HC Deb 20 July 1965 vol 716 cc1323-4
19. Mr. Longbottom

asked the Minister of Overseas Development whether a country which qualifies for interest-free loans will receive all its financial aid from Great Britain in this form; and what criteria will be used to determine the appropriate terms for the various loans which that country is to receive.

Mrs. Castle

A country which receives all its financial aid in the form of loans and qualifies for interest-free loans, will receive all new aid in this form. Some countries, notably the dependent territories, receive grants and grants will continue to be given in appropriate cases. The criteria for determining the terms of aid to be offered to a particular country will be mainly two: the degree of need of the recipient country, in particular the income per head and the prospective burden of debt; and, on the other hand, the capacity of the country to achieve balanced and effective development.

Mr. Longbottom

I am very grateful to the right hon. Lady for that very clear reply. I am sure that she is aware that we all recall the speeches which she made on a number of occasions about the heavy interest borne by a number of the countries, and the burden which this was upon them, and we very much appreciate the efforts she is making in this field. However, would she also bear in mind another criterion, that where loans are given for infrastructure it is impossible for countries to be able to sustain the heavy interest element upon this because it is non-productive in character? Is this another criterion which she will bear in mind?

Mrs. Castle

I think that, obviously, we would have to have regard to the content of the development plan, but I want to lay particular emphasis on the criteria I have mentioned, because these are, broadly, in line with those which the I.D.A. follows in allocating its interest-free loans, and I think we would all agree that it has great experience in this field and has some useful examples to offer us.

Mr. Francis Noel-Baker

Would my right hon. Friend say whether India and Pakistan specifically would qualify for such interest-free loans?

Mrs. Castle

I am considering particular cases, but I expect that India and Pakistan would qualify.

20. Mr. Longbottom

asked the Minister of Overseas Development whether she has yet offered any interest-free loans or indicated to any of the developing countries that they would qualify for aid in this form.

Mrs. Castle

No, Sir. I shall apply the new policy case by case, and each case requires study. I propose to deal with new loans as they arise, and not to offer any general intimation, such as the hon. Member suggests, to countries which might receive them.

Mr. Carr

Can the right hon. Lady say whether she has had any applications for interest-free loans and whether, therefore, any are under consideration?

Mrs. Castle

Yes, I have certainly had applications, and I am considering them urgently.