Clause 1.—(THE RESOLUTION.)

HC Deb 11 February 1964 vol 689 cc224-62

3.49 p.m.

Mr. John Stonehouse (Wednesbury)

; I beg to move, in page 1, line 19, at the end to add: subject to the resolution including a provision for the expansion of the resources of the Association to a total equivalent to 5,425 million dollars by November 1968". I move this Amendment because I believe that the Committee will want to impress upon the Ministers responsible for our overseas aid the degree to which we feel that the work of the International Development Association should be expanded and extended.

Once again, I must protest that the Ministers directly responsible—the Secretary of State for Technical Co-operation, the Secretary of State for Commonwealth Relations, and the junior Ministers of those Departments—are not in their places to take part in this debate.

This further indicates the lack of interest among hon. Members opposite in the work of the I.D.A. Hon. Members on this side of the Committee feel that the International Development Association is a most important organisation and its work should be increased and expanded. A former president of the World Bank referred several times to the need for the Association to have further finance put at its disposal in order that it may extend and expand its work.

During the Second Reading debate last week I quoted what he said at the annual meeting of the World Bank group. He pointed out how important it was that the Association-type loan should be extended. This is because the high interest loans granted by I.F.C. and the World Bank result in too onerous a burden for countries engaged in long-term development.

The I.D.A. provides loans at a nominal rate of interest equivalent to 0.75 per cent., with provision for repayment over a period of 50 years. This is the type of loan which enables developing countries to develop railways, transport, irrigation and hydro-electric schemes which take a long time to produce any return. In the opinion of most of the experts on the problems of newly developing countries, work which ha been done by the Association should be expanded.

What do we find when we look at the details of the work of the I.D.A.? We see that there is available a total of 775 million dollars which is to be expanded by a further 750 million. I ask the Committee to consider whether this is sufficient, bearing in mind the enormous need for development aid at low rates of interest for long-term development projects. The summary statement of development credits which appears in the I.D.A. Report for last year shows that on 30th June, 1963, the actual amount dispersed by the Association was only 68 million dollars whereas the un-dispersed portion was over 365 million dollars.

This is far too small a sum compared with the crying need which exists in so many newly developing countries. But what is particularly a matter for concern is that the details of the disbursements reveal that over two-thirds of the dispersed portion has gone to India and nearly two-thirds of the un-dispersed portion is also allocated to India. I, and I am sure other hon. Members, would not want any of these sums to be withdrawn from India. We want more money to be available for India, and long-term credit to be extended and improved for other countries which are crying out for development assistance.

There are 29 countries which are already Part II countries in membership of the I.D.A., but which as yet have received no assistance in the form of long-term development credit. I hope that the Committee will bear with me while I read out the list: Afghanistan, Bolivia, Brazil, Ceylon, Cyprus, the Dominican Republic, Equador, Ghana, Guatemala, Iran, Ivory Coast, Liberia, Malaya, Mexico, Morocco, Nepal, Niger, Nigeria, Peru, Philippines, Senegal, Sierra Leone, Somalia, Syria, Tanganyika—which, I believe, has received some assistance, and we are glad of that—Togo, United Arab Republic, Vietnam and Upper Volta.

In addition to the countries which are already independent and have joined the I.D.A. as Part II countries, there are many other newly independent countries in need of assistance which have not yet received it. They include Kenya, Uganda, the two Congos and Dahomey. There are countries which are still dependencies of the United Kingdom, but for which the governments have not yet applied for development assistance. We believe that they should apply because there is a great need for development in countries like Mauritius, Basutoland, Bechuanaland, and other territories for which we are still responsible. None of the countries which I have mentioned appears in the list of territories receiving development credit from the I.D.A. They will 'iced assistance. They need it now.

I wish to refer to some specific projects which they lave in mind to develop if assistance is forthcoming. We can only presume that no assistance has been given from the I.D.A. because funds are not available. In the last annual report of the I.D.A. there is an acknowledgement that insufficient money is available in I.D.A. resources to deal with all the demands which are being made upon them. There is a further reference to the problems of the many newly independent countries which need immediate assistance but cannot rely on the metropolitan Powers to help them to the extent that they need help. They have not yet developed a credit-worthiness of their own sufficient to borrow on the scale which is necessary. These are the countries which will need help in the next few years and the I.D.A. work needs to be expanded to cope with this enormous demand.

I believe that the first annual report appeared three years ago and referred to the fact that In relation to I.D.A.'s sphere of operations and the need for the type of development capital that I.D.A. can provide, its resources are small". That is why, in the Amendment, we propose that the resources available to the International Development Association should be expanded sevenfold by 1968. We feel that there are many countries which would desire to take advantage of the advantageous terms of credit available through the Association, if those funds were made more freely available.

I wish to refer to one or two examples of development which are needed in the territories concerned, but which cannot be proceeded with because the money is not available. I will quote from the economic development of Uganda, in the report prepared in October, 1961, by the World Bank. In a long and interesting report there is a reference to the tremendous opportunities for the expansion of economic activities in Uganda if the money is available for long-term development. There is a reference, for example, to water development and the need to bring into use large areas of the country which are at present unused; the need to open up 6,000 square miles of Uganda which at present are covered by swamps and the need to have an irrigation scheme for the area north of Kasese. in Toro. This scheme will cost about £500,000, for which the Uganda authorities have not the available resources.

4.0 p.m.

When I was in Uganda, in 1962, attending the independence celebrations, I met one of the officials of this department. He described some of the schemes to me in terms full of enthusiasm showing the great advantage to Uganda's wealth which could be created if some of these long-term schemes were engaged in. He spoke of the possibilities of irrigation schemes opening up large areas for the growing of coffee and cotton and some other cash crops. They are enormous, But Uganda is held back because the accumulated funds—developed when the prices of coffee and cotton were high on world markets and gave the administration an opportunity of building up reserve funds which were then available for long-term economic development—are now running out.

During the last few weeks we have heard that Uganda, like Kenya, has had to cut back her coffee growing because of the vulnerability of this crop on the world market. The fact that under the International Coffee Agreement Uganda has had to cut back the amount it can sell in the world is a very great blow to a country which depends for its income largely on production of coffee and cotton. It is necessary for the country to diversify the economy and to grow other cash crops to enable the peasant community to increase its cash income. I am well aware of the fact—I saw it at first-hand when I lived there—that a large part of the population of Uganda is prosperous, but there are other sections who are very poor indeed. They are suffering from the disease of malnutrition, which exists in so many other territories.

It is very important that these developments should go on not only in the prosperous areas where there are obvious economic opportunities, but in the remoter spots where there need to be long-term schemes for development which, although they may not produce an economic return in the short term, in the long run may prove of immense value to these people and also to Uganda itself.

I turn to the example of Bechuanaland. In addition to Uganda, in Bechuanaland we have a direct responsibility. According to the replies—or lack of replies—to questions put to Ministers responsible for seeing the Bill through the House, there has been precious little information about obtaining I.D.A. assistance for Bechuanaland and Basutoland, although some information is available about Swaziland. It is important that we should obtain economic aid for Bechuanaland and Basutoland, because in relation to South Africa they could be an example of how development can go ahead without the rigorous repression which exists further south.

When we read reports of the money which South Africa is spending on development of South-West Africa and of some of the new Bantu schemes which are being established, we should be extremely ashamed at our lack of attention to Bechuanaland and Basutoland in particular. The Morse Committee went to the Protectorates and came back with a report which has been largely neglected by Ministers who have responsibility for these territories. That report referred, in paragraph 6, to projects which would carry each territory well on the way to becoming a viable economic unit. Projects detailed in the report would be likely to carry Bechuanaland and Basutoland into becoming viable economic units, yet very little attention is given to the Morse Committee's Report. It has been allowed to lie neglected on the shelves for many years.

There are many examples. I shall not quote them all, but we have reference to the need for new road development and development of the coal beds in Southern Bechuanaland to produce cheap power and the development of water resources for which there is a crying need in Bechuanaland. All this needs money. That money could be obtained from the International Development Association if its funds were enlarged and if the Government had the initiative to carry an application through to the I.D.A. asking it for those funds to be made available to the protectorates.

Another example I refer to in passing relates to South America. I have been looking at a very interesting United Nations report on development of Peru. It says that nearly half the population exists on an average income per year of less than £30 per head. It is extremely low and, as it is an average, it must cover intense poverty of many tens of thousands of people who live in the under-developed part of Peru. The United Nations report points to many economic possibilities in Peru which would help to raise the standards of the present population and give them new cash crops to grow. These opportunities could open markets of which they could take advantage and help to develop new processing industries for the primary goods which could be produced. Yet the amount of money which is made available in Peru from the International Development Association is precisely nil.

We are proposing this Amendment because we believe that the I.D.A. work should be enlarged, not that the World Bank activity should be reduced, but that the should become a far more important aspect of the Bank's work. For the newly-developing countries it is vitally necessary to have low-interest-rate loans, or loans without any interest, over a very long period of time so that they may get on with the development of their infrastructures, railways and irrigation schemes which cost enormous amounts of money. We are proposing that the grants should be expanded and that the sum by which they should be expanded should be a realistic one

Mr. James Griffiths (Llanelly)

I begin by expressing regret to my hon. Friends that, owing lo other commitments, I was not able to be present for the Second Reading of the Bill. I am glad now of the opportunity of saying a word in support of the Amendment. I hope that we shall hear from the Minister that he and the Government are prepared to consider at least some addition to the sums of money provided for in the Bill.

My hon. Friend the Member for Wednesbury (Mr. Stonehouse) has told us of countries whose plans for development are being held up through lack of resources aid money. This is a very big challenge to all of us in the industrially-developed world. In my short intervention I wish to concentrate on two areas about which I, and I think all of us, have been thinking lately. I recently had the privilege and pleasure of visiting some parts of Asia. I went to India and through Malaysia, Singapore, Sava and Sarawak.

I found in India and Malaysia one common factor which will adversely affect development. Each has its development plans. Each has to spend more and more of its resources in money, material and human beings, upon defence. India must do so because of what occurred upon the border with China not long ago. Malaysia must do so because of the Indonesian confrontation. It seems clear to me that, faced with the obligation, which they all recognise, of meeting these increased requirements of defence, something will suffer.

I believe that their development plans will suffer. It would be extremely serious if the development plans of India and Malaysia were curtailed because they are confronted with problems of defence, upon which I know that they will be aided. The fact of the matter is that their development plans, although they are ambitious when considered in monetary terms, are inadequate when considered in the light of the explosive growth of population in Asia. The last report from the United Nations Demographic Association indicates that during the last year or two the world's population has been increasing at the net rate of 61 million a year and that about 37 million of this increase has taken place in Asia.

India and Malaysia are the only two areas in Asia and in South-East Asia where what we regard as being our democratic system has any chance of surviving. If democratic government fails in India and Malaysia, we can forget about Asia. Therefore, everything depends upon whether these two countries will be able not only to maintain but to enlarge their development plans. For this reason, there is the strongest possible case for the richer countries and for associations like this one—this is only one medium, but it is an important medium—increasing their aid. There is every reason why this Association and all the other agencies of the United Nations and of the Commonwealth should provide far more generous help to these countries than they have done previously. They should say to these countries, "If you have to devote some of your resources to defence, we will ensure that your development plans will not suffer at all, and we will make it up". We would be well advised to do this in our own interests. We have a moral obligation to do it. This is another reason, in addition to those advanced by my hon. Friend, for increasing the amount of money.

I turn now to East Africa. My hon. Friend referred to Uganda. We have all been disturbed, anxious and concerned about what has happened in East Africa. I do not want to discuss the political situation or recent events. I merely want to stress that they have highlighted the fact that these countries face colossal problems. I have had the privilege of visiting Kenya. I am sure that we all pay tribute to the Prime Minister of Kenya for the way in which he faced recent events. I have not been to Kenya for some years, but some friends of mine who have visited Kenya recently are deeply disturbed about the colossal problem of unemployment there.

On the outskirts of Nairobi there are thousands—some say tens of thousands—of unemployed people. They are almost without any financial assistance. It appears from the reports which appeared in the Press that this was at least a factor in the background to all the recent disturbances. This affects all these countries. It affects Tanganyika. It affects Uganda. I understand that it affects Kenya more than it does the other two countries.

4.15 p.m.

Whatever our views may be about recent events in that part of the world, it is certain that the new Governments who have come to power face colossal problems. They face, first, the enormous problem of how to provide work and livelihood for the thousands of people who are unemployed. One of the consequences of the developments in agriculture is to put more men out of work. For instance, as a result of the agricultural development in the form of land resettlement which has taken place in Kenya it is absolutely essential for peasants displaced by new land measures to be provided with work in towns.

All that has happened recently in these two areas and all that is happening now provides a pressing reason for very substantially increasing aid, not for reducing it. I therefore hope that the Amendment will commend itself to the Government. I am sure that it commends itself to my right hon. and hon. Friends. This is our biggest challenge. Those who care for the preservation in the world of the values we cherish will realise that these are now in danger in areas which, because of the needs of defence, have to cut back their development plans, as a result of which they will face problems of unemployment and poverty that could overwhelm them. For all these reasons, it is the highest wisdom as well as a moral duty for us to provide help.

I have some experience in these matters, because I am privileged to be the treasurer of an organisation which works in this field. I have the opportunity of meeting young people, teenagers—people in all walks of life. One thing which encourages me perhaps more than anything else about our country is that there is an ever-increasing recognition that we have a real deep moral obligation to help poverty-stricken countries. I believe that there is a readiness even to make sacrifices, if necessary.

I give this assurance to the Government. I have no need to give it to my right hon. Friend the Leader of the Opposition and my hon. Friends, because I know that they already have faith in it. When we make calls to this country to aid poorer countries, the Government need not be afraid of the country. I believe that the country is ahead of the Government so far. I hope that we shall soon have a Government which will be as anxious to face up to these problems as the people are.

Mr. Francis Noel-Baker (Swindon)

I rise to support my hon. Friend the Member for Wednesbury (Mr. Stone-house). I am particularly pleased to follow my right hon. Friend the Member for Llanelly (Mr. J. Griffiths), part of whose work in connection with War on Want I have had the privilege of watching from two different points of view.

First, perhaps I may say that from above, as a member of the National Committee of the Freedom from Hunger Campaign and of its Projects Group, I know very well what this voluntary body is doing in supporting schemes all over the world. Secondly, I know about it from a worm's eye view, because I am the chairman of a very small foundation which is doing development work in Greece, and we sometimes find ourselves in the queue hoping to attract a little help from organisations such as that of which my right hon. Friend is treasurer.

I hope that the Amendment will enable the Economic Secretary to say something to dispel the impression which he and his right hon. Friend gave last week, and which, I am sorry to say, was very much fortified during the debate on technical assistance for the Commonwealth on Thursday, that the Government entirely lack any kind of fervour in their approach to the whole business of technical assistance and aid to the developing countries.

I regret that, apart from the Economic Secretary, there is not a Minister on the Govern Went Front Bench. I also regret the absence of even one Conservative hon. Member on the benches opposite. It is a disgraceful demonstration of the lack of interest the Government and their supporters show in this vital problem. One would have thought that the Whips could have mustered two or three hon. Members to decorate the benches opposite, and so at least give the impression of interest.

I hope that when the Economic Secretary replies he will not take refuge behind the work that has been and is being done by private citizens and voluntary agencies in this country, important though that is, in claiming that more official funds are not required for the kind of work which I.D.A. is doing. I was disappointed in the debates last week that not a reference was made by the Government to the tremendous amount of work that is being done by voluntary bodies such as Oxfam, War on Want, Inter-Church Aid, Save the Children Fund and the many organisations which are co-operating in the Freedom from Hunger Campaign.

I hope that it the Amendment will give the Economic Secretary the opportunity of saying a word of thanks and encouragement to the millions of private citizens who are supporting development projects throughout the world. I am aware that there is anxiety being expressed in some circles about the methods being used to follow up and inspect some of these projects. My hon. Friend the Member for Blackburn (Mrs. Castle) mentioned this in the debate last week. It is difficult for voluntary bodies giving money for schemes throughout the under-developed world to have the resources to watch and inspect these schemes. There is a need for the Government to help them to co-ordinate their work and also to co-ordinate it with the activities of the Government and international agencies like I.D.A. I hope that the Economic Secretary, in saying a word of encouragement to the voluntary effort, will also say something about the Government's plans to help the voluntary agencies to co-ordinate their activities with the work of the Government.

I wish to take up some remarks made by the Economic Secretary in the debate last week when, answering an intervention of mine, he stated that, in his view, Her Majesty's Government had no responsibility at all for the failure of developing countries to absorb the aid we are offering them through I.D.A. and in other ways. He made some play with the fact that not all of the allocation through I.D.A. had been taken up in the current year. He may use this argument today.

One of the major obstacles to the efficient deployment of economic aid and technical assistance is the difficulty which the developing countries themselves experience in planning, administering and organising that aid and assistance. It is often a feature of an under-developed country that its administration is weak and inexperienced—sometimes inefficient and even corrupt—and does not have the "know-how" to enable it to plan and coordinate the aid offered by international agencies and national governments.

Her Majesty's Government have, as a participant in I.D.A. and other international agencies—as a member of the Commonwealth and as a national Government who are offering bilateral assistance to the developing countries—a direct responsibility in helping those countries to organise themselves in such a way that they can absorb that aid more effectively. A great deal was said in the debates last week about the relative merits of bilateral and multilateral aid. There are advantages in both systems, though I believe that my hon. Friends hope that when a new Government take office in Britain there will be a great extension of British participation in multilateral schemes through the United Nations.

However, bilateral schemes have an important part to play and the problem which the Government of every developing country is facing is how to organise and co-ordinate the aid which is offered in the most effective way; and usually the most effective way is by setting up, under government auspices, with some degree of independence, an economic planning board. United Nations agencies have often been helpful in achieving this.

I went to Israel and Cyprus last month to look at what the United Nations was doing there by way of technical assistance. When I was in Cyprus my mind was rather taken off that subject by other and more immediate preoccupations. However, Cyprus is an example of a developing country where the United Nations has been instrumental in setting up a semi-independent planning board on which the main economic Ministers are represented along with a United Nations representative. This board is doing excellent work and is helping to utilise the aid. There are many other examples where this is being done.

Certainly, Her Majesty's Government, as the promoter of many bilateral schemes and as a participant in I.D.A., have a direct responsibility in helping the Governments of developing countries to set up machinery to absorb aid more effectively. I hope, therefore, that the Economic Secretary will reconsider some remarks he made in the debate last week. He said, for example: …it is difficult for the donor countries to have any control at all over the rate at which the aid allocated is taken up. A certain amount of help can be given but, ultimately—and especially in the case of the independent countries—it is the receiving countries' responsibility."—[OFFICIAL REPORT, 3rd February, 1964; Vol. 688, c. 908.] We cannot control the aid taken up, but we can take effective steps to enable the developing countries to absorb it.

In the great argument about multilateral and bilateral schemes I think that opinion generally is now moving in favour of the integrated, comprehensive development project, even if it is only on a pilot scale—in other words, even if it is conducted in an area or district of a country. Often such a scheme can be more effective than several isolated projects not related to each other but important though they may be one by one.

May I illustrate this, from my limited experience, by taking an example from Greece? We have a British volunteer doctor working with Greek doctors and helping villagers to organise and to use the rural health services more effectively. The other day I asked him, "What is the most urgent piece of equipment you require?" He replied, "A bulldozer". When I said that that seemed rather far removed from medical work he replied, "On the contrary. We have enough medical people in the area, a small laboratory, an X-ray unit and various other facilities provided by the Foundation. Our big problem in the winter is that we cannot use our Land Rovers to get to our patients and, therefore, from the medical point of view, a bulldozer would be of great assistance".

This illustrates how one aspect of development inevitably overlaps another. We are finding that our agricultural extension work overlaps veterinary work, that veterinary work overlaps work into the medical sphere and that that, in turn, overlaps educational work. This shows that one cannot take a piecemeal approach to this problem.

Her Majesty's Government have a big part to play in helping and advising the Governments of developing countries to plan the aid we offer in such a way that they are able to co-ordinate and integrate the work being done. I press the Economic Secretary again to explain what he and his right hon. Friends meant when they claimed that Her Majesty's Government had no responsibility for the preparation of development schemes by dependent territories. That left us baffled at the time and we remain baffled. My hon. Friend the Member for Wednesbury is now asking for a greater extension of funds to be put at the disposal of I.D.A. to be used in various territories, some of which he mentioned and some of which are dependent territories.

In our earlier debate the Economic Secretary and the Chief Secretary, when questioned about Montserrat by my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman), said that Her Majesty's Government had no responsibility to help Montserrat to produce a project to fit the requirements of I.D.A. Clearly, this is nonsense. I am sure that the Ministers responsible did not wish to mislead the House, they must have realised that Her Majesty's Government have direct responsibility to help Montserrat to produce projects to which the funds of I.D.A. and other international agencies could be usefully turned.

I hope that the Amendment will provoke the Economic Secretary into doing something to repair the very lamentable impression which was left by Government spokesmen last week. I hope that he will convince us that the Government, even during the last dying weeks of their tenure of office, will take more seriously tile great task of technical assistance and aid to developing countries, a matter in which Great Britain has such an enormous future rôle to play.

4.30 p.m.

Mr. Donald Chapman (Birmingham, Northfield)

The purpose of the Amendment of my hon. Friend the Member for Wednesbury (Mr. Stonehouse) is to get this country to support the I.D.A. operating at a much greater pace of activity and with much larger funds at its disposal. I should like to put that into the setting of the Development Decade, which we are supposed to be in, although I begin to wonder whether the targets of the Decade will be reached. It is a terrible thing to have to say this, but I begin to feel a little despondent about it.

It is worth putting the Amendment into the setting of the United Nations Development Decade. The aim of the Decade is to raise the rates of growth of the incomes of developing countries from 3½ to 5 per cent. per annum by 1970, which will be sufficient to double their standard of living in 20 to 30 years. The United Nations estimate that if aid were 1 per cent. of the gross national products of the rich countries, this would take the developing countries halfway towards the Decade's target. That is the figure which we must keep in mind. One per cent. only of our gross national product, added to 1 per cent. of the gross national product of all the other rich countries, would still take the world only halfway towards the target of the Decade.

What is our proportion today? I rely on the calculations made impartially by the Overseas Development Institute, a fine British body which is doing first-class work for the country in looking into the whole question of foreign aid. The Institute estimates that our aid to developing countries is 0.6 per cent. of our gross national product. If this is so, it means that our race of assistance to developing countries mist be substantially expanded immediately and that even when we reach a rate of 1 per cent. as opposed to our existing 0.6 per cent., we shall still be doing our share to get only halfway to the Development Decade target.

The Overseas Development Institute says that this is the sort of thing that must happen in all the developed Western countries. Quoting from the Institute's booklet on this subject, "Survey and Comment," on British aid, it states: "For the O.E.C.D, countries to achieve this average percentage of gross national product in aid would imply an increase of about 40 per cent. over the 1962 figures. That is our immediate target, at least 40 per cent. better than we are doing now. In this wider setting, the new target of increased aid which my hon. Friend the Member for Wednesbury is giving us in his Amendment is imperative. I hope that when the Economic Secretary replies there will be no doubt that the Government accept, if not the letter, at least the spirit of the pledge that is involved in the Amendment.

There are two other particular reasons for the Amendment. There is, first, the argument about multilateral versus bilateral aid. I repeat the point, which I made on Second Reading, that during the last decade our aid has been largely bilateral; only 12 per cent. of our help has been given to multilateral agencies. It is inevitable that this must change. During the last decade, that bilateral help was largely to our colonial dependencies, most of which are now independent countries; and much as we shall wish to continue helping them, they will take their place in a larger total of independent countries whom we will wish to help.

If, as I suspect and hope, the multilateral aid is to be increased, the one way above all in which we must do it is through I.D.A. because of its low rates of interest, because of its experience and because it can be made into the foremost development agency in the backward areas.

The International Development Association and, with it, the International Bank for Reconstruction and Development have had one valuable piece of experience which I want to see extended once it has more money. What I.D.A. and I.B.R.D. have been doing in India, for example, is to act as chairman of a consortium of countries which are help ing to improve India's development. If I.D.A. could have more money, it could do this in other parts of the world on a big scale. In other words, not only could we use I.D.A. to give out money internationally. It could use its position to draw in even extra money under consortia of interested countries in various parts of the world.

On Second Reading, I quoted the example of the West Indies. The new economic survey prepared by Dr. O'Loughlin, to whom I referred at Question Time today, shows that we shall need about £100 million of capital development to put the new Caribbean Federation on its feet over 10 or 12 years. Much as I want an enormous contribution towards this total from Her Majesty's Government, it is wrong to rely simply on our Government as the main contributor towards the foundation, in a capital sense, of the new Federation.

Two other countries have traditional great interests in that part of the world. One, curiously enough, is Canada—I see that my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) agrees with me—which has taken an active interest in the Caribbean countries.

Mr. J. Griffiths

Having regard to the success of the Colombo Plan, I suggested many years ago that we might have a Caribbean plan with the participation of such countries.

Mr. Chapman

That is my point. With Canada's great interest in that part of the world, and with the great interest there also of the United States, why not have a consortium under I.D.A., with its increased capital at its disposal, to put in some I.D.A. money, more American money and some Canadian and British money, to hit the target of the £100 million which is needed over 12 years to launch the new Caribbean Federation?

However one looks at the problem of aid, there are increasing adventurous opportunities for an expanded I.D.A. I am extremely pleased that the Amendment raises the question of committing this country to an I.D.A. with expanded powers and greater opportunities and the chance of solving problems in many parts of the world.

The Economic Secretary to the Treasury (Mr. Maurice Macmillan)

Extremely interesting points have been raised in the debate, but I have one difficulty in replying to them. It is a difficulty which the hon. Member for Swindon (Mr. F. Noel-Baker) put to the Committee, although without realising it, when he said that the Amendment asked for a lot more money to be made available, implying by Her Majesty's Government.

This is not, with respect, what the Amendment seeks. It asks that a contribution to the I.D.A. by Her Majesty's Government shall be made only on condition that the Resolution includes a provision for the expansion of the resources of the Association to the total which the Amendment suggests. This means that if the Amendment were accepted the Government would have to go back on negotiations and, meanwhile, there would be no contribution to the I.D.A. unless we could obtain agreement to this much higher figure by all those concerned.

This is why there is some slight difficulty in answering the debate, and why I must say at once to the Committee that there is no possibility of the Government accepting the Amendment as it stands, although we very much take the point that it is necessary for all concerned to do everything they can to expand multilateral aid to the developing countries. One of the problems of this sort of organisation is simply that they are international and their policy depends not on the will of one Government, but on negotiations between a large number. Hon. Members spoke in the debate from time to time as if this were entirely under the control of Her Majesty's Government and largely for the benefit of the Colonial Empire. I thought that I detected a somewhat Kiplingesque attitude of mind among hon. Members opposite.

It is not true to say that Her Majesty's Government take no interest in development aid, whether in the Commonwealth or in other countries. The fact that no Minister responsible for disbursement of aid is present in the debate is no evidence of that. It is evidence of the narrow purpose of the Bill, of which we are discussing one Amendment to one Clause. Even the Long Title of the Bill is narrow in the extreme in what it seeks to achieve. This is a Bill to Enable effect to be given to a resolution of the board of governors of the International Development Association. It is not concerned with the general policy of Her Majesty's Government on aid and contributions throughout the field.

Mr. Stonehouse

I hope that the Economic Secretary will explain what the Government are doing to take advantage of the resources of the International Development Association in the territories for which we are still responsible. Surely the Committee is entitled to replies on these points. The Bill proposes to vote a great deal of additional money to the I.D.A. and, therefore, we must expect the Ministers responsible to indicate how they exert their influence within the I.D.A. itself.

4.45 p.m.

Mr. Macmillan

It is paradoxical that the hon. Member should continue to plead for multilateral aid under an international organisation and then seek to hold Her Majesty's Government responsible for its policy. I shall have something to say shortly about the lending policy of the I.D.A., but I cannot give an undertaking of this sort, simply because the I.D.A. is not under the control of Her Majesty's Government. It is an international organisation with British representation, but its policy is evolved as a subsidiary of the International Bank and not as an offshoot of the Colonial Office. The hon. Member must accept that there is a considerable difference between the two.

Mr. F. Noel-Baker

The hon. Gentleman has said a number of times that this is a narrow debate on a narrow Bill and is not concerned with wider aspects of development and technical assistance. May I ask the hon. Gentleman to take back to his colleagues the warm desire of this side of the Committee that we should have a wide debate on the general problems of development and technical assistance?

Mr. Macmillan

If the hon. Member makes that point on Thursday, no doubt my right hon Friend the Leader of the House will lake it. Certainly, I will remember it. I think that many people would agree with the hon. Member, but this debate is not the one that he is seeking.

On the point raised by the hon. Member for Wednesbury (Mr. Stonehouse) about developments in Uganda, Bechuanaland, and Basutoland, I have no detailed information on why the I.D.A. found itself unable to help the Uganda irrigation project. I doubt whether it is purely a question of funds, simply because there is a carry-over. There is a manpower difficulty and a difficulty in the time required to assess various projects and to find out whether or not they are suitable.

The standards of the I.D.A. are very high and rigid when it comes to questions of the size of the project and the population of the territory concerned. A scheme for highways for Uganda as well as Basutoland and Bechuanaland is under consideration, but, again, I do not think that is primarily the concern of this Clause to give effect to such projects, although I hope that the projects will come to a successful conclusion.

I have the same difficulty in answering the right hon. Member for Llanelly (Mr. J. Griffiths). It is a little difficult for the United Kingdom to plead in any international organisation that the defence requirements of territories, some of which are independent, some colonial and some having nothing to do with the Commonwealth, are our particular concern and that we should make greater efforts than the other countries involved. I would hope that the Government would take a lead in all projects, particularly where the Commonwealth is concerned, in getting across the need for development, but to say that we have a special responsibility because we are a leading member of any alliance is to stretch the point a little far.

Mr. J. Griffiths

I mentioned defence incidentally, because of these consequences, but I was concerned because it was, in my view, essential—and I hoped that it would be accepted by the Government—that these countries should be helped to maintain and expand a development programme which ought not to be cut down because of what is done in defence schemes. I thought that when debating an Amendment which seeks to increase the amount of money available to I.D.A. it was right that we should bring this matter to the Government's notice.

Mr. Macmillan

Again, the right hon. Gentleman puts me in a difficulty. He is really saying that the I.D.A. should contribute more to a development, no matter whether it reaches the I.D.A.'s standard or not, simply because the country concerned is spending a great deal on defence. That is an extraordinarily difficult argument to put forward in a body concerned entirely with development on a rather narrow front. I fear that I cannot, on this Amendment, go into matters for which the Government have really no responsibility.

In reply to the hon. Member for Swindon, I gladly recognise the great work done by private institutions and private people in relieving hunger and misery, including the really fine and, one might say, noble work of the organisations he referred to. I agree that, in this country, the response to this sort of appeal has been very great. We should, at the same time, pay tribute to the American people, who have always put aid to foreign countries above reductions in taxation at home.

The hon. Member for Birmingham, Northfield (Mr. Chapman) said that total I.D.A. aid was too little. I have no doubt that it would be admirable if we could get the Part I member countries of the I.D.A. to agree to 1 per cent. of their gross national product all round being devoted to aid. At present, the United Kingdom is leading in the proportion of gross national product contributed through I.D.A., and the negotiations were partly concerned with trying to get some of the other contributories even up to the level we have reached ourselves.

The hon. Gentleman also referred to the O.E.C.D. I should be out of order if I took the debate any further into the difficulties of supplying markets in Europe and in this country for industries of developing territories. Perhaps our willingness, even at the cost of inconvenience to home industries, to accept imports from developing countries is at least as important as building up the industries in those countries.

The same considerations I have mentioned to the right hon. Member for Llanelly apply to the hon. Member for Northfield's ideas for Caribbean development. It would be admirable for the Caribbean to produce a plan on the lines of the Colombo Plan, but that is not pail of the functions of the I.D.A. Nor is it within my terms of reference today.

Mr. Chapman

The hon. Gentleman says that it is not part of the functions of the I.D.A. to produce a plan for the Caribbean. I challenge him on that point. The I.D.A. is increasingly, as was pointed out during Second Reading, instituting the research to draw up projects. Indeed, the Director of the International Bank for Reconstruction and Development picked out this aspect of its activities as one which was bound to increase. It is part of the I.D.A.'s functions to do this. The suggestion I made of the I.D.A. being, as it were, chairman of a consortium is precisely what it is doing in India.

Mr. Macmillan

I am grateful to the hon. Member for the correction. I entirely agree with him. He is a little ahead of me in time. This is not, in fact, what the I.D.A. is now doing, and we are supplying money for immediate purposes. Perhaps it would be convenient if now I spoke of what is now the lending policy of the I.D.A. since that might clear up one or two difficulties and, perhaps, misunderstandings.

The loans, which are normally referred to as credits, are on the standard terms of a 50-year period with a 10-year grace period for capital repayment, and are interest-free, with an annual service charge of ¾of 1 per cent. The basic policy of the I.D.A. is really the same as that of the International Bank, except that it does not require the same ability to repay.

The type of project with which it is prepared to assist is the same and the standards of what they call "project appraisal" are the same, but, for a number of reasons, a very large number of countries eligible for an International Bank loan cannot afford it. That, indeed, is why the I.D.A. came into being In deciding on what countries do or do not qualify or what projects do or do not qualify for I.D.A. credits, the I.D.A. is prevented by the Articles of Agreement from lending when the money could otherwise be obtained privately or from the International Bank.

Thus lack of creditworthiness is one of the qualifications of countries seeking I.D.A. assistance and this does, incidentally, eliminate a number of Commonwealth countries and territories which might, for other reasons, have qualified. But there is no absolute standard of creditworthiness. That is why a number of countries are judged able to afford a blend of International Bank and I.D.A. financing. India and Swaziland have both been helped on this basis.

Another major criterion has obviously been poverty, and over three-quarters of the credits have gone to countries with a per capita income of less than 100 dollars a year. Finally, the I.D.A. has regard to the efforts of the applicant Government to mobilise its own resources.

It was originally feared that the I.D.A. would not be prepared to consider applications from dependent territories but, fortunately, that has not been so, although few British. Colonies, other than Swaziland, Bechuanaland and Basutoland, are eligible, partly because others have too high a G.N.P., like Hong Kong or Malta, or are too small to have a project of sufficient size to justify an I.D.A. Credit.

The minimum size for a project—although, again, this is not a fixed standard—is about 1 million dollars, and the number of people a territory needs to qualify is also normally about¼ million. The great proportion of the I.D.A. aid is going to India and Pakistan. The proportion going to Africa has been comparatively low because few African countries were actually members in the first year of the I.D.A.'s operations, and suitable projects in Africa are only just be ginning to come forward.

Finally, the original agreement setting up the envisaged that it would make loans solely for the foreign exchange cost of a project and that the borrower would be expected to advance the local costs. It has been asked to finance only a small proportion of the local costs. The local costs rule has created some difficulty in countries with low rates of savings and little scope for increasing tax revenue. It has meant that some countries have not been able to put forward projects with high local costs but have had to propose instead projects with lower local costs and higher foreign exchange content. However, the I.D.A. is reconsidering the rule, and, naturally, the Government welcome this very much.

I now want to go through, in general terms, the details of the level of contributions the Amendment seeks to alter.

5.0 p.m.

The Amendment would make the United Kingdom contribution which is authorised by the Bill conditional on the replenishment resolution now before the Board of Governors of the I.D.A. being amended so as to multiply the resources of the Association by about five by 1968. Under the Resolution as it now stands, the disposable resources will be about doubled by 1968. The initial resources of the I.D.A. were 968 million dollars including the subscriptions of the Part II—the developing countries—and about 750 million dollars if we take account only of the freely disposable subscriptions of the Part I countries.

The replenishment operation, which has been the occasion of this Bill, provides a further 750 million dollars to be contributed by the Part I countries, making total disposable resources of 1,500 million dollars. The Amendment would appear to provide for additional contributions of about 1,500 million dollars a year for the three-year period 1965–67 as compared with 250 million dollars a year provided for in the Resolution in its present form. I think that is about right—1,500 million dollars a year as opposed to 250 million dollars in the original Resolution.

The United Kingdom cannot determine the scale of the replenishment operation. The scale which the Amendment provides for is far beyond that which any of the contributing nations were prepared to contemplate and beyond what I suspect I.D.A. would be able to dispose of effectively without considerable reorganisation of its own manpower and operations. When Mr. Black was President of the I.B.R.D., and the I.D.A. first raised the matter of replenishment at the Bank's annual meeting in 1962, he suggested that the I.D.A. should be provided with funds of about 500 million dollars a year, and finally the amount agreed, as the Committee will be able to work out, was half that amount.

The difficulty is that the scale of replenishment had to be agreed by the general body of the contributing countries, and fixed at a realistic level in relation to the willingness of Governments to contribute; unless, of course, the hon. Gentleman is willing for this country to bear the burden more or less single handed. It had to be adjusted so that the level of contributions should be equitable as between the industrialised nations.

In deciding what they should contribute, the Governments took into account their other multilateral aid programmes, their bilateral aid programmes, and all their other expenditure in the years ahead. I said the "Governments" because it was not merely the United Kingdom Government but the Governments of all the countries concerned with these negotiations. The final level of contributions was settled after a pro-longer period of negotiations, between the principal contributing nations. As I said on Second Reading, the negotiations were confidential, but it was clear that the willingness of the United Kingdom to participate in this operation and the amount of the total contribution that we were prepared to contemplate was only one of the many factors relevant in determining the final level.

It will be about another two years before member-nations will have to consider what provision should be made at the end of the period covered by this replenishment. The scale of annual contribution in the Bill is about a 66 per cent. increase over the 150 million dollars per annum contributed in the first five years, and with the carry-over of the uncommitted money from this first period it should be enough to meet the new commitments to be made at the rate of 300 million dollars a year, for this year and the remaining two years of the three-year period, allowing for a time lag of normally about two years between commitments and dispersements.

There is no particular significance in the fact that the replenishment operation is for a three-year period as against the initial period of five years. It is partly because some nations are a little reluctant to commit themselves precisely for so long ahead, and partly because other nations welcome a shorter period as giving an earlier opportunity to revise and review the scale of I.D.A.'s activities, with a view to revising it upwards.

I have tried, without straying too far from the terms of the Bill, the Clause and the Amendment, to answer some of the general points which have been raised in this, as it was, second stage of our general serial debate on aid. I can assure the hon. and right hon. Gentlemen who made them that they will be studied by the Government. I would reiterate to the Committee that no discourtesy or lack of interest in what it was to discuss was intended by the absence of my hon. Friends from the Commonwealth Relations and Colonial Offices, or any other Government Department. It is simply that the terms of the Bill are not to give aid to the developing countries, but, narrowly, to enable effect to be given to the resolution of the Board of Governors of the I.D.A.—a resolution which has yet to be taken, and which depends upon the agreement of all those concerned.

Mrs. Barbara Castle (Blackburn)

The Economic Secretary has made a very spirited effort to fight back against the accusations that he and the Government are not sufficiently apprised of the urgency of the need for aid for under-developed countries. He has made a rather better effort this afternoon than he did last Monday. None the less, he cannot get away from the fact that the status of this section of aid has been further downgraded by the Government this afternoon. During the Second Reading debate we at least had the pleasure of the presence of the Chief Secretary to the Treasury as well as of the Economic Secretary. Now the Economic Secretary is left to battle alone.

We have had four first-class, informative speeches from hon. Members on this side, but not a single speech from a Conservative back bencher to help us in the task of studying aid needs. I anticipated that the Economic Secretary, in giving us the answer he has done, would take refuge in a technicality. He tells us that my hon. Friend's Amendment, far from improving things, might actually delay the coming into operation of increased aid by necessitating the reference back of the whole issue to I.D.A.

The hon. Gentleman took refuge in the implication that if it were not for this he would be only too glad to consider the need for increasing aid—aid in this most effective form—for the under-developed countries, and that he would be very glad to meet some of the points that my hon. Friends have advanced with such knowledge and passion this afternoon.

If this is the hon. Gentleman's desire, he has a way open to him to implement it. It need not involve holding up the application of the Bill. Why does he not do what Sweden has done? We are told in the annual report of the I.D.A. for 1962–63 that during its work from 1961–63 Sweden made two welcome supplementary contributions totalling 10 million dollars, thus doubling her initial contribution. That is not an unimpressive gesture from a small country. There is nothing whatsoever in the rules of the I.D.A. to stop us emulating it. I suggest to the Economic Secretary that, in the light of the evidence which has been brought before him this afternoon, it is a way out of his technical difficulty which he should consider urgently.

The problems of some of the countries we are discussing have been brought to the pitch of desperation. Let me elaborate the example given by my right hon. Friend the Member for Llanelly (Mr. J. Griffiths). He quoted, rightly, the unemployment situation in Kenya. I wonder whether the Economic Secretary has read the very terrifying story which appeared in The Times only yesterday. Under the heading, Grim prospects facing Kenya: desperate measures to check mounting unemployment". The special correspondent of The Times writes from Nairobi: Desperate measures to alleviate the mounting unemployment in Kenya which is considered the most explosive force in the political situation after the mutiny will be announced this week. A tripartite agreement has been negotiated between the Government, the employers and the unit ns for all private employers of labour to take on 10 per cent. more staff than they had on January 23rd…The Government will take on 15 per cent. more employees. In return the trade unions have undertaken to call no strikes and to accept a wage freeze for a year". This is done because in Nairobi alone there are 40,000 unemployed and in the Riff Valley 60,000 unemployed. In addition, 80,000 school leavers will be coming on to the labour market with no jobs in prospect for them.

This morning I took part in a march organised by the Young Socialists to protest against the lack of job prospects and prospects of proper openings for the young people of this country. That is an urgent problem to which we have rightly drawn attention here. But imagine what the political situation in this country would be if we faced the kind of desperate prospects which face the new Government in Kenya. They are having to deal with it in ways which they recognise—and Mr. Tom Mboya, the Minister of Labour, has said this—will add to the economic burden of the country because they are compelling employers and the Government service to take on an uneconomic labour force. The reason for this is that they have mutiny and political unrest on their doorstep.

The Times continues: These are some of the facts which lend weight to the parting shot by Mr. Chou En-lai, the Chinese Prime Minister, that Africa is ripe for revolution. The Kenya Government with remarkable realism accepts that it has only a limited time to deal with the security problem while British troops strengthen the forces of law and order. Mr. Mboya who led the negotiations with the employers frankly described the situation as ' desperate '. The employers accepted this work-spreading scheme, which in many cases will reduce efficiency, just as frankly as a necessary insurance policy. We have heard the Prime Minister at the Dispatch Box opposite repeating the old favourite dark hints of the Conservative Party about subversive elements from outside being at work in Africa. They do not need to be at work in Africa from outside when Africa faces conditions like these.

5.15 p.m.

Up to now, as the Economic Secretary admits, the I.D.A. has had to concentrate its resources almost exclusively on the equally pressing and desperate problems of Asia. As my hon. Friend the Member for Wednesbury (Mr.Stonehouse) pointed out, none of us begrudges help to India. She, too, is trying to hold back the flood tide of disaster with inadequate funds. But in the lifetime of the I.D.A. to date only about 18 million dollars have been spent in Africa, and they have been concentrated in Tunisia and Ethiopia. It has not begun to tackle problems like this in Kenya which are repeated over the length and breadth of the Continent.

We have been told that there is no Government representative present from the Department of Technical Co-operation and no Tory Member on the benches opposite because we are dealing with a technicality. We on this side refuse to consider the work of the I.D.A. and the question of how we should extend it and whether we are extending it far enough as a technicality. This is a desperate economic challenge which faces not only this country but the whole world. We deny that the Government are bound hand and foot and that they are prevented from giving a more vigorous lead in extending the work of the I.D.A. to meet this challenge.

A hundred and one suggestions could be made. Let me put one to the Economic Secretary, because it impinges directly on the work of his Department, which is answering for this section of aid today. Why is the I.D.A. so important and valuable? I refer the hon. Gentleman to the resolution of the Executive Directors of the I.D.A. on which part of the Bill is based. In talking of the need for additions to resources, which is why we have this Bill, it points out three things: (a) the existing freely usable resources of the Association will be wholly committed in the near future; (b) if the steady progress of development is not to be seriously impeded, a substantial amount of the future net capital inflow into the less developed countries must be made available on terms which would place little or no burden on their balance of payments (c) in order to meet part of the need for assistance of this character, it is desirable that the Association be provided with additional resources… Would anybody in this Committee deny for a moment that, faced with the situation which I have outlined, the new Kenya Government are incapable of meeting it with conventional forms of finance, whether operated through the World Bank or the type of bilateral loans which this country is making today? Can the Kenya Government begin to face the debt burden of borrowing money on the sort of rates at which money is borrowed in the City of London in a wealthy developed country like our own? It is dangerous, out-of-date nonsense to suggest that it could.

The Treasury does not realise it because, particularly under a Conservative Administration, the Treasury Is totally and ideologically committed to conventional forms of financing in this country and even overseas. If it were not, there would be a remedy open to it and there is a remedy open to us now. It is to extend the sort of help which we feel we are giving inadequately even under the additional resources to be committed under the Bill.

Why do we not alter the terms of our own bilateral loans and extend the amount of the loans which we give bilaterally on terms matching those of the I.D.A.? Why do we not give bilateral loans for fifty years at ¾ per cent. merely to recover the administrative costs involved and not to exact a ruinous rate of interest? It is because the Treasury is too hidebound by the sanctity of the principle of lending at commercial rates of interest. It has such a doctrinaire belief in the virtues of the market economy that only a short while ago, in the White Paper of 1957, it was arguing that the best way to meet the needs of the under-developed territories was not even by World Bank type of loans, but by private investment. It said: Her Majesty's Government considers that it is through the investment of privately-owned funds in the Commonwealth that the United Kingdom has made in the past and should continue to make its most valuable contribution to economic development. What out-of-date nonsense that is! It does not fit the actualties of the situation facing the under-developed countries and that is why the most recent White Paper, Cmd. 2147, had to record that there had been a tendency in recent years for the flow of private capital to the developing countries to level off, or even decline. Why are these countries not able even to take up the money which on paper we have committed to them? It is because they cannot face the burden of servicing the debts which will accumulate from borrowing from terms of this kind.

That is why we say that we are justified in again accusing not only the Gov ernment but their supporters of a total lack of an adequate sense of urgency about the situation facing us. Let us have no more of the Prime Minister's speeches about Communist infiltration in Africa. Let us have a few more speeches about the failure of the developed countries of the West realistically to face up to their duty. Whether the Amendment can be faulted on a technicality or not, the arguments behind it cannot be so faulted, and the Government could meet the situation which we have outlined in other ways if only they had the heart and mind to do so.

Mr. Stonehouse

My hon. Friend the Member for Blackburn (Mrs. Castle) has summed up the debate with a brilliant speech, as we have come to expect from her on this subject. She has given an inspiring lead to the Committee, and we can hope that the Economic Secretary will carry this message back to his colleagues and will try to persuade them to take a far greater interest in tackling this enormous task, not only in the territories which have acquired new independence from our colonial rule, but also the many territories facing these enormous problems of backwardness, problems with which they cannot cope entirely from their own resources.

The Economic Secretary's reply so far has been disappointing, because although his interpretation of the effect of the Amendment was correct, he did not acknowledge the Government's responsibility for influencing the policy of the International Development Association itself. He does not seem to have realised that what we are asking the Government to do is to take a far more energetic part in the deliberations inside the Association so that it can become a more dynamic part of the world's attempts to cope with the problems of backwardness.

Since he made his speech, I have looked up the annual reports of the Association and I have found that the present Leader of the House was the Governor of the International Bank and I.D.A. appointed by the United Kingdom in 1961, that the present Chancellor of the Exchequer held the appointment in 1962 and Mat today it is held by the Earl of Cromer.

Mr. J. Griffiths

Is he a Minister?

Mr. Stonehouse

What instructions are given to our representatives on the Board of the Association to pursue the policy points which the Economic Secretary apparently agrees should be pursued? Are we now to expect that they will demand that the Association's work be extended?

The Economic Secretary asked whether I was anxious that the United Kingdom should accept all the additional burdens suggested by the Amendment. I have no such intention. I want all the industrial and advanced countries to accept their responsibilities. This is something not only for the United Kingdom, but for the United States, for France, for Western Germany, which should be paying a much greater part of her increasing income into international funds of this sort rather than, as at the moment, concentrating on economic aid with strings attached. We want this sort of aid to be enlarged, and the Government can play some part in influencing the policy of the I.D.A., because it has a substantial vote in its decisions. The percentage of the total voting power of the United Kingdom has been slightly reduced over the years, but it is now 11.53 per cent., or 26,728 out of 156,544 total votes by Part I members of the Association.

These votes should be exercised wisely and in the direction in which we have pressed the hon. Gentleman, namely, the expansion of the Association's work so that more funds can be made available at very low or nonexistent rates of interest so that the newly developing countries can get substantial assistance for their development projects. Judging from the hon. Gentleman's reply, the amount available for new commitments will be only about £100 million per year. Is that sufficient to cope with the tremendous backlog of demand and the problems of Kenya and Uganda and those developing in the Protectorates for which we still have primary responsibility.

5.30 p.m.

Is the Economic Secretary really telling the Committee that £100 million a year is enough for the work of this international Association? I wish to ask whether he will give an undertaking that the Government, through their representatives on the Association, will in the years ahead press for the work of the I.D.A. to be expanded and enlarged. I accept that were our Amendments agreed to it would delay the proceedings, because the proposal would have to go before all the other member countries and this would hold up a decision regarding the additional amount on which most have already agreed. I do not want that delay. But I desire an undertaking from the Economic Secretary to consider this with his colleagues so that the policy points may be pushed forward by United Kingdom representatives and that we may get an extension of this work.

I wish also to ask the hon. Gentleman to convey to his right hon. Friend the urgency of preparing plans for the economic development of Basutoland and Bechuanaland. He did not refer to this, but I understood him to say that the Articles of the I.D.A. prevented it from considering projects which were not economically viable.

Mr. Maurice Macmillan

I hope that I did not mislead the hon. Gentleman. It is not in the Articles; it is the policy and practice.

Mr. Stonehouse

I thank the Economic Secretary for that correction. But he also mentioned the need for creditworthiness before loans can be granted through the I.D.A.

I refer the hon. Gentleman again to the Morse Committee's Report which shows that many of the projects proposed were economically viable. I ask him, therefore, to consult his right hon. Friend the Secretary of State for Commonwealth Relations on the advisability of making requests on behalf of Bechuanaland for assistance for the projects described in that Report as economically viable—and therefore as much entitled to economic assistance as any other projects which have so far been assisted by the I.D.A. Subject to being given such an undertaking, I shall ask leave to withdraw the Amendment.

Mr. Maurice Macmillan

I can certainly give the hon. Gentleman an assurance that the points he has made will be considered most seriously. The Morse Report on the High Commission Territories has not been neglected or shelved. It is being used in relation to the development plans of the three territories concerned, as are other surveys of other parts of the Commonwealth. I hope I did not say that it was creditworthiness which made a country suitable for an I.D.A. loan. It is very much the reverse. It is the fact that it has not creditworthiness for I.B.R.D. loans which is one of the qualifications for an I.D.A. loan.

Mr. Stonehouse

I thank the Economic Secretary for that assurance and beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Question proposed, That the Clause stand part of the Bill.

Mr. A. E. Oram (East Ham, South)

The debate on the Amendment gave my hon. Friends an admirable opportunity, which they exploited to the full, to point out the limitations of the funds which will be made available through the acceptance of this Bill. I wish to comment on the kind of project which may be aided under the provisions of this Clause by the implementation of the Resolution by the executive directors.

In his reply to the debate on the Amendment, the Economic Secretary raised a point which was made on a number of occasions during the Second Reading debate by the Chief Secretary to the Treasury, namely, that the actual amount of funds spent on projects was less than commitments entered into. Since the Second Reading debate, I have been pondering why this was so. One suggestion has been made by my hon. Friend the Member for Blackburn (Mrs. Castle), and I think another reason is that there is still a vast gap in the needs of the developing countries to be met either by loans available from the World Bank or from the finances available from the I.D.A.

The kind of need which I have in mind could be financed by the Association. But I doubt whether that is being done. We know the kind of project which qualifies for a loan from the World Bank. It is, perhaps, an ambitious scheme for a steel works which it is apparent is likely to become a profitable undertaking within a few years. Or perhaps it is the construction of a dam or irrigation works, which may readily be assessed as a means of providing productive farmland which will produce funds to repay the loan. That kind of obviously profitable undertaking qualifies for a loan from the World Bank. But the things dealt with by the I.D.A. are different. The Chief Secretary to the Treasury gave an estimate during the Second Reading debate that roughly 30 per cent. of assistance had gone on roads and 20 per cent. on other forms of transport; 20 per cent. had gone on irrigation and the remaining 30 per cent., or a little less, was divided between electrical power, communications, industry, water and education. I mike no complaint about the use of I.D.A. funds for that kind of very necessary project. Obviously, that is the kind of thing which the I.D.A. was set up to deal with.

My point is that when we have dealt with all the things for which world Bank loan; are particularly suited, and the things for which I.D.A. loans are suited, and which are financed by the policies pursued hitherto by the I.D.A., there is still a vast number of needs of developing countries which cannot be met from any normal, usual, international financing institution. I have in mind not a vast steelworks project, not roads, not an electrical supply undertaking, but perhaps the small, less ambitious, physical need of some new agricultural process, or the establishment of an agricultural co-operative. There the need would be for the sort of physical equipment which would not qualify under any of the schemes we have considered hitherto.

I hope that the Economic Secretary will not reply that the encouragement of such things as agricultural co-operatives is nor appropriate for the I.D.A. because that would come under technical assistance and that there are other means of promoting co-operatives. I accept that technical assistance is what is largely required; that it is largely a question of education, and of sending out experts or establishing educational courses—bringing suitable students over here for study, and so on. That is a great part of the problem.

But there is another substantial part, namely, the provision of the kind of physical equipment that these cooperators would need in the establishment and working of their undertakings —such things as warehouses for the crops when harvested, fencing for their farms, ginneries for their cotton, and things which are not seen to be immediately profitable undertakings; not the sort of projects which easily qualify for financial assistance by the World Bank but which are still necessary and, in the long run, are perhaps more suitable from the point of view of development in the territories that we have in mind in Africa and South-East Asia. I believe that schemes of this sort are as essential as the more ambitious ones which are so often discussed in this connection.

Some of my co-operative movement colleagues say that co-operatives ought to be self-financing, as far as possible, and that the voluntary association of members and the voluntary accumulation of their funds is the real strength of the co-operative method, so that any suggestion of their being financed from public funds—either bilaterally or multilaterally—under the I.D.A. is perhaps dubious in co-operative theory. I do not accept that point of view. I believe it to be essential for co-operatives to be encouraged in these developing territories to a far greater extent than is likely to be the case if they are left to accumulate their own funds in the orthodox way. That is why I am anxious to see the I.D.A. cast its net wider in respect of the sort of project that it takes under its wing.

When he was replying to the debate on the Amendment the Economic Secretary queried whether my hon. Friend the Member for Wednesbury (Mr. Stonehouse) was right in suggesting that our representatives have any major part of the responsibility for the policy of the I.D.A. My hon. Friend gave the answer, which I am glad to reiterate, that we are a major partner in the I.D.A., and therefore ought to be putting forward strong and vigorous views, and voicing the opinion of hon. Members of this House as to the kind of thing that I.D.A. funds should be used for.

If our representatives there speak with the same lack of enthusiasm and conviction that has been shown from the Government benches during these debates it is not surprising that we do not have a great influence in the councils of the I.D.A. I hope that the points which have been made so strongly by my hon. Friends will eventually find their echoes inside the councils of the I.D.A., and that the kind of point that I have been putting forward this afternoon on behalf of the co-operative movements, which are so essential a part of the development of these territories, will be borne in mind and vigorously advocated by our representatives.

5.45 p.m.

Mr. Maurice Macmillan

The problem which has been raised is one of which we shall take note. The hon. Member's plea was a two-fold one. First, he said that the I.D.A. should pay attention to smaller schemes. That would be a reversal of its policy. Secondly, he said that it should pay special attention to the needs of co-operatives—and especially to the physical needs. All that has been said in the debate will be studied by the British representatives on the I.D.A. As the hon. Member pointed out, we have a good representation on it. We have just over 11 per cent. of the votes.

But there is a genuine problem here. Because of the need of the I.D.A. to study the complexities of these projects, and because of the trouble that it has to deal with them all, it is difficult for it to undertake small projects without being unfair as between one territory and another by giving too much aid per head of the population. Subject to that qualification, I undertake to see that all the points which have been raised are put before the proper authorities.

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

In view of what the hon. Member has said, I do not think that we can let the Clause go without once again reminding him that his reply has been inadequate, in the light of the nature of the debate. It reinforces the complaints that we have been continually making, that the Bill has been left entirely to be dealt with by Treasury Ministers. The Economic Secretary knows a great deal about company taxation, but he knows almost nothing—with respect to him—about the problems of co-operative development in under-developed countries. That is the kind of knowledge which a Minister who answers this sort of debate should bring to the Government Front Bench.

If the hon. Member knew something about it—and I do not blame him for not knowing about it: it is not his prime responsibility—he would know that the new Director of the International Development Association, Mr. David Woods, has recently laid great emphasis on the need for the I.D.A. to devote more of its resources to exactly the kind of agricultural development that my hon. Friend has mentioned. Mr. Woods has been saying that agricultural credit banks are just the kind of thing that the I.D.A. should go in for. I gather that a great deal of criticism has been expressed by some of those associated with the I.D.A. about its going into this field of operations, which is normally held to have greater risks attached to it than some of the more straightforward developments for which I.D.A. money has so far been used.

But I would have liked to hear from the Minister, in reply to the excellent points made by my hon. Friend, that the Government believe that this is the direction in which the I.D.A. should go, and that our representatives are pushing in that direction. Our objection to the Clause is that the resolution mentioned in it does not go nearly far enough in terms of the kind of rôle that the I.D.A. can play in world affairs.

I do not want to go over the ground that has already been covered in our discussion of the Amendment, but what has been missing in this newest development of the I.D.A., is the opportunity of making it into a major instrument of economic development for the poorest countries. If it were to have the kind of voice which it should have, and which was mentioned in our debate on the Amendment, it would be able much more easily to carry out some of the smaller schemes that my hon. Friend has been advocating.

The Minister's reply—that it is impossible for the I.D.A. to undertake small schemes because it might mean providing a disproportionate amount of aid per head between different territories—simply indicates once again that he has been brought here without having been adequately briefed on this Bill. The outstanding feature of the I.D.A.'s work, and the one that disturbs us—great credit though we pay to it for what it has done—is that its geographical distribution is extremely uneven. As my hon. Friend the Member for Wednesbury (Mr. Stonehouse) pointed out, there is a long list of member countries of the I.D.A. which have had no money per head of population from the Association.

I should have thought that even on the limited resources contained in this resolution mentioned in the Clause it would have been well worth while the International Development Association considering whether it might go down the line into smaller territories and smaller undertakings.

What the Minister said in reply to the Amendment, and what he said during the Second Reading debate, reinforces our view that there ought to be in the Government of this country a Minister of Overseas Development charged with overall responsibility for these matters. If during the lifetime of the forthcoming Labour Government a further I.D.A. Bill comes before the House, the Government will fulfil their responsibilities to the House by ensuring that the subject is dealt with by a Minister with knowledge of and responsibility for this whole sphere of economic aid.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.