COLONIAL LOANS BILL

HC Deb 02 April 1962 vol 657 cc32-99

Order for Second Reading read.

3.31 p.m.

The Secretary of State for the Colonies (Mr. Reginald Maudling)

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

This is a short and a fairly simple Bill, and one which, I am confident, will commend itself to the House as a whole. I should like briefly to explain its purposes.

The International Bank for Reconstruction and Development, which, since its foundation, has made such an immense contribution to the development of the countries of Africa, Asia and South America, lends money primarily to its members. But it can lend money to dependent territories if it has a guarantee from the parent Government, being a member of the Bank. In our case, therefore, the Bank can lend money to Colonial Territories if, but only if, the British Government guarantees the principal and interest. For some years now it has been the practice of the British Government, supported by this House, to give these guarantees. The purpose of the Bill is not to change the principle, or the procedure, but to extend the amount for which guarantees can be given.

Clause 1 (1) proposes to increase the aggregate amount of loans from the Bank to dependent territories which can be guaranteed by the Treasury from £100 million to £150 million. The purpose of subsection (2) is to deal with a situation which has arisen in East Africa. As the House will be aware, the East Africa High Commission, which consisted of three Governments, Kenya, Uganda and Tanganyika, had been running certain common services partly of a purely governmental nature, such as the collection of revenue, and partly of a quasi-commercial nature, such as operating the railways, posts and telegraphs. Now, already, Tanganyika is independent and we look forward to an independent Uganda this year. If the High Commission, now called the Common Services Organisation, is to be able to borrow from the World Bank—which I am sure we all wish to see it doing, if possible—we must be able to provide a guarantee.

To do so we must have the authority of Parliament to provide a guarantee for an organisation in which, at any rate, one territory is a Colony. As I say, we may find that of the three territories Uganda and Tanganyika are independent and Kenya is still dependent, but we shall want to guarantee loans from the World Bank to the Common Services Organisation which covers all three. The purpose of subsection (2) is to enable us to do so, and I have little doubt that the House will support the proposal.

Subsection (3) deals with a separate point regarding the New Hebrides, where we have a condominium with the French Government, and where we cannot guarantee loans from the World Bank. There is at present no proposal for such a loan. But we thought it wise, while introducing the Bill, to include the power to guarantee such a loan if at any future time it appeared to be wise to do so. If there were a proposal for a loan we should, of course, act in consultation and co-operation with the French Government.

The main purpose of the Bill is to continue a process which has been going on for a number of years and to give scope for a greater aggregate amount of money to be guaranteed by the Treasury to cover special cases relating to the East African Common Services Organisation and the New Hebrides. I think that the need for the Bill now is clear. The current limit fixed by the Acts of 1949 and 1952 is £100 million and already we are getting close to that total. The amount of International Bank loans now guaranteed under the Acts of 1949 and 1952 is about £88 million.

A very large number of these loans have been to the African territories, the East African High Commission, the Federal Power Board, to Nigeria, Kenya, Uganda and again to Kenya. Also, there have been loans to British Guiana and to Trinidad. By and large, these loans have been made to meet such needs as railway development, basic power development, harbour, agricultural and land settlement schemes and agricultural credit. The moneys loaned under these schemes have been used to develop the basic economic potential of those services. I have no doubt that this is of great advantage to this country and our Colonial Territories and I am sure that it will command the support of the House.

As I have said, the loans already guaranteed amount to about £88 million and at present there are applications lodged with the International Bank for another £6 million, one from Malta and one from Mauritius. Both loans are for electric power development. It is clear that, with other proposals coming along, the limit of £100 million will soon be reached. Therefore, we propose that the limit be increased to £150 million.

There can be no doubt about the value of the work of the World Bank. It is one of the great institutions which have been established at Bretton Woods in recent, years and I think that its performance has been praised thoughout the world. Under its distinguished President, Mr. Eugene Black, whom many of us know for his outstanding qualities of character, the World Bank has contributed to the peace and well-being of the world, not merely by the money it lends, but also by the way in which it is lent. Loans are made on a practical banking basis.

Any proposal or scheme is examined on a hard-headed basis to try to ensure that the territory borrowing the money will be in a position to service the loan from its own resources over the period of the loan. The Bank has done great service in providing technical advice and economic surveys for many countries. I have no doubt that we are right in doing all we can to assist and to make it possible for the Bank to participate in the economic development of Colonial Territories. That is the main purpose of this short Bill.

I wish to refer briefly to what we ourselves are doing towards the development of the Colonial Territories, because it is a story which cannot be told too often, and one which, I think, is sometimes imperfectly understood. The grants and loans made under the Colonial Development and Welfare Acts since the war aggregate over £250 million. During recent years the average rate has been £25 million a year. In addition, we have been making Exchequer loans during the last two or three years of about £16 million or £17 million a year. Then there are grants made under the Colonial Services Vote, grants in aid, assistance for relief and natural disasters, emergencies, accidents and that kind of thing, and last year they amounted to no less than £32 million. Advances to the Colonial Development Co-operation, which was set up in 1948, are about £85 million now, net of repayments.

These are all very large figures and, in total, our financial aid to the Colonies, which falls upon Government expenditure and the balance of payments, has increased from about £35 million a year in 1957–58 to about £80 million in 1961–62. During the last four years our general overseas aid has risen from £80 million to £180 million, which, as a proportion of our national income, I claim bears comparison with any other country in the world, without exception. [An HON. MEMBER: "Not with France."] Yes, it stands comparison also with France. It may be lower than some, but it is more than most. I said that it stands comparison, and that is precisely what I meant. As an effort it is something of which this country can be proud, and should be proud.

An interesting fact to know is that, although the number of territories which have become independent and moved outside the colonial sphere is substantial, in 1961 the colonial Dependencies received the same share of our total overseas aid as they did four years ago, namely, 44 per cent. This shows that we are concentrating our help very much on the remaining dependent territories.

In addition to the aid we give, there is the very large investment by private enterprise—probably £80 million a year—by means of the technical assistance schemes; the training schemes; and the various Colombo Plan United Nations schemes by specialised agencies. In this and in many ways we are contributing to the aid given to the Colonial Territories. At a time when we are doing our best to contain Government expenditure, and are often urged to do so, and even to reduce it, it is notable that the ceiling upon aid is a very high one indeed and that the proportion of Government expenditure going to aid, and particularly the proportion of Government expenditure going to aid to the Colonial Territories, is one for which the House and the country can claim credit.

The purpose of the Bill, to sum it up briefly, is to continue a process which has been going on for several years enabling, through the medium of British Government guarantees, capital for development to flow from the International Bank to the Colonial Territories, in addition to the massive sums we ourselves are making available. I believe that this is a purpose with which the whole House agrees, and I confidently urge the House to give the Bill a Second Reading.

3.43 p.m.

Mr. G. M. Thomson (Dundee, East)

I am glad, as I am sure that my right hon. and hon. Friends are, that the Colonial Secretary has tried to put the Bill in perspective against the background of the Government's overseas aid policies generally. I was inclined to agree with the interjection to the effect that, although the figures no doubt stand comparison with other countries, they are by no means as generous as a country like us with our special position in the world might achieve. However, I thought that the right hon. Gentleman's rejoinder was apt, because it hardly lies in the mouths of hon. Members opposite, who are continually badgering the Government to reduce expenditure, at the same time to say that the Government ought to do more in providing overseas aid.

The Bill is a modest one, but, as the Colonial Secretary went on to say, it raises big issues. In one way it raises what is probably the biggest issue of the times in which we live, namely, how we are to close the gap between the 1,000 million members of the human race who live on levels of relative affluence and prosperity and the 2,000 million members of the human race who suffer from chronic hunger, disease and illiteracy. The Prime Minister is fond of saying that we in this country have been able to wipe out the two nations which existed in the time of Disraeli. However that may be, we certainly still live in a world in which there are in effect two human races.

To put it crudely, there is the overfed world and there is the underfed world. There is the world in which some proportion of our national resources is spent on advertising to try to persuade us that we ought to eat the kind of foods which contain the minimum of calories, whilst, at the same time, the other two-thirds of the human race—the underfed world—are struggling to prevent themselves starving.

For example, the average income in this country, which is by no means the wealthiest country in the world, is £338, whereas in the High Commission Territories within our own Commonwealth the average income per head is £20. We in this country think that an old-age pensioner on the kind of pension that the Government award him is very harshly treated in terms of living standards here, but by African standards and the standards of other overseas countries for which we are responsible an old-age pensioner in this country is very much on the level of a millionaire.

We shall not have a decent or a moral world so long as this gap exists. Very probably we shall not have a safe world so long as we allow it to continue. Yet the terrible truth is that this gap, despite all the efforts which have been made, despite the very considerable efforts which the right hon. Gentleman has just described to the House, is widening rather than narrowing. Mr. Paul Hoffman, the former Marshall Plan administrator and the head of the United Nations Special Fund, showed recently in a pamphlet that during the 1950s the income per head in developing countries had risen at an average rate of 2½ per cent., whereas in the under-developed countries the income per head had risen by only 1 per cent. These dangerous inequalities are widening, despite the scale of aid so far given from the wealthier part of the world to the poorer part.

For this reason, we welcome the provisions made in the Bill. The Bill does something to help to make the wealth of the developed world flow more easily towards the under-developed world through a United Nations agency, the World Bank. We on this side join in the tribute paid by the Colonial Secretary to Mr. Eugene Black, the head of the World Bank. However, although we accept the Bill generally, its provisions deserve a closer scrutiny.

More than half the loans made under the Colonial Loans Act have had only a limited application to the poverty stricken masses of the dependent territories. I refer to the fact that, so far as I can see from the figures, probably rather more than 141 million out of 245 million dollars have gone on the Central African Kariba scheme and its associated developments. It is true that the Kariba scheme brings benefits to the African majorities in the territories, but the fact must be faced that the prime motive of the scheme has been to provide power for what has turned out to be a brittle boom in secondary industries in Southern Rhodesia.

It is time that someone said something heretical about the Kariba scheme in terms of the development of the underdeveloped territories. Kariba is a magnificent scheme, but in terms of priorities and scarce resources it is by no means necessarily the best way of lifting the living standards of a poor agricultural African population. If the World Bank had been able to make its criterion the raising of living standards throughout the whole of Central Africa, it would not have concentrated on Kariba to the extent that it has done.

Mr. Philip Goodhart (Beckenham)

Would the hon. Gentleman associate the Owen Falls Dam, which was started by his party, with this criticism?

Mr. Thomson

The Owen Falls Dam is on a different scale in relation to the development which has been going on in Uganda, but Kariba has overshadowed other developments.

I do not want to make too much of this criticism. I put it forward merely because it illustrates one of the weaknesses of the way the World Bank has to operate. If Mr. Eugene Black and the World Bank had at the time been able to carry out one of their economic surveys in Central Africa, as they have done with such tremendous success in the East African Territories, and if they had drawn up a development plan on the basis of priorities, I believe that some of the money which has gone on Kariba would have gone into agriculture or into smaller irrigation and development schemes in Nyasaland, which is the poorest of the Central African Territories.

I mention that because it underlines the fact that the World Bank is limited by its own regulations about the servicing of interest to the relatively developed underdeveloped territories, if I may use a rather Irish phrase. The Secretary of State commended the World Bank for having to operate in that way, and for having to make sure of the creditworthiness of the kind of projects which it finances, but if one looks at the World Bank's activities, one finds that a remarkably high proportion of them have to be in the South American countries, because they are relatively more developed than some of the dependent territories for which we are responsible.

It is that kind of compromise with commercial criteria of investment that the World Bank has to make that puts the West at such an undeserved psycho logical disadvantage compared with the Communist countries in giving aid to the under-developed countries. I say "undeserved" because, of course, the West gives aid on a scale several times that of the Communist countries—

The Under-Secretary of State for the Colonies (Mr. Hugh Fraser)

Ten times.

Mr. Thomson

The Minister says that the scale is ten times, and I accept that We handicap ourselves by some of the commercial tests we impose, and by the interest charges we make. The World Bank's interest charges, judging from its last Report, vary between 4¾ per cent. and 6 per cent.

Incidentally, it is interesting to note that the first Colonial Loans Act, under the Labour Government, was not used at all, mainly because the World Bank then charged 4¾ per cent., which was so much higher than the interest charges then being asked in this country under our Administration. Jamaica recently raised the first loan for some time on the London market, and had to pay 6¼ per cent.—a crippling burden on a developing country. For the underdeveloped countries of the Commonwealth the price of Toryism is a very high one indeed.

For that reason, therefore, we welcome the setting up by the World Bank in 1960 of the International Development Association, which can give no-interest loans over fifty years—with, I think, ten years' grace before repayment has to begin. I notice that the Colonial Territories have so far received 3 million dollars from the I.D.A. out of a total of, I believe, 137 million dollars of loans so far issued by that Association. I should like to ask why the Colonial Territories have so far benefited relatively little from the I.D.A.'s operations, which seem to me to be so especially relevant to the kind of problems we get in our colonial dependencies. I should also like to know whether this Bill, guaranteeing, as it does, loans by the World Bank, is also taken to guarantee actions by the World Bank's subsidiary, the International Development Association. It is very important that the British Government should give the maximum possible encouragement to the expansion of the work of the I.D.A.

It is true that in their efforts in the realm of overseas help the Government are very much hampered by the balance of payments problem. We appreciate that. But it is also true that the Government's balance of payments problem is very much one of their own creation, and results from their own domestic policies. It would be tragic if the Colonial Territories were to be made the victims of the Conservative Government's domestic philosophy of, "I'm all right, Jack." Some of the Government's balance of payments difficulties arise directly out of the kind of spending spree that they have been encouraging at home.

It is because of those balance of payments difficulties that it is especially necessary for the Government to give every encouragement it can to the World Bank and to the I.D.A., because, through those United Nations agencies, we can do something to ensure that our own balance of payments difficulties are offset by increased multilateral aid to the Colonies.

The Government can do some other things, if they really want to, to face the balance of payments problems in giving aid, and I shall very briefly indicate some of them. The Government might do something to make available to some of the hungry, under-developed, under-nourished countries the surplus skimmed milk we have in this country. I understand that the Government are just about to pour about a quarter of a million gallons of surplus skimmed milk down derelict coal mines, at a time when in our own Commonwealth countries in West Africa, children are dying from the deficiency diseases caused by the very lack of that same skimmed milk.

When this was raised with the Government, not long ago, the Foreign Office spokesman, in reply to a Question, said: … it would hardly be sound economics to be both importing milk products and giving them away at the same time."—[OFFICIAL REPORT, 13th March, 1962; Vol. 655, c. 1285.] I do not know whether it would be sound economics to do that, but I am sure that many hon. Members on both sides of the House would think it sound humanity to do so. What, apparently, seems sound economics to the Government, will really seem insane to the ordinary person. I beg the Government to reconsider that position before it is too late. The season of this milk surplus is still ahead; there is yet time for the Government to take action. They would enjoy widespread public support if they were to break some of the rules in order to help in this way, and it would involve very little payment across the exchanges.

Then there is the matter of pensions. We could give more aid to some of the Commonwealth countries that need aid without aggravating our balance of payments troubles simply by ourselves taking over the responsibility of paying compensation and pensions to colonial civil servants of territories that have recently become independent, or which soon will become independent. So far, the principle has been that the newly-independent Governments accept responsibility for those matters; in practice, it very often means a severe hardship for colonial pensioners in this country, who find that the value of their pensions is dropping in an inflationary age. It also often means a burden on emerging countries that has caused varying degrees of friction with us.

With rising prices here, some of the pensions have failed to keep their value, and have imposed a humiliating retirement on people who have served the country well—

Mr. Maudling

There is quite a distinction here between compensation payments and pensions. With respect, I think that the hon. Gentleman is a little confusing the two.

Mr. Thomson

That may be. I was thinking primarily of the pensions pay- ments. They tend to drop in value as time goes on, and there are the greatest difficulties in persuading the newly-independent overseas Governments to grant pensions increases—

Mr. Speaker

I am sorry to interrupt the hon. Gentleman, but I do not follow how he relates that matter to the provisions of the Bill.

Mr. Thomson

I think that for the Government to justify the Bill, it has to be seen in perspective against the Government's overseas policies generally. The right hon. Gentleman did so in his speech. With respect, Mr. Speaker, I think you will find that in earlier debates of a similar nature that Ruling has been given by the Chair. However, I do not want to develop it at any great length, but I do want to ask the Government to consider whether they might not reexamine with the newly-independent Commonwealth countries the whole principle of the arrangements for pensions.

I think that it is wrong in principle for such a country as this, with an average income per head of £340, to seek to obtain English standard middle-class pensions from an underdeveloped country with an annual income per head of only £20. If the Government were prepared to re-examine that matter, and do something about it, it would be the equivalent of the kind of aid that is envisaged in the Bill, and it would help to put right an injustice to many of our own retired public servants in this country. It would also greatly increase the good will we enjoy from the former Colonial Territories.

The Secretary of State referred to the Colonial Development Corporation. I hope that the Government will give fresh consideration to allowing the Corporation to initiate new projects in Colonial Territories after they become independent. The Corporation has got together a unique body of expertise and "know-how", and although, no doubt, there are problems about the kind of capital provision which may be made from this country to the Corporation's operations overseas, it would be immensely helpful if its teams of experts were allowed to participate in new projects in newly independent Commonwealth countries. We all welcome the Report from the Corporation to the effect that it has been able to establish good and cordial relations with the World Bank. Indeed, on one sugar estate in Tanganyika, it is already cooperating with the World Bank in a very useful project.

I now wish to deal with the colonial development and welfare money which the Minister mentioned. We very much welcome the figures for the past which he has given. What we should like from the Under-Secretary is a more lucid explanation of exactly what will happen in the financial year ahead of us. The Colonial Secretary used a somewhat vague expression in this connection. He said that we had the kind of ceiling on overseas aid which would stand comparison with any other country.

What we want to know is whether we are to give as much overseas aid next year as we gave last year. Is there to be a cut, or will we be able to give more? There have been reports that the Colonial Office has been asking the Administrations of the High Commission Territories to make a 5 per cent. cut in their budgets for the next twelve months. I should be grateful if this could be denied, because it would be shocking if we imposed such a cut in those territories at this stage.

The coming to independence of a Colonial Territory nowadays makes very little difference to the economic situation in which that territory finds itself. I hope that the Government will seek means to continue into the period of independence the kind of balanced development expenditure which they have given under the colonial development and welfare arrangements. These arrangements are different from the World Bank arrangements in that social expenditure is possible and expenditure can be related to a general development plan. It does not need to be related simply to the kind of credit-worthy commercial undertakings which can be expected to repay their capital in a fixed time. It would be immensely helpful if the Government could take a much more imaginative look at this sort of situation.

In Sierra Leone, the last Colonial Territory to become an independent member of the Commonwealth, more than half of its expenditure on educational development came from colonial development and welfare funds. This has been completely cut off now that Sierra Leone is independent and it will be in the greatest difficulty in making progress unless the Government adapt their aid policies to fit the changing shape of the Commonwealth and the reducing size of the dependent Colonial Territories.

In conclusion, I commend to the Government what may well turn out to be the most important resolution passed by the General Assembly of the United Nations during its recent session. This resolution proposed that the 1960s should be regarded as the United Nations decade of development. The idea originated with Mr. Paul Hoffman in the booklet to which I have referred. It was backed by President Kennedy, in his speech to the General Assembly. It has been taken up as part of the official policy of Her Majesty's Opposition.

I hope that the Government will feel that Britain, in particular, should give a real lead in ensuring that this development decade is a success. It involves setting a target for aid to underdeveloped countries on a global scale which would allow such countries to increase their income per head by 2 per cent. a year. Because of the population explosion in those under-developed countries, this means the increase in wealth in those countries needs to be of the rate of 4 to 5 per cent. a year. This is by no means impossible if the developed countries act wisely and generously.

For our part, it might mean the Government accepting as an immediate target in terms of their own governmental aid to under-developed countries the suggestion of the Labour Party at the election that we should put aside each year 1 per cent. of our national income for helping under-developed territories.

Viscount Hinchingbrooke (Dorset, South)

The total figure of public and private investment in the underdeveloped countries is much more than 1 per cent.

Mr. Thomson

I distinctly referred to governmental aid. I was deliberately excluding private investment.

The Opposition's proposal was that the Government, the community, the nation, should put aside 1 per cent. of its national income through public means to do this. It is true that the £180 million which the Secretary of State announced this afternoon is probably about 0.8 of 1 per cent., so that what I am putting forward is a very modest immediate target, something that is practicable even in the light of the financial difficulties which the Government have created for themselves. If the Government were to adopt this suggestion, it would give a notable lead to other countries.

I do not think that this can be seriously argued that a country like ours, where we spend 2½ per cent. of our national income on advertising, on persuading people that they want something which they do not want until they have seen or heard the advertisement, cannot afford to spend 1 per cent. of its national income on helping with our Commonwealth responsibilities.

I hope that the Government, in spite of the somewhat disappointing remarks of the Secretary of State about a ceiling on overseas aid, will take a lead in making a ten-year plan for world development through the United Nations a reality.

4.6 p.m.

Mr. John Tilney (Liverpool, Wavertree)

I hope to refer to the remarks of the hon. Member for Dundee, East (Mr. G. M. Thomson)—some good, some rather partisan—in my speech. I say at once that I give only a qualified welcome to the Bill, because I think that some fresh thought should be given to the whole of our policy on loans and gifts overseas. I am beginning to wonder whether Great Britain is like the daughter of a great house, brought up on a large estate with great possessions, who wishes to remain the lady bountiful even after heavy death duties of two world wars have been paid.

We are inclined to distribute our largesse as of old, forgetting at times whether we earn it ourselves, and to countries irrespective of whether they play the democratic game, work, and treat other members of our Commonwealth family properly. In fact, we are inclined to give our aid to the deserving and undeserving without proper thought.

There are certain fundamental principles which we should consider. The first is that capital is not just clutched out of the sky. It is what we save ourselves individually, through pension funds, by our own saving and by insurance policies. It is not gained by speculation, which is merely taking somebody else's possible profits. It is not gained from a national bag in the sky from which wealth can be produced.

Secondly, there are many people in this country who believe that we are not investing enough in the United Kingdom. I confess that I agree with the hon. Member for Dundee, East that we have a moral obligation, in view of our affluence, to help those who are much worse off than ourselves. But there are people who say that if we merely put an extra spurt into our own economy, in five years' time we will be able to give and loan overseas much more than we can now and that we will be able to compete with the Common Market.

The third point I wish to make is that it is no good talking about guarantees as though they do not affect our own credit. The more guarantees one gives, the more one is liable. The hon. Member for Dundee, East referred to the high cost of some of these loans. I agree that in many cases it would have been cheaper to borrow the money ourselves and lend it rather than give these guarantees.

Mr. G. M. Thomson

It is not true.

Mr. Tilney

The British Government can still borrow money on short-term more cheaply than some of these guarantees to which the hon. Gentleman referred.

I should like to ask my hon. Friend the Under-Secretary whether these guarantees will continue for many years even after independence is achieved, and that, therefore, we are virtually guaranteeing a completely independent country. I believe that an overall policy for developing countries as a whole, and particularly those of the Commonwealth, should be considered.

Let us consider the information paragraph of this exercise. The first point is that for many years since the war our balance of payments position has been very precarious. Because of this, we have a way pause, to which the hon. Gentleman referred as a spending spree. We have also, morally anyhow, a dividend freeze. We have the Common Market challenge, which industry must be geared to meet. The more we invest overseas, obviously the less we have to invest at home, and yet the demand for capital overseas in these developing countries is virtually limitless. As I see it, therefore, the aid must be limited. We cannot give everyone what he wants.

What is our intention paragraph? I agree with my right hon. Friend that we ought to help, first, our remaining Colonies. We also want to help the independent members of the Commonwealth. Then there are certain foreign countries to which we must give aid. But the first priority must, of course, be the Colonies.

What is our second intention? I am not sure whether the Government agree with me that there should be a division in those three categories. Because the amount that we can lend is limited, certain standards of behaviour should be applied to the three categories. First, they should have a free democracy and not be a police State, and any individual of any race or creed should have equal rights with anyone else. This would eliminate some from the list of possible recipients of aid.

Secondly, fair treatment should be given to existing investments. Many of these investors have made the territory's viability economically possible, and such investors should be fairly treated. If they are not, it is a bad advertisement for fresh private capital or, for that matter, Government capital. If this standard were followed, some more countries would be eliminated.

Thirdly—and the hon. Member for Dundee, East referred to this—the territories should not have forgotten those who made their political viability possible. No doubt the hon. Gentleman has seen the Motion I tabled, signed by nearly 70 of my horn. Friends. I regret that it is signed by only two hon. Gentlemen opposite. I hope that after his speech today the hon. Gentleman will add his name to this Motion.

[That this House calls upon Her Majesty's Government to recognise the hardships inflicted on many former members of the Colonial Service, Her Majesty's Overseas Civil Service, and the Sudan Civil Service, by the effects of inflation in the United Kingdom since 1939 and, while taking whatever steps are possible to increase the pensions paid so as to accord them treatment no less favourable than that already accorded by Her Majesty's Government to retired members of the Home, India, Burma, Pakistan, and Palestine Civil Services to take into consideration when giving or lending British taxpayers' money to colonial or successor Governments whether such Governments have taken action to bring the pensions of their former civil servants into line with the provisions of the Pensions (Increase) Act, 1959, in the United Kingdom.]

The hon. Gentleman rightly referred to the pensions of the ex-servants of some of the territories, and I should like to add that pensions for widows—

Mr. Charles Royle (Salford, West)

It would be helpful if we knew the Motion to which the hon. Gentleman referred. Some of us might want to sign it.

Mr. Tilney

It is the Motion calling on Her Majesty's Government to consider, when lending British taxpayers' money to overseas territories, the pensions paid by those territories to their ex-servants, and calling their attention to the Pensions (Increase) Act, 1959.

I call attention to the fact that premiums payable for pensions for widows were made compulsory by a fiat of the predecessor of my right hon. Friend. Many of those who had their salaries docked perhaps wish that they had taken out their own life insurance policies for the benefit of their widows, because with profits they might have shown a better return than they get now.

My point is that the record varies greatly in this matter. The worst offenders are among the independent members of the Commonwealth, and as we are discussing the actual Colonies for which we are responsible it is as well to notice that not one independent country, with the honourable exception of Nigeria and possibly Somalia, due to a grant-in-aid has bothered to do anything about pensions since it became independent, and little has been done by Her Majesty's Government.

On 27th March, I asked the Colonial Secretary: when he drew the attention of the Government of Sierre Leone to the United Kingdom's Pensions (Increase) Act, 1959, in relation to pensions of ex-members of the colonial and Her Majesty's overseas services … and what was the nature of the reply of the Government of Sierre Leone. To my surprise, he replied: A despatch was addressed to the Governor of Sierre Leone … on 2nd October, 1959. This did not call for a reply."—[OFFICIAL REPORT, 27th March, 1962, Vol. 656, c. 109.] That despatch was sent two-and-a-half years ago, and yet I have been told constantly that the Government have this matter very much in mind and are doing all that they can to put it right.

Despite the Colonial Office publication No. 306 of 1954, to which reference was made by Lord Boyd in another place, in a first-class speech, I wonder whether Her Majesty's Government have abandoned the hopes of these wretched ex-servants.

Mr. Speaker

Order. I understand how the point about "these wretched ex-servants" might arise in another context. While the territory in question remains a Colony, which seems to be the only context in which the provisions of this Bill would relate to the matter, no doubt they could possibly reasonably be related to the subject matter of the Bill, but once the country is independent I do not understand how that can be so. I do not follow.

Mr. Tilney

Many of the territories that we are discussing are about to become independent, and I wanted to call the attention of the House to what happened in the case of a Colony which became independent. When one asks a Question about an independent country, one is told time and again that this is a matter for the independent country to decide. This makes it extremely difficult to discuss the problem of pensioners of existing Colonies, and many of them will in due course become pensioners of independent countries.

I have here a list of the guarantees to loans made by the International Bank under the Colonial Loans Acts, 1949 to 1952. The list shows that 28 million dollars went to Southern Rhodesia; 14 million dollars to Northern Rhodesia; and 28 million dollars to Nigeria. I have no objection to this. Both the Rhodesias and Nigeria have played the game extremely well by their ex-servants.

Now I come to the 5.6 million dollars given on 27th May, 1960, to Kenya and the 8.4 million on 29th November, 1961, and again in January, 1962, to Kenya, where 110 out of 370 pensioners receive less than those who worked in the United Kingdom; and £3,300 per annum would put them right. Uganda received 8.4 million dollars in August last year, and there, 75 out of 280 receive less than people in the United Kingdom and yet only £2,500 a year would put them right.

British Guiana, receiving 1¼ million dollars in June last year, pays all those receiving over £200 per annum smaller increases than the increases awarded in the United Kingdom under the Pensions (Increase) Act, and the same applies to Trinidad and Tobago, where five out of 50 of those receiving pensions over £300 per annum get less. I come to British Honduras which, according to the Estimates of this year, I see, will get £375,000, and there nine out of 10 get less than in the United Kingdom. In the Gambia, which, according to the Estimates, gets £600,000, 10 out of 25 get less.

Unless the Government, while we are in control, do something about those pensioners, what chance is there of their ever getting a fair deal?

Finally, there is Singapore, which is a more difficult case, I admit, and where those receiving pension of over £400 get very much less. There are, I believe, 350 of these officers and the total would be as much as £25,000, but even that £25,000 is very small considering that the expenditure we are discussing this afternoon is of £50 million, or a guarantee of it. It is really a fleabite. And with the widows and orphans—of these, 2,300 get less, and the cost would be £110,000. I am not surprised that many of the pensioners think of the words of Lord Strafford: Put not your trust in princes I should like to stress that I am particularly thinking of the pensioners who retired immediately after or even during the war who did not get the benefit of the uplift of salaries which happened in many territories in the late 1940s. If the policy of the Treasury is that the affluent State prefers to forget these people, let the Treasury say so, and those who are thinking of serving the Crown overseas in future can make up their own minds about it. We still, however, control many territories, and I can only hope that we shall use the sanction of the purse—I see no reason why we should not do so—to see that these countries play the game properly.

After all, it has really been a matter of luck as to where a colonial servant has been sent. If he went to Hong Kong he would have done extremely well. On the other hand, if he was sent originally to Ceylon and then went to a Colony he would find that any increase in the Colony's pension is taken off by the Government of Ceylon, and that seems to me to be extremely unfair.

We have a Welfare State. It may be the policy of the Government that these people who have served the Crown so well should rely on National Assistance. I can hardly believe it, but I can hardly believe that those who have served us so well in the past should be quietly forgotten—forgotten, perhaps, till they have to vote in places like Orpington, or somewhere else. Many of them, let us remember, have held high office in their territories in days gone by. In the old Tennysonian line, they who serve the Crown find that Sorrow's Crown of sorrow is remembering happier things applies very much to them.

I should like very much—

Mr. Speaker

I cannot compete with the hon. Member any more. I do not understand how that position is to be improved by increasing the maximum which can be guaranteed under the Bill, or by the method in the Bill. I cannot understand the connection.

Mr. Tilney

I am trying to debate the whole lending policy of the Government, Mr. Speaker, surely the power of the purse—

Mr. Speaker

The hon. Member referred to somebody living on National Assistance because in the past he missed out his chance of getting his pension increased under the Pensions (Increase) Act. I understand the hon. Member's difficulties, and I am in no way out of sympathy with him, but the occasion seems inapt.

Mr. Tilney

I want to avoid this happening again in the territories which are to get the benefit of these guarantees from the World Bank where the credit of Great Britain is engaged. I am hoping that by the sanction of the purse over these guarantees the Government will ensure that this situation does not arise again in the future. I believe that it can be put right and that these wretched, poor relations of the Victorian novel will just fade away and will not be re-created in another edition.

I believe that if the Government take a consistent line in this matter they will do a magnificent job for their old servants, that the territories concerned will realise that in the end it is only our money which is paying, or our credit which is paying, for their obligations.

So, finally, may I turn to the method paragraph of fulfilling this intention to help the developing territories? Before money or credit, and especially before independence, is granted, I hope that the Government will consider the principles which I have suggested. I hope that they will follow them and that the limited amount of capital we have available will be for those countries which have played the game with their investors, and their ex-servants, and that it is they only who will receive the benefit of the guarantees under this Bill.

4.27 p.m.

Mr. Charles Royle (Salford, West)

Even if my knowledge were sufficient to follow the hon. Member for Liverpool, Wavertree (Mr. Tilney) in the main part of his speech, I should be prevented from doing so, Mr. Speaker, in view of your Rulings. Therefore I would only say to him that I am mainly in agreement with him on the things which he has said about greater help for the Colonial Territories. In that respect the hon. Member followed my hon. Friend the Member for Dundee, East (Mr. G. M. Thomson). All of us on this side of the House are very concerned indeed that the help given to the Colonial Territories should be as much as it possibly can be.

I remember that very early in my membership of this House a friend of mine from the Colonies said to me that the House was not interested in colonial matters. I supposed that he had been in the Gallery and had seen the number of Members who had attended colonial debates. I tried as well as I possibly could to assure him that the House really was interested in all matters connected with the Colonies and that the number of Members occupying places in the Chamber during our debates was no criterion of interest.

So it will be today. In spite of the fact that there are so few of us in the Chamber at the moment there is no doubt either that the House as a whole is very deeply concerned in these matters, or that the House as a whole will be ready at the end of the debate, to give approval to the Bill.

The Bill, in principle, is excellent. None of us can dispute that fact. This is a move in the right direction. I am one of those who welcome any increase in the guarantees. It was about the time that that remark was passed to me by my friend in the Colonies, soon after 1945 or 1946, that things started to happen. They started to happen in a rush, with the introduction of C.D.C. and C.D. and W. and, in 1949, the Colonial Loans Act itself.

Perhaps I may be permitted, as a back bencher on this side of the House, remembering what happened in those days, to pay a modest tribute to two of my right hon. Friends whom I am happy to see in the House at the moment—my right hon. Friend the Member for Wakefield (Mr. Creech-Jones) and my right hon. Friend the Member for Dundee, West (Mr. Strachey). At that time, the latter was Minister of Food, and I remember that when we started off the Colonial Development Corporation and the colonial development and welfare funds, we were having to do it at tremendous sacrifice. The imagination which was shown by my two right hon. Friends at that time was something very much to be admired. It probably was not a popular thing at that time. We were calling upon our people to make tremendous sacrifices.

May I remind the House that about the same time we were compelled to impose bread rationing on our own people, to make sure that people in other parts of the world were not dying of hunger. If we were able to do those things in those difficult years immediately following the war, how much more important is it that at this time this country should be giving a greater measure of aid to our Colonial Territories and all the under-developed nations of the world.

Those days to which I just referred were days when our people generally were being called upon to make sacrifices. Today, we live in a different kind of atmosphere—one of plenty. We have been told that we have never had it so good, and there is no doubt that the standard of living in this country is higher than ever it was in our history. Therefore, have we not a right to call upon our people, not to make a sacrifice, but at least to make substantial grants and loans to the territories which are so much needing our help?

The word that we have to think about more than anything else today is "adequate". Are the things that we are doing for our Colonial Territories an adequate contribution to their great needs? I agree with the Secretary of State for the Colonies that in recent years we have made very substantial contributions to these territories. That is something of which we have a right to be proud, and I do not hesitate to say so, but is the word "substantial" just enough? Are the contributions that we are making adequate contributions? My hon. Friend the Member for Dundee, East has referred to the Labour Party's suggestion that 1 per cent. of our national income should be devoted to this purpose. We could afford this so easily, and we could do it without asking our people for sacrifices. We know that we can do these things, and I hope that in their further consideration of thus matter the Government will make sure that what we are doing for our Colonies and the underdeveloped nations generally will be properly adequate.

During the present Session we have given quite a lot of attention to the Colonies, one way or another. Some of us seem to have been talking about Colonial questions for almost the whole of the Session. Therefore, I do not want to speak at length today, but there is one final matter to which I would like to refer. It concerns British Honduras. There is a very startling short article in The Times this morning pointing out what has happened in that Colony. It is a long time since I was there, but I can visualise just what has happened because of my knowledge of the topography of the area. I can picture just what the effects of the hurricane have been.

It was the privilege of a few of us last week to have a conversation with Mr. George Price, Chief Minister of British Honduras, who, I understand, was having, and maybe still is, talks on his great problems with the Colonial Office. I suppose it is right to say that no British Colony has been as badly shaken in recent years, in proportion to its size, population, economy and its resources, as British Honduras has been. This is a country which, in effect, has been wiped out. Therefore, my plea is that, maybe through the guarantees in the Bill which we are now considering, or by other forms of grants, but not loans, we can do something really good for British Honduras. Mr. Price told us last week, for example, that the Colony is seriously considering—and, I take it, putting it up to the Colonial Office—moving the capital of Belize further inland, where it would not be subject to hurricanes in the way in which it has been on the coast.

The great need of British Honduras at this time is for outside finance; it has nothing of its own, and is one of the poorest of our Colonies. It has not been included in the general setup of the Federation of the West Indies, which we shall be considering later today, and, therefore. I appeal to the right hon. Gentleman that as much generosity as possible shall be extended to the Colony.

I know that perhaps this does not come strictly within the terms of what the Bill does. I see that the Under-Secretary of State agrees with me. Nevertheless, this is an opportunity for saying the things that we want to say about the needs of the Colonies. I will not pursue that point any further, but I appeal to the right hon. Gentleman to have British Honduras uppermost in his mind when considering grants and loans. I hope that he will do all he possibly can to help the Colony.

Apart from that, I want to welcome the Bill, as far as it goes. We could offer the criticism that it does not go as far as we should like it to go, but we welcome any step forward, and I am completely confident that the Bill will receive a Second Reading without a Division or any disagreement at all.

4.40 p.m.

Mr. Patrick Wall (Haltemprice)

I am sure that both sides of the House will agree with the hon. Member for Salford, West (Mr. C. Royle) that it is incumbent upon us as the richest member of the Commonwealth to do all we can to speed up the development of the less fortunate members. If the Commonwealth means anything it means that the strongest members must help the weakest.

As I understand it, this Bill guarantees loans by the International Bank for Reconstruction and Development to assist development in all the British colonial Dependencies, but there is one Dependency to which I want to direct most of my remarks and that is Kenya. The land schemes in Kenya are very much in the minds of all hon. Members. They have already attracted a considerable amount in loans from the International Bank and I suggest that they are likely to need to attract even more.

In the summer of 1960 there were, broadly speaking, two development schemes in Kenya designed to encourage the transfer of agricultural land from European to African ownership. One was the yeoman farmer scheme of £3¼ million and the other the peasant farmer scheme of £3 million. Then there was the Land Bank, which was designed to attract international funds, and funds from the national bank, to help economic development in Kenya through these and other schemes. The assistance given the Land Bank by the World Bank at that stage was about £3 million.

In the middle of 1961 there was a change of policy with regard to these funds. I should like to quote briefly from the periodical East Africa and Rhodesia dated 14th September, as follows: An additional 12,000 African families are to be settled on land to be bought by the Kenya Government in the White Highlands. This amplifies an existing £8½ million project for resettling 8,000 families with a £4½ million loan from the World Bank and the Colonial Development Corporation. Less stringent qualifications as to the financial standing and the experience of the farmers will be required under the new plan. About 350,000 acres of ex-European farmland were to be purchased, representing about 5 per cent. of the total of European-owned land and on this African families were to be settled giving about 25 acres per family. These families were expected to live off the land and in addition to make a profit of about £100 a year. Repayment to the World Bank and to British funds sunk in the scheme were to be over long periods.

These schemes do not seem to have been working out as was expected two years ago and I should like to know why. I suggest that one of the reasons is that the African farmer, knowing that Kenya will be independent soon, believes that he will get the land free. He therefore does not want to spend even 10 per cent. of the value of the land, which is required as a deposit, if he is to have the land free in a year or two's time. If that is so, we should think of a much more ambitious scheme which will prove to the African majority in Kenya that we intend to settle large numbers of Africans on the land. This would greatly strengthen the economy of Kenya and would enable these loans eventually to be repaid to the Treasury and to the World Bank.

Seventy-eight per cent. of the Scheduled Area, which is now the name for the old White Highlands, comprises small farms of under 2,000 acres, and would include some 2,800 holdings totalling 2 million acres. I suggest that with the assistance of the World Bank we should introduce an ambitious scheme to purchase about 50 per cent. of the land, or about 1 million acres, on which some 100,000 African farmers could be settled. This could be done through a new land authority or board, or by stepping up the power and scope of the present Settlement Board.

The board should be under an obligation to purchase any small mixed farm in the area and within the categories specified in the scheme. A farmer who wished to sell his land should, however, be required to remain on as a tenant until the board could take over the land and divide it up between the required number of African farmers. If the farmer who has sold his land is required to stay on as a tenant he is assured of an income and, at the same time, the land will be kept in good use until the time comes to settle African families. Experts have calculated that such a scheme, spread over five years, would cost between £30 million and £35 million. Obviously the main burden would fall on the British Treasury, but this would be far cheaper than any form of civil disturbance or emergency which might arise if some such scheme were not carried out.

If a board were set up with Kenyans of national standing of all races and possibly men of international standing, it would attract World Bank money and it would have a great effect on the economy of Kenya, particularly on the employment situation which is causing grave anxiety to those who are concerned with security. A scheme of that kind financed by the loans which we are discussing under this Bill would be of great benefit to Kenya and to Africa as a whole.

I should like to mention economic assistance needed in two other countries. The first is the George Cross island of Malta. My right hon. Friend the Colonial Secretary, in reply to a Question of mine, illustrated to the House the other day how much we in Britain have done to develop the economy of Malta during the time we were directly responsible. While the Constitution was suspended thirteen new industries have been set up, a further twelve have been approved, together with six new hotels, giving additional employment to 6,000 people. The dockyard is being converted and the civil harbour completed. These schemes cost £35½ million, of which the British Treasury has furnished just under £30 million. I understand that the main need in Malta today is for a new power station. My right hon. Friend mentioned this in his own speech today. It is required not only to ensure that industries attracted to Malta will have sufficient power to function satisfactorily but also to enable a new water distillation plant to be set up so that adequate supplies of fresh water can be made available to industry and to the population.

I understand that a World Bank mission went to the island a month or two ago and that it has now agreed to finance or part-finance this scheme. I should like to know when we are likely to see the power station completed, as it is of fundamental importance to the island. I am sure that we all welcome the fact that Malta now has an elected Government and Prime Minister of her own. The next two or three years will be vital in establishing her civilian economy on a firm basis and this power station, furnished largely from World Bank funds, would be a key factor in her economic development.

I shall mention the next country only briefly because I am not quite certain whether Southern Rhodesia can still be included under a Colonial Loans Bill, though I think that my right hon. Friend referred to that country in his speech. Southern Rhodesia has an outstanding record in education. About 80 per cent. of African children there receive education, which is a higher figure than for any other independent country in Africa. I should like to know from my right hon. Friend how much money in loans or grants we in this country have made available to Southern Rhodesia. Are these not very much less than those granted to other countries for which we have a responsibility, for example, in East Africa, or in Nyasaland and Northern Rhodesia? I hope that we shall be generous in helping Southern Rhodesia to advance her educational development. I hope that we shall do all we can to encourage the World Bank to put money into this very deserving cause, which is of such fundamental importance to the people of Southern Rhodesia, which will enable Africans to be gradually trained up to take their rightful share in government and industry.

I do not want to follow my hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney) in discussing the case of civil servants who have already retired, but I should like to make a few remarks about some of the problems which are facing civil servants in Kenya today. I believe that this will be in order, Mr. Deputy-Speaker, as I submit that unless the civil servants remain in Kenya through the difficult period of transition and immediately afterwards when the country is independent we shall have a difficult position there and Kenya will not attract loans or grants from the World Bank or anywhere else. Indeed, the fact that there are likely to be disturbances means that the country will not be able to pay back the loans to the World Bank which we are proposing to guarantee by means of the Bill. I think that that is a justification for touching briefly on these facts.

There are four points that I want to make. My first concerns the members Her Majesty's Overseas Civil Service. I refer here to the designated officers. They have been treated well, even generously. Those who are to be Africanised have received adequate, and even generous, compensation. Those in Kenya and the other countries of East Africa who remain serving will have their inducement allowance made up by Her Majesty's Government so that they will not become more expensive to the Governments concerned than one of their own people.

There is, however, one difficulty and my right hon. Friend knows about it, because I have been in correspondence about it. The members of Her Majesty's Overseas Civil Service who retired under this scheme last year—9th December was the key date, I believe—were supposed to receive compensation in the form of a lump sum together with further instalments until the total amount was reached. The compensation was expected at the time of their retirement. However, I know several cases where those concerned retired in December, but have not yet received a penny in compensation. They have come to this country and in order to buy a house they have had to raise a mortgage, at fairly high interest rates, and yet they have not only received no capital sum in compensation but have also been refused interest.

Mr. Deputy-Speaker: (Sir W. Anstruther-Gray)

I think that the hon. Gentleman is tending to get rather a long way from the Bill.

Mr. Wall

I will bear your remarks in mind, Mr. Deputy-Speaker. I hope that I shall be able to relate my next few points rather more closely to the Bill.

I suggest that unless the situation in Kenya is satisfactory over the period leading to and immediately after independence, the economy cannot be strong, and if the economy cannot be strong, Kenya cannot attract loans from the World Bank or any other source. In relation to this Bill we are discussing the fact that we are trying to attract World Bank loans to Kenya by guaranteeing their repayment. If the situation in Kenya is bad, we may have to meet these guarantees.

On these grounds, I crave indulgence to mention two other factors about overseas civil servants. My first point concerns the position of the non-designated officers. They are vital to the future of the country during the transitional period. They have as yet no scheme to deal with them after independence. They do not know how they will be treated. They do not know whether they will be allowed to retire at independence or not. I know that my right hon. Friend has done all he can, and that he says that the ball is now in the court of the East African Governments, but I hope he will exert every effort to ensure that some scheme for the non-designated officers is announced in the very near future. Otherwise the morale of the Civil Service will deteriorate very much indeed, and, as I have said earlier, a strong Civil Service with a good morale is vital to Kenya and to the future of the loans that we are discussing.

There is also the question of discrimination between men and women in the Civil Service—

Mr. Deputy-Speaker

It really is impossible to follow the hon. Gentleman in his endeavours to keep his remarks within the bounds of order. I hope that he will come back to the Bill.

Mr. Wall

I will not, Mr. Deputy-Speaker, discuss the question of women, but I hope that that will not be taken to imply any reflection on the fair sex

I am sure that all hon. Members on both sides of the House feel that we should be as generous as possible in the loans and grants that we make to all the colonial Dependencies. I feel that these loans should be so directed as to attract other loans; in other words, World Bank loans—so that we can build up the economies of the countries concerned.

Western investment is of great importance. It is said that we cannot provide enough for the Commonwealth. The Commonwealth countries need £400 million a year for their development, and we provide about half. Therefore, they have to go to other sources for the balance, to the World Bank and to the other countries of Europe—indeed this is one of the justifications put forward for Britain's joining the Common Market.

There is also the question of Communist activity. It is often said by African countries that if they do not get financial aid from Britain or the World Bank they can go to Peking or Moscow. It is also said that there are strings attached to British aid and to World Bank aid but no strings attached to Communist loans. I think that if we asked President Nasser he would confirm that there are very many strings attached to Communist aid. I will not pursue this subject but, it is important to people in Africa to realise that Communist aid has far more strings attached to it than any aid from the World Bank, the United Nations or this country. If anyone wants to see the moral pointed, he should examine what happened in French Guinea and to the Soviet ambassador in that country.

The nub of the problem of helping the under-developed countries of the Commonwealth is the promotion of better understanding about the Commonwealth in this country. I believe that our taxpayers, who, after all, are finding the money for direct loans and any sums required to guarantee the World Bank loans we are discussing, would be much more willing to do so if they really understand the problems. We should do all we can to ensure that the facts about the Commonwealth and its development are spread far more than they are among our youth in our schools and by all the propaganda means that we have available.

4.58 p.m.

Mr. Arthur Creech Jones (Wakefield)

In welcoming and supporting the Bill I want to make a few general observations, because I had some responsibility originally for bringing Bills of this type before the House.

The debate illustrates very clearly the remarkable change which has come over our thinking on colonial development. I well remember that over twenty years ago the mood of the House was distinctly that of letting alone and permitting territories to develop their economies in the light of their limited resources and doing the best they possibly could with what means they had. This doctrine of laisser-faire was common among all sections of our people, and particularly was it the driving force—the negative driving force, perhaps—in regard to colonial policy.

It is interesting to notice today that all of us are genuinely interested that the utmost should be done to help forward economic and social development in the territories and to bring to their aid all possible financial assistance. But the problem is of great complexity and difficulty because of the limited resources which are available and which are in desperate demand by emergent territories anxious to equip their States for nationhood.

The intense poverty of most of these territories is recognised and known to all of us, but, because of the spirit of nationalism, because of the international interest which is taken today in the underdeveloped and underprivileged territories, and because, too, of the practical changes which have come about all over the world, the peoples of these countries, whether we think it wise or unwise, or whether we think their demands practical or otherwise, are determined that they shall rid themselves of alien government and equip their countries with all the necessary factors in civilised living. They want to take their full place in the life of the world.

To cope with that situation, the contribution which can be made to these developing nations is comparatively small. If it should be, as I believe it to be the case, that the great industrial nations are increasing their production and their wealth while the less privileged nations are increasing their populations and growing poorer in spite of the aid that is forthcoming from various quarters of the world, then a very dangerous situation is being created, and it is one to which we in the more developed nations must look.

It is, therefore, important that we should mobilise all the resources we can to help forward these aspiring peoples. We have, of course, started to do a large number of important things to help the progress of these new nations. Reference has been made today to the Colonial Development and Welfare Act, funds, which have become increasingly available for economic and social growth. There is also the Colonial Development Corporation, with its vast reservoir of technical knowledge which can be applied for the benefit of developing peoples.

When I introduced the Overseas Development Act, 1947, and the Colonial Loans Act, 1949, I was concerned that not only those industries and undertakings which might produce a profit and pay their way should have the support of the Corporation and Bank, but that those projects which involved risk yet were essential to the well-being of the nation concerned should be equally encouraged.

One of the bodies now in operation is the International Bank. It is important that a word of caution should be uttered. The Bank issues its funds under the most onerous and difficult conditions. Moreover, the interest charges and the other terms are rather heavy. That means that, as a new nation is building up its economic life and is exploiting its resources, it becomes increasingly aware of the very heavy burden of interest and other charges which it has to meet in order to equip itself. The problem of the future for the emergent countries is: if they are to go forward with the necessary enterprises for their own well-being, how are they to meet the very heavy cost these loans involve?

Another point should be made. Unless the technicians and skilled workers are available to carry out a project, it matters little whether the money for it is available or not. I remember that in my own administraton at the Colonial Office we were frequently in the position where the funds required for big projects were available, having been voted by Parliament and having received the approval of the Treasury, but we had not, on the spot, the skilled workers and technicians necessary to carry them through.

It is very important therefore, that, while we are making resources available to territories we should do all in our power, through technical training, to provide the skills so that these projects can materialise. I emphasise that point because it is too often overlooked. It is not only money we want—we also want skills and technicians. The great advantage of the Colombo Plan has been its emphasis on technical training. It has utilised, in all quarters of the world, the schools, training colleges and technical colleges so that men and women may be trained and, that, back in their own countries, they are able to play an active part in the building-up work so desperately needed.

Mention has been made of priorities. I agree that we should pay a little more attention, in planning inside the respective territories, to those things which are most urgent and likely to contribute to the general standards of the people in the community. In my day I did all I could to encourage large-scale hydro-electric schemes, big damming, soil conservations, and so on. But all the time I was conscious that probably a great deal of the money available by grant or loan could possibly be better employed in other ways, such as transforming primitive agriculture through the teaching of better methods, and through simple soil conservation, simple irrigation and a whole variety of other small things touching the villagers. It seemed that often the money would have been more wisely spent by emphasising the small projects, for they help to pull up the general level of living.

Finally, it has always seemed to me to be an extraordinarily short-sighted policy that the Government should have taken a rather pedantic view of the terms of independence. It is true that schemes which have been sanctioned prior to an emergent country becoming independent are allowed to work their way out, and that the same is true for funds employed by the Colonial Development Corporation on certain projects which have been sanctioned. Under pressure, the Government also agreed that the Colonial Development Corporation could employ its great reservoir of managerial and technical knowledge should an independent State ask for it and perhaps pay for it.

I sincerely hope that the new Department of Technical Co-operation will face the problem of the technical needs in overseas territories, whether they are dependent or not. Its terms of reference now cover foreign States as well as Commonwealth countries. But it is im- portant that we should take a view different from that which has prevailed in recent years about moneys made available for colonial development and welfare after independence.

Over the last twenty years a whole variety of services of vital importance to emerging territories have been built up in the Colonial Office and have now been transferred to the Department for Technical Co-operation. Those services are almost unique. They are highly specialised and vitally important in the developing life of emerging countries. I hope that we shall insist that the Government think again about financial aid which should be made available under the Colonial Development and Welfare Acts and by the Colonial Development Corporation itself.

It is along these lines that we can secure the maximum of good will and well-being for the people in the territories for which we are responsible. It is remarkable how the climate of opinion in the House and the country has changed over these years. Today, we record another stage in our thinking about the necessity of meeting some of the desperately urgent requirements of the Colonial Territories.

5.12 p.m.

Viscount Hinchingbrooke (Dorset, South)

I want to make two pleas as strongly and as briefly as I can. The first is that the good we do should be not only done but seen to be done, and the second is that the good we do should be enhanced many times.

I have travelled to all parts of Africa in the last eighteen months and experience has borne in on me the fact so often these countries, whether independent or still dependent, do not know the sources from which they gain the good things of life. British goods are apparent everywhere in a straight trading connection, and when horror is expressed about our declining share of Commonwealth trade and our growing share with Europe and that which Europe has with the Commonwealth, we should sometimes look at the gross figures and appreciate that, both ways, ours is about 40 or 45 per cent. while that of the next country, whether it is France, Germany, or the United States, is less than 10 per cent.

It is not about straight trade that I am pleading but about investment projects and gifts. It is about the exciting projects on which colonial countries and those newly independent lay so much stress as giving them a sense of the greatness of their approaching independence, or new-found independence. Everywhere one finds signs of the World Bank and the United States agencies of various complicated sorts, with many American businessmen and politicians and the semi-politicians associated with them, and we are beginning to see some Germans and Israelis, not to speak of the quite forceful and enterprising people from behind the Iron Curtain. These are the sorts and types who seem to be concerned with the exciting new endeavours in which the new countries in East and West and Central Africa are especially interested.

I would have liked the Bill to lay more stress on the establishment of some kind of new British agency for the investment of money overseas, or the development of the Colonial Development Corporation into a new concept into which foreign money could be enticed, so that when expenditure took place in our Colonies or ex-Colonies, it would be quite obviously a British concept. It could be known by a side wind that the Americans, Canadians, Australians, Swiss and Germans, whoever it might be, had also contributed.

I do not know whether it will be possible to amend the Bill in any sense which does any good, but I shall look through it to see whether it is possible to insist that where these increased guarantees are given by Her Majesty's Treasury to the investments made by the World Bank, there is some British sign or purpose associated with them to make sure that these countries realise the good which we are doing to them. Let not our good be done by stealth. Lest it be done with all high Biblical authority—candles to be seen about the house and not shrouded, as is so often the case, within their bushels.

Mr. H. Fraser

Or kilt.

Viscount Hinchingbrooke

I thought that when my hon. Friend went to the Commonwealth in his kilt he did not attempt to use it to hide anything, but rather to flaunt his virtues and Scottish lineage.

The other point which I wish to make equally briefly is that the figures should be enhanced. In the last few weeks I have been looking up some of the figures connected with Commonwealth development and I have found them absolutely staggering. First, there is the total. This country generates about £22,000 million worth of goods and services every year. Regarding us as the major lending and giving agency in the Commonwealth, I have left out of account those who might be associated with us in any figure, namely, Canada, Australia and, to some extent, New Zealand. I go next to India and all the countries down to the tiniest fortress island, adding them all together—India, Pakistan, Malaya, Nigeria, Ghana and so on down the scale of geographical size, if not importance. Does the House appreciate that that total from the rest of the Commonwealth, minus Canada, Australia and New Zealand, is merely £16,000 million? We have a power potential of £22,000 million generated annually while the rest of the Commonwealth generate only two-thirds as much.

We ought to do more than we are now doing. We are not doing as well as France. I looked up the figure for France in the last forty-eight hours, and found that it was 1.3 per cent. of her national income against 1.1 or 1.2 per cent. in our case. Be it remembered that French dominion responsibilities are very much reduced. One can see the contrast when one goes to Senegal, as I was privileged to do quite recently for forty-eight hours. No doubt one would see the same sort of thing in the other French territories of West Africa.

French commonwealth-associated Powers are fewer and France's dominions are less, and yet for these purposes France generates more money, relative to its national income, than we do, so that the standard of living enjoyed by those countries is consequently very much higher. I argue that we should do as well as France in absolute and also relative terms—that is, spend enough to make the standard of living in our territories as high as theirs.

I shall try to say how this should be done, but I should like first to take up a very weighty point which was made by the right hon. Member for Wakefield (Mr. Creech Jones). His speeches in this House on this subject perhaps carry more influence than those of anyone else because of his great knowledge of these matters. Going round one gets the same picture. People speak with grief about the British having dressed their Colonies up for the feasts of independence like trussed up Strasbourg geese, and the moment that independence and feasting have died away practically nothing takes place.

The loans which have been organised by the Colonial Development Corporation and the technical aid mean that a certain amount is done. I found in Ghana and Nigeria some laboratories which, to the extent of a few thousand pounds were still being completed because independence had taken place and it was felt that we should be honest and continue the operation. But everywhere in these Dominions and independent republics one finds an atmosphere of sadness that Britain has not been able to continue the pace of development which she initiated when they rose towards independence.

Of course there must be limits to this. We could pour money into India, but it would be lost down the drain. There are 400 million inhabitants. Every pound we invest in India we somehow think produces a new life which in due course will suffer from privation. Of course there must be limits and some criteria must be applied to stop the thing getting out of hand, but I do not think that the criteria should be the date of becoming independent. The French, more wisely and intelligently, carry the process over. When the daughter of a Frenchman marries, she gets her dot of course, but her father does not forget her for the rest of her life. I sometimes think that that is the policy of Her Majesty's Treasury in regard to overseas lending.

In Sierra Leone—a very recently independent country—I was told that the loan which the Treasury offered was 6¼ per cent., 6 per cent. because that was what the British Bank Rate was and ¼ per cent. for handling charges. Next door, in Guinea, the Russians had offered £3 million at 2½ per cent. I think those were the figures. Of course the contrast is made straight away. I am not saying that we could take on the Communist world in its mass bribing techniques. That would be ridiculous and would yield us no good at all.

Yet the British Government are able to propose a £30 million loan to the Cunard company and so to arrange matters by an associated grant of money that the interest is cut down to something which the company is able to tolerate. I wonder why we cannot think up in the Colonial Office this same sort of device so that we could give a loan of whatever is required and give, associated with it, a grant of money which is a permanent grant and which in effect cuts by half the interest which the country will have to pay upon the loan. Devices of that sort, which we have applied already at home, I should have thought could be applied to the Commonwealth also.

We are always being told by Chancellors of the Exchequer, by Treasury officials and by financial writers in the Press, "You cannot make these great loans to the Colonial countries because they are all on independent currencies. You will have a balance of payments crisis on your hands in five minutes." If we cannot get round that situation, what is the use of the Commonwealth and of Britain continuing to suggest how it can be run? I have said this before in the House. We should think of the schemes which the Russians use to trans-ship men, materials and goods and services from one end of that vast territory to another, not always by political persuasion but often by subtle financial and economic techniques. We see how from north, south, east and west the United States of America can send capital consumption goods right across that vast continent without suffering balance of payments crises. Surely we can think of something by which we can ship gifts from this country to deserving members of the Commonwealth. We should perhaps lose a fraction more of the £22 thousand million and be giving them a fraction more than they are getting now, but we should avoid a balance of payments; crisis supervening.

I should like to propose a motif, "Buy and ship", lease-lend to the Commonwealth. Let the Treasury buy outright certain industries and services in this country and the technique associated with them and send them out across the exchanges to establish them in the appropriate parts of the Commonwealth. That is the kind of technique, in default of a Commonwealth Bank and payments union, which we have to think of if we are to keep these people supplied.

These are things perhaps not for this moment but for after the certain collapse, which I am sure it will be, of the approaches which the Government are making towards union with Europe. I am quite sure from the attitude which the Labour Party is now beginning to adopt in the country that it too is thinking in these terms and will join some of us on this side of the House in turning that zeal and enthusiasm to new projects for assisting the Commonwealth when the time arrives and when the Government finally acknowledge defeat.

5.28 p.m.

Mr. Donald Chapman (Birmingham, Northfield)

I would, of course, agree with the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) in his final sentences if in nothing else, but in fact I think that most of us would agree with practically everything he has said today. His plea was for greater streaks of imagination in our approach to the development of the Commonwealth. Heavens above, that is needed. The tendency, which is as much the fault of the average politician as of the Government, is to treat expenditure in the Commonwealth as one part of administrative expenditure to be rationed, calculated and decided upon like anything else on which we spend our taxation.

The plea which many of us have made before and are making again today is that if some Government will take the lead in presenting this as what it is, an imaginative attempt to capture people's interest in contributing to various parts of the world, partly from humanitarian and partly from narrow self-interest motives—which are important—I am sure that we could voluntarily, so to speak, have a greater slice of taxation devoted to expenditure in the Commonwealth and to development in particular.

I was sorry that the noble Lord was not here when we were debating the setting up of the Department of Technical Co-operation. Some of us on this side of the House, my right hon. Friend the Member for Dundee, West (Mr. Strachey), myself and others, pleaded that that was the opportunity to set up a Ministry for Aid. Perhaps that was a bad name to give it, but it was with the same intention as the noble Lord has been suggesting. It would examine the whole scope of Commonwealth needs and would be a department for funnelling public investment and co-ordinating private investment in a planned sense in the Commonwealth. The noble Lord ought to have been there on that occasion when we were making precisely the sort of plea that he has been making today.

Before I come to give a welcome to this Bill, which will be a very qualified welcome, let me say one other thing about our total investment in the Commonwealth. The Colonial Secretary was enthusiastic over the spending of £180 million a year. He is, of course, entitled to say that this is an increase and how well it compares with that of other countries. On the other hand, I think that those of us who can still reduce these matters to simplicity, as opposed to what Governments do, are entitled to point out that if we knocked £50 million off the £2,000 million spent annually on defence and added it to the £180 million spent on Colonial development, we should be doing more good for world peace than we are.

I am not a pacifist, and I do not want to cut defence expenditure by anything of great moment, but at least we are entitled to say that if within the orders of magnitude that we are dealing with in terms of expenditure on defence, money raised from tobacco, from Purchase Tax and from alcohol, £180 million spent on colonial development is chicken feed. It is miserable by any comparison. What does it mean? It is 1s. 2d. per head of the population per week. If that means the equivalent of another five cigarettes—and it does not mean that, because a large part of the taxes are paid by companies on profits as opposed to individuals—it would not be a very great sacrifice to add another quarter for the good that it would do in parts of the Commonwealth.

I want to say why my welcome to this Bill is qualified. My welcome is restricted for this reason. Most of the lending activities of the International Bank, which we are guaranteeing under this Bill, are inevitably towards developing nations whose economy is what one might say off the ground already. It is by its traditions and by its businesslike methods of approach—I am not complaining of that—confining its investment to Colonies relatively well-off already—Colonies where the economies have got going off the ground.

One example, which I quoted to the House recently, is the raising of a loan of 40 million West Indian dollars to Trinidad for developing its electrification. I am delighted to see that loan. I am delighted that by our legislation here we are underwriting the guarantees there. Let us look at the position. This is a 40 million dollars loan to Trinidad. It has been done by a careful economic analysis made by the International Bank into the state of the Trinidad economy. It is happily reporting that interest on foreign loans is now less than 1 per cent. of the annual exports in value from Trinidad. In other words, what it pays out in interest on loans is less than 1 per cent. of its annual exports. That is a marvellous position. How lucky they are. I imagine it is less than ours.

Their income per head in Trinidad is 500 United States dollars annually. People are well-off in Trinidad. It has a progressive Government. It has free secondary education and a five-year plan, which is a delight to see. There are posters all over Trinidad stating: "So-and-so school is being erected in this phase of the five-year programme. It will cost so much and will be completed at a later date." Later, there is inserted the date on which it was completed. There is a sense of economy being on the move. A large part of that is financed by budget revenue surpluses. That is a very good thing.

From 1951.1960, in Trinidad the national income has gone up 60 per cent. at constant prices. That is a real advance of 6 per cent. added annually. That is progress. Now the International Bank underwrites that development and that success with a loan of 40 million West Indian dollars for further electrification. I am delighted to see it, but it must be only a qualified welcome. If one looks at the extent of this, one must not pretend that these loans which we are primarily facilitating under this Bill are actually helping the terribly bad off parts of the Commonwealth as we know them today.

Let me give some examples from nearby. How much better it would have been, if I may put it that way, that a loan like this should go to the Windward and Leeward Islands, which are Trinidad's poor relations. In Trinidad and in Jamaica, the crucial figure is the relationship of gross fixed capital formation annually. About 25 per cent. of their resources are devoted to investment in fixed capital each year. In the Leeward and Windward Islands—a stone's throw away—it is 10 per cent. to 11 per cent., taking into account the colonial and welfare grants that we have already made. What has been done by the Trinidad Government as a pilot for development in the West Indies indicates the enormous need for development capital in areas like the Leeward and Windward Islands for the next ten years.

To give other figures, they are looking in the next ten years for about 316 million West Indian dollars to develop the area, and that is 200 million to 250 million more than is on the horizon at the moment. That is the sort of thing that we are dealing with in these really backward areas where they need 300 million dollars. It is only investment on that scale that will bring the gross fixed capital investment annually up to the scale of the better-off Colonies and the better-off countries in that area. We have to provide all this. As the noble Lord said, we are not doing in many areas as well as other countries are doing.

The Report stated: The proposed West Indies and British Guiana figures are less than one-half of the figures for Guadeloupe, about one-third of the figures for Martinique, and about one-tenth of the figures for British Guinea. On the other hand, the figures for the French Cameroons and Italian Somaliland, although lower than the proposed West Indies and British Guiana figures, come reasonably close to them. Not only is there no prospect of the large part of the capital needed, but if they get it on the sort of scale they want we should be away behind the figure that France has poured into the West Indies in recent years.

These are important matters. Let us, therefore, not be over-enthusiastic about the Bill. This is a Bill which underwrites the successful Colonies and the successful development areas, but we have to think all the time not only of these. Let us welcome every penny we can get but not be so enthusiastic as to disguise the fact that the Bill is leaving us with an enormous burden in the badly-off colonial areas throughout the world.

I disagree with one point made by my right hon. Friend the Member for Wakefield (Mr. Creech Jones)—and I do so despite his great knowledge on the subject. He saw a danger for the underdeveloped parts of the world in that our national income was advancing rapidly whereas theirs, because of their rising population, was falling. This is not true. I am sure that it is not true. Certainly I am sure that it is not true throughout the West Indies, which is one of the areas of biggest population growth. The growth in the population of the West Indies is 1-2-2½ per cent. per annum, but the recent increase in national income has been at the rate of 6 or 8 per cent. per annum. Given enormous amounts of capital, we can sustain a rate of growth which will contain the rate of growth of the population.

Let us be happy about the Bill but not too enthusiastic. I want to see every penny made available—and let us bring more British pennies into the Commonwealth and the developing areas. But let us not for a moment overlook the need to put more money into the backward areas where the dangers of poverty lie.

5.42 p.m.

Mr. Philip Goodhart (Beckenham)

I followed with interest the speech of the hon. Member for Birmingham, North-field (Mr. Chapman), but I am sorry that he raised the question of defence expenditure because it seems to me that this is very much of a red herring which is frequently drawn across the colonial development scene. Only a few months ago I was talking to the Finance Secretary for Kenya in Nairobi, and he pointed out to me that the contribution made by Her Majesty's Forces to Kenya amounted to £9 million to £10 million a year and that if this contribution were withdrawn the economy of Kenya would virtually be brought to bankruptcy. I believe that the hon. Member is an enthusiastic supporter of the Labour Party official defence policy, which believes in the withdrawal of these forces from Kenya and their transfer to Germany, which would be a most severe blow to this part of the Commonwealth.

Mr. Chapman

Labour Party official policy also includes abandoning the nuclear deterrent, which would save quite enough for the purposes which I outlined in my speech.

Mr. Goodhart rose—

Mr. Deputy-Speaker

Order. Hon. Members are getting a long way from the Colonial Loans Bill.

Mr. Goodhart

I am not sure that the hon. Member is interpreting his party's policy correctly, but I will not pursue that further.

I wish to recall that, to my surprise and pleasure, I found mentioned in Clause 1 (3) the New Hebrides. This allows me modestly to point out that I am the only back bench Member I think in history to visit these isolated islands, for which we have a considerable responsibility. As my right hon. Friend pointed out in his opening speech, these islands are a condominium. When I went there I hoped that I would find a suitable memorial or museum where it would be possible to recollect the two glorious Colonial Empires of Great Britain and France. The expenditure of Great Britain and France per head of the indigenous population in the New Hebrides has been quite high, but the amount of economic development which this has generated is, alas, almost entirely negligible.

The blame, I feel, falls not on the British and French authorities but on the fact that until recent years—indeed, until the school days of my hon. Friend the Parliamentary Secretary—the main form of economic activity in the New Hebrides was the cultivation of curly pigs' tusks, which formed the basis of wealth in their society. It is possible to make pigs' tusks grow in a circle, and a man's wealth was reckoned by the number of circles which he could develop on the tusks of the pigs which he owned. I have heard of one tusk which went round in three circles. To buy this pig one had to offer the three daughters of a chief. I owned one tusk which went round once, which probably entitled me to a baby sitter for a week or two but not much more. One of the troubles about the tusk economy is that it is very difficult for the pigs to eat and the women, who play a major part in the economy of the New Hebrides, used to spend some time in ancient days chewing grass and then spitting into the mouths of the pigs. I think that World Bank loans will be a more palatable form of economic diet!

The Second Reading of this Bill is a somewhat more melancholy occasion, oddly enough, than the Second Reading of its predecessor in 1952. At that time, although the Mau Mau revolt had recently started in Kenya, the whole House, I think, looked forward to the notion that there would be a considerable period of rapid economic development within the Colonial Empire. These hopes have very largely been justified. There have been ups and downs, but in the last nine-and-a-half years there has been a tremendous expansion in many parts of Africa and other parts of the Commonwealth. The hon. Member for Northfield referred to some of the expansion which has taken place in the West Indies. I remember Mr. Manley telling me of the vast increase, some 15 to 16 per cent. in some years, in the gross national product in Jamaica.

But now there is a growing realisation and fear that the problem of our remaining Colonies in East and Central Africa is not one of expansion but rather one of a desperate attempt to see that past expansion is not destroyed. In 1952 the House devoted much of its time in the debate on the predecessor to this Bill to Kenya, and it is there that the problem is still most acute. As most hon. Members know, the economy is based largely on the tiny minority of British farmers, who generate over 80 per cent. of their country's exports and almost 50 per cent. of the national revenue. Alongside this comparatively large area of extremely well-run European farms, however, there is a large and growing mass of landless Africans.

Therefore, unfortunately, the facts of economic life in that part of Africa do not fit the political realities of today. It is easy enough for us in this House to say that the African electorate should recognise the economic benefit that the European community brings to them—one should recognise the value that any entrepreneur may bring—but we are demanding of the large African electorate a higher degree of political sophistication than we would expect from our own electorate at home if we do not imagine that they will cast envious and covetous eyes on this rich land.

To my mind, therefore, the question is not whether British farms should be handed over to African yeoman farmers for resettlement, but whether this resettlement takes place in such a way that it becomes a disorganised rout in which both black and white in Kenya suffer or whether the British Government will accept their responsibilities and ensure that this transfer of land is done with the minimum of disadvantage to Kenya's economy.

I salute the great skill with which my right hon. Friend the Secretary of State for the Colonies has conducted the current conference on Kenya at Lancaster House. He has done just about everything that could be done to retrieve a most dangerous situation. In the past twelve months, however, an increasing number of people, both in this country and in Kenya, have come to realise that whatever constitutional manipulations there may be, whatever soft words may be uttered and however much the concept of Uhuru may be accepted, the problem of the minority of rich farmers and a large landless majority remains.

Mr. Deputy-Speaker

Order. I am sorry to interrupt the hon. Member, but I find it difficult to connect his argument with the Colonial Loans Bill.

Mr. Goodhart

I hope to be able to point out, Mr. Deputy-Speaker, that it has a direct relevance, as some of the loans from the World Bank are used for these purposes of resettlement. We should accept the fact that although the organisation of the Loan Board proposed by my right hon. Friend may be exceedingly sound, the time has arrived when we need cash and not committees.

The International Bank is already associated with schemes for the resettlement of Africans, as my hon. Friend the Member for Haltemprice (Mr. Wall) has pointed out; at least, money has been offered by the International Bank for the various resettlement schemes. My understanding, however, is that so far practically none of this money has been taken up. The fact is that the resettlement schemes have been an almost complete failure when it comes to the transfer of Africans to British farms.

I believe that the reason why these projects, backed by the International Bank, have failed is that the Colonial Office did not really want them to succeed. I suspect that the Minister concerned in Nairobi was also anxious not to see a transfer of large numbers of the European population out of the country.

Mr. H. Fraser

Do I hear my hon. Friend saying that we did not want these schemes to succeed?

Mr. Goodhart

I will expand on that if my hon. Friend wishes.

Mr. Fraser

It would be interesting to hear my hon. Friend do so.

Mr. Goodhart

I suspect that within the Colonial Office and in the Ministry of Agriculture in Nairobi, there was a lurking feeling that it would be desirable to retain the maximum number of British farmers in Kenya and that, therefore, it was desirable to devote an entirely disproportionate amount of the capital available to the so-called development of the property and to apply the minimum amount to the purchase of land. Indeed, the figures are extraordinary. Only £5 million has been devoted to the purchase of land and £11 million to redevelopment and subdivision. That is an extraordinary allocation of capital.

Despite that allocation, one finds that the International Bank has not received applications for any of the credit which it has offered to make available. This suggests that the scheme was entirely ill-founded. Knowing the skill involved, I can only imagine that there was not the will to see a major reallocation of land in Kenya.

In recent months, however, there has been a radical change of heart, both here and in Nairobi. How much can the International Bank contribute to these schemes? I am doubtful whether it can contribute much. After all, the International Bank is entitled—indeed, charged—to look for a profit before making an investment. There will not be much profit in the sort of salvage operation on which we ought now to be embarking. I do not, therefore, think that we can look to this sort of international organisation to take over responsibility for the British community in Kenya, which to my mind rests squarely on the Government here, on this country and, above all, on this House.

6.0 p.m.

Mr. James Boyden (Bishop Auckland)

It would be pleasant to follow the hon. Member for Beckenham (Mr. Goodhart) to the New Hebrides, but I doubt whether that opportunity will come my way. We welcome the Bill to the extent that it guarantees an extra £50 million, but against the background of general enthusiasm and interest in the encouragement of development in the under-developed territories it is disappointing that the Government have not been able to do even better, under the terms of the Bill, in respect of social development.

The great weakness of the Bill—and, indeed, one weakness of the technical assistance department—is that there are no massive loans at much lower rates of interest for investment in social services. There are grants, such as those from the colonial development and welfare funds, which have been going on for a long time. Much good work has been done with them. But there is a need not only for commercial investment but for social investment at low rates of interest, under a recognised plan, in a Bill of this sort. The Government ignore this in local government, where it is still needed in England. How much more is it needed in the Colonial Territories?

Not only would such a scheme and such a set of loans be of value in developing the economic side; it would also have a good effect in increasing the confidence of the staff who have to serve in the Colonial Territories. The question of the break when a Colonial Territory becomes independent has been referred to on several occasions during the debate, and it is referred to indirectly on a number of occasions in the last report of the Colonial Office in connection with colonial research.

For example, paragraph 8 of the Report of the Colonial Social Science Research Council states: The Council viewed with great concern the break between the United Kingdom and overseas territories in the field of social science research which would ensue on the attainment of independence by colonial territories. The Council considered that it was of the greatest importance both in the interests of the emergent independent territories and of the United Kingdom that measures should be adopted to provide facilities for United Kingdom research in the social sciences in the colonial territories which became independent, and to provide liaison between the United Kingdom and the Independent territories. Just as in social research, so in relation to these loans, there is far too little concentration on the gap. In relation to our own domestic affairs in these days we have the National Economic Development Council. We go into detailed considerations about the form of estimates, the method of budgetary control and the better development of our economic system. But in the Colonial Territories concentration still seems to be placed far too much on a harsh sort of commercial loan.

Mr. Maudling

I shall be happy to debate this point with the hon. Member, but this Bill is designed to increase the loan guarantees that we can give to the World Bank, and the World Bank can lend only for commercial projects. I do not see how Government policy outside this sphere can be in order at this stage.

Mr. Boyden

The Government should use their influence with the World Bank to create and operate a section in this field. If we are allowed to debate the provision of another £50 million for commercial development in Colonial Territories it would seem very much to the point to debate a similar provision in respect of social development. Up to now the Chair has not ruled me out of order. Perhaps I may be allowed to continue until I am interrupted by the Chair.

Enough thought does not seem to be devoted to the multiplying effect of loans of this description—the multiplying effect of social investment—the Keynesian theory of using one's resources to the best advantage. In relation to the general economic situation in England, it took the Conservative Government a very long time to take action in respect of the location of industry and economic development generally. In fact, it was not a Conservative Government at all; it was the Labour Government which first applied this kind of doctrine to the economic situation. My argument is that in this Bill the Government lag behind, just as they did in national economic development in the 1930s and up to the outbreak of war. Today this is a very serious problem for underdeveloped territories.

I want to give two small examples of the sort of thing that I have seen with my own eyes, where inadequate concentration on social investment has not produced the results that could have been obtained had there been loans for social development at low rates of interest which an emergent country could call upon. I am thinking, for example, of Malta, where there is a big expansion in the tourist industry and where proposals for six large hotels have been made. The weather and general amenities are favourable for holidays, but many of these projects may run into snags if there is inadequate development of the water supply. I know that this is an intractable problem. Numerous reports have been made on the Malta water supply. The water that comes from the taps in the hotels is salty and unpleasant. If, under the terms of the Bill, there were a massive loan at a low rate of interest upon which the Maltese Government could draw, they would be able to keep in step the development of their hotels and the amenities to go with them.

My other example is Sierra Leone. When it was a Colony there was a drive towards adult literacy. There was a literacy bureau in Kenema, but it was very frustrated.

Mr. Deputy-Speaker (Sir William Anstruther-Gray)

I am getting a little anxious about the hon. Member's speech, which seems to be going very wide of the Bill.

Mr. Boyden

My argument is the same as I would make on the economic issue. Just as we need an economic multiplier so we need a social development multiplier. I am pointing out that inadequate thought is being given to this matter by the Government. Considerable money was expended in raising the standard of adult literacy in Sierra Leone, but when the people were literate inadequate printing apparatus was available in the centre, and so there was insufficient reading material for the people to use. In other words, the social investment was to some extent successful but nothing like as successful as it could have been if more money had been expended on it.

We are debating a system of loans for Colonial Territories, and it seems to me that this is a field in which there should be some accompanying promise from the Department of Technical Assistance or the Colonial Office that much more attention will be given to social investment. It seems to me that this is an investment which would produce even greater dividends than the commercial loans proposed under the scheme.

6.10 p.m.

Mr. Eric Fletcher (Islington, East)

I wish to underline the point made by my hon. Friend the Member for Dundee, East (Mr. G. M. Thomson) and refer again to the fact, brought prominently to our notice yesterday, that about 2 million pints of skimmed milk were poured down the shaft of a disused coal mine. I have had much correspondence from constituents, who were scandalised that such waste should occur at a time when, as we all know, all over the world, and particularly in some of our Colonies, many small children are suffering from deficiencies in their diet and from diseases. The milk could have been used to help to alleviate their sufferings. I cannot believe that it is beyond the bounds of possibility to devise a scheme to enable surplus milk to be dried, preserved and sent overseas to places where young children and others are badly in need of it.

It seems to me to be a complete disgrace and a reflection on our civilisation and the whole of our colonial organisation that what was announced in the Press yesterday was allowed to happen. It does not make sense that 2 million pints of skimmed milk, containing nutriment of great value particularly to children, should be poured down a derelict coal mine shaft, when there is so much malnutrition in other parts of the world. I hope that the Minister will deal with this point which was referred to so forcibly by my hon. Friend the Member for Dundee, East.

As I say, I have received a volume of correspondence on the subject already, and I am sure that all hon. Members were shocked when they read accounts of the matter in the Observer and other newspapers. I hope that we shall receive a satisfactory reply from the Minister and that the Government will take immediate steps to deal with this vital human problem.

6.12 p.m.

Mr. Denis Healey (Leeds, East)

This has been a valuable debate, although inevitably rather ragged. Everyone welcomes the Bill. Our only criticism of it would be that in some respects it does not go far enough. But many hon. Members are concerned about the context in which the Bill must operate in the Colonial Territories. So the debate has been wide, and has dealt with subjects ranging from the curly pigs' teeth in the New Hebrides to the Land Board in Kenya.

I hope that many of the points will be dealt with when the Minister replies. In particular, I wish to reinforce the requests of my hon. Friends the Members for Dundee, East (Mr. G. M. Thomson) and Islington, East (Mr. Fletcher). I hope that we shall be told whether the Minister's own Department is capable of initiating a scheme to make use of milk which may otherwise be thrown down coal shafts.

Inevitably, such a debate as this is a rather unsatisfactory basis on which to discuss the problem to which the Bill mainly refers, the problem of aid to the developing parts of the world from the West in general and Britain in particular. I sympathise, Mr. Deputy-Speaker, with the difficulties caused to you on more than one occasion in deciding whether particular points were in order.

I think that I am justified—as was the Colonial Secretary in opening the debate—in saying a word about the general context within which the Bill must operate. We are all conscious that the challenge of poverty in Africa and Asia, and many other parts of the world, is likely to be the most important single, political and economic problem facing Britain, and the world in general, over the next thirty or forty years. Irrespective of party we must all admit that the efforts now being made by the richer countries to solve this problem are inadequate.

Since this debate started at half-past three, nearly 15,000 new babies have been born, and the problem of the developing parts of the world even to keep pace with this enormous explosion of population is one to which the developed countries are making only half of the contribution required of them. It has been estimated by Mr. Hoffman, to whose work other hon. Members have paid tribute, that to double the standard of life in the African. Asian and Latin-American countries, and the many poor island territories—for some of which we have a responsibility—the richer countries will have to contribute 2.3 per cent. of their own wealth per year for the next fifteen years. At present, they contribute under 1 per cent.

With respect to the Colonial Secretary, I do not think that any country which is failing to reach the required target, as set out by Mr. Hoffman, can be satisfied with what it is doing, although it may well credit itself that it is doing anything at all. The International Bank for Reconstruction and Development, to whose work everyone has rightly paid tribute, is fortunate, as an international institution, in having at its head a man like Mr. Eugene Black, who seems to combine the authority in Wall Street of an extremely experienced American banker with the appeal, in Africa and Asia, of an extremely sensitive human being.

The World Bank is fortunate to have such a man as Mr. Black at its head during its critical initial years. But the total expenditure of the World Bank in the whole of its operations so far amounts to little less than one year's expenditure on defence in Britain. I do not think that the Colonial Secretary or anybody else can be satisfied with the impact which the rich countries are making on the problem of poverty so long as that can be said.

There is justification in the criticism made by my hon. Friend the Member for Bishop Auckland (Mr. Boyden) that the terms of reference of the Bank and the conditions under which it is able to lend money are unnecessarily restrictive. I hope that the Under-Secretary of State will be able to say whether the Bill will apply also to the activities of the subsidiary to the World Bank, the International Development Association, which is able to lend money on less restrictive terms than is the Bank itself.

The real problem which arises regarding the operations of the World Bank in the Colonial Territories, to which the Bill refers, is the qualification that the Bank lends only to those countries with a substantial ability to absorb the loans. In the last resort, this comes down to the potential borrowing country having sufficient trained personnel and the type of economic and social infrastructure capable of supporting a loan on normal financial terms. Whether countries have the type of trained personnel and the infrastructure to enable them, first, to obtain a loan from the Bank, and, having obtained it, to repay it—which, after all, is what the Bill is concerned with—will inevitably depend upon what other forms of external aid the Colonies may obtain.

This makes it inevitable that in such a debate as this we should discuss at any rate in general terms, the scale and nature of the effort of the Government in respect of the Colonies. On this issue I felt that the Colonial Secretary was strangely complacent. I do not blame the right hon. Gentleman personally. We all know that the main responsibility lies with the Treasury. But I hope that when he is talking to the Chancellor of the Exchequer the Colonial Secretary will not appear to be quite so satisfied with our effort as he seemed to be when addressing the House this afternoon.

The total volume of Government aid to which the right hon. Gentleman referred is still under 1 per cent. of our total national income; and although, to quote his own odd phrase, it "bears comparison" with that of other countries, the comparison when applied to countries with responsibilities similar to our own, is by no means a favourable one.

The Colonial Secretary knows, for example, that France, which is the only European country with colonial responsibilities in any way analogous with those of Britain, has been spending over twice as much in Government aid to her external territories as Britain, although in many respects the range of her responsibilities is less than ours. She is responsible for fewer people than we are. The United States of America, which has no direct political responsibilities for any countries abroad, other than Hawaii and Puerto Rico, has been spending per million of the population more than twice as much as Britain.

I do not think that it is for the Colonial Secretary, of all Ministers in Her Majesty's Government, to declare himself satisfied and complacent about the scale of British aid to her Dependencies so long as our aid compares so unfavourably with that of France, which has similar responsibilities, and with that of the United States, which has not. Moreover, during last year, of the £94 million which went from the British Government to our Dependencies, £44 million were loans at a very high rate of interest. In many cases these loans were made to enable colonial Governments to repay their debts to Britain—in other words, it was a vicious circle. We must also face the fact that many of the grants which are included in the existing figures will inevitably fall off as Colonies become independent and no longer qualify for colonial development and welfare aid and as assistance from the Colonial Development Corporation begins to taper off.

I want to confine my remarks from now on to the area with which the Bill is particularly concerned, namely, East Africa. As the Colonial Secretary said, the main purpose of the amendment of the old Colonial Loans Act is to enable aid to be given to groups of countries of which only one is a Colony, is to enable the Government to guarantee World Bank loans made to East Africa. Incidentally, I commend the valuable article appearing in The Times today on this subject by Mr. William Clark. Director of the Overseas Development Institute, which is doing so much to stimulate interest and develop knowledge in Britain on this range of problems.

We all hope that the whole of East Africa will be independent in about a year from now. I, too, congratulate the Colonial Secretary on the skilful way in which he has so far succeeded in guiding the Kenya Constitutional Conference towards what we all hope and pray will be a successful conclusion during the next few days.

The real responsibility we must carry is what is to happen to these territories when they become independent. Not only our chance of saving the money which we are guaranteeing under the Bill, but our reputation in the world as a whole, will depend very largely on the ability of these countries, which are now in the last stages before standing on their own feet, to survive the extremely rigorous economic problems which will face them the moment they become independent.

Unlike the noble Lord the Marquess of Salisbury, I have always been a great supporter of disengagement, not only in colonial affairs but also in foreign affairs generally. However, I have never thought that disengagement should imply a lack of interest or a writing-off of one's responsibilities in an area. I believe that the abandonment of direct colonial responsibility for the East African territories must be accompanied by a long-term economic effort to ensure that these countries will remember us happily and will not curse the day on which they were pushed into this new status.

We must face the fact that these territories are, financially, by far the weakest of all the territories which, so far, have been moving towards independent status in the post-war period. Ghana became an independent country with reserves amounting to £40 per head of the population, whereas Tanganyika went into independence last year with reserves amounting to only 8s. per head of the population. This shows the scale of the problem involved. Again, Tanganyika started with a deficit on its current account of £1 million. Uganda is likely to start in October with a deficit of £2 million. The financial problems of Kenya are more serious still.

I hope that in replying to the debate the Under-Secretary will say something about the Government's plans for providing financial assistance to these territories when they become independent. In particular, has he yet succeeded in Teaching agreement with the Finance Minister of Tanganyika about the rate at which the so-called "Golden handshake" is to be distributed to Tanganyika over the next few years?

Apart from the problem of aid in general, the problem which is most acute in these countries, to which several hon. Members have referred, is that of technical expertise. None of these bank loans is likely to be repaid unless these territories can provide more trained people to run their economy than they seem likely to be able to provide at present. There is at the moment an appalling shortage in all three territories of African technicians. For example, in the whole of Uganda at present there is only one trained African electrical engineer. There is no doubt that education at all levels is desperately needed.

I cannot help feeling that the Government should be doing more than they are doing to stimulate the educational development of these territories. I understand that under the "Teachers for Africa Programme", which is a joint British-American programme, the Americans are by now providing 150 teachers but only nine are going from this country. This is an extremely inadequate and unfavourable comparison for this country to have to sustain.

Whatever we do about training Africans, it is inevitable that in the short run the real problem is whether we can do anything to make it possible for these countries to keep the British experts and technicians who are at present serving them. At present, a mass exodus of trained British personnel is beginning from all the East African territories with which the Bill is concerned.

Viscount Hinchingbrooke

Is that to be wondered at?

Mr. Healey

It is reckoned that in the first year of independence Uganda is likely to lose 45 per cent. of her doctors and 58 per cent. of her trained engineers. This is a haemorrhage which, unless it is staunched rapidly, can lead to the foundering of the independence of these countries in the very near future in circumstances which can be even a threat to world peace.

Viscount Hinchingbrooke

Who is responsible?

Mr. Healey

If the noble Lord will listen for a moment, he will hear what I think the Government can do about it.

Viscount Hinchingbrooke

Does not the Labour Party bear some responsibility?

Mr. Healey

I would not accept any blame for it. The Tory Government have been in power for eleven years, which is far too long for us to take responsibility for this.

Viscount Hinchingbrooke

Socialist cries of freedom throughout the world!

Mr. Healey

This is a very serious problem. Even the noble Lord will agree that, whatever the responsibilities were in the past—I for one do not accept that my party has any responsibility whatever—drastic action is needed in the immediate future. One of the ironies of the present position is that these newly independent Governments will have to pay compensation to the departing British personnel they desperately need and borrow money from Britain to be able to pay this compensation.

I should like to ask the Under-Secretary two questions in this respect. First, is it not possible, even at this late hour, to consult all the other Commonwealth countries in order to see whether we can rapidly establish some sort of Commonwealth technical service which would guarantee a secure career for people who have acquired expertise in our own Colonial Territories; as, for example, in East Africa?

There is no doubt that the central problem is that technicians do not expect long-term security in Uganda alone, in Kenya alone, or in Tanganyika alone. Nothing can possibly give them that, but might it not be possible to consult the other Commonwealth Governments to see whether a scheme could be jointly worked out to ensure that experts in these rather limited spheres like tropical agriculture and agronomy should have a guaranteed long-term career in one territory or another? We all know for certain that if there is to be continued economic growth in Africa and Asia there must, somewhere or other, be some guaranteed career for all the experts the world can produce over the next few generations.

It should not be beyond the wit of the British and the other Commonwealth Governments to create some machinery now by which we can, at least, stop the absurd drain on the expertise now available—which means that people who have spent twenty or thirty years mastering the problems of African agriculture spend the next twenty years as secretaries of golf clubs, estate agents in Cumberland, or something like that. If the Government would take the initiative, inside the Commonwealth, for some such scheme it would be one of the ways in which they could revitalise the whole Commonwealth concept and give it a new meaning—

Mr. Speaker

I hate to interrupt the hon. Gentleman, but that is really a very long way from the provisions of the Bill.

Mr. Healey

With respect, Mr. Speaker, I am not sure whether I made the point before you succeeded Mr. Deputy-Speaker in the Chair, but it was pointed out by Government speakers that the main obstacle to effective World Bank loans to Colonial Territories was the lack of trained personnel to carry out the projects for which those loans were being made. I think that if this House is to protect the sums of money that the Government are now guaranteeing as being lent by the World Bank, the House has not only the right but the duty to make some comment on the means by which the Government may safeguard their money—

Mr. Speaker

On that principle, one could go in almost any direction from this Bill. I understand that the emphasis on the need for efficient technicians is right, but how to constitute those technicians into some inter-Commonwealth force is rather remote.

Mr. Healey

In all sympathy with the predicament in which you find yourself, Mr. Speaker, I gladly bow to your Ruling, although it seems that if we are to mention all the implications of the Bill, there are very few fields of colonial or foreign policy into which one might not at some time divagate.

Secondly, would it not be possible for the British Government to accept the whole cost of compensating those who do leave? It seems to me to be absurd that these countries, as they become independent—with no reserves at all—should have to borrow money from us to compensate the British technicians whom they so desperately need but who leave their country. That is what is happening now; 10 per cent. of the budgets of Tanganyika, Uganda and Kenya are likely to be spent in the immediate future on the compensation of trained European personnel who decide to leave.

I hasten to reassure you, Mr. Speaker, that I do not propose to follow the hon. Member for Liverpool, Wavertree (Mr. Tilney) into the realm of pensions, except to remind the hon. Gentleman that the reason why so few hon. Members on this side signed his Motion was that he sought to obtain some sort of economic sanction under which Britain would not lend money to colonial Governments unless they did exactly what he wanted about pensions.

Further, on this subject of trained technical personnel, is there nothing that the Government can do to stimulate more than they so far have done some sort of voluntary service overseas by trained British people? On my recent tour of West Africa I was tremendously impressed by the political and economic impact made by two or three people from the Voluntary Service Overseas serving as teachers in a remote village. I am sure that the fund of idealism and ability that is available amongst our own young people here could be utilised more efficiently if the Government were to give a higher priority to the stimulation of that sort of activity.

The second major problem that arises over East Africa—and this, I assure you, Mr. Speaker, is directly relevant to the Bill—is the sort of planning that is being carried out at the moment by the World Bank and by the local territorial Governments. Almost all the planning being done in East Africa is being done by the World Bank, which has already published a plan for Tanganyika and is, I believe, shortly to publish plans for Uganda and Kenya. At present, however, there is very little joint planning in those territories, and very much of the planning which the World Bank is suggesting involves simply a carrying over of plans already made by the present colonial Governments.

Is it not possible for us, who are now guaranteeing the loans to be made to the East African territories, to use our influence with the World Bank and with the local Governments to produce more effective regional planning in the area as a whole than is at present taking place; and, in particular, a more effective co-ordination of the various types of Western international aid that are flowing into the territory from countries Like Germany, France, Italy, as well as Britain; from private as well as public sources?

In that respect, I hope that the appointment of Mr. Adu as the African in charge of the Common Service Organisation—a man whom all who have met him will agree is a man of exceptional vigour and ability—will lead to a more effective attempt by the Organisation to co-ordinate action there. Is it not possible for the British Government to press, inside the O.E.C.D. for the co-ordination of aid coming from the Western countries which are members of O.E.C.D.: an attempt, perhaps, to get some sort of consortium which would canalise and co-ordinate the various type of private as well as public investment that are going through?

I regret that I may have trespassed on your kindness a little, Mr. Speaker, to enlarge the frontiers of this discussion, but, as I said earlier, I believe that in East Africa—which is, after all, the territory most directly concerned with the Bill—we see in microcosm the type of problems that we face in most of the Colonial Territories, and about which there is at present far too little being done. Though the Bill is limited in its application, it raises very wide problems—problems which, perhaps, may be more important than all others in the world for the next thirty years. Because this Measure makes a small contribution towards solving those problems, we on this side, welcome it.

6.39 p.m.

The Under-Secretary of State for the Colonies (Mr. Hugh Fraser)

The terms of the Bill have not been followed very closely by many hon. Members who have spoken this afternoon—that is one of the problems—and I apologise to you, Mr. Speaker, I think on behalf of us all, for our having gone rather wide. This is a matter not of colonial loans but of a guarantee of loans made by the World Bank. I should like to join in the tributes which have been so rightly paid to Mr. Eugene Black and the other officials of the World Bank who, apart from the work of that organisation, have been so invaluable for the advice they have given; people like Professor Mason in Uganda, and other visitors from the World Bank who have been of great value to us all.

If I may, I will turn for a few moments to deal with the advantages of the Bill and then turn to some of the—I will not say red herrings—but some of the things which have been built up ingeniously by my hon. Friends and hon. Members opposite—with great ingenuity in some cases—as a great superstructure on the comparatively simple structure of this comparatively simple Bill.

The hon. Gentleman was entirely wrong when he said that in the past these guarantees have run us into trouble. In fact, so far none of these guarantees has been called upon. I am sure that that will continue. Not one Government reneged on their obligations, and I am certain this will continue. The Bill carries with it automatic safeguards. One hon. Member opposite talked about these loans as a banker's ramp—or words to that effect—suggesting that this was hard, harsh moneylending. On the contrary, I would say that the whole point of these loans and of this Bill is that they mean that this world money will be available for projects which we could not ourselves afford. It makes money available for more generous economic projects than we in this country could afford. The Bill and the arrangements it sets out have to be fitted into the general jigsaw of the pattern, and in that they are an extremely valuable contribution. The rates of interest are low. Of that there is no question. The rates of interest are running at about 5¾ per cent., which today is generous.

My lordly Friend—

Mr. Healey

"Lordly" is right.

Mr. Fraser

My noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) compared our aid with Communist aid and said that by comparison we were not showing well enough. I would say that there are very great disadvantages in receiving Communist aid. First of all, all Communist loans are tied to Communist projects. All Communist loans, however cheap they may be, at from 2 per cent. to 3 per cent., are tied to Communist bloc projects of which the prices are decided entirely by the Communist bloc. They may be prices well below world prices or well above them. Those who have suffered being tied to the Communist organisation would infinitely prefer on the whole, I think, to do business with Mr. Eugene Black and the World Bank. On this I think there is no argument.

Certain hon. Members have suggested that we should withdraw our support for the guarantee for loans to those countries unless they do something for the ex civil servants. This system of guaranteed loans is of immense benefit to our own balance of payments. I am not going into the figures now, but it is absolutely clear that, from the point of view of the people of this country, by guaranteeing these loans a great deal of money freely flows back to this country. No less than £15 million flowed back in orders to this country last year from money lent overseas. That is a tribute both to our competitive costs in the world and to the excellence of this system of loans.

I turn to one or two of the things said by the hon. Member for Leeds, East (Mr. Healey), if I may be allowed to reply to some of the points about East Africa which have been put to me on this simple Bill, because various hon. Members have made various accusations against my Department and I should like to answer shortly. The hon. Member for Leeds, East talked about the wicked showing of this country as compared with the showing of the United States in supplying teachers. He talked about our supplying nine as against their 150 teachers. That is not really the comparison. We are providing hundreds and thousands of teachers elsewhere while the United States are not. That is the comparison which ought to be made—the comparison with the total number of teachers we provide for backward areas as a whole. It is not a comparison of 150 and 9. The whole point was that by sending our nine we helped to show the Americans the way—and they were, so to say, the pilot fish for what might become a thundering herd.

My hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney) raised the point about colonial servants. I quite agree with him that this is a matter of great importance to the whole House. I am glad, personally, that he raised it, and I hope, speaking personally, and as a Member of Parliament, that he will pursue the matter. I would point out to him some of the things we have done in the past year. First there is the O.S.A.S. scheme, one of the most generous of such schemes in the world. In 1961 to 1962, the Bahamas, Bermuda, Gilbraltar, Northern Rhodesia, St. Helena, the Gilbert and Ellis Islands, the British Solomon Islands, and the Aden Colony have now come into line with our pensions scheme. This was a great act on their part. We are in negotiation with the Gambia and with the Leeward and Windward Islands. Obviously, after the hurricane, British Honduras is not in a position to make such payments. Singapore is tied up with the Malaysian matter, but we are in negotiation on this subject.

I hope my hon. Friend will understand that we at the Colonial Office and my right hon. Friend will continue every possible action to see that this cause is brought forward and that our old civil servants, who have worked overseas for this country, are in their old age compensated in the normal, proper way, in line with those in the mother country. There are wide difficulties about this. I do not believe that this is the moment to go into them except to say that we are trying our best at the Colonial Office, and we can show some success with colonial Governments over the last few months. I do assure my hon. Friend that this cause is very near to my own heart and also to the heart of my right hon. Friend.

Mr. Leslie Spriggs (St. Helens)

What is the hon. Gentleman's attitude to the compensation scheme for the East African designated staff?

Mr. Fraser

That is still under negotiation. I cannot say more at the moment.

Now to go on to some of the other points raised. The question of British Honduras was raised by the hon. Member for Salford, West (Mr. C. Royle). We are negotiating at the moment, and aid of more than £750,000 has been given. As he will know from my visit and various reports which have been made available to this House, we have done all we can in that matter.

I turn to the speech of my hon. Friend the Member for Beckenham (Mr. Goodhart), who had some interesting tales to tell of pigs with curly teeth. He then turned, tooth and claw, on me. Curly teeth or not—and I have not actually looked inside his mouth—he made some remarks about our not having done the right thing about Africans and land settlement and European farms. I do not like using strong language, but I think that this was an absolute divagation from the truth of the widest sort. When we took over the schemes and I went out to East Africa last year, some 180,000 acres of European land were to be settled. We have 350,000 for settlement by African settlers. To say we have been trying to hold up this scheme is neither kind nor well-intentioned.

Mr. Goodhart

Does my hon. Friend say these schemes are a success?

Mr. Fraser

I say these schemes are going forward. The land is being bought. What more can we expect? The money is there. The point I make is that in the last year we have increased the acreage of settlement of European land to be purchased for settlement from 180,000 acres to 350,000 acres. It is scarcely helpful when people of one's own side say that nothing has been done.

I turn to the question of milk supply. This is an important point, which I shall certainly raise with my right hon. Friend the Minister of Agriculture. Of course, an enormous supply of full milk, not skimmed milk, was made available by the Canadian and United States Governments, and is available free except for paying for the aircraft to distribute it. It is a question whether it would be worth while processing the skimmed milk here in this country, which would be expensive, when we can get from the Canadian Government full milk at the cost of the transport by either sea or air. I do not want to go further into the matter, but I must make that point to the House.

My noble Friend the Member for Dorset, South talked about the investment which the French are making. It is very difficult to compare like with like, first because of the Algerian investment, and because of our ability to concentrate larger sums of money on comparatively smaller territories, while having in the past made overseas investments, for which there was enormous opportunity, in larger territories, such as the amounts which we put into India and Pakistan, which have no corresponding investment in the French balance of payments.

Turning to the general problem and the wider question raised by many hon. Members on both sides of the House—the need for wider investment in the backward areas—the problem, as the hon. Member for Dundee, East (Mr. G. M. Thomson) said, is between the over-fed and the under-fed, to put it at its crudest. We realise that this is a problem, but I want to say something about the general jig-saw into which all these things have to fit, and of which pattern this Bill forms a valuable part. Of all the activities of the World Bank, this one is certainly the one most devoid of any mean or base intent. This is a very fine performance by the World Bank, and certainly for the economically viable projects the World Bank has a huge part to play.

In addition, there is the Colonial Development Corporation, and here we are still regarding the question, which we started to review, whether it cannot be extended into the period after independence has been reached. We have the system of grants in aid, which runs into millions of £s a year, and we have the colonial development and welfare scheme. We have the Department of Technical Co-operation, and we also have the assistance which we give militarily to some of our friends and allies, and even to some in colonial status who most desperately need the support of our Armed Forces. We have the system of Commonwealth loans for those territories that are in need of funds, and Tanganyika is an obvious example. We also have the resources of the City of London, and we have the various commodity schemes, such as the Commonwealth Sugar Agreement, and other agreements which I am sure we should like to see pushed further. All these are of value.

Finally, we come back to the question—and I see that my noble Friend the Member for Dorset, South has now left us—of where is the dynamo and the root of all this. The dynamo is the power of ourselves in this country to provide a surplus, so that as a rich country we can have money to invest and to give abroad, and I underline that, because, apart from anything else, more than 40 per cent. of the money we gave last year to the Colonial Empire—some £93 million in various forms—was in the form of grant, which is a gift. This is of immense importance, and although my noble Friend has left us, I want to say that all this talk about Commonwealth loyalty and this and that is meaningless unless this country has the capacity to produce the goods to provide a surplus for investing overseas. That is what the present Government are resolved to do.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee, pursuant to Standing Order No. 38 (Committal of Bills).