by the Prime Ministers' conference will be of no avail.

The same applies to what is called the political approach in the Commonwealth, particularly with regard to the dependent territories, the emerging territories, and the like. It is thought that if we can only promote self-government in these territories all will be lovely in the garden. I have never held that view. Unless we can inject a realistic economic basis, the education of the colonial people as barristers, lawyers and professional men will be no asset. I do not care whether they are lawyers, doctors, journalists, or politicians. What matters is that we must provide an economic basis. Before we can do that, as hon. Members opposite have rightly said, we must ascertain what are the resources available to the Commonwealth.

I know that there have been some surveys. When I was in Australia, not long ago, I discussed the question of geological and physical surveys with some of the Ministers. They assured me that there had been surveys, but when I probed further into the matter I discovered that they were aerial surveys. They, of course, are not adequate. When I reproached them, I discovered that the reason there had been no adequate geological and physical surveys was that they were too expensive to undertake. No doubt they are, but we ought to know what raw materials there are in the Australian Continent, in New Zealand, in Canada, in Ghana, and throughout the whole of the Commonwealth and Colonial Territories. We ought to make a beginning. So far as I understand, a beginning has not been made.

Another question which I regard as extremely important is the creation of adequate machinery for consultation, When I returned from my visit to Australia and New Zealand I conceived the notion, which may have been fantastic, that we might form an unofficial group of Members of all parties to consider Commonwealth affairs. After all, we had made many speeches over there and had learned a great deal. We had been stimulated and our minds had been illuminated about the potentialities of Australia and New Zealand.

Therefore, we thought that we should do something. I became chairman of the group, to my surprise. We held many meetings and we had an agenda containing some specific points. Unfortunately, we were quite incapable of doing anything for the reason that we did not know what Her Majesty's Government have in contemplation. We ought to know, and if the right hon. Gentleman winds up this debate I hope he will convey to the House some information as to the Government's intentions about Commonwealth affairs, and will not rely on what has happened in the past. That is not sufficient for our purpose.

Then I come to the question of what machinery should be created. We met some of the High Commissioners and their deputies, who told us that there was a great deal of machinery available. There were many committees, many consultations, but there was no centralised organisation capable of dealing with these matters in a comprehensive fashion. It appears to me that this is what is required.

It may he that there are difficulties on the part of the Commonwealth Governments. What I feel about their position is that they want finance to enable them to develop, and they will take the finance from any quarter in which it resides. If they cannot get it from the United Kingdom, they will take it from the United States. I understand that in the case of Ghana, statements have been made by representative people in the new Commonwealth that they are not much concerned whether they get the finance from the United Kingdom or not, because they are certain they will get it from the United States.

That is all very well and, as the hon. Baronet said, he does not mind where the money comes from as long as the development takes place, and as long as the Commonwealth controls the development. I doubt whether that is likely because, if there is American economic and financial penetration, it will be the Americans who will be in control and not the Commonwealth.

We find that already in Australia, where the Americans have a holding company controlling the entire motor car industry. In Australia, the Americans have bought up millions of acres of land. They contemplate rice growing in the Northern Territory. They have an agricultural project in view in Western Australia, where they have purchased 2 million acres of land. It is obvious that if they put the finance in, they will exercise control.

Therefore, it seems to me that, unless we are careful, the Commonwealth will become another economic satellite of the United States of America and, frankly, I dislike the idea. I am not criticising the United States. It is a very fine country and Americans are very fine people, but I do not want to see the independence of the United Kingdom sapped. And it seems to me that it will be sapped, and very soon indeed, in a fashion we dislike—a fashion that may reduce our standard of living—unless we can associate ourselves in the matter of raw materials and in migration and in technical association with the Commonwealth countries, and make ourselves less dependent on the United States of America.

I do not think that it is necessary to say a great deal more on the subject. I hope that the right hon. Gentleman will not regard this as harsh criticism of Her Majesty's Government. The Government must say categorically whether they wish to see further development of Commonwealth resources, or whether they are prepared to leave it to the United States of America or to other countries in possession of the necessary finance to take part in this development, and even control the development. They must tell us. Unless they do so, as I suggested yesterday to the President of the Board of Trade, we shall have to be on our toes and we may have to force the Government to take action.

I hope that this afternoon, as a result of the speeches that have been made—factual, unchallengable so far as documentation is concerned, and practical to a degree—the reply given by the right hon. Gentleman will not be merely to dismiss these matters as of little consequence, but to realise that they are of the utmost importance to the United Kingdom, as they are to the entire Commonwealth.

I conclude on this note. I apologise in advance that I may not have the opportunity of listening to the right hon. Gentleman, because I have to go off soon to my constituency. I shall, however, read carefully in the OFFICIAL REPORT what he says. It may well be that the Minister will say that, as regards investment in the Commonwealth, the percentage of the United Kingdom investment compares favourably with that of any other country. I believe that to be true. Also, the volume of trade on a percentage basis is at a very high level. The trouble, as I see it, is that there is now a variation in the percentages which is to our detriment, and it is an indication that the position may become worse in the future. If I am wrong in that assumption, the right hon. Gentleman can correct me when he replies to the debate.

The question that arises—and it is a practical question which was faced by the hon. Baronet—is whether we can find the finance to inject more investment into the Commonwealth countries. I do not know whether the scheme propounded by the hon. Baronet is the most effective one. It is for the Government to say. Yet of one thing I am sure, that there must be co-ordination in these financial matters throughout the Commonwealth. Canada must he brought in, Australia, New Zealand, Ghana and all the others, and they must make their contribution according to their ability.

If they are incapable of making any contribution, what is to happen to the Commonwealth, and to this country, with its more than 50 million people? Our country is highly industrialised and, apart from coal, depends largely on raw material from overseas. What is to happen to us? In my view, we are not likely to survive for many years longer as even a second-class or third-class industrial Power unless we can avail ourselves of the vast resources of the Commonwealth. We have the sentiment, we have the attachment, we have the affinity, we have the good will. All we have to do is to co-ordinate it in a realistic fashion.

I beg hon. Gentlemen opposite and the Government to understand that when we on this side of the House address ourselves to Commonwealth affairs we do so in no partisan spirit. We do it because we believe sincerely that unless something practical is done, and in the most urgent fashion, the standard of living which we on this side of the House wish not only to maintain, but to improve upon, will be impossible for the United Kingdom to provide.

Because we want that, and because we desire it not only for ourselves but for the people in the Commonwealth, and particularly for the native people in the Colonial Territories, I beg the Minister to give us some hope this afternoon that the Government regard this question with urgency and with some enthusiasm, so that we can assure ourselves that, although the way may be long and although there may be obstacles on the road, nevertheless we are making a beginning to a solution of this problem.

12.8 p.m.

Mr. John Tilney (Liverpool, Wavertree)

Somewhat unusually, I find myself today in agreement in large measure with what the right hon. Member for Easing-ton (Mr. Shinwell) has said. I say "in large measure", because there are two things he said with which I do not fully agree.

The right hon. Gentleman referred to the Commonwealth becoming an economic satellite of the United States of America. If American dollars, which I should like to see invested in the Commonwealth, were to be channelled through a Commonwealth bank or a Commonwealth organisation, then the Commonwealth, in my opinion, would be strong enough not to be a satellite but to become an economic partner. The trouble is that at the moment that is not happening. What we see is that individual members of the Commonwealth go to the United States of America and borrow, either through the World Bank or through private enterprise in America, and then they are in danger indeed of becoming economic satellites of the great dollar empire. If we could only arrange for the flow of American capital to go through some Commonwealth bank, we could have a proper partnership with the West in developing the great Commonwealth of the future.

The right hon. Gentleman also referred to curtailing the imports of New Zealand, Australia, or even ourselves; but the right hon. Gentleman, and certainly I and many of our colleagues in the House have had to curtail our own "imports" from time to time. If we spend more than we can get for what we produce, or more than what we can borrow, we occasionally have to curtail our imports. If only we had a Commonwealth bank which could tide us over difficult periods provided that one knew that those periods were only temporary—that curtailment need not take place.

Mr. Shinwell

I was not complaining about the curtailment of imports. That was not my point. I was dealing with the point made by the President of the Board of Trade when, in replying to Questions yesterday, he seemed to indicate that the reason for the reduction in the volume of Commonwealth trade was the curtailment of imports. I suggested that we must take a comprehensive view.

Mr. Tilney

I agree that we want expansion of world trade, and in that expansion of the whole we want to see Commonwealth trade increased even more.

I congratulate my hon. Friend the Member for Shrewsbury (Mr. Langford-Holt) and my hon. Friend the Member for Harrow, West (Sir A. Braithwaite) on what they have said and on the Motion. It is worth while considering what should be the Commonwealth of the future. It is no use investing in a Commonwealth which will not be a firm base for investment. We are all proud of the past of our Empire for the bulk of its history. Of all the metropolitan countries, Great Britain has done more for the underdeveloped areas of Asia and Africa, certainly in spiritual matters, than any other.

I want to trespass a little on what I want to say in Monday's debate, if I am lucky enough to be called. What should be the future of this great confederation? Most of the members have now democratically decided to remain in the Commonwealth. There are one or two former members, like Eire and Burma, who have gone out, but most of the new Dominions have decided of their own free will to remain.

There are still certain territories which have not yet been given the chance to opt in or to opt out. Several million people are in what might be called "Commonwealth pocket or rotten boroughs". A date in the comparatively near future should be stated when certain territories will be told that they will be given full freedom remain in the Commonwealth, or to go outside. I believe that most of them will decide to opt in, because many would find it very difficult to get on completely by themselves and without the very large expenditure which throughout the years has come from this country for their well-being.

One territory which has recently opted to remain in is Ghana, and I congratulate my right hon. Friend the Secretary of State for the Colonies and the Prime Minister of Ghana on the excellent Agreement about public officers. The Oversea Civil Service, as visualised in that Agreement, represents technical aid of high quality. Administrators are hard to get in this world, and in the Oversea Civil Service we in this country have trained a fine body of 'men who have done splendid work throughout the world. At one time I was afraid that so many would want to leave that we would be unable to continue the Service. I hope that those who are still there will read the Agreement and decide that, with the suggestion that those employed in Ghana at present may be given jobs elsewhere, the future for the Service now looks very much better than it did a year or two ago. Incidentally. I wish that other West African Governments, remembering that Agreement, could also remember the old pensioners who, in the past, gave those territories such good service.

What are the factors which must be remembered in deciding on the investment of capital in the Commonwealth? The Commonwealth is multi-racial and has very varying standards. For defence purposes it is far too widely separated and, above all, there is not enough capital, not enough savings in this country and probably not in the world for what has to be done in the underdeveloped areas. It may well be very much better for people in this country to invest their savings at home rather than in territories where they run the risk of nationalisation measures. In the same way, it would have been very much better in the past if money had been invested in the Commonwealth rather than in oil wells in Baku, or Customs loans in China, or railways in South America.

I know that there is a problem in that we have not fully implemented our 18 per cent. subscription in sterling to the World Bank and that, therefore, there is still an implied liability to give sterling so that World Bank loans may be made with our money, but we must also look after our own people for whom we are responsible. The sterling area is responsible for half the world's trade. There is a turnover of £15,000 million a year very largely backed by the dollar earnings of the newly emergent States, particularly Nigeria, Ghana, and Malaya.

It is worth looking at the dollar transactions between the sterling area and the dollar area between January, 1954, and June, 1956. It must be remembered that that was before the big drain, especially through India, at the time of Suez. The balance of our transactions with the dollar area at that time was minus £181 million. The balance of the independent members of the Commonwealth was a deficit of £205 million, and it was only the net gold sales of the United Kingdom and, above all, the balance from the United Kingdom Colonies of £291 million which adjusted that deficit. With these new territories becoming independent, will they continue to support the sterling area, especially as we have not invested their money in a good way in the past? It might have been very much better for the marketing boards of the Gold Coast to have bought the Aluminum Corpora- tion shares rather than Government stocks that have depreciated in value and in price. Malaya and Nigeria may be thinking similarly.

I welcome what my right hon. Friend the Chancellor of the Exchequer has done in his Budget for the overseas trade corporations which, in private enterprise, will help capital investment very much in the Commonwealth, but as my hon. Friend the Member for Harrow, West has said, big investment in ports, harbours and railways, which cannot be undertaken by private enterprise, must be considered.

I hope that the Government will also be thinking of the future of the Bank of England—whether the term "England" is not rather like the term "Empire" and whether we should not have our own national bank and hive-off a bank of the Commonwealth or a bank at least of the sterling area. What Ministry is thinking of the economic development of the Commonwealth? Is it the Colonial Office; is it the Commonwealth Relations Office; is it even the Capital Issues Committee of the Treasury? I do not know, and I do not believe that any of my colleagues do either.

Is it not worth while creating a Commonwealth development committee with an absolutely first-class chairman and with the job of looking at the possible developments and the possible priorities in the Commonwealth and then getting the various Government Departments moving? Sterling trade represents 50 per cent. of the trade of the world, and I think that it has been said that if only lid. in the £ were levied on that it would produce £30 million a year. That £30 million could quite well go into what my hon. Friend the Member for Harrow, West has rightly suggested should be a revolving credit in order that we can go to countries that have capital and get that capital channelled through our Commonwealth committees or banks and into various territories of the Commonwealth.

I know that we are now one of the world's greatest debtors—in fact, the world's greatest debtor—but my experience of business is that a big company, if it is a sufficiently great debtor, is never allowed to go bankrupt, and I cannot believe that the United States has not an interest in seeing that the Commonwealth expands and is really a stable economic member of the world community.

We have so much to offer in this Mother Country. We can, with our "know-how" and as the leader of Europe, bring the Commonwealth and Europe together as a great trading area. I am one who hope to see the Free Trade Area in Europe so adjusted that Commonwealth raw material producing territories will benefit and not suffer. It is up to Her Majesty's Government to see that that is done.

Neither do I see why such development should run counter to the broader conception of the Atlantic community in which I have always believed. But unless something is done, territories like Nigeria, Ghana, and Malaya will tend more and more to go to the United States for help. That would have such a bad effect on our balance of payments that we, in turn, might have to curtail the imports of American tobacco—we can well grow tobacco elsewhere—and films —which we can well make ourselves—from America. Surely it is much better to come to an agreement between the Commonwealth and the United States rather than run into economic war.

Finally, it is confidence in the £ which will make the sterling area really work in the future. That confidence involves our own hard work and the determination in this country not to consume more than we produce; in fact, to produce enough to provide savings of £350 million a year. Provided we obtain those savings and spend wisely in long-term investment, I think that in an expanding Commonwealth that has come together by its own free will we shall have firmly based one of the greatest experiments ever seen in the history of the world.

12.26 p.m.

Mr. William Blyton (Houghton-le-Spring)

I hope that the hon. Member for Wavertree (Mr. Tilney) will forgive me if I do not follow all his remarks. I think that he is very optimistic, in the light of the development that we have seen in the last two or three years, both in the Commonwealth and in the Colonies, when he thinks that American money will be channelled into a Commonwealth bank.

I should like to congratulate the hon. Member for Shrewsbury (Mr. Langford-Holt) not only on his luck in the Ballot, but also for raising what I regard as the most important question affecting this country today.

In the second half of this century—we have to face it—we are now seeing the old imperialist outlook being attacked everywhere in the world. Countries are demanding their independence and sovereign rights. That should not upset us because as the Commonwealth continues to grow, and emerging nations come within the Commonwealth, I believe that that will not allow us to relapse into what some people would like to term a little Britain.

It is possible, I believe, to reconcile the process of this growth with effective cooperation and it is essential that this co-operation should exist if the Commonwealth is to expand in the future. In discussing this very important subject we have to face the fact that as the old imperialism dies, and as nations get self-government and a status of equality, they will expect a rising standard of living. We therefore face the problem: can these emerging nations in the Commonwealth build up stable democratic Governments once sovereign powers have been given to them? Very often they cannot, and that is why they need capital and technical help without any strings attached to them.

It is being said in the world today that the United Nations should build up a bank for development and that each nation should contribute to this fund according to its wealth. We are far from that situation in the world and, therefore, it is imperative that we in Britain should face the problems of the Commonwealth which are embodied in this Motion.

This week I read with great interest the Government's policy concerning a grand design for Europe, which has been enunciated at the Council of Europe. The Government now have an opportunity of bringing forward a grand design for the future development of the Commonwealth, upon which the greatness of this country in the years ahead must depend. The economic integration of Europe is based upon the federal approach. Although I believe that we must have some association with Europe, I do not think that we could ever hand over our economy to a supranational authority.

Are we doing all we can, especially in the economic field, to help the Commonwealth to obtain the necessary capital to exploit its natural resources and give its peoples a higher standard of living? That is the greatest protection against the advance of Communism. I recently went to the West Indies, and I came back a very disillusioned man. Here were a number of islands building up towards economic integration and the setting up of a federal Parliament, ultimately leading to Commonwealth status.

In Barbados, with a population of nearly 250,000, the economy is fully stretched. The people receive no unemployment or sick pay. Those who work on the plantations do so for only five months in the year and have to live on credit for the rest, which means that they are always mortgaging their future. Those who are capable of work but are unemployed receive nothing. In such circumstances, emigration is the only outlet.

The question of technical assistance is of great importance, especially in the Caribbean area. There is no apprenticeship system in any part of the Caribbean. We must send technical men out and impress upon employers and trade unions alike that if they want to develop their economy in the present very technical world it is essential for them to have an apprenticeship system.

I now turn to the question of American penetration in our Colonies. In Trinidad, which is a great island, there was great consternation among the people when the Trinidad Oil Company was sold last year. That sale had a remarkable effect, which was felt throughout the Caribbean. The feeling grew that as we were selling our assets it was no use looking to us to help them find the capital to develop their resources. This week that ideology has been shown still to exist.

Sir Alexander Bustamente—the head of the equivalent of the Conservative Party in the area says: The West Indian Federation will not have the economic viability necessary for independence in anything like five years. We shall need a very large loan at low interest rates and a substantial non-returnable grant. Under standing Britain's economic difficulties, we cannot expect too much in the way of continued subsidy from London. I favour an approach to the United States for financial help. Perhaps we could be aided by some Commonwealth organisation similar to the Colombo Plan. Apart from the question of the merits of the sale, we must consider the effect that it has had throughout the Caribbean. The feeling has grown there that it is no good looking to England for any capital help.

America controls the whole of the bauxite industry in Jamaica. An English firm which is to make aluminium in Canada is to buy raw material produced in Jamaica. When I consulted the Chief Minister and the Minister of Trade they said. "If only Britain would lend us some money, so that we could invest in our own industry, we should be able to look to the future to control our own economy. If we cannot get it from Britain then we must get it from somewhere else if we are to increase the standard of living of our people."

I am speaking here today simply because my biggest fear is that if we cannot help our Commonwealth and Colonies by formulating a plan which will give them the necessary capital to develop their own resources we may reach the stage when, although we are the political heads of the Commonwealth, the internal economies of its various parts will be controlled by someone else. It has always been my belief that control of the economy was the most important thing in political life.

Jamaica is to become part of the Commonwealth and will eventually reach Commonwealth status. It is important that the Government should state not only that they will provide capital to help the Caribbean maintain a fair balance between American investment and their chance of controlling their own economy, but that they will also continue to provide aid through the Colonial Development Acts. It is in no partisan spirit that I urge upon the Minister the argument that if we are to be a power in the world between the great empires of Russia and America we must develop our Commonwealth, with Britain as an equal partner in a great Commonwealth which will have some standing in the world of the future. If we do not do that we may be left in a very isolated position as the second half of the century progresses.

So far, I may have seemed critical, but I want to point out to the world outside that Britain has done more in the way of giving people their independence than any other country in the world, many of whom criticise us so much. In the last ten years we have given freedom to many countries, yet we are still criticised. It should go out from this House that the critics who criticise us so severely should look at the record. Ours is as good as any in the world. I therefore ask the Minister to give serious consideration to the principle embodied in the Motion.

On Commonwealth affairs all we get at the moment is a long communiqué after the Commonwealth Prime Ministers have met. That does not convey very much. I want to see an organisation for Commonwealth countries set up upon the basis of the Council of Europe. Why should not the parliamentarians of our Commonwealth meet in a consultative capacity, argue out the great problems facing the Commonwealth as it develops, and have power to make recommendations to a council of Ministers who would have the power of veto? If that can be done in Europe, why cannot we do it for the Commonwealth? Let us have a real interchange of opinions about the development and the future of the Commonwealth.

I believe that in the second half of this twentieth century it is upon those lines that we have the best hope of solving the problems which face us as a nation.

12.42 p.m.

Mr. Archer Baldwin (Leominster)

I wish to begin by congratulating the hon. Member for Houghton-le-Spring (Mr. Blyton) on his contribution to this excellent debate. I can only hope that the result of the expressions of opinion in the debate will circulate throughout the Commonwealth, and, indeed, throughout the world, because if there is one thing that we find when important visitors from the Commonwealth or the Colonies come here it is their wish that there could be some bipartisan agreement on all Commonwealth matters. Too often the message which they get from this House is a distorted idea of what the House really thinks, and it is on occasions such as this that I feel proud to belong to the House. During the periods of emotion and hysterical demonstrations of the last six months there have been occasions when I felt thoroughly ashamed of this great debating House, but on this occasion, and in this small company, I feel very proud to belong to it.

I have enjoyed very much the speeches to which we have already listened today. They have been practical and have stressed something which is of vital importance to the whole Commonwealth and to no member nation of it more than this country. I only wish that the people of this country would realise that it is on the Commonwealth, and on the future of the Commonwealth, that their standard of living depends. I am afraid that too many of our people think that their standard of living is something which they themselves are creating. They should realise that if we had not got the Commonwealth at the back of us, and with us, that standard would decrease. Therefore, if they have to make some contribution towards the development of Commonwealth, I hope that they will do it ungrudgingly.

The right hon. Member for Easington (Mr. Shinwell) made a suggestion which I hope will be developed. He said that there should be a committee composed of hon. Members on both sides of the House which would approach this subject in a non-party and non-political spirit. I hope that the right hon. Gentleman will follow up what he said by making an endeavour to get that committee functioning. The debate today, and the debate which we had on the same subject on 30th November last, should give the Government, and, indeed, the Front Benches on both sides of the House, something not only to think about but something to take action about.

My hon. Friend the Member for Shrewsbury (Mr. Langford-Holt) said that we had discussed this matter time and time again and that he hoped we should continue to discuss it time and time again. I cannot go with him to that extent. I hone that this will be the last time that it will be necessary to bring forward and debate this subject. I further hope that the debate that took place in November and today's debate will convince the Government that some steps should be taken, that when the Prime Ministers' conference takes place shortly this matter will be very high on the agenda, and that something better will emerge from that conference than has emerged up to now.

Conferences are no use unless something of interest and of vital importance emerges from them, and unless action is taken on what is decided at them. Therefore, I sincerely trust that the Front Benches on both sides of the House will read what is said during today's debate. I can only wish that they were present this morning to listen to the speeches, because then they might be convinced that some steps should be taken. It is quite possible that certain steps are already being taken and that what we are saying today will encourage everyone concerned to proceed with them. I believe that as a result of previous debates, the Government have taken steps in the Budget to do something extremely important for the development of the Commonwealth. That matter has already been referred to, and I think it will have a very beneficial effect.

The development of the Commonwealth rests on two fundamental factors— money and people. Not long ago we had a debate in this House about emigration. But emigration is quite useless unless it is assisted by cash for the development of the countries to which the migrants go. I know that this does not apply to Canada, because Canada is now a wealthy part of the Commonwealth and can finance all that is necessary in relation to the large number of emigrants she receives. But there are other parts of the Commonwealth which have not the necessary cash. I hope that a result of this debate will be that the Government will decide to make cash available to Commonwealth countries in order to help their development of houses, hospitals, schools, transport, so necessary for the emigrants who are now going to them in such great numbers.

Where is the money to come from and who should administer it? I think that the money could be made available from the Budget surplus above the line which, too often in the past, has been used for development in this country that, unfortunately, has not proved of any great value. I have in mind, for instance, what is almost the bribing of local authorities to spend money because of the great amount of grant that will be given by the central Government. I am glad to think that the giving of percentage grants to local authorities is passing, and that instead they will be given a block grant, the result of which may be that they will spend the ratepayers' money more economically than in the past. Some of that money will be saved instead of being handed out in the way in which it has been, and can now be used in the development of the Commonwealth.

I do not agree that money is not available. I know the difficulty that faces my right hon. Friend the Chancellor of the Exchequer in reducing taxation. He has explained that a reduction in taxation to any large extent would result in inflation. I suggest that if my right hon. Friend still has that fear by the time of the next Budget, he should devote a percentage of the Income Tax which is paid by returning to the Income Tax payers something resembling post-war credits but without their disadvantages. The idea of postwar credits was quite sound, but its operation is not very good. I think that if the taxpayer were issued with interest-bearing bonds for the money he had paid, he would be satisfied. Such bonds should not be encashable for, say, ten years. I make this suggestion to the Chancellor of the Exchequer.

Next, who should administer the money? At present, we have the colonial development and welfare funds, the Colonial Development Corporation and the Colonial Development Finance Committee. It should not be necessary to create a fresh company or a new bank such as a Commonwealth bank to operate the funds. The Colonial Development Corporation has just issued an interesting report. The C.D.C., as it says, has come to the end of its tether. It started off in 1948 with a grant of £100 million, of which it has spent £85 million, and I believe that it is committed in respect of the remaining £15 million. It is about time that we let the C.D.C. know exactly where it is going.

I suggest that the Commonwealth bank which has been proposed today should be attached to the C.D.C., which has the necessary machinery. It has a very able body of people in it and a very able gentleman at its head. I suggest that the Commonwealth bank should be amalgamated with the C.D.C., which then would have two necessary functions. One would be the development of certain projects of a profit-making nature, and the bank would loan capital to the Commonwealth for the development of the houses, roads and hospitals which it so badly needs.

If we are to develop, we must first make it possible for those who will take the risk in the various countries to undertake the development, and there must be some opportunity for housing the people who will be sent out from this country. The remarks of Mr. Armstrong, the emigration officer of Australia, a few weeks ago, are typical of what can be said about other parts of the Commonwealth. He said that the Continental countries were taking a keen interest in the settlement of their nationals in Australia; that the Netherlands, for instance, were providing capital in Australia to help Dutch migrants to obtain accommodation. He also said that there was a limit to the amount of money that Australia could find for immigration.

That is typical of several other parts of the Commonwealth, and it is in that direction that the money which, this morning, we are suggesting should be found for the development of the Commonwealth should be utilised. I am quite sure that if roads and transport were developed, there is still plenty of enterprise in this country which would go out and develop the resources which in many Commonwealth countries have never been touched. The surveys of which we have heard this morning have been only aerial surveys. In particular, in many parts of Central Africa and in Australia the surface has scarcely been scratched.

I am not advocating that all that mineral wealth which would be found should be brought to this country for development. I want to see it developed in the countries where it is found and where white men can live. We have the "know-how," the labour is available in those countries, and it is only fair to them that their natural resources should go to increase their standard of living.

I speak particularly of Central Africa, which I have visited on one or two occasions, where there is that teeming mass of Africans who can never, under present conditions, increase their standard of life. At the moment, their means of advancement is mainly by selling their mineral wealth to this and to other countries. Those people are waiting to be educated and trained and are willing to work. My experience from watching them is that they are able to work if they are given the "know-how".

I want to see the day come when Central Africa is developed with transport. I am one of those who believe in the East-West railway there, not as a means of bringing out the mineral wealth and taking other commodities in, but from the defence point of view. As well as spreading our population and money throughout the Commonwealth, I should like to see our defence forces spread, and then this little country would not be quite so vital a target as at present. Defence, therefore, plays an important part in this problem of development.

I congratulate my hon. Friend the Member for Shrewsbury and my hon. Friend the Member for Harrow, West (Sir A. Braithwaite), who know so much about the development of the Commonwealth and Empire, and, in fact, the world, on raising this matter today. I can only hope that when the Minister replies, he will be a little more forthcoming than in the previous debate, and will give to us who have taken the trouble to remain here on a Friday some encouragement that the Cabinet and the Government generally really will do something.

12.56 p.m.

Mr. James Johnson (Rugby)

I have followed the hon. Member for Leominster (Mr. Baldwin) on former occasions, when I have heard him make his plea for a bi-partisan policy concerning the Colonies. I agree, but on what terms and in what parts of the world does the hon. Member mean?

I would go a long way with him concerning economic development in, say, New Zealand or Canada. where there are no complications of colour or a plural society, or, again, West Africa but when the hon. Member talks about the Copper Belt, for example, in Northern Rhodesia, I would say this. I am all for developing the Copper Belt, whose production is now worth about £108 million per annum. Without that output of money, we could not subsidise the social services; schools and hospitals for Africans, or provide money for African agriculture.

When I visited the Northern Rhodesian Copper Belt recently, I found there the beginning of a magnificent new Copper Belt technological foundation. I found, however, that, so far, only the white boys can go to the technical college and only they, of course, can become apprenticed and rise in the industry. When we speak of a bi-partisan policy, therefore, there sometimes arise these difficulties on which the two sides must clash if each side is honest to its ideals and when each of us believes sincerely that what he is saying is true. There is bound to be a conflict.

I cite Northern Rhodesia; especially in the matter of education in the vital copper industry, which is the whole basis of the financial economy of the Federation. It is Northern Rhodesia which is at present putting away about £29 million worth of taxation into the Federal coffers to buttress most of the development that is now going on in the new Federation of Central Africa.

Before I return to the subject of East and Central Africa, I should like to say a word about the hon. Member for Shrewsbury (Mr. Langford-Holt) and the hon. Baronet the Member for Harrow. West (Sir A. Braithwaite), who moved and seconded the Motion. For a few moments, I imagined myself sitting with them on the benches opposite, because they carried me with them in much of what they said. When they spoke of Mr. Nixon's speech, I recalled my recent visit to Africa, where, at Nairobi, the American information service is superb and is used day by day by the Africans, almost as a municipal public library. Why are we doing nothing of this kind? If we believe in our way of life, why leave it to the Americans to dispense, as they do very well, their literature, books and the like? I could quote other examples of this kind of thing.

The hon. Member for Harrow, West spoke about the Colonial Development Corporation. A few days ago, I was speaking to the Prime Minister of Southern Rhodesia, Mr. Garfield Todd, in Salisbury. One of the things he told me was that he had a magnificent housing scheme for the Africans. We all know that without a housing scheme for these people, particularly when the man from the bush is urbanised, we will never get a stable African working population, without which the minority of whites, with all their technological skill, could never develop these parts of the Commonwealth.

Mr. Garfield Todd was pleading with the Government here to give him help by the Colonial Development Corporation, but what happens? When he has a Bill in the Southern Rhodesian Assembly for African housing, he is handicapped because he cannot get the money to develop Highfield Estate, in Salisbury.

When he asked for £ million, he was told that he could not have it. So we have the C.D.C. in the United Kingdom being held back by this parsimonious Government of ours, which does not think big enough; and we also have a forward-looking, sincere statesman in the Federation who is prevented from getting on with housing by lack of finance. There is something wrong somewhere.

I agree with other hon. Members who have asked, "Why do not the Government do something— give some help to a Commonwealth organisation to survey, plot and map the potential resources?" As the hon. Member for Shrewsbury, who, I am sorry, is now absent, spoke in such glowing terms about economic development, can I take him to one place in particular which is booming— the Central African Federation? There, everything is happening which hon. Gentlemen opposite want to see done. Capital is pouring in on a scale which even the Canadians cannot match. The Americans have invested about £48 million there in a very short time. Our money, and World Bank money, is coming in—but on what conditions? I beg the Under-Secretary to convey to his right hon. Friend just a few of my next remarks about the terms and conditions upon which Western capital goes into a backward under-developed society. and how that capital must behave when it gets there.

Today, more capital per head of population is going into Central Africa than into any other spot in the globe. It is going into the Copper Belt and into many other concerns both north and south of the Zambesi—but, again, what are the conditions? The hon. Member for Shrewsbury told us of his first lesson in economics being about money, men and machines—or raw materials, capital, labour, and so on. I submit that we can talk about white expertise, technology "know-how," money in the Bank of England, and all the rest but, in the final analysis, it is labour that is the basis of all that is done. When, in Central Africa, there are companies handling literally hundreds of thousands of pounds worth of contracts with only seven white men and hundreds of black men working there, it is quite obvious where the labour is, and who is doing most of the work in civil engineering, and almost all other public works. Let us, therefore, look at the conditions under which the money is being injected.

One can talk about planning and about geological surveys, but unless there is a sweet and harmonious atmosphere, as between the two colours, we will wait long before we see the dividends we ought to be getting in terms of the capital invested. We still have this schizophrenic outlook this dichotomy, this division of the two colours, and until those two colours get together better than they do at present, this booming part of Central Africa, which holds out one of the most promising, futures in the Commonwealth if handled correctly, will not flourish as it should.

What happens? I have met too many people there, European and African, who are uneasy not only about the political and social set-up, but about the volume and tempo of capital going in to that region. Too much is going in too quickly, and an inflationary situation is developing. If one looks at immigration, one finds that Ministers, having examined the figures, are beginning to be cautious, because, like Australia, New Zealand and Canada, Central Africa can absorb only so many people per annum. At present, there are educational and hospital difficulties, and the like. There is a saturation point at which one must say that sufficient people are coming in.

When one looks further into the economic development, one finds jobs which could well be done by Africans being done by white men. Even worse, one finds that the leader of the Federation, Sir Roy Welensky, is now importing Italian and Greek labour to act as firemen on the footplates of the locomotives —work that could be done by the Africans already living there.

Sir A. Braithwaite

Is not the importation of Italian labour due rather to the Kariba Dam, the contract for which has been let to an Italian company? It was always recognised that those men would go there if the Italian company got the contract?

Mr. Johnson

I accept that, but I have been there on a "fact-finding tour" and checked this up. They have many Italians working at the bottom of the Zambesi Gorge on that project, but there are also, shall I call them Latins— South Europeans and Greeks— coming in to do these jobs on the railways which could be done by Africans, and which are done by Africans next door in the Belgian Congo and Portuguese Mozambique.

I want to convey to the Minister and, I hope, to wider interests, that it is a question not just of investing capital, but of the terms and conditions under which it is invested. As I say, it is very important to have a harmonious labour force in this part of the Commonwealth, where we have these complex colour relations. We have had sufficient trouble over the last year or two in the Copper Belt not to know what can happen. I suggest that we should look beyond £40 million, £50 million or £60 million being invested in a Colony, and in Central Africa, in particular. We should look at immigration, and working conditions to see whether we can get a happier atmosphere in which to develop one of the most promising parts of the Commonwealth.

Mr. Baldwin

The hon. Member criticises C.D.C. for not having spent more money in Central Africa, but I should like to remind him that up to now it has spent £20 million there in projects either completed or in progress, including £1 million for African native housing—a fifth of their total resources.

Mr. Johnson

I could not agree more, but would not the hon. Gentleman agree that African housing is extremely important? To my mind, decent housing conditions for the man, his wife and his family, getting them out of the bush and making them a stable, fixed part of society in their new urban conditions, is even more important than women's education in Africa; and the more that is invested in housing the better.

I will finish this comment on harmony in labour relations in Central Africa by quoting a man whom many hon. Members will know. He was the Finance Minister, and has now gone back into the Government. Sir Edgar Whitehead has said: We are really the first people in Africa facing up to the building of an expanding economy in a multi-racial society where there is such a disparity between the different races. We have to convince— this is a European leader speaking— the indigenous African population that, but for us, they would be poverty stricken and in many cases starving. We have to feel that essentially we are one people, that we are building up our economy not simply to try and make the biggest profit in the shortest time, that we who are entrusted with this responsibility are thinking for all the people of the Federation economically, and that we are going to build up this country into a prosperous and wealthy State. We will never do ourselves any good if we fail in those objects We are all in this boat together, on a very great new experiment I could not agree more with that. All I would say is that in this matter of economic planning we have, particularly with coloured peoples, to convince them that we are "all in the boat together" and all stand or fall by the success or failure of the eventual economic development. We must carry the Africans with us in this matter of economic planning and capital investment. At present, we are not doing so.

We are not taking the Africans with us, and they are suspicious of the money which is being pumped into Central Africa, because, unfortunately, they see the evidence that they are falling behind in the matter of technological development, and in their prospects of themselves becoming the executives, as the Europeans are now; and, ultimately, directing and guiding their own affairs.

I hope that the leaders both here and in the Federation will pay more attention to this. I know that they are well aware of it, but they will have to think more about this difficult matter of convincing the coloured man that, where European capital does go into their Colonies, it does so for the good of all. As Sir Edgar Whitehead said, we are all in this boat together, but so far we have not been convincing the people there that the money is going in for the good of all and for that same purpose.

To come back to the chief impression that I had in Central Africa, I repeat that it is that Her Majesty's Government must not leave these protectorate territories while the Africans are, as they are today, so ill-equipped in education and in other ways to play their part, stand upon their own feet and hold their own with the more advanced, better equipped and technically superior Europeans who have come among them. It is vitally important.

If we can convince the Africans that we are there for their good, we shall have done a wonderful job. But if we fail in Central Africa, if we do not convince the Africans that we are there for their own good, if the Federation experiment goes down, and this difficult matter of black and white living together in the Federation and in Kenya fails to achieve a solution, the whole of Eastern and Central Africa will slide, and the Commonwealth itself is bound to suffer as a result.

This is the linchpin of the Commonwealth. We can talk academically and didactically here about investing so many millions of pounds in these countries, but talk will be useless unless we carry with us the full confidence of the indigenous people living in those Colonies, where we are thinking of placing our capital.

1.12 p.m.

Mr. Bernard Braise (Essex, South-East)

I should imagine that so far in the debate one fact has been brought home to the Treasury Bench, if nothing else, and that is the complete unanimity of all those who have spoken on this subject.

I was struck very much by what was said by the right hon. Member for Easington (Mr. Shinwell). He said that he liked the way in which the debate had been opened, because there was an absence of the emotionalism which had characterised so many Commonwealth discussions in this House in the past. As he said that, I was reminded of the saying of Lin Yutang: Only cynics will ever save the world The trouble with the kind of starry-eyed idealism which we have had from both sides of the House in the past is that it has tended to conceal from us the realities.

In this connection, there are two realities which we ought to face. The first is that there is no permanence whatever in relationships between States, even between States linked by blood and sentiment, as we are to some of the older Dominions, because these relationships can be changed, and are, in fact, changing, under the pressure of world events, by hard calculations of what are the advantages to be gained and what are the disadvantages to be met by following particular policies.

I think we must ask ourselves how strong the links are which bind the Commonwealth together. Indeed, this question should be put at the head of the agenda of the conference of Commonwealth Prime Ministers, when they meet very shortly. Let them ask themselves, "Here we are now, meeting together as the political heads of a great family of nations: how strong are the links which bind us together?"

Frankly, the answer is that nearly all the links are weakening, and weakening fast. There is still a strong sense of family relationship between ourselves and some of the older Dominions, between ourselves, say, and the Australians and New Zealanders; but that is a relationship which exists only between those who are of the same blood and bone.

There is the mysterious unifying influence of the Crown; but the Crown commands the allegiance of a minority of the people who dwell within the modern Commonwealth. We like to remind ourselves, too, particularly those of us who are members of the Commonwealth Parliamentary Association, that there is a like-mindedness which springs from the possession of common parliamentary institutions and from certain basic British concepts of law and justice; but this like-mindedness did not prevent —and I am not now arguing, one way or the other, as to whether we were right or they were wrong many States in the Commonwealth and many millions of people from quarrelling with our actions in November of last year.

Obviously, the conclusion one reaches from this is that if the political, sentimental and cultural ties, which have been so strong in the past, are now weakening, then the economic ties of trade and investment must loom larger if the Commonwealth is to survive.

The second reality which we must face, in my view, is that these very economic links are weakening, too. I suppose that if the process was accompanied by serious economic disturbances in this country and in other parts of the Commonwealth, if there was unemployment here and in Australia and Canada and deep economic distress in the West Indies, similar to that which we experienced in the late 'twenties and early 'thirties, something would be done about it. We should have mass demonstrations in Trafalgar Square, and we should have half a dozen Lucy Houstons rising up in their wrath and crying, "A plague upon all your parties—you are assassins of the Empire." There would be ugly scenes here, and I can imagine the right hon. Member for Easington, who made such a powerful speech today, with every word of which I agree, provoking a violent scene in this House, and, if I may say so, with full justification.

On the contrary, everybody is doing very well. An illustration of current complacency was given by the President of the Board of Trade yesterday. My right hon. Friend had had a look at the figures, and they were not at all discouraging. In this country, there is full employment, exports are booming, and this morning we hear that our exports to Europe are doing very well indeed. Overseas, there is a development boom at this moment in countries like Australia, South Africa, Rhodesia and Canada such as they have never experienced before. I had a look at the figures the other day, and the countries that I have mentioned lead the world in terms of the rate of economic growth.

Tremendous development is under way. A great dam is being built spanning the mighty Zambesi River; another is bottling up the Snowy River, in Australia. It does not matter to anybody that the Kariba dam is being built by an Italian firm with Italian labour and that the Snowy River project is being undertaken substantially by American contractors. It does not matter because the picture is one of general expansion in which we can all take great delight.

I am sorry that the Economic Secretary to the Treasury is not here at the moment. I acquit my hon. Friend the Under-Secretary of State for the Colonies; I think that the Colonial Office has its heart in the right place, but I am sorry that the spokesman for the Treasury is not here, because these trends matter a great deal. They matter to us in the House, to people generally in the country and to the Commonwealth as a whole.

It is odd that neither of the two great world wars which have disfigured our century have injured Commonwealth unity in any way. On the contrary, with the exception of Ireland, they have served to unite the Commonwealth peoples. After all, the most important part of Commonwealth relations is that at rock bottom they are human relationc. Supreme crises have brought us closer together.

Sir Leslie Plummer (Deptford)

What about South Africa?

Mr. Braine

In both world wars South Africa was on our side. She contributed substantially to the common cause. Not even in the economic depression has the Commonwealth drawn apart. I believe I am right in saying that Great Britain was the first of the major industrial Powers to pull out of the depression of the 1930s, largely as a result of the economic integration which took place at Ottawa in 1931 or 1932.

Yet here we have the anomaly that in a time of great economic expansion, of relative prosperity such as we have never known before, and of comparative affluence and ease. real danger to Commonwealth unity is arising. I am assuming that we all agree that the relationship between the United Kingdom and the Commonwealth ought to be continued. because the Commonwealth is greater than the sum total of its individual parts. Therefore, if we believe that the Commonwealth ought to be preserved, we ought to be concerned about the means of ensuring its preservation.

The relationship between the United Kingdom and the Commonwealth is threatened in two ways. First, we are losing our preponderant position in Commonwealth markets. That does not seem to be a matter of much concern to the President of the Board of Trade, but it is certainly a matter of great concern to the rest of us in the House. The reasons are the steady erosion of preferences, the inability of Britain to compete effectively in markets even where she enjoys preference, and our failure to seize the investment possibilities which undoubtedly exist in Commonwealth countries.

The second threat to this relationship lies in the realisation by the two superpowers—the United States, on the one hand, and the Soviet Union, on the other —of the potential of the Commonwealth and their eagerness to take part in its development. I believe that the blame lies square on the shoulders of those who have been taxing us out of existence. Moreover, those who pass through the portals of Gt. George Street fall under the corrupting influence of that place and its strange teaching that two and two make four. In terms of Commonwealth development two and two do not make four. They make five. They sometimes make six, and could make seven.

I remember the right hon. Member for Ebbw Vale (Mr. Bevan) making his great resignation speech in 1951. It was a very impressive and serious moment. It was an attack by one Cabinet Minister on former Cabinet colleagues. I remember how at the time he pointed a stabbing finger at the Government Front Bench and talked of the dead hand of the Treasury. Parts of the Treasury have never come to life at all. There is no imagination. There seems to be no realisation of the fact that this country has no future whatsoever until it is linked with the Commonwealth.

For example, the very day that we surrendered our sovereign right to adjust those preferences after the war in return for dollars, we gave up the most powerful instrument that we had in shaping Commonwealth trade in channels mutually advantageous to Commonwealth countries. The effect was masked for a number of years because of the preference given to sterling area commodities through the dollar shortage. Now, at a time when the dollar shortage is being overcome, we are waking up to what has happened. Less than 50 per cent. of our trade now is with Commonwealth countries, and our proportion of that trade is steadily declining.

In addition, Commonwealth countries themselves are becoming much more interested in securing a share of growing world trade—that is natural and inevitable— than they are in merely trying to increase preferences here. They want to preserve the preferences that they have got, but it is far more important to attract new capital to expand their manufacturing industries.

I have recently looked up the figures relating to Australia. I did so because Australia is our best customer, and I thought it would be a good idea to see what the figures revealed. Since 1939, making allowance for the change of money values, the volume of our exports to Australia has doubled and the volume of Australia's exports to this country has decreased. That is an extraordinarily significant and challenging fact. Before the war the Australians had a trade surplus with this country; they are now running a substantial trade deficit.

The fall in money values has altered the balance of advantage. The value of the preferences which we enjoy in Australia is greater than the value of the preferences which Australia enjoys in this country. We receive a preference on 85 per cent. of all our exports to Australia, and we have no competitors. The Australians receive a preference on 50 per cent. of their exports to this country, and that preference is enjoyed by their principal competitors.

If I may give a practical illustration of what that means to the Australians, a preference of 15s. on 1 cwt. of butter was equivalent to a 15 per cent. ad valorem preference in 1932. In terms of 1956 prices, it is worth 4½ per cent. The preference link has weakened.

Having said that, I accept, and I believe everybody in the House will accept, that nothing can be done to adjust these preferences to knit our countries more closely together. I accept that Australia's fortunes are bound up with expanding world trade. Nevertheless, there is still Australia's need of capital for development, and that is something that we ought to supply. If we can supply it, we shall not only be forging new links between ourselves and Australia but we shall have a stake in the expansion of Australia.

Unhappily, we are falling far short of what is required. Previous speakers have said that if we go on like this, the Americans will be going into Australia in a big way. They are already there. I have here an extract from an information bulletin, entitled, "An American Looks at Our Investment Value" prepared by the editor of the "McGraw-Hill American Letter", and circulated last October to members of the Victorian Employers' Federation, in which he says: With Great Britain having difficulty in meetings her own capital requirements, Australia must rely on U.S. capital for de- velopment. Realising the tight squeeze placed on England (last year she only supplied 40 per cent. of new foreign capital going into Australia, compared with 70 per cent. before the war) American businessmen stand ready and willing to take the place of the British as bankers. Australia is regarded as the natural jumping-off spot to tackle the potentially huge South-East Asian market which is the long-range goal of many U.S. companies. I think we should take that seriously. If we are not willing to supply the needs of these Commonwealth countries, there are others who will.

The Americans are not merely interested; they are taking an active part in the development of Commonwealth resources. The Soviet Union is interested too. In the last four years or so the Soviet bloc has made available loans in the region of £500 million on quite generous terms, angled towards the underdeveloped countries of Asia and Africa. Here we see the two great colossi, whose shadows lie across the earth, reaching out now to develop our inheritance. I should have thought that if they are moved to take an interest in the matter, my right hon. Friend and the Government should also be moved to take an interest in it too.

Why should the Americans be interested in Commonwealth resources? Why is it that we hear of coal deposits in Queensland— investigated years ago by British firms, but not developed— being developed by American firms? Why is it that we hear that a newly discovered bauxite deposit, I think in Queensland— said to be the largest in the world— is to be developed by the Americans? Why is it that they are taking such a keen interest in the uranium deposits of Canada, South Africa and Australia? Or that whenever we hear of new minerals being uncovered it is American capital which seems to be taking the prime interest?

The answer is that our American friends have taken very much to heart the lessons of the Paley Report, published in 1952, to which reference was made today by my hon. Friend the Member for Harrow, West (Sir A. Braithwaite) in his magnificent speech. Here we have a report of an investigation into the raw material resources of the United States and the likely requirements over the next quarter of a century. What was the lesson drawn from it? It was that the mighty United States economy would slow down unless efforts were made to conserve domestic resources and develop new resources overseas.

Again, why is the Soviet Union so interested? I do not think we need to look for a Communist under every bed. The reason here, I believe, is sheer economic necessity. As the Soviet five-year plans have developed, industrial production has outstripped agricultural production. We see a reversal of the old economic pattern. The U.S.S.R. used to import capital goods and to export raw materials and foodstuffs to pay for them. Today, the Soviet Union is finding that she is deficient in many vital mineral resources. She is totally deficient in natural rubber and industrial diamonds and many of her mineral ores are low-grade. Her agricultural production is insufficient to meet the requirements of a rapidly expanding population. The result is that Soviet industrial development has reached a point where she can produce capital goods and provide others with mining and constructional equipment, vehicles, tractors and things of that kind, but must import food and raw materials in return. Accordingly, the pattern of her trade is changing.

Thus, it should be no surprise to anyone in this House that India has got a steel mill on a twelve-year £40 million loan; that she has got £6½ million worth of constructional steel and £45 million worth of machinery from the Soviet Union. That is the new pattern. At this moment Soviet teams are making resources surveys in India, which is the job we should be doing. I suggest that these are matters which should weigh heavily with the Government. It does not matter what are the motives of these great Powers, because undoubtedly the aid they provide will bring great benefits to the recipient countries. What matters is that at a price countries like India, Australia and Canada can grow rich and powerful and add to their resources without Britain. If they can do that, then the Commonwealth itself ceases to exist, because this country is the only possible hub around which the system can revolve.

Mr. J. Johnson

I am becoming a little baffled by the argument of the hon. Gentleman. Will he please tell the House, and the Minister, how he intends or hopes to get these technicians and techno- logists in the United Kingdom to go out to the Rhodesias and to India? The hon. Gentleman talks about sending out these teams. Will the Government advertise for them? Does he propose that they should be paid more wages, or will he impound teams, in a Communist or Soviet way, to go overseas to help these territories?

Mr. Braine

I do not propose to be diverted from my main argument by that particular "red herring".

The point is that we have to decide here, in the United Kingdom—it would have to be decided by the Government of the day—that we shall give first priority in the allocation of our national resources to the development of the Commonwealth resources. It is a question of balancing advantages. If we do that, the right answers will follow. The difficulty is, and this is the burden of the complaint —both in the debate on 30th November last year and now of hon. Gentlemen on both sides of the House, that it has been no one's job to work out the priorities in this respect. The matter has been tackled in a piecemeal fashion.

The hon. Member for Rugby (Mr. J. Johnson) need not take this from me. He is an assiduous reader of Commonwealth newspapers. It was Sir Roy WelensKy, the Prime Minister of the Central African Federation, who said earlier this year: We know that Britain cannot provide all that is required. We need to pool our resources as a Commonwealth family. It was Mr. Harold Holt, the dynamic Australian Minister of Labour, who, earlier this year, said: It is time we worked together to produce a Commonwealth plan. It would be rash for us to think that time is on our side or that the solution to our difficulties will suggest itself. I know of no more urgent task of long-range planning for British people today than this large question of how we can make the most of the potential we have. I go further. Hon. Members may recall that Sir Eric Harrison, the Australian High Commissioner in London, speaking at the last Australia Club Dinner, called for the setting up of a permanent Commonwealth body in London charged with the duty of advising the Prime Ministers' conferences and collecting and evaluating economic information about the Commonwealth as a whole. It is no use saying that the Commonwealth Economic Committee exists to do the job. It is neither large nor powerful enough, nor has it been given the powers to do the job on the scale required.

Why cannot we have a "Commonwealth Paley Report"? I should like my right hon. Friend to tell us why, when the Americans have shown the way, and the Canadian have had a Royal Commission to inquire into their economic prospects over the next quarter of a century—and even O.E.E.C. has made a cautious, but intelligent, forecast of what is to happen to the European economy during the next five years—we cannot have a similar survey for the Commonwealth as a whole.

It is not just a question of showing the world what resources we possess, though that in itself might spark the imagination and produce results. It is that such a survey would lead to changes in national economic policies such as happened in the United States after the Paley Report came out. Within twelve months of the Report being published the United States Administration were considering revision of their tariff policy to encourage low-cost imports, were laying emphasis on the kind of technical assistance which would develop resources overseas, and were considering loans for small mining companies. Business was adjusting itself in the same way. If those were the results which flowed from what the Americans did through the preparing and publishing of the Paley Report, why cannot we follow that example?

As I understand the argument against this, it is that we do not need any more machinery; what we need is more cash. That has been the argument from the Front Bench in the past. We should ask ourselves, therefore, these questions. Would a Commonwealth bank, the kind of proposal which my hon. Friend the Member for Harrow, West made this morning raise new capital not at the moment coming into the Commonwealth, and would it encourage new savings at home and so enable us to divert additional resources to Commonwealth development? I think that the answer to both questions is "Yes," and the onus is on the Government to prove the contrary.

I have just addressed a question to my right hon. Friend the Economic Secretary, and I do not think that he was doing me the courtesy of listening to it, but as he is now disengaged I will repeat it, because I should like it answered today. I was saying that we should ask ourselves whether a Commonwealth bank would raised new capital not at the moment coming into the Commonwealth, or whether it would encourage new savings at home and so enable additional resources to be diverted to Commonwealth development. I say that the answer to those questions is "Yes." If the Government propose to take no action at all on that front then the onus is upon them to prove why the answer should be in the negative.

I end as I began. If we are all agreed that the Commonwealth as such ought to be preserved, then we must will the means.

1.42 p.m.

Mr. J. Grimond (Orkney and Shetland)

We are usually friendly on Friday mornings, and today is no exception, I find myself in agreement and in sentiment with nearly all that has been said in the speeches which have been made and, in particular, with the Motion.

I start by apologising very sincerely to the hon. Gentleman the Member for Shrewsbury (Mr. Langford-Holt), who moved it, for not having been here when he made his speech. Unfortunately, I had an appointment which went on longer than I expected. But I did have the pleasure of hearing the excellent speech of the hon. Gentleman the Member for Harrow, West (Sir A. Braithwaite), the seconder of the Motion.

In spite of a great deal of what has been said about those who will the end must will the means, and that if we devise new institutions we shall call out new capital, I still believe that the real crux of the matter is the provision of capital and that it really does not entirely lie in the development of new institutions.

The question we have to face is: who is to save the capital to invest in the Commonwealth, or, indeed, anywhere else? Are we to do it voluntarily? If so, how? Or are we to have forced savings? Is that really what we are asking the Government to do? There have been moments today when hon. Members have suggested what would amount to forced saving. I, personally, should regret it.

We have to realise, whether it is forced or whether it is voluntary, that somebody has to give up something, and if the provision of this capital is to be on the large scale which has been suggested it will be necessary to give up a great deal. Capital is wanted not only for investment in the Commonwealth overseas, but for investment in oil in the Middle East, nuclear energy at home, for roads, railways, mines. Therefore, even though, as the hon. Gentleman the Member for Harrow, West rightly said, his £300 million for ten years may not, by itself, be so very big, it is still a substantial addition to all the other demands on cur savings.

I do not think that it is much good blaming the Treasury, much as I enjoy doing that. The Treasury, after all, has to get this money out of the pockets of the ordinary people. It cannot produce it itself. This is a task we have to face ourselves. One question I would ask is: is this a matter which can be considered by the Radcliffe Committee—this question of saving? I do not know; I am only asking that question.

In the days of the Macmillan Committee it discovered what was called the "Macmillan Gap" in investment. I suggest that the gap which there is today is in savings. I do not think it would be proper to go into that matter in detail now, but I would say that we have to tap new sources of savings. We have to induce the wealthier artisans and technicians to save, and provide them with an incentive to invest their savings in productive industry here and overseas.

Though I have not a great deal of faith in Government publications, I think it would help if there were a publication to show the demands to be made upon our savings and to show the people clearly where our obligations are, and to help them to choose whether they want to consume now or whether they want to save to invest in the Commonwealth and develop a better future for their children.

In the schools, this aspect of the matter has not been given nearly enough attention. The really fundamental question is one of education, and these things have to be put across to the children in our schools and the young folk in our universities. It would help to make the Commonwealth a living reality to the people of this country if more of us could go there. It is really deplorable how few of our people ever see a British Colony —and what a shock some of them get if and when they do see one. This is a question not for the Treasury, but there must surely be a large philanthropic body which could help.

I have noticed a slight tendency among hon. Members to feel that if we link a number of weak parties together they somehow grow stronger. I am all for bringing the Commonwealth closer together, but I think that we should be deluding ourselves if we believed that by linking, for instance, Australia, Canada, New Zealand and ourselves more closely together we should somehow create more savings, because those countries themselves want more than they have and we shall not create a surplus by linking together a group of deficit countries. We must escape from our deficit before we do anything else.

We built the Commonwealth and we must pay our debt to the Commonwealth in helping to provide many things it wants. There are, for instance, the social services, housing, roads, and I suggest that it is an obligation on the people of this country to help. We have accumulated large parts of the globe and we have an obligation to deal with these matters, but then there is the problem of the projects which are economically rewarding.

I agree with the hon. Member for Essex, South-East (Mr. Braine), who has just spoken, and whose speech I so much enjoyed, that a Paley Report for the British Commonwealth would help to give us part of the answer, but I am afraid that it will show that, of course, there are greatly divergent circumstances. I am afraid that it will show that Australia is not the great mine of natural resources which some people think it is. Exploration for oil in Australia has not been very successful. There is a widespread feeling in this country that there are limitless quantities of oil in Canada, but if we look at the figures of the quantities being raised, or likely to be raised, we see that the Canadian resources are limited indeed compared with Middle Eastern resources.

Having spoken about savings, I must say that I do feel that the suggestion by the hon. Member for Harrow, West, of a Commonwealth bank, should certainly be examined further. If it could be used to channel dollar investments so much the better. I would also suggest that if we are to have a Capital Issues Committee it should have this subject within its purview. It must be relevant to considering investment in this country to consider the possibility of alternative overseas investment, and I have always said that, though I have my doubts about the Committee, if we are to have it at all it should be an investment board to examine all the different calls upon our savings—not only the Commonwealth but, incidentally, the nationalised industries.

I have noticed in the debate a slight tendency, which I am sure hon. Members do not want to go out as the view of the House, to assume that we invest in the Commonwealth for nationalistic reasons. We are not, I hope, investing in the Commonwealth because we want thereby to retain our political hold on the people of the Commonwealth, or for the lake of a dog-in-the-manger attitude towards the Americans. We invested immensely in South America without taking political control of any country there, and it is not true to say that that investment has been wasted. We gained enormously by investment in Mexico and in South America generally even though, in the end, many of our enterprises were nationalised.

I feel that what we can do now within our present resources is strengthen the lateral ties throughout the Commonwealth. I entirely agree that the future of this country lies as a member of the Commonwealth, but I do not believe that we can supply all the services and the "know-how" necessary to run it. We must get Canada to interest herself more in the West Indies, and Australia in the African Colonies, and get Mr. Menzies to talk to the South Africans. That idea could be stimulated at the forthcoming Prime Ministers' conference.

The time has come to develop more Commonwealth institutions. It has been suggested that there should be a meeting of Commonwealth parliamentarians on the Strasbourg model. That might help. I should approach this matter very much from the point of view of practical cooperation over definite problems. For instance, we might very well have had the Canadians in to help over Malta. A Roman Catholic French-Canadian might have been a good person to look at Malta. I should also like to see Governors and Governors-General drawn from all over the Commonwealth, and the development of a technical and administrative service recruited from all countries and prepared to go all over the Commonwealth and even to underdeveloped areas outside the Commonwealth.

In previous debates doubts have been expressed about the future of the Colonial Service. A common service would resolve these doubts and it would be immensely useful in cementing the Commonwealth together. Singapore, for example, is essentially a Commonwealth question. I find it distressing, when talking to representatives of some of our Commonwealth countries, to discover how little attention they give to problems outside their own country. It is true that they have grave internal problems of their own, but really it is India, Pakistan and Ceylon, not to mention Australia and New Zealand, that ought to come in on the question of Singapore, because it is a Commonwealth matter. We took part in the development of a service for Ghana, but we must go further and create a Commonwealth service of technicians and general administrators for all Dominions and Colonies who want it.

One great bond in the Commonwealth which has not been stressed very much in this debate is education. Large numbers of people come from the Commonwealth to go to the universities in this country, and it is very significant how many Commonwealth statesmen and leaders have been educated here. If that practice were to cease, it would he extremely serious for the future. But the universities are having great difficulty in accommodating those who come, Many of these students may not come up to the high standards of people in this country, but we must make every effort to take them.

I ask the Government to address themselves to the problem, within the larger problem created by the fact that we have not enough places for those of our own whom we want to educate. However, there are universities like that of St. Andrew's, which are too big for the pool from which they draw their students and they should be expanded into a great Commonwealth university. The Government should also go out of their way to help Oxford and Cambridge to meet the demands upon them.

I should like to support the hon. Member for Rugby (Mr. J. Johnson) in what he said about the social difficulties attendant upon the growth of investment in the Commonwealth. We should have been able to learn by now from the mistakes made in the sudden development of oil production in the Middle East. I should like to be assured that the social implications of the rapid development of backward societies are being studied and that there is Commonwealth concentration upon them.

This debate has been one of the most useful that we have had recently, but I should like to feel that the House does not evade the fundamental issue of what the British people themselves are prepared to do and to give up for the sake of the Commonwealth.

1.55 p.m.

Mr. John Stonehouse (Wednesbury)

I am very pleased to be able to follow the hon. Member for Orkney and Shetland (Mr. Grimond). He underlined two matters of great importance. He spoke of the need for effective savings so that development can take place in colonial countries. If the rising standards of the Colonial Territories can be fairly shared among the population, and there can be development of peoples' institutions like co-operative societies and trade unions. savings can take place through those institutions which will help the economic development of the countries concerned.

I was also impressed by the hon. Member's reference to the need for a Commonwealth service to provide the necessary technicians and administrators. Perhaps we do not have to wait for such a service to be established. We have already international agencies like the World Health Organisation and U.N.E.S.C.O. which could do a very effective job indeed in our colonial countries if we allowed them to go in there. Some years ago, when I was in Uganda, an annual meeting of the World Health Organisation was held in Kampala, but such was the parochial outlook of our Colonial Civil Service in Uganda that it prevented representatives attending that conference from having anything to do with the health service which was being established in Uganda. They were not allowed even to see the services that had been established. That is a fantastic state of affairs. We must be big enough to realise that in our Colonial Territories we can receive a great deal of assistance from these world agencies.

I have been struck by comments from the benches opposite on the unanimity of feeling on the subject of this debate. It may be partly due to the fact that there have been a few conversions on the benches opposite. There has been a great development of ideas in the past few years. I thought so when I heard the hon. Member for Harrow, West (Sir A. Braithwaite) explaining the importance of public enterprise in colonial development and when the hon. Member for Wavertree (Mr. Tilney) spoke of the importance of establishing a target date for colonial countries to achieve independence, so that they should be able to choose in advance whether or not they would remain in the Commonwealth. I thought that, too, when the hon. Member for Shrewsbury (Mr. Langford-Holt) introduced the subject of the debate in his very able speech and emphasised that development in colonial countries must be carried out with the object of improving the standard of living of the people of those countries.

References have also been made in the debate not only to the assistance that we in the United Kingdom give to the colonial countries, but also to the assistance that our economy can receive from the Commonwealth. I should like to underline that point, because in too many places today it is assumed that all the aid is flowing in one direction. As my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) said in the House a few weeks ago, our economy has been greatly assisted by the sterling balances which the colonial countries have built in this country in the last few years. They amount to over £1,200 million. The fact that these colonial countries have been sending raw material and foodstuffs here, which we have not yet paid for in goods, has been a substantial help to our economy.

We all want to see the economic development of colonial countries. Why? Because we want to see the standard of living of the indigenous people in those countries improved. We are all approaching this subject with that premise in our minds. I wonder, however, whether economic development has always meant better living standards for the people in the colonial countries, and whether the economic rewards are being fairly shared among all sections of the community when development takes place?

I was impressed when my hon. Friend the Member for Rugby (Mr. J. Johnson) referred to his experience in the last few weeks in Northern Rhodesia. I was struck by his remark that we need to examine the terms and conditions of investment and the benefit that flows from it. I have here the 1955 Annual Report of Northern Rhodesia, which is the latest available. This states that the number of Europeans involved in the copper mining industry in Northern Rhodesia is 7,660, whereas the number of Africans engaged in it is approximately 50,000. The monthly wages of Africans, the Report states, are … based on thirty shifts of eight hours.… Surface workers receive from £10 12s. to £23 7s. and underground workers £11 10s. to £25 14s. On the other hand, the Europeans receive much higher incomes. According to the Report. their monthly earnings range from £125 17s. 8d. to £176 6s. 8d. for surface workers and from £103 7s. 1d. to £197 12s. for underground workers for twenty-six shifts of eight hours' duration. Of course, it may be said that the European workers are doing much more skilled jobs. That may be true in some cases, but it is also a fact that many Africans have been denied an opportunity of participating in the skilled occupations which they could well perform.

Mr. J. Johnson

May I intervene to say this about the wages, in case someone may attack my hon. Friend later for misquotation? The most up-to-date figures show that the Africans earn between £45 and £47 a month.

Mr. Stonehouse

I am grateful to my hon. Friend for that correction. With his more recent experience he has more up-to-date information at his disposal than the Report from which I was quoting. At any rate, the comparison of incomes still applies.

Again taking the figures for 1955— and I have no reason for supposing that the percentages have changed to any great degree—the African workers in the industry, who are receiving an average of £200 a year by way of income, receive a total remuneration in the region of £10 million a year whereas the 7,600 Europeans, with an average income of £2,000 a year, receive an income of £15,200,000 from that industry. So although the number of Europeans involved in it is so much lower than the number of Africans, the amount of money they are receiving in the form of wages and salaries is much greater. namely, £15 million as compared with £10 million a year.

The total wage income from the copper mining industry in that year was approximately £25 million. The Report also shows—a fact which my hon. Friend the Member for Rugby also commented upon —that the total production of minerals in Rhodesia is £120 million. Yet the total wages received by both Europeans and Africans amounts to only £25 million a year.

We may well ask where the rest of the money goes. Some of it goes in royalties, some in taxation. A very large part indeed comes to this country in the form of interest and bonus shares to shareholders. I should like to see a greater part of the profits made out of the copper mining industry in Northern Rhodesia being ploughed back in development of all kinds and into a diversification of the economy. Companies which make big profits because of their position in a country have the moral duty to plough back the profits they make into the development not only of their own industries, but into the general welfare of the country in which that exploitation takes place.

My hon. Friend the Member for Rugby also referred to the new technical foundation. This is one example of how the copper mining companies have started to do something in a general sense to improve the educational opportunity in the country concerned. When, however, we look at the miserly amount of money, £400,000 which they are donating to that foundation, we realise how inadequate is their contribution. I was amazed to hear from my hon. Friend something I did not know before, that the foundation will limit its educational service to Europeans That is a shocking state of affairs when Africans also need educational opportunities.

We have a responsibility to make sure that economic development takes place on the right lines. In colonial countries particularly, we must not only talk about building railways, roads, factories, and hydro-electric development schemes, but we must also concern ourselves with the development of land. The prosperity of countries such as Kenya, Tanganyika and Uganda will depend on the value of the produce that is extracted from the soil.

In that connection, we must examine the participation of the African peasants in the economic development of the land in those countries. Here, I want to sound a note of warning. We speak in broad terms of economic development, but unless we make sure that the development which we encourage means participation in real terms by the African people who live in those countries, we may find that it will take place without any real benefit for the indigenous populations. We want to avoid that.

I should not like to see in a country such as Uganda economic development which would mean that the peasant population would be removed from their independent land holdings and transformed into a landless proletariat living in squalid conditions round the towns, employed in factories, without having any opportunities to improve their lot. The importance of economic development in the countries to which we are referring is that it will enable the indigenous populations to improve their lot and play a bigger part in the development of their own countries.

I was very interested a few weeks ago to read a speech by Mr. Michael Blundell which was made to the Central African Group of the Conservative Commonwealth Council. He said: Many thousands of Africans are now growing coffee in half-acre plots, the increase in the past three years being some 21,000 acres. By next year we shall have about 29,000 acres of coffee under cultivation by Africans. Having grown the crop myself for 25 years, I know something about it, and I can say that much of this African coffee is magnificent. Some of the growers are getting yields of between 15 or 30 cwt. to the ton, and of a quality which is selling today on world markets at £550 per ton. Some of this new coffee can rank with the best in the world—and this wonderful result has been achieved by Africans who would have been described not long ago as 'ignorant men with a hoe,' men whose wealth would then have been reckoned in terms of scraggy goats. I am very glad that Mr. Michael Blundell should have made a statement like that. A few years ago some of my hon. Friends on this side of the House were lone voices calling for the Africans in Kenya to have an opportunity of growing coffee. I am glad that people in Kenya itself have been converted to the wisdom of allowing Africans an opportunity of participating in the agricultural wealth of the country.

There is no doubt that when an African peasant farmer has an opportunity to develop land he can make a real contribution to improving the value of produce flowing from the land, thus increasing the exportable earnings from a particular territory and so earning the money which is required for internal development and the development of social services in general.

I should like to refer to the part which co-operative societies can play in colonial countries. We want to make sure that the African people have all the encouragement that we can give them in the development of their land. Co-operative societies can be the best way in which we can establish a bridge between the Government and the governed, so that we can break down so many of the suspicions which have existed in the past.

When I was in Uganda, I found a great many farmers there very suspicious indeed of the advice coming from civil servants who, in their own way, were trying to do a good job. Where the farmers were members of a co-operative society and getting advice which they thought was objective and sincere, they were very often prepared to do work on their land which they would not have done if that advice had not come from their co-operative society.

The agricultural co-operatives in those countries can play a big part in making the marketing of crops more efficient. The surplus gained from the economic activity of co-operative societies can be ploughed back into economic development which we all want to see. In Uganda the development of up-to-date cotton ginneries, for instance, under cooperative supervision, is one of the best contributions which can be made to the internal economic development of that country.

Another most important aspect of the contribution which can be made by cooperative societies is the training in democracy which Africans receive when they participate in them. Finally, co-operative societies give African peasant farmers an incentive for improving their own contribution. So often in those countries we find that peasant farmers have no interest even in improving their standard of life, because they have felt for so many years a deep suspicion of what we call progress. They do not, as we do, take for granted that progress is necessarily a good thing. They do not always believe that economic development and economic investment are good for them, but when they are members of and participating in democratically controlled co-operative societies, they get that confidence in themselves and in their own countries which enables them to forge ahead and to make the best of their own land.

I should like to deal with a point made by the hon. Member for Orkney and Shetland about the need for a Commonwealth service. The development of cooperative societies could well come within the orbit of that assistance from some Commonwealth or United Nations organisation. It is vitally important that the supervision of co-operative societies should be undertaken by people who have a sincere interest in the ideals of those co-operative societies.

It is an absolute mistake for the supervision of co-operative societies in the colonial countries to continue to be in the hands of civil servants who, very often, have been seconded to a co-operative department, and have no real interest in co-operative societies or in the co-operative ideals which should be behind them. An international service providing cooperative administrators not only from this, but from other countries with a cooperative background, like Denmark and Sweden, would provide groups of administrators who would be able to give of their best in the development of cooperative societies.

I was very struck by one remark of my right hon. Friend the Member for Easington (Mr. Shinwell). He said that before political independence could be achieved, there needed to be an economic basis for political independence. There is some truth in what he says. I hesitate to welcome Colonial Territories rushing into a political independence and freedom before the people of those countries have had an opportunity of building up democratic institutions like co-operative societies, trade unions and political organisations which will give them the opportunity of controlling the democratic structure when it is established. To rush those countries into independence before the people have had an opportunity of building up those institutions may leave the colonial countries with landlords and an aristocratic clique in control, to the detriment of the real welfare of the mass of the population.

But I also believe that the economic development of a country is very often tied to the political initiative within it. I was very interested to read a quote in a book by Gunnar Myrdal called "An International Economy." Gunnar Myrdal quotes Professor J. K. Galbraith, who wrote, in the Journal of Farm Economics, that: … land reform— in underdeveloped countries— is a revolutionary step; it passes power, property and status from one group in the community to another. If the government of the country is dominated or strongly influenced by the land-holding groups—the one that is losing its prerogatives—no one should expect effective land legislation as an act of grace ߪ The best assurance of land reform, which I for one hope can be orderly and peaceful, is a popular government by those who really want reform. He further quotes Professor Galbraith as saying: In the past few years we have somehow managed to persuade ourselves that all of the governments of the world want economic progress. This is undoubtedly true of the great masses of the people of the world. But we should not suppose that the lip service that members of their governments pay to these aspirations reflects, in all cases, a genuine desire for change. In important parts of the world … governments are still the property of the puppets of small groups whose future security may be not with progress but with stagnation. He goes on to comment: In underdeveloped countries small groups of privileged people, enjoying exceptional wealth, political power, and prestige, … are often likely to be apathetic, if not actively hostile, to many of the measures required for economic modernisation. I think that that is an important point which we should not fail to take note of in this debate. We want economic progress but we also want the political inspiration which will help the people of those countries to take the best advantage of it. As Myrdal said in his book: …nothing is more apt to strengthen the basis for the frail beginnings of political democracy in underdeveloped countries than the successful embarking upon the reforms necessary to break down social and economic inequalities. Economic development in the colonial countries must be organised in such a way, if necessary with legal safeguards, so that the wealth flowing from such development is fairly shared among all sections of the community, and also in such a way that the people in those countries have a chance of developing the democratic and economic institutions which will enable them to participate in the economic rewards flowing from development and also to participate in the political control of their own countries.

2.23 p.m.

Mr. Norman Pannell (Liverpool. Kirkdale)

I hope that the hon. Member for Wednesbury (Mr. Stonehouse) will pardon me if I do not comment specifically on his speech. There are many points on which I should like to cross swords with him, but I am anxious, in the course of my speech. to deal with the general subject of Commonwealth development. I have listened with great interest to all the speeches in this debate and I agree with most that has been said. The doubts that arise in my mind concern the means by which our objectives can be achieved.

I personally think that this Government and all Governments since the war have had a fairly good record in the matter of colonial development. The Colonial Development Corporation, the colonial development and welfare funds and the Colonial and Commonwealth Development Finance Corporation are all doing excellent work. Now the Government are proposing that overseas trading corporations shall be exempted from United Kingdom tax. These are all moves in the right direction, but I freely admit that their scope is limited. They cannot achieve all that we want to achieve but I think that it would be quite unrealistic, in present circumstances, to advocate any grandiose scheme of Commonwealth development.

The day, unfortunately, is past—I hope only temporarily—when this country could invest large sums in overseas development whether in the Commonwealth or outside it. Up to fifty years ago this country was earning regularly every year large export surpluses, and it invested those surpluses overseas. In this way we promoted the development of Dominions such as New Zealand, Canada. Australia and South Africa, and also of countries outside what was then called the Empire, such as the Central and South American Republics.

It was quite natural that we should do so. It was, indeed, necessary, because no country could consistently build up surpluses against the rest of the world without redressing the balance by overseas investment. But the situation has drastically changed in the meantime. Our erstwhile investments have virtually disappeared as a result of two world wars and we have accumulated large debts to overseas countries.

The recent White Paper disclosed that our overseas unfunded sterling debt amounted to about £4,000 million. Of that, £2,860 million was owed to countries within the Commonwealth; that is to say, £1,286 million to Colonies alone and £1,574 million to the independent countries. In addition to this £4,000 million, we had funded dollar debts to the U.S.A. and Canada amounting to £2,000 million, giving a total external debt of £6,000 million, against which we have gold and dollar reserves of roughly £800 million.

We do not know the break up of this sum of £2,860 million which is owed to the Dominions and Colonies. The figures are a secret. Efforts to get them have been unsuccessful. Probably it is wise that they should not be divulged. But we do know that very large sums are owing by this country in respect of money deposited by underdeveloped countries such as Ghana. Nigeria and Malaya.

All this money is at short call and the problem, in my view, is not what we shall invest in those countries, but how we can dissuade them from drawing heavily on those reserves, which they have a moral right to do. since they have. by their efforts and trading, contributed very largely to the gold and dollar reserves of the sterling area.

We talk of inter-Commonwealth co-operation and I believe that there have been moves to bring the Commonwealth countries together to discuss a general plan of development. What, in effect, can this country say to its Commonwealth partners about such a scheme? All it can say is, "We will put in our debit balance of £2,860 million. What can you offer?" Quite plainly, we cannot invest a deficit and that, from the monetary point of view, is all that we have to offer.

There have been suggestions that we should invest the Budget surplus. We have had no overall Budget surplus of any consequence for many years. Admittedly, we have had from time to time, and have at the moment, a large surplus above the line, but to invest that in Commonwealth enterprises would be highly inflationary. If, for example, we were to manufacture machinery for that purpose in this country it would give rise to increased spending power with no corresponding increase in the amount of goods available.

Moreover, any increase in overseas investments reduces the amount of money available to us for imports, and to that extent it must be detrimental to our balance of payments position, although possibly only in the short-term. I agree that we should benefit in the long-term. by stimulating the demand for goods on the part of those Commonwealth countries, but the immediate effects would undoubtedly be adverse. I am afraid that we are not yet in a position to support even an immediately adverse effect.

It has been mentioned that gross fixed investment in this country is running at the rate of £2,000 million a year—a sum very much greater than we ever thought it possible to invest in the Commonwealth. Could not we divert some of that to Commonwealth development? I say that we cannot do so if we are to maintain our competitive position in world markets. Therefore. that possibility is ruled out.

Quite clearly, the essence of the problem facing us is the balance of payments position. We are constantly told that we require a balance of payments surplus of £300 million. year in and year out, if we are to honour our obligations overseas and slowly build up our reserves. In the last two years we have scarcely broken even on our balance of payments position, and we have had to draw upon our gold and dollar reserves to honour our commitments.

As a result, over the last two years our reserves have fallen by £200 million, and this despite the fact that we have borrowed £200 million from the International Monetary Fund and sold the Trinidad Leaseholds for £60 million. But for those two extraneous items our reserves would have been reduced not by £200 million, but by £460 million, to the uncomfortable if not dangerous level of a little over £500 million. It is a curious commentary upon our desire to develop the Commonwealth and Colonies that we have had to sell for £60 million one of our colonial enterprises in an effort to bolster our own economy.

For many years nervous fears about our gold and dollar position have bedevilled all our thinking and conditioned all our actions. At all costs we must maintain the level of those reserves, or risk another devaluation of the £. If we were again to devalue the £ we should most certainly risk the break-up of the sterling area and the end of any possibility of Commonwealth co-operation, because in devaluing the £ we should devalue those thousands of millions of pounds deposited by the Commonwealth and colonial countries, and reduce their purchasing value.

We are constantly looking over our shoulders at the spectre of devaluation and are inhibited from adopting a bold, courageous and reasonable foreign policy, for fear of unfavourable world reaction which might cause a run on sterling, which our present meagre resources would not permit us to sustain. We arc the victims of our own chronic poverty, and at the mercy of all who wish to take advantage of it.

Mr. Callaghan

Do not be so gloomy.

Mr. Pannell

I say that with a smile on my face, in deference to the hon. Member for Cardiff, South-East (Mr. Callaghan). I admit that we have come a long way since 1951.

Mr. Callaghan

Since 1945. We were bankrupt then.

Mr. Pannell

Until 1951 we were depending largely upon American largesse. Since that date we have been able to dispense with it and have been able to begin to pay our debts, although I agree that we have recently had to seek an accommodation in that respect. Presumably we shall resume our capital payments this year, and we will endeavour not to seek another waiver of the interest. To achieve that aim we shall have to do very much better this year than we did last, even to maintain our present rather precarious position.

I may be accused of pessimism, but optimism, unsubstantiated and unsupported by facts, will do no good. We must face the facts of the situation. If we are to embark upon any worthwhile scheme of Commonwealth development we must now be ready to enter the second stage of our recovery. Instead of a £300 million balance of payments surplus, we require a surplus of £500 million annually. Even if we achieve that it will take us ten years to cover our external debts. Obviously, a national effort will be needed, but it is one that is by no means beyond our powers. Last year, the gross national product was £18,000 million. A little more than 1 per cent. of that would give us the extra surplus that we seek.

Unless we do achieve this object, overseas development, including Commonwealth development, will inevitably lie with the United States of America. Of all the countries in the free world only the United States has vast reserves and an annually recurring surplus on her balance of payments—a surplus which, as in the case of ourselves, formerly, must find its outlet. If that money is to be invested outside the United States I would think it churlish and foolish of us to resent its investment in the Commonwealth and Colonies.

I was rather surprised to hear the right hon. Member for Easington (Mr. Shinwell) say that American investments meant American control. We have invested very large sums in independent territories, but there has never been any suggestion that by doing so we have retained or gained control. Indeed, we go further than that; we give Colonies their independence, relinquish all control and, having done so, endeavour to invest further sums there. Surely it is not reasonable to assert that Americans will be different from us and will invest money in our Colonial and Commonwealth territories with the object of getting control of them.

We certainly have a part to play. The present schemes that I have mentioned will do something, but apart from that we can offer these countries our technical assistance. There, I join with the hon. Member for Orkney and Shetland (Mr. Grimond) in suggesting that we should extend what has been done in Ghana by creating a Commonwealth overseas technical service which would be available to aid all countries within the Commonwealth and Empire who needed it. As the right hon. Member for Easington emphasised, we must also ensure that conditions in the countries for which we are responsible are favourable for investment; that the Governments concerned are reasonable ones which will have due regard to the rights of capital which is invested. That is where our duty lies at the moment.

Despite that, however, we must not give up hope of resuming once more our traditional rêle of a lending and investing nation. I have said before that this will require an effort on a national scale. How is it to be induced? Exhortations on the purely domestic plane have not been particularly successful. Is it likely that an appeal on more altruistic grounds will be more effective? Somehow or other we must make the people of this country Commonwealth-conscious. by education —as was mentioned by the hon. Member for Orkney and Shetland—and by all the other means within our power.

We must deflect the gaze of the country from purely domestic considerations and turn our thoughts to our responsibilities as the focal point of a great Commonwealth and Empire. That, in due course, will bring its own reward and should stimulate the country to make the effort. It will bring its reward not only in the moral satisfaction of knowing that the world has been make a better place, but by the assurance that this country will thus be restored to its rightful position as a beneficent and potent force in world affairs.

2.40 p.m.

Mr. A. Fenner Brockway (Eton and Slough)

This is the third occasion this year that we have discussed the subject of development in the Commonwealth and Colonial Territories. The debates have been remarkable for the degree of unanimity shown on both sides of the House. I think that the speech to which we have just listened from the hon. Member for Kirkdale (Mr. N. Pannell) is the only speech, except those from the Government Front Bench, which has taken the view that we are unable, in our present position, to go much further in colonial development.

I do not want to answer that speech in detail, but I would say this. The hon. Gentleman argued that the present balance of payments position prohibits greater investment from this country. I would remind him that the rubber of Malaya and the cocoa of Ghana contributed more to a restoration of the balance of payments situation than all the greater production in this country.

I would further say to him that if there is to be a solution of the balance of payments position, it must come through purchases by this country of goods which we now buy from the dollar areas. The Colonies can contribute to this country nearly everything we need in the way of foodstuffs and raw materials, and, in the long run, there can be no contribution to the solution of the balance of payments problem so great as the development of our Colonial Territories.

Whilst there has been unity in this House in demanding greater expenditure upon colonial development, I am not sure that there is real unity between the two sides of the House as to the purpose of that development, the source from which investment should come, the conditions under which that investment should take place and the final ownership of enterprises developed in Colonial Territories by such investment. The history of this country and the history of every imperial country is not happy in this respect.

The Motion moved by the hon. Member for Shrewsbury (Mr. Langford-Holt), which, if I may, I should like to congratulate him on introducing, refers to the natural resources of the Commonwealth. I would lay it down that those natural resources should be the property of the peoples in the Commonwealth and Colonial Territories and should be used for the welfare of those peoples. That has not been the story. In too many British Colonies, as in the colonies of other European Powers, the peoples have often been tricked and cheated out of their ownership of natural resources. We actually have today the rather pathetic sight in Swaziland of the chiefs building up a fund so that they can purchase the land and mineral rights out of which they were bamboozled by traders in past years.

If the natural resources of the Commonwealth and Colonial Territories are to be used primarily for the benefit of the peoples of those territories, then we have not only got to have greater investment in the territories, but much stricter rules governing the conditions of that investment. I do not deny that the investment which has taken place has resulted in a lifting of standards in those territories. It is one of the sad things to many of us that Africans in Nyasaland go to the Rhodesias because of the higher standard of life which is accompanying industrial development there, and Africans in the Rhodesias likewise go to the Union of South Africa and Johannesburg.

However, if there has been a lifting of standards of life owing to such industrial development, there has also been very great exploitation of the African peoples. I have in my hand the "Special Study on Social Conditions in Non-Self-Governing Territories," published by the United Nations in December, 1953. I should very much like to quote later figures, but when I have put Questions in the House in an attempt to get them, the Secretary of State for the Colonies has replied that they were not available.

This Report shows that if one takes Colonial Territories as a whole the proportion of exploitation of the value of production by investment is between 3 and 4 per cent. That figure may seem low, but in the estimate of the production of the territory subsistence economy is included. In most of the Colonial Territories, a great part of the production is subsistence and agricultural which does not come into the cash market at all. If the percentage is between 3 and 4 per cent., representing dividends, profits and interest which go to external financiers, the accurate figure paid to them on their investments would probably be nearer 10 or 12 per cent.

The Report, however, show s something much more marked than that. It shows that in the case of investment of mineral development in the Colonial Territories, the degree of exploitation is very much higher. A table in the Report gives the net payments abroad as a percentage of the geographical product, that is to say. the amount which is returned to financiers on their investments compared with the value of the total production.

These figures show the amazing fact that 30.6 per cont. of the value of the total products of Northern Rhodesia goes in interest, dividend and profit each year to financiers in Europe and in America. My hon. Friend the Member for Wednesbury (Mr. Stonehouse) described the wage levels of African workers in the copper fields. When, on top of those disgraceful facts, is added this proportion of one-third of the total value of production of the Colony which passes to external financiers, one begins to understand the degree of exploitation which is taking place in the Colonial Territories.

Therefore, I say that whilst there will be unity on both sides of the House that greater investment in these territories is necessary, there is likely to be a difference between the two sides when we insist that conditions must be attached to that investment which will prevent the exploitation which I have described.

If investment is to take place, it can be provided from two sources. It can be private investment or it can be public investment. One must recognise that while most capital is privately owned. most of the investment must come from private sources. I hope that these will be only temporary circumstances, but while capital is mostly privately owned it is inevitable that Ghana and Nigeria. East and Central Africa, and other Colonial Territories, will be dependent to a large extent upon private capital.

I suggest that certain conditions should be laid down for the investment of that private capital to prevent the exploitation of the African and other colonial peoples. In the first place, I would suggest that the concession should be for a reasonably short term so that at the end of it the people of the territory would be able, if they so desired, to take over the economic enterprise which has been established in that way. I admit that if the term is made too short, one would not be likely to get the investment of private capital.

I would, however, draw the attention of the House to what I regard as the greatest and most valuable economic enterprise that has taken place in the Continent of Africa—the Gezira Scheme, in the Sudan, where the concession to the two British companies was limited to only thirty years and at the end of that time every halfpenny in loan and in investment had to be repaid. I suggest that there should be conditions for concessions of a short-term character so that the peoples of the territories in which these enterprises take place shall be able to take over those enterprises, if they so desire, after a reasonable period.

The second condition which we ought to lay down for the investment of private capital is that there should be minimum wages of a living standard, not for a single worker, but for the whole family. In Kenya, one of the tragedies has been that wages have been decided on the level of a single man and the family often had to scratch what existence it could in the land around its huts on the Reserve. In Kenya, that mistake is now being recognised. I would lay it down as a condition for the investment of private capital that in all Colonial Territories there should be a minimum living wage for the African population which should be on a living standard for the whole family and that that minimum wage should progressively rise.

Thirdly, I would stipulate that if there is to be the investment of private capital in Colonial Territories, the African and other indigenous workers must be trained for skilled work and prepared for ultimate management. In the case of Uganda, in the copper mines which have been discovered in the Mountain of the Moon, conditions of that kind have been laid down. What has been done in Uganda can be done in other areas as well.

I believe that another condition for the investment of private capital should be the recognition and encouragement of trade unions and that that trade union organisation should apply to the African and indigenous workers as well as to any European workers who are so employed.

My final condition would be that there must be housing plans for the African and indigenous workers which will prevent the growth of the shanty towns, insanitary and unhealthy, which have grown like mushrooms round so many of the industrial enterprises which have been established in the Colonial Territories. I welcome the fact that in Central Africa there are certain firms which have almost model housing schemes, but the development of such housing schemes ought to be an absolute condition of the investment of private capital in the Colonial Territories.

If I seem to be over-emphasising these points, it is because no one who has any knowledge of Africa can be less than fearful at times about what may result from the industrial revolution which is now taking place. Our own Industrial Revolution in this country brought its horrors. A similar industrial revolution is now taking place in the Continent of Africa.

One thinks of the High Commission Territories, of Bechuanaland, Swaziland and Basutoland, where gold and silver, copper, iron ore, uranium and thorium have been discovered and where, if that wealth were utilised primarily and with the definite purpose of lifting the standards of living of the people in those areas, they could be revolutionised within a quarter of a century.

But what may happen with concessions given to private capital, with the great profits which can be made out of the exploitation of minerals in those territories? We may have there the same shanty towns which have in the past disgraced the industries of Johannesburg. I beg the Government not merely to encourage the investment of private capital in those territories, but to ensure that it is introduced under conditions which will not make permanent the appalling circumstances which so often surround industrial areas in Colonial Territories.

I want to make a further suggestion. One of the difficulties in many Colonial Territories is that, because of the very high return on the investment of capital in particular Colonies, they dare not tax invested capital heavily. Kenya is a case in point, and Jamaica is another. There, we have actually had Governments begging us not to impose taxation on investments as, otherwise, the investment of private capital would not be encouraged. In Kenya, they dare not tax invested capital heavily because, if they do so, that capital will be invested in Northern Rhodesia, where the returns are high, as I have described.

I suggest to the Colonial Office and to the Commonwealth Relations Office that there should be a code extending over Commonwealth and Colonial Territories so that there would be no longer be the competition of one country wanting investment yet not daring to tax it because of the high returns offered in another. There should be a code covering all the Colonial Territories and, if possible, by agreement, the Commonwealth Territories as well, by which the profit, interest and dividend made by capital investment in those countries might be kept at a certain standard. So much for the investment of private capital.

Turning to public investment, I would urge upon the Government that they should very greatly extend public investment through the Colonial Development Corporation and through the colonial development and welfare funds. I hope that they will listen to the appeal made in the Report of C.D.C. that its funds should be made available to the newly-independent countries. I hope that the moment will soon come when the British Government will change their attitude towards a contribution to such United Nations funds as S.U.N.F.E.D., because by such public investment we may be able to escape the effects of the exploitation by private capital.

There may be some difference between the two sides of the House as to the source from which public investment should come. I suggest that if we are to have the funds to develop the Colonial Territories, we can only find them by a much more drastic reduction in expenditure upon defence and armaments than has at present been contemplated. One hears a great deal now about the cuts to be made in defence, but, so far, the figures do not justify these expectations. In 1956, the defence figure was £1,600 million, and for 1957 it is £1,483 million. The reduction is comparatively small. It is very likely that, as we pass to concentration on nuclear weapons, the actual reduction in armament expenditure will be disappointing.

I urge upon the Government, as I should like to urge upon all Governments, that if there is to be a world war against want, if there is to be a lifting of the standards of life of the peoples, if we are to destroy disease and illiteracy and lift mankind, then, at all costs, we must find an agreement to cut our expenditure upon arms and begin to spend in a constructive way instead. If our Government would begin to try to turn the mind of man in that direction, they might be captured by a constructive and positive idea which would hold their minds as much as fear and destruction grip them today.

The hon. Member for Essex, South-East (Mr. Braine), who referred to starry-eyed idealists, has now left the Chamber. I would only say to him that the material realists, if they maintain the policies to which they are at present committed, may prove to be the real destroyers of civilisation and human progress.

3.5 p.m.

Mr. James Callaghan (Cardiff, South-East)

I should like to thank my hon. Friend the Member for Eton and Slough (Mr. Brockway) for his eloquent speech, which I found so much in tune with a great deal of the sentiments that I would like to utter. It was a reminder to all of us that industrialisation can be bought at too high a price, and that the consequences upon the living conditions and on the breaking up of the tribal life of the backward and underdeveloped peoples of the world may be so great as to make one really wonder whether unrestricted development of the type of which we sometimes talk and think is really worth while in these areas. If my hon. Friend's speech has done nothing more—and I think it has—it has brought us back to a realisation of our great interest in the underdeveloped members of the Commonwealth.

But we are discussing today not only Africa and its territories, but also those developed areas of the Commonwealth like Australia and New Zealand, which can, at any rate politically, look after themselves. I have enjoyed all the debate, even though I thought I heard many echoes from the debate of four or five months ago. Even then, those echoes were still worth listening to.

Today, we have a second chance—and I put this point to the Economic Secretary to the Treasury—of hearing in a little more detail what is the Government's attitude on a number of these proposals. Speaking for myself and, I know, for a great many of my hon. Friends, I must say that the reply we had last time from the then Under-Secretary of State for Commonwealth Relations, who has since been translated to the Scottish Office, was singularly unimaginative, and I think that it is, in part, the dissatisfaction which many hon. Members felt with that debate that has prompted so many speeches to be made again today.

I should like to congratulate the hon. Member for Shrewsbury (Mr. Langford-Holt) on bringing up this important subject again. I agree with him very much that the basic problem here, as far as investment is concerned, is how this country is to secure sufficient capital savings to enable it to fertilise and water the underdeveloped territories of the Commonwealth.

This is the real problem, and I must say that, apart from the tax remissions that have recently been announced and which appear in the Finance Bill, the attitude of the Government seems to be broadly limited to restricting the Colonies and other parts of the Commonwealth from spending their sterling assets too quickly, and running them down. It is that rather gloomy approach that I contrast with the expansionist and buoyant approach of the hon. Member for Harrow, West (Sir A. Braithwaite), and if I had to choose between him and the hon. Member for Kirkdale (Mr. N. Pannell), I know where my vote would go.

We must approach this problem not in the spirit that we are down and out and that anybody can take advantage of us, because I never did believe that because someone thinks that we fought an excellent battle in 1940 we ought to be looked after now. I repudiate that approach. We have 50 million people in these islands, highly skilled and with very great civic virtues, and I deny the proposition that we cannot stand on our own feet and build our own future. It is in that spirit that I want to see the Treasury and the Commonwealth Relations Office approach this problem.

May I say a word about the Commonwealth Relations Office and its attitude towards other members of the Commonwealth? It is, I think, still obsessed by thoughts of the Statute of Westminster and the fact that twenty-six years ago Australia, New Zealand, South Africa and Canada wanted to break away from the Mother Country in order to live their own lives. That was no doubt true in 1931, when we passed the Statute of Westminster. I am sure that as all children grow up they wish to break away and lead their own lives, but when I talk to statesmen who come here from the Commonwealth I wonder whether they have not explored the limits of freedom and have begun to see that one cannot live entirely unto oneself in the modern world.

The Commonwealth Relations Office is falling a little behind the pace of development, in the view of many other people who are outside these islands. At any rate, I agree with those who say, "Let us really put this to the test with the Commonwealth countries; are they ready to come along with us or are they not?" This cannot be done on the basis of civil servants in the Commonwealth Relations Office talking to civil servants in the Commonwealth. As the hon. Member the Member for Harrow, West (Sir A. Braithwaite) said, this is really a matter for a great debate at the next Prime Ministers' conference.

I would say that this should become the major issue for discussion at this forthcoming conference in June or July: what is to be the pattern of development in the Commonwealth? How are we to secure the capital and the savings that are necessary to make the investment that will be needed to lift all our standards of life and make us more independent than we are today of some of the extraneous resources that some of us do not much care about?

I put this to the Government and to some hon. Members opposite. Is it possible to build up the Commonwealth in the way that we have been talking today and, at the same time, to follow a policy of liberalisation in trade both in Europe and outside of Europe, throughout the rest of the world, and particularly is it possible for us to enter into the Free Trade Area without many more reservations than are contained in the White Paper that was issued since we had our last debate in February, 1957?

It seems to me that the Government were caught napping about the Free Trade Area in its relationship to colonial products. I am sure the Government must know that the French are always ready to put across "swift ones." If I have one abiding recollection of my experience at Strasbourg, it is that the French could out-man™uvre us any day of the week. They are past masters of the art. The Government ought to be ready for that sort of thing, and instead of shedding tears about it they should be aware that it is likely to happen, anyway.

As usual, the French, at the last moment, introduced a proposition relating to the Messina Convention to the effect that the products of the French colonial territories and of the other Messina countries should be included in the Free Trade Area. So far as I know, our Government had not even given any thought to the possibility of that happening before they had declared themselves in favour of the European Free Trade Area.

So far from talking this afternoon about whether we are going forward with great schemes of Commonwealth expansion in trade, we ought to be considering what is to be our attitude to the Free Trade Area in the light of this last minute development on the part of France and the other Messina territories. I hope that we shall have some answers from the Economic Secretary to the Treasury. I speak as one who has a great affection for France, but I know that France looks after her economic interests, and we ought to make sure that we look after ours. I do not think the Treasury has thought this business out yet.

I want to put some questions to the Economic Secretary to the Treasury on the Free Trade Area, and I should like a clear indication of the Government's mind on the problem. I am glad that the Economic Secretary is to speak, because he is capable of answering these points. Let us, first, consider the results of bringing in the French Colonies. If the Free Trade Area agreement is entered into, will it mean that we shall continue to grant preferential concessions to Commonwealth produce? Because if it does not mean that, if we are excluded from doing so, why should we imagine that the Commonwealth and Colonies will be willing to continue to grant preferential concessions to British exports? Either it must be one or the other. I say to the Economic Secretary that this seems to me to be the most important question to be answered and on which we have as yet had no guidance about the views of the Government.

On the question of the liberalisation of trade, I ask the Economic Secretary this. I think it historically true, if we review the history of the last ten years, that, however desirable liberalisation may be in theory, a dose of liberalisation of trade, at any rate in the short run, is always followed by a balance of payments crisis; the balance of payments crisis gives rise to retrenchment; retrenchment gives rise to a credit squeeze; the credit squeeze seems to give rise to higher rates of interest, and, in the long run, to less investment in the Colonies.

This sequence of events may not be a causation, it may just happen every time. I ask the Economic Secretary: suppose that the Free Trade Area agreement comes into force and we go through this miserable sequence—obviously, if the Free Trade Area means anything at all it will mean more imports from the Continent of Europe into this country, we shall not have more exports without more imports—and the sequence is a balance of payments, I will not say "crisis" a balance of payments deficiency—shall we be able to reimpose quantitative controls?

As I understand this memorandum on quantitative import restrictions, according to paragraph 19—I am referring to Cmd. 72—we can, in certain circumstances. The question which follows is that if we enter into this agreement, can we ensure that if we have to reimpose quantitative restrictions we can treat the Commonwealth at least as favourably as the Free Trade Area? It seems to me that the whole purpose of this Free Trade Area is to ensure that it would be the most favourable trading unit and that territories which are not included in it will in some way or other be discriminated against. If we are to have to impose any controls on imports at all, are we bound on entering this Free Trade Area to exclude or make it more difficult for our own Commonwealth to send its imports to this territory? That is a fair question which I think the Government have to answer.

I ask this third question. We understand, as a result of the last minute intervention by the French, that the Common Market colonies produce will be imported freely into the Common Market itself. The question follows, therefore: what is to be the position of the Commonwealth or colonial products? Are they to be allowed to enter freely into the Common Market area, or are they to be discriminated against? If they are to be discriminated against, that is something else to be smoothed out before we can consider signing an agreement of this sort.

I do not wish to speak for too long, but I should like to ask two more questions, and the first is this. One of the things which I think has become more and more clear to us since the war has been the need for stability among primary producers. Part of this element of stability has been the necessity to enter into market arrangements, longterm agreements, bulk purchase contracts, and the rest of it. I am asking everyone to put aside his ideological considerations. Let us face the fact that, whether we like it or not, there are at least some territories ready to enter into long-term contracts and agreement, and some territories which certainly would not be averse to market arrangements that would secure bulk purchase.

Certainly, we on this side are ideologically more committed to it than hon. Members on that side, but I ask the Economic Secretary this: will he undertake not to bind a Socialist Government in such a way that we cannot enter into bulk purchase agreements and long-term contracts which could be and, in certain circumstances, might be desired by some members of the Commonwealth as being in their interests as well as in our interests? I believe that to be an important question which has to be answered in relation to this Free Trade Area.

My last question is this, and it is in relation to the expanded schemes of investment which we have debated today. Are we to be free under these Free Trade Area proposals to work out reciprocal trade agreements on the basis of British investment in the sterling area following our own investment?

I say this to the right hon. Gentleman, and I say it also to the hon. Member for Shrewsbury, that unless and until we get clear and satisfactory answers to these questions, the passage of the hon. Gentleman's Motion today will be a mockery. It really will. We cannot foresee any substantial expansion in Commonwealth trade unless we have at least these guarantees and conditions worked out and reconciled even with the Free Trade Area.

My own approach would be this. I should like to see the Free Trade Area and Common Market come into being. I would approach the problem not with the view of wrecking them, but with a view to trying to reconcile our basic needs and desires as substantially a debtor country.

Major H. Legge-Bourke (Isle of Ely)

Would the hon. Gentleman say whether, in this request he is making of the Government, he also visualises completely revising our attitude to G.A.T.T. and Ottawa? That is what is involved.

Mr. Callaghan

do not this afternoon. I think that we have asked the Economic Secretary to the Treasury sufficient questions today at least to carry us through this debate. Perhaps we could come hack to G.A.T.T. on another occasion. I was trying on this occasion to relate the Free Trade Area with the Commonwealth. because it is to me of great importance, as it also seemed to be to hon. Gentlemen opposite.

I ask the Government what is their attitude towards Commonwealth development. Are they really in favour of it? Do they really want to raise this splendid conception to the highest level and to secure co-operation between the Commonwealth as a whole, and the British people to march forward together? Or have they become Little Englanders who, while paying lip service to the doctrine of the Commonwealth, are ready to walk into a Free Trade Area and say, "Well, the Commonwealth will cost us a lot of money; we are very heavily in debt; we cannot find the capital to expand; so we have to realise the realities of the situation and give up any thoughts and hopes for the future"?

That would be entirely wrong, and it should not be our approach today. I thought the hon. Member for Kirkdale was a bit gloomy. He may have thought that he was being realistic, but the only purpose of facing facts is to overcome them and to try to adjust them to the situation one wants to see. That is surely the art of politics. I believe that it is still politically possible—I have yet to be convinced by the Government that it is politically impossible—to bring the Commonwealth along in this direction.

I want the Government, at the forthcoming conference of the Commonwealth Prime Ministers, to make a supreme effort to try to enlarge our conception and vision of what can be done, and at the highest level where its consideration can be of tremendous importance to the future of our people and of those who are still to come after us.

I follow the approach of my hon. Friend the Member for Eton and Slough towards our ideal of trying to raise the standard of life, raising the general standard of living in the underdeveloped territories of the world. It is a noble conception, one we all ought to have at heart. The circumstances have gone, however, in which that was our only conception. It may be part of our duty, but the plain truth—and this is why we really do have to find out how far the Commonwealth is ready to come along with us—is that we need the Commonwealth as much as the Commonwealth needs us. The day has gone by when we could just invest large sums of money in raising the standard of life of the backward peoples out of a bountiful surplus that we might have. This is no longer our position. With us. the development of the Commonwealth is basically a matter of life or death.

I believe that we are approaching a crisis in our relationships with the Commonwealth economically. Either we are to tax ourselves, or in some other way raise the level of our savings so that investment on a considerable scale can take place in the Commonwealth, or, alternatively, if we do not do that, the Commonwealth as we understand it as a concept is politically and economically at an end, and we shall be forced either to turn inwards upon Europe or to have substantial emigration from this country.

I do not believe that it is possible to escape from one or other of those conclusions. My conclusion is that in 1957, with the opportunities that lie ahead of us, we should take the decisions and achieve the resolution that will secure capital and the adherence of other Commonwealth countries to the concept that we have in mind and lay the foundation for the material and economic prosperity of thousands of people throughout our own territories.

3.21 p.m.

The Economic Secretary to the Treasury (Mr. Nigel Birch)

The hon. Member for Cardiff, South-East (Mr. Callaghan) has taken advantage of this occasion to make a speech on the Free Trade Area which I feel that he has been wanting to make very much during the last few weeks.

Mr. Ede (South Shields)

A very good speech.

Mr. Birch

Well, it had its points.

Perhaps I might make one or two comments on the matters outside the general theme of the debate which the hon. Member for Cardiff, South-East mentioned. The first is the effect which the Free Trade Area would have on our balance of payments. The view of Her Majesty's Government is that it would strengthen our balance of payments rather than the reverse. Then there was the question whether we could maintain our preferences for the Commonwealth. It is because of these preferences that we have said that we will not enter the Free Trade Area unless agriculture is excluded from its scope.

The hon. Member raised a number of other points of great interest about the entry of products into the Free Trade Area, and so on, but these points are at this very moment under discussion with the Commonwealth. Therefore, I do not want to anticipate the results of the consultations, nor do I think it appropriate to do so in this debate. The main point that the hon. Member made which had reference to this debate was to ask how we were to secure the extra savings that we need. I waited for the answer, but I am afraid that I did not get it.

Mr. Callaghan

Is the right hon. Gentleman really not going to say anything more about the Free Trade Area? Surely even the Treasury knows that at least 15 per cent. to 20 per cent. of colonial products go to Continental Europe.

Mr. Birch

Of course the Treasury knows what goes to Continental Europe, but this is not a debate on the Free Trade Area.

Mr. Callaghan

A Treasury answer.

Mr. Birch

We have had a very interesting debate and one in which there has been universal good temper and a great deal of agreement on both sides of the House. My hon. Friend the Member for Essex, South-East (Mr. Braine) made a few acid remarks about the Treasury, but that is something to which we are well accustomed. On the whole, there has been very general agreement.

This is a subject, of course, which commands the strongest emotions and the loyalties of everybody in the House. There is in the Commonwealth a vast field for investment and for ensuring greater prosperity and social good. We are all agreed on that. It is also universally agreed in the House, and by Ministers for that matter, that everything that we can do should be done, and that obviously the ideal amount, other things being equal, is not being invested.

We are urged to invest far more in the Commonwealth. In just the same way, during the Budget debate we were urged from both sides of the House, and sometimes by exactly the same people, to invest far more money at home. We were told that we needed more roads, more tankers, more shipbuilding capacity, more atomic power stations, and a hundred other things. Of course, both these demands for investment must be met from the same pair of pockets. They depend upon the same volume of savings.

In their eloquent speeches both my hon. Friend the Member for Shrewsbury (Mr. Langford-Holt) and my hon. Friend the Member for Harrow, West (Sir A. Braithwaite) mentioned £300 million as the amount which we ought to be investing now annually in the Commonwealth. My hon. Friend the Member for Shrewsbury seemed to indicate that we had entered into an undertaking to invest that amount of money. So far as I have been able to find out, no Government statement has ever been made, nor was it made at the time of the 1952 Commonwealth Conference, that £300 million was the undertaking: we only undertook that we would invest what we could. It would be extraordinarily difficult to say exactly what sum we ought to invest. It would take the wisdom of Solomon to decide that, because the gap between what it is desirable to invest and what it is possible to invest is so very large. Therefore. I do not think that the figure of £300 million has any great validity.

I will look briefly at what we are doing and the agencies by which those tasks are accomplished. Having done that, I will consider whether we need any new agencies, and whether there are any means available by which we could increase the present volume of investment in the Commonwealth. That will deal with some of the points raised in the debate.

Investment in the Commonwealth, both public and private, is running at present at a rate of about £150 million a year, and that figure excludes Canada. The figure of £150 million for the sterling Commonwealth comes through Commonwealth and colonial Government loans, through private investment and, almost the most important, through the ploughing back of profits by United Kingdom companies operating in the Commonwealth. I endorse what several hon. Members have said about the relevance of that to the legislation in the Finance Bill for overseas trading corporations. I believe myself that in the long run—not quickly of course—that legislation will do a great deal to help to build our companies operating overseas. That is something clear and practical which my right hon. Friend the Chancellor of the Exchequer has been able to do.

Mr. Grimond

May I ask a question of fact? The right hon. Gentleman has referred to the profits ploughed back, including those of United Kingdom companies trading in the Commonwealth. Does that figure include profits ploughed back by companies registered outside this country and in the Commonwealth, but which are largely owned here and in America and Canada?

Mr. Birch

The figure which I was giving dealt with companies where there was United Kingdom control. If the hon. Gentleman asks whether it includes the reserves ploughed back by, say, a Canadian company in Canada or an Australian company in Australia, the answer is, "Obviously not."

Mr. Grimond

Yes, but, there are companies owned in this country but registered in Canada and South Africa.

Mr. Birch

I should like notice of that question.

Now I wish next to say a few words about Canada. It is only since 1953 that we started to invest in Canada again. Owing to the dollar difficulties after the war all investment in Canada was stopped. We are now investing in Canada at the rate of approximately 100 million dollars a year, and in the long run I believe that we shall derive great benefits from that, both for ourselves and for the Canadians.

The figure of £150 million also includes the amount invested by the Commonwealth Development Finance Company. This is a relatively new finance company; but it has on its board a number of prominent industrialists, and it has been most helpful not only in advising the Government, but in bringing in outside capital to good purpose in the Commonwealth. It also includes money spent under the Colonial Development and Welfare Acts, and money spent by the Colonial Development Corporation. I do not want to deal at length with the Corporation because I understand that there is to be a colonial development debate on Monday, when that matter might be dealt with.

Someone used that very popular word "stagnation" on the subject of the Colonial Development Corporation, but the fact is that the Corporation still has money which is unexpended. The whole question of finance for the Colonial Development Corporation and the whole question of finance for the emergent independent countries are, as the House has been told, under consideration and decisions will be given shortly—certainly before the Summer Recess; so I will not deal any further with that particular aspect of the problem.

Mr. Callaghan

Has the right hon. Gentleman noticed that although the Colonial Development Corporation has unexpended money, it says, in paragraph 14 of its Report, that these unexpended sums are already committed and that the present limit is thus in sight and that the Corporation has already spent up to the limit?

Mr. Birch

One can be in sight of a hole without falling in it.

Mr. Callaghan

Answer the question.

Mr. Birch

The answer is simply that there is no stagnation now for want of money, and that decisions will be given as soon as it is needed.

Mr. Callaghan

I do not think that the right hon. Gentleman has looked at the Report. If he has, the Report is wrong, because it quite clearly says that the Corporation is refusing new and pressing business.

Mr. Birch

As I have said, questions of the Corporation's finance, how much money it wants, and when it will get it. are now under consideration, and it will get the answer in due course.

We have got slightly off the subject of the debate. The Government have also promised the release of £60 million from our subscription to the capital stock of the International Bank over the six years from 1953.

A number of hon. Gentlemen mentioned technical assistance, and there is a reference to it in the Motion. I think I am right in saying that the Colombo Plan is one entirely for technical assistance and we have hypothecated £7 million over the next seven years. The main channels through which the United Kingdom provides assistance to less developed areas of the world are the colonial development and welfare schemes, the Colombo Plan, which I have just mentioned, and, of course, through Her Majesty's Oversea Civil Service.

Colonial development and welfare schemes have been made to help finance the building of colleges of art, science and technology in the Colonies, and slightly more than £3 million has been made available for that in the period 1946–56: that is for higher technical education. In addition, between 1946–56 we have provided, through the colonial development and welfare funds, £6:6 million for other forms of technical and vocational training. At the end of 1955 there were 560 colonial Government officials and 234 students studying in the United Kingdom under colonial development and welfare schemes. That is only a small proportion, as the House knows, of the total number of colonial students who are over here. In all, there are 12,622 colonial students studying in the United Kingdom in 1956–57. A large proportion of those students are studying technical subjects. That is a matter which several hon. Members raised, and I should like to answer them.

Included in those figures are 1,295 students who are taking engineering. That is a higher figure than for any other subject except nursing. Less than 10 per cent. are studying law. We have been rather given the impression by some hon. Members that everybody was going to become a lawyer. I do not think that there is a member of the lawyer's union in the House or he might have spoken up for the lawyers. At any rate, less than 10 per cent. are taking law.

Mr. Langford-Holt

The figures which I gave were those for 1955. They are the Central Office of Information figures. If the figures which my right hon. Friend is giving show an improvement, I am pleased.

Mr. Birch

I was giving the latest figures, which I know are not available to my hon. Friend, and I was pointing out that this is not entirely a lawyers' holiday.

Under the Colombo Plan we give Asian students training in the United Kingdom, pay their fares, and maintain them while in this country. There are 400 trainees in the United Kingdom under this scheme. We are providing experts in technical matters for temporary service in Asian countries. There are about 50 such experts in Asia at present. We are also making gifts to Asian countries of equipment for training purposes and for research.

We have entered into a mutual technical assistance scheme, as the House knows, with the Government of Ghana, and it is contemplated that under that scheme officers nominated by the Government of Ghana—many will be younger public servants—will come to the United Kingdom at our expense for training in practical and technical subjects. We are also ready to supply the Government of Ghana with experts to fill specialised technical or professional posts of a temporary or advisory nature, and the cost of such experts will in that case be shared equally between the two Governments.

It is perfectly true, as several hon. Members pointed out, that we have not enough technical staff either in this country or in the Commonwealth. It is for the very reason that such people are in great demand that during the last ten years Her Majesty's Government have made every effort to push on with all possible speed our technical education schemes at home; and those schemes are still being pushed steadily ahead.

The point has been raised several times that we cannot force technical experts to go overseas. Unless they get decent treatment there is no reason why they should go. Similarly, we cannot force people to invest capital in countries where they do not think they will get a square deal. But I do not think that our record is at all bad in this matter. In a recent O.E.E.C. study of the proportions of their national incomes which countries were devoting to underdeveloped countries, the conclusion was that the United Kingdom was really doing better than any other country in the world in proportion to our means. We are still, in spite of American money—which is certainly and rightly going into the Commonwealth—overwhelmingly the most important provider of external capital for the Commonwealth, and today over 70 per cent. of the external capital provided for the Commonwealth comes from this country.

There is one other body which I will mention because it has been referred to by several hon. Members. That is the Commonwealth Economic Committee. We attach a good deal of importance to that Committee. It is composed of the High Commissioners of the Dominions in this country and representatives of the. Colonial Office and the Commonwealth Relations Office. The Committee is engaged in carrying out a study of all raw materials existing in the Commonwealth. and those studies are, I understand, approaching completion.

Although it may not be in exact analogy with the Paley Report, I should have thought that that study was something not altogether dissimilar, and when that report is available it will be circulated not only in this country but in all the countries of the Commonwealth. As hon. Members pointed out, certain conclusions emerged from the Paley Report and action was taken on them. It may be that when this report to which I have referred comes along certain conclusions will equally emerge upon which action can be taken.

When we are talking about machinery we must not forget the two Ministries—the Colonial Office and the Commonwealth Relations Office—both of which, as one of their tasks, specifically engage in studying the economies and resources of all the countries in the Commonwealth.

The question, therefore, is whether we need any more agencies than we now have and whether there would be any advantage in setting up any new bodies.

Several hon. Members have raised that question, and I want to deal with it for a few moments. There has been the suggestion of a development agency, and some hon. Members have talked of correlating and integrating all the development plant of the Commonwealth. In the previous debate we had upon the subject my noble Friend who was then Under-Secretary of State for Commonwealth Relations, said that he would consult members of the Commonwealth to ascertain their reactions to the establishment of such a body. The consultations are not completed but I should be deceiving the House if I let it be supposed that the answers so far received have been particularly favourable.

We must remember that independent Commonwealth countries are composed of highly independent-minded people. The right hon. Member for Easington (Mr. Shinwell) said some quite tough and rather old-fashioned imperialist things about planning the Australian economy. Too much intervention from this country would not he welcomed by these independent countries. Plans for the economic development of the Colonies are invariably drawn up by their own Governments, and are made in their own interests. Although we can help, and we do help, the idea that it is within our power to integrate all those plans is rather dangerous. It is quite fun being the integrator, but not such fun being integrated—as many people discovered when they had a planning. Government in power.

Mr. Braine

I hope that my right hon. Friend will not misrepresent the views that I put to the House. In 1951, at the Finance Ministers' Conference, it was agreed that certain economic policies should be followed which would strengthen the Commonwealth as a whole. In the last few months calls have been made by Commonwealth statesmen—I cited Sir Roy Welensky—for a central organisation, meeting, body, or some such thing, to decide upon priorities. That would suggest that something has happened in regard to priorities. It is in that sense that some of us are arguing that some machinery should exist whereby priorities in relation to major economic developments in the Commonwealth should be decided.

Mr. Birch

I quite see my hon. Friend's point, and there is some force in it. I was arguing against the utility of setting up a body to decide the matter. Government machinery exists to deal with these matters, and I do not think that there is any need to have a new agency to do this work.

Mr. Callaghan

This is an important point. Quite apart from developing new machinery, is there any discussion about the proposal to co-ordinate the monetary policies of the Commonwealth along the lines suggested by the hon. Member for Wavertree (Mr. Tilney) in order that we can stand together, independent, instead of becoming, individually, economic satellites of someone else?

Mr. Birch

As the hon. Member well knows, there is the closest day-to-day consultation between this country and the members of the Commonwealth. When the hon. Member was a member of the Government no doubt he read the telegrams which went out every day. There are periodical consultations between the Finance Ministers of the Commonwealth and ourselves, and constant consultations between the various central banks involved. I really do not think it would be possible to devise any means by which there could be closer contact in financial matters than, in fact, there is at present.

That brings me to the last suggestion made by several hon. Gentlemen that there should be a Commonwealth bank. My hon. Friend the Member for Harrow, West suggested that in setting up such a Commonwealth bank we should get subscriptions from the Commonwealth. He mentioned, I think, the sum of £30 million with which to set it up. I know that it is irritating to say it again, but it is, of course, the fact that this country is the only net capital exporter in the Commonwealth. As my right hon. Friend the Prime Minister pointed out, and as my hon. Friend the Member for Kirkdale (Mr. N. Pannell) pointed out today, one cannot invest a deficit. The only way in which the Commonwealth countries could subscribe to the bank would be by cutting back their own development programmes, which would not be a very satisfactory thing to do.

I can assure my hon. Friends that this suggestion, which was first put up, I think, last November, is still under consideration, and we are consulting the Commonwealth about it. I think the 64,000-dollar question, as it were, was put to me by my hon. Friend the Member for Essex. South-East. Quite clearly, such a bank would only be of benefit if it did two things—if it had some effect on stimulating savings in this country and if it proved a more convenient channel than any other now available for getting investment, and that really means investment in dollars by the United States of America.

On the question of savings, I am not really prepared to pronounce. Would somebody not buy a television set because there was a new Commonwealth bank? I do not really know. Such a project might have a certain appeal, and I think it is worth thinking about. On the question of whether it would be useful in canalising the dollar flow to the Commonwealth, that, again, is a subject which is under examination. So far, the United States has always been rather unwilling to use machinery other than United Nations machinery or machinery which it has itself set up. But it is a suggestion well worth examining whether we could reap any kind of advantage from that.

Mr. Braine

Before my hon. Friend leaves that topic, may I ask whether he would also consider the possibility of European money flowing to such an organisation? If Germany is willing to put money into a European development fund, is it unlikely that she, the Swiss or the Swedes would be unwilling to put money into a Commonwealth bank?

Mr. Birch

I quite agree. It is a good point, and one which we are also considering.

If the bank did not stimulate savings or did not make it easier to raise money from outside countries which are in surplus then, I think, it would have no purpose. Infinitely, the most important factors in all this business are the savings in this country and our own balance of payments.

Some of the speeches today have rather suggested that if the balance in one's bank is not big enough, all one has to do is to have a bigger cheque book. That is a device which has often been tried and which has not worked very well. What we need is, as I say, a strong balance of payments position and sufficient savings at home. It is precisely to that end that my right hon. Friend the Chancellor is bending his efforts, in the Budget, to stimulate savings and to strengthen our balance of payments. I will, of course, report to both my right hon. Friends, the Secretary of State for Commonwealth Relations and the Secretary of State for the Colonies the suggestions, many of them very valuable ones, which have been made.

I should like to thank my hon. Friend the Member for Shrewsbury, the proposer of the Motion, and my hon. Friend the Member for Harrow, West, who seconded it, for making this debate possible, and for their admirable speeches. On behalf of the Government, I am perfectly willing to accept the Motion. There is only one slight rider that I would add. We all agree that investment in the Commonwealth should be greater. What I am saying is that it is at the moment as high as we can make it, given the present financial position. Our object is to improve that financial position, and when we have done so greater investment will result.

Mr. Langford-Holt

The Motion states: presses Her Majesty's Government to consider as a matter of urgency, in consultation with other members of the Commonwealth … I think it was unanimous, on all sides of the House, that this was a subject which not only should be considered at the forthcoming meeting of Prime Ministers, but should be considered at the head of the agenda. I realise that my right hon. Friend cannot give a straight answer now, but will he see that that is put forward to the Prime Minister as being the unanimous view of the House?

Mr. Birch

I will certainly see that the Prime Minister is informed of that view.

Question put and agreed to.


That this House, believing that the development of the natural resources required for the economic and social progress of the Commonwealth and Empire depends largely on the provision of adequate capital and technical skill, and not being satisfied that the needs of the Commonwealth and Empire, in these respects are being met adequately at present, presses Her Majesty's Government to consider as a matter of urgency, in consultation with other members of the Commonwealth, how best these aims can be achieved.

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