HC Deb 30 November 1965 vol 721 cc1220-1
18. Mr. Alison

asked the Minister of Overseas Development what proportion of bilateral aid is currently tied to United Kingdom goods and services; and what is the estimated figure for exports that this tied aid will generate in the current financial year.

Mrs. Castle

Some 42 per cent. of our official bilateral financial aid disbursed in 1964 was wholly tied, and another 16 per cent. partly tied. A significant part of disbursements under Technical Assistance, pensions and compensation, will also have been spent in the United Kingdom.

It is not possible to estimate the amount of exports generated by this aid in the current financial year as these exports will be spread over several years.

Mr. Alison

Is the right hon. Lady aware that that is an encouraging reply in so far as the proportion she has just given indicates that quite a large amount of foreign aid must generate British exports? Will she bring her Answer to the attention of the First Secretary of State and Secretary of State for Economic Affairs and persuade him to give a much fairer crack of the whip to aid under the National Plan than he has done?

Mrs. Castle

It is true that aid, not only by this country but by other countries, does generate development and, therefore, develops exports. No doubt my right hon. Friend will have noticed that.

Mr. Freeson

Will my right hon. Friend bear in mind the importance of not tying too high a proportion of aid in view of the need for developing countries to pay for aid from local costs? Will she also bear in mind the need to keep open the door to future genuine internationalisation of development aid to poorer countries?

Mrs. Castle

I entirely agree that it is important to pay attention to the local cost elements. We always make reasonable allowance in our aid for local cost elements—more generous than other countries. That is why our aid is so effective.