HC Deb 15 December 1964 vol 704 cc186-9
5 and 6. Mr. R. Carr

asked the Minister of Overseas Development (1) what is the annual target for Government aid to developing countries as a proportion of national income;

(2) whether she is proposing to allocate a large proportion of British aid expenditure to technical assistance.

8. Mr. Tilney

asked the Minister of Overseas Development whether she is proposing to make any change in the proportion of British aid which is tied to expenditure in this country.

14. Sir R. Russell

asked the Minister of Overseas Development what changes she is proposing to make in the proportions of British aid expenditure devoted to bilateral and multilateral programmes.

Mrs. Castle

With permission, Mr. Speaker, I will answer this Question and Nos. 6, 8 and 14 together. I do so because these Questions, taken together, call for conclusions on major aspects of our aid policy.

We consider that a thorough review is needed in these matters. Hon. Members will realise. I hope, that this review, which I am undertaking as a matter of urgency, will necessarily take time. We have to bring the necessary economic analysis to bear on the concrete problems which confront us in this field, to consider what policies are practicable in our present economic situation, and to discuss our proposals with other countries with which we collaborate. I shall certainly make our proposals known to the House as soon as I can. For the present, however, I would prefer not to comment on particular aspects of a policy which we shall need time to define in detail.

Mr. Carr

While not complaining that this matter should be looked at fundamentally in the way that the right hon. Lady suggests, may I ask her whether she can give us some idea of how soon she will be able to give these replies, bearing in mind that she was pretty definite about some of these things in the House not many months ago?

Mrs. Castle

I am sure that the right hon. Gentleman will appreciate that my Ministry has been in existence for only a few weeks. Although he is quite right to anticipate that the Government will take urgent action on all matters of public importance, we cannot do it as quickly as that when the staff has not even been built up. Moreover, the United Nations Conference on Trade and Development at Geneva last spring called for a review of the policies by the donor countries. This is now being carried out in the Development Advisory Committee of O.E.C.D. Some months must elapse before even the interim reports can be produced for the consideration of the Ministerial Council.

Mr. Tilney

Since giving aid to the Colonies has so far been untied, although it is always hoped that the Colonies will buy British, can the right hon. Lady say what percentage of aid is tied at present and whether, in consulting other donor countries, she will endeavour to get all aid untied?

Mrs. Castle

Rather more than one-third of our bilateral capital aid is formally tied. I agree with the hon. Gentleman that if all countries were to untie their aid this country would probably stand to benefit. But I am sure that he will agree that in the present urgent economic situation we could not take unilateral action in this field.

Sir R. Russell

Could the right hon. Lady be a little clearer in answer to Question No. 14? Does she favour more bilateral aid or more multilateral aid?

Mrs. Castle

This is clearly a matter which must be considered in the light of the general review. About 12 per cent. of our aid at the moment is multilateral. I cannot add to what I have already said about policy.

Mr. Carr

Could not the right hon. Lady answer a little more definitely my earlier question about how long she anticipates this review will take? It is not true to suggest that these matters have not been considered before. Does she still adhere to the view which she expressed to the House at the end of July that the balance of payments should not be advanced as a reason for there not being an immediate increase in Government aid?

Mrs. Castle

On the time factor, I think that the hon. Gentleman is a little unreasonable in asking why we are not in a position to make this policy statement yet. I repeat that I am still completing the staffing of my Ministry. I also repeat that the Development Advisory Committee has not finished its considerations. It would be quite wrong to try to reach conclusions in isolation from the other donor countries and international agencies involved.

13. Mr. Longden

asked the Minister of Overseas Development to what extent the balance of payments affects the scale of Government aid to developing countries.

Mrs. Castle

In present circumstances the effect on the balance of payments is a factor which the Government will have particularly in mind when determining the amount and types of aid which can be made available. The extent to which aid is a burden on the balance of payments depends on many factors including the extent to which it is spent in this country, and the extent to which other countries are giving aid simultaneously.

Mr. Longden

Does not the right hon. Lady recall that on, I think, 28th July last she made another speech in this House in which she advanced the theory that the balance of payments was no valid reason why this country should not increase its aid to 1 per cent. of the national product then and there? Why has she changed her mind since then?

Mrs. Castle

I fully recollect that in my speech from the Opposition Front Bench in February I said that the balance of payments position would be bound to have a crippling effect on aid until we had introduced international monetary reform which removed the shadow from our activities. I have stressed that clearly there is some return to us from aid, and this is a point which we should never overlook. There is a direct return of some of the moneys back to this country and there is also the indirect return in the stimulation of world trade, from which we can only hope to benefit.

Mr. Lubbock

Is the right hon. Lady considering means of giving aid to the developing countries which would directly help British industry? In particular, has she considered the provision of light air-craft, of which production is expanding in this country and for which there is particular need in some of the nations of Africa?

Mrs. Castle

Wherever we see an opportunity of increasing opportunities for British exports without damaging the main purpose of aid—which is to stimulate the development of the receiving countries—we seek those opportunities.