HC Deb 17 May 1966 vol 728 cc1189-266

Order for Second Reading read.

6.41 p.m.

The Minister of Overseas Development (Mr. Anthony Greenwood)

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

We shall be judged by posterity on the progress we make during the next vital quarter of a century in achieving a juster distribution of the world's wealth, in banishing hunger and disease, and in conquering illiteracy. The Bill before the House constitutes a modest—but far from negligible—contribution to the discharging of that great responsibility—a responsibility which all of us accept without any qualification save that imposed by our economic difficulties.

The Bill contains a number of Clauses on matters for which legislative authority is required, and I shall begin by referring to Clause 1, which is intended to provide the Minister of Overseas Development with the general financial powers which he needs. This Clause forms the main substance of the Bill, but the other powers which I am seeking are also indisputably necessary if we are to continue our present policies, and most of these powers are urgently required.

Up to now overseas aid has been provided under various financial powers. Loans and grants to the Colonies for their development are provided under the Colonial Development and Welfare Acts, as extended by the Overseas Development and Service Act, 1965. The appropriate powers have been transferred to me by Order in Council. The Secretary of State responsible for the Colonies will be able to provide budgetary aid to them. None of these powers is affected by the Bill, except that it enables me to provide to the Colonies certain technical assistance outside the scope of the Colonial Development and Welfare Acts.

Loans to independent countries, both within and outside the Commonwealth, which are intended to be tied to the supply of goods from this country, have been provided under Section 3 of the Export Guarantees Act. In addition, some loans to independent countries provide funds for other purposes as well as the supply of goods from this country—for the local costs of investment projects; and in some cases we also wish to make grants either for development, or to help countries to provide, through their budgets, indispensable administrative services.

Assistance of this kind was formerly provided on the Votes of the Secretaries of State for Commonwealth Relations and for Foreign Affairs. It is now provided on my Votes, under the covering authority of the Appropriation Acts. Technical assistance is similarly provided. Since we now have a continuing financial commitment to the developing countries which in recent years has reached very significant levels, I recognise that functions involving financial liabilities extending beyond a given year should be defined by specific Statute, and I therefore seek specific legislative authority for the activities of my Department.

Accordingly, the purpose of Clause 1 is to confer continuing power upon me to provide economic assistance in the appropriate forms to independent developing countries overseas. I must point out, first of all, that although the Bill provides me with powers it provides me with no money. Funds for all purposes are to be provided on the Votes of my Department, and will, therefore, be subject to the annual approval of Parliament.

Now as to the purposes for which aid may be provided. For the most part bilateral aid to independent countries is in the form of loans for their development. Help may also be needed to remove obstacles to potential development, or to create conditions in which development is possible. Thus, in some cases we may need to assist poor countries to balance their budgets, or it may be desirable to help them to deal with overseas debts which are beyond the strength of local foreign exchange resources.

We shall continue to provide technical assistance, and to provide ourselves with the means to do so by, for example, financing research in tropical medicine. We shall continue to provide aid through multilateral channels, and the Bill covers the possibility of enlarging contributions to the funds of institutions specially capable of making a significant additional impact on development. It is for reasons such as these that the provisions are drawn in wide terms, and I think it is right that the powers should be wide.

The needs of the developing countries for external aid extend into almost every field of human activity. We are financing the provision of heavy electrical machinery from this country for India, and diesel locomotives for East Africa. We are helping to keep thousands of skilled public servants in the field. We are training others. We are carrying out mapping which is essential to development planning. We are helping a score of universities in as many countries with staff, buildings, and equipment; and we are contributing to the fight against illiteracy at the other end of the educational spectrum.

Volunteers from this country, whose work we support and value greatly, are carrying out a vast range of tasks, and demonstrating an unselfish way of life. We are helping with medical research in tropical diseases of men and animals. We are helping to build up statistical services and providing the tools of economic planning. These are just examples of the sort of aid we intend to continue providing.

Next, as to the terms on which aid may be provided. The Clause specifies that aid may be provided by grant, or by loan on such terms as the Treasury may approve. Most of this aid—except for technical assistance—will be, as I have said, by loan. My predecessor explained our policies as to the terms on which we provide loans when announcing our decision to introduce interest-free loans last June, and in the White Paper of August, and I need not repeat them now.

Those, then, are the spheres in which financial powers are sought. I hope that I have made clear that the main purpose of the Clause is to reformulate in a way which is both comprehensive, and, in some respects, more appropriate, powers which I already exercise. I hope that the House will approve them.

I need not describe in detail the work of the Ministry which has been set up to enable me to carry out these functions. This was described in the White Paper to which I have referred. I would make only two general observations as to the reasons for establishing it. The first was to concentrate in one Department functions which had previously been dispersed between five.

The second was to make it possible to study the problems of development in greater depth, and to base our policies more deliberately on the results of that study. I am sure that the concentration has achieved valuable results, and that the second object is being gradually achieved. Indeed, we are increasingly being consulted by the developing countries on their development programmes.

I should now like to refer to some of the broader aspects of the aid policy for which the financial powers in the Bill are needed, and to the international setting in which our programme and policies take their place.

During the past 50 years we have made enormous progress in tackling the problems of poverty and unemployment at home. As a general problem extreme poverty as we used to know it has been virtually eliminated. Our standards of living are rising, although perhaps not as fast as we should wish. We see the enormous possibilities of modern technology and as a result our own appetites are rising faster than ever before. The more we have the more we tend to want.

But in the developing countries of the world the picture is very different. The majority of the world'spopulation still lives in poverty and a large proportion of these people live in the less well endowed of those countries which we colonised and brought to political independence. Income per head in the developing countries is on average no more than one-tenth of our own.

In the 1950s considerable progress was made. Income per head in the developing countries rose by about a quarter in 10 years. But, regrettably, since 1960 the rate of progress has slowed down. This is partly due to the accelerating growth of world poplation, but is also due to the difficulties which the poor primary producers are experiencing in sustaining the export earnings of their traditional products.

A crucial factor in the past progress was the rapid rise in economic aid given by developed countries, which almost tripled between the early 'fifties and the early 'sixties; our own contribution in the same period also tripled. The aid still represents only a modest proportion of the total resources of the developing countries but it offers a vital supplement to domestic savings and foreign exchange earnings. It is vital to the progress of development.

Mr. Cranley Onslow (Woking)

The right hon. Gentleman relates the increase in aid from developed countries to developing countries to the rise in income of those countries during the late 1950s and the early 1960s. Can he say whether the aid from the developing countries that was put to use was so immediately productive that it was reflected at once in an increase in the gross national product in the developing countries?

Mr. Greenwood

No. The hon. Member has not followed my point. I was not saying that the rise in income of the developing countries was solely due to development aid which had been pumped into them, but it was a factor in improving the situation, raising the purchasing power and injecting vital help to the economy at a time when it was badly needed.

I am, therefore, profoundly concerned that—taking the donor countries as a whole—the growth of this flow now seems to have slowed down almost to a halt. The economic implications of this, taken in conjunction with the trade prospects of the developing countries, could represent a major set-back to world development.

The reasons for the slowing down of the increase in aid no doubt vary from country to country. But in all donor countries official aid competes with other uses of national resources and with other forms of public expenditure. Some people may be disappointed that the existing aid is not showing quicker results. But we cannot achieve an economic revolution in a developing country within a few years. Where aid has been prolonged and substantial, considerable results are being achieved. We have to recognise that aid to developing countries is a long-term business and that we must accept a continuing obligation.

We must not lose sight of the needs and responsibilities which we have to face. We might remember the assessment by the President of the World Bank that the developing countries could usefully absorb at least 50 per cent. more aid than they are at present receiving. We must not allow ourselves to relapse into what the Secretary-General of the United Nations has described as prosperous provincialism. Whether or not we agree with the terms in which this description is put we cannot overlook the seriousness of the situation.

International attention will be focused on these matters at the second United Nations Conference on Trade and Development which takes place next year. This, like its predecessor, will be a major international event. The main theme will again be the need of the poorer countries for resources for development and their prospects of obtaining them either from trade or from aid. A great many of these matters bear upon the responsibility of my right hon. Friend the President of the Board of Trade, but they have implications for our development policies with which I am closely concerned.

All parties in the House have always emphasised that this country should make an adequate contribution to international development. We stated in the Labour Party election manifesto at the recent General Election that we have increased the flow of aid both inside and outside the Commonwealth, in spite of our economic difficulties, and that it would be our aim to mobilise increasing resources in money, export advice and voluntary effort to make war on want. We emphasised that we should play a positive part at the next United Nations Conference on Trade and Development.

Many people ask whether the United Kingdom can afford to give aid at the present time. Aid cannot be costless; it is intended to transfer real resources to help the growth of developing countries; the human and material resources we provide could have been used to add to the growth of our own economy. There is also a significant foreign exchange cost in aid which, at present, places a special burden on our economy for reasons which Members will not need me to spell out.

But the burden should not be exaggerated; aid is still only a very small fraction of the national income, and at least two-thirds of the value of British aid results in additional exports of goods and services, representing costs in resources rather than foreign exchange. And like all other bilateral donors we are aware of the help given by aid in promoting exports and contributing to the stability of areas where we have political interests.

But the basic reason why we give aid to developing countries is that their living standards remain appallingly low, while ours are going up. Such a situation is no more acceptable in the world nowadays than such disparities of wealth could be at home.

I turn now to our own policies and, first of all, to the size and shape of our aid programme. We expect the total to increase from about £200 million in the financial year 1965–66 to £225 million in 1966–67. At this point, I ought to draw attention to a misprint in the Explanatory Memorandum to the Bill. In paragraph 9 the date "1966" in the third line should be "1966–67". I might, at the same time, explain that the apparent discrepancy between the £137 million and the £225 million is largely made up by the amount which is spent in the Colonies and under Section 3 loans which are not covered by the £137 million.

Repayments on development loans made in the past will be somewhat higher this year than last, so that the net cost of the programme will not increase by as much as £25 million. Nevertheless, the increase will be substantial, and I hope that it will be regarded as giving reality to our policies in this field, in spite of our own economic difficulties. What we can do in future will naturally depend on our progress in overcoming those difficulties; my right hon. Friend the Prime Minister has already stated that we shall review the aid programme in future with this progress in mind.

Within our programme we attach particular importance to aid through international agencies which carries special advantages. Not the least is that a multilateral institution can more easily secure the efficient use of aid without laying itself open to political criticism. It is one of the hopeful signs in the situation I have described that multilateral aid is steadily growing, although it still only represents one-seventh of the total flow.

We support the wish of the International Bank to extend and increase the operations of its affiliate, the International Development Association, which makes long-term interest-free loans available, subject to a small management charge. Her Majesty's Government, together with the Swedish Government, took a leading part in promoting in the U.N.C.T.A.D. a new scheme for supplementary financial measures to help developing countries whose development plans are disrupted by unexpected shortfalls in their export receipts. I gladly pay tribute to the part played by right hon. Gentlemen opposite in that proposition. We hope that a workable scheme can be agreed between all concerned. We have supported and shall continue to support the planned extension of the United Nations Development Programme.

Apart from increases in multilateral aid, we hope to see much closer collaboration, as time goes on, both between aid-giving countries, through the Development Assistance Committee, and between donors and recipients, through consortia and consultative groups, such as those which meet under the chairmanship of the International Bank. International collaboration in providing aid is still only in its early stages. We want to see much closer collaboration, and the development, where possible, of a consensus as to the needs of individual countries and the ability of the donors to meet them.

I will now deal with Clauses 2 to 7. Clause 2 covers the payments of a subscription to the Asian Development Bank. The agreement to set up the Bank has been laid before the House and should be ratified not later than 30th September. It will be necessary to make some reservations on ratification. We shall have a total liability to the Bank of £10.7 million, of which one half is paid-up subscription to the initial capital, payable over the next five years. The Bank has attracted powerful support from the industrialised countries. The United States and Japan, for example, are subscribing 200 million dollars each. But a fact of at least equal significance is that the Asian and Far Eastern developing countries have committed themselves to putting large sums of money of their own into the nominal capital, a quarter of it in convertible currency.

Clause 3 raises the financial limit on the contribution to the Indus Basin Development Fund from the £20.86 million authorised by the Act of 1960 to nearly £35 million. This project for works to implement the agreement between India and Pakistan for the allocation of the Punjab waters is a joint one between the World Bank and a number of donor countries. It was agreed in 1964 that greatly increased contributions would be necessary if the project were to be successfully completed. The House is asked to authorise the provision of funds to meet the increase in the British share.

Clauses 4 and 5 follow from the introduction of our policy of providing interest-free loans. Clause 5 is necessary so as to remove any possible doubts about the power to apply the policy to Colonies and Clause 4 makes it possible to relieve the Commonwealth Development Corporation of interest charges in respect of capital provided for enterprises of a special developmental character during their fructification period.

The purpose of Clause 6 is to amend the Commonwealth Teachers Act, 1960. That Act limits expenditure, both under the Act and under the Commonwealth Scholarships Acts, 1959 and 1963, to a total of £6 million. It provides that a larger amount may be substituted by Order in Council, and the limit has been raised in this way to £11 million. We think it right to amend the Act so as to abolish both this form of financial limit and the need for further Orders in Council. Provision would then, of course, be made in annual Estimates.

Clause 7 gives power to establish an Overseas Service Pensions Fund. This is a new initiative, to meet a gap in the technical assistance which we offer developing countries. As the new Commonwealth countries attain independence, the pensionable overseas officers serving there become free to leave, and I am then asked to make many contract appointments to replace them. We cannot meet all these requests by creating a new pensionable British Government Service, since we could not guarantee continuous overseas employment or a full career. But short-term contract officers, although professionally well-qualified, are often inexperienced in life overseas.

We want to encourage these valuable men and women to build up their experience and make their own careers overseas through a series of contract appointments. My scheme offers them security for the future if they attempt this, by providing from contributions pensions for fund members and protection for their dependants.

The scheme will apply to employment overseas approved by the Minister of Overseas Development. It will be open, for example, to all contract officers designated under the Overseas Development and Service Act, 1965, and to members of my Ministry's small corps of specialists. The scheme will be fed from the contributions of members, but the Government propose to meet the full cost of the contributions due from members of the corps of specialists.

Perhaps I may conclude by referring once again to the new international situation which has been created by the development of Government-to-Government aid on a large scale. It creates new relationships, new opportunities, new challenges and, we must say, new dangers. The co-operative effort in which the richer and the poorer countries are becoming more and more deeply involved to overcome the causes of poverty and to create the opportunities of a full life for all will be needed for a long time.

We shall have our setbacks and our disappointments. We shall make our mistakes and suffer our disenchantments, but we must always recognise the continuing responsibility which we have to discharge. We cannot be content to keep our growing wealth to ourselves. We must help less fortunate men to overcome their poverty. This country has a great deal to offer in this fight. Our financial resources are limited, although the contribution we make is not unimpressive; but we are also providing our trained men, and women, whose service abroad means far more to the growth of understanding and the founding of the sort of human society we want to see than a simple measure of how much it costs could indicate.

The needs of the developing countries are almost infinite. In many countries the growth of facilities for education can scarcely keep pace with the expansion of the population. They are greviously torn between fighting illiteracy, and training the graduates they so desperately need in their Government and industry. It requires a great co-ordinated effort of the developed countries of the West if we are to meet this challenge. We are proud to have in the United Kingdom a special Ministry whose task is to adapt the material and human resources which we can make available to the needs of the less developed countries.

The Ministry has had to work in a prolonged and difficult balance of payments situation. We are rightly conscious of the burden which aid places both on the public purse and on the balance of payments. This can be and often is much exaggerated, but however the economists may assess this burden I think that we should bear one final thought in mind. In the end, the balance of payments is one reflection of the ways in which we choose to use our economic resources. It is not a separate problem. In the end, the amount of aid we give will have to reflect our decisions on the sharing of our resources. It will depend on how far-sighted and generous we are prepared, as a nation, to be.

7.7 p.m.

Mr. Richard Wood (Bridlington)

The right hon. Gentleman has explained the purpose of the Bill and has explained also that what the Bill does not do is provide for new programmes of expenditure. He made it clear to the House that such new programmes would require the annual approval of Parliament. But the right hon. Gentleman gave us a brief account of the work of his Department and I should like to take the opportunity which this Bill affords to examine the aid policy of the present Government.

First, I should like to go back to the 13 so-called wasted years, and the total of British Official Gross Economic Aid, to use its official title. We can see from Cmnd. 2736, in Table X on page 24, that the total aid given in those 13 wasted years was nearly 1,500 million, rising from £52 million a year to £190 million a year and, perhaps more significantly, from one-third per cent. of the gross national product to two-thirds per cent. In the last 18 months, I am delighted that Government aid to countries abroad has continued to rise, but, in the words of the present Minister of Transport a year ago, "overwhelmingly the greater part of disbursements in 1965–66 will be the result of commitments entered into a year or more previously."

In the last months of the Conservative Government before October, 1964, the right hon. Lady who is now the Minister of Transport called for a greatly increased programme. She said that 1 per cent, was no longer adequate and that 2 per cent. ought to be the goal. Furthermore, she put a generous interpretation on the recommendation of the United Nations Conference on Trade and Development at Geneva, pointing out that the amount of money returning to Britain in the form of debt repayments so eased the burden of aid on the balance of payments that this burden, she said, should not be advanced as a reason why the Government should not immediately increase their—that is the official—overseas aid to 1 per cent. of the national income. As I shall try to show, I believe that the present Government will be hard put to it even to maintain the present level of official aid which, as we all know. is a long way below 1 per cent.

The White Paper, to which I have referred, avoided these awkward questions about the level of aid. In the preface, in the second sentence, it says, We do not specify the amounts of aid which we propose to provide in any particular periods. Then came the National Plan of last September. This was a little more specific but it was not very much more forthcoming. In paragraph 39, on page 75, it said: … the plan makes provision for only a small rise over the level of the current financial year. It would be very reassuring this evening if the Government shared with the rest of us their thinking about the likely expansion of aid in the rest of this decade, and I dare say it would relieve many of the anxieties of their own supporters. Realising that it could only guess at the future, the Fabian Society's Venture of last December gazed into the crystal and forecast, perhaps rather pessimistically, £220 million a year in the later 1960's and on this forecast it calculated that this would be an increase of £30 million or 16 per cent. by 1970 over the aid levels of 1964–1965 compared with a 25 per cent. target increase in national income over the same period. The article went on, rather revealingly, If this guess is near the truth, it means that it is officially anticipated that official aid, as a proportion of national income, is likely to fall from its present level of .67 per cent. It is therefore most unlikely that Britain can maintain, let alone improve on, the famous 1 per cent. proportion of development assistance to national income. We should be grateful if the Parliamentary Secretary, who I understand will wind up the debate, will tell us whether this bold guess of the Fabian Society's Venture was inspired or uninspired, because the same anxiety is no doubt shared by the hon. Member for Dover (Mr. Ennals), who is now Under-Secretary of State for Defence for the Army and who formerly was Parliamentary Private Secretary to the right hon. Lady who is now Minister of Transport. The hon. Member for Dover is reported to have said, in my county of Yorkshire, last January, that now that he had left the Ministry of Overseas Development he was burning to criticise the National Plan for its lack of specific targets for overseas aid. I am and my right hon. Friends are sorry that his promotion to the Government will no doubt prevent him from burning as brightly tonight as we might have hoped. In spite of his forthright comments in Sheffield, his party's election manifesto was as guardedly uninformative as was the National Plan. Its title, as we all remember, was "Time for Decision", but some of us found the words, a few of which the right hon. Gentleman quoted tonight, not particularly decisive.

Certainly we all support the offer of interest-free loans to developing countries with special needs—a useful step in the liberalisation of aid terms set out in the Conservative Party's White Paper Cmd. 2147 of 2½ years ago. But the Government must be well aware of the policy of our international competitors, especially the U.S.A. and Germany, of subsidising economic planning and feasibility studies by private firms with a view to securing valuable export orders and the consequent edging out of British firms which are still charging the Governments of the developing countries for their studies.

The Government must also be aware, perhaps even more seriously, of the effect of last year's Budget—in April—on the level of private investment in developing countries, because even if the level of Government aid continues slowly to rise, the action which the Chancellor of the Exchequer took last year is bound to make it increasingly difficult for us to go on hitting the target of total aid set by the United Nations Conference on Trade and Development.

I should like to make a few specific comments and to ask a few questions about the Bill. The right hon. Gentleman has kindly answered the first question which I had in mind about the relationship of the £137 million mentioned in the Explanatory and Financial Memorandum to the £225 million which he quoted again today.

May I ask about the Asian Development Bank, with its 19 regional and eight non-regional countries? This bank has a membership which is not the same as but is as comparable to that of the Colombo Plan, with its essentially bilateral agreements between countries giving or receiving aid. The purpose of the bank is to meet the demand for wider and more comprehensive powers of financial allocation to needy countries. The question which I should like to ask the hon. Gentleman, if he would be kind enough to answer it, is, first, what will be the future relationship between the bank and the Colombo Plan and secondly, how will the existence of the Bank affect British contributions to the Plan?

As we all know, the Indus Basin Development will cost more, and Clause 3 of the Bill gives the Government authority to provide the British share of the supplementary funds needed. My own opinion is that if the Agreement makes, as it can, a real contribution to relations between India and Pakistan, then it will be worth many times the money which we are now asked to provide.

I have already made it clear that we welcome the interest-free loans in suitable cases. Our introduction of the Commonwealth Teachers Act and the Commonwealth Scholarships Act, together with the undertaking given by my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle) at the Ottawa Conference in August, 1964, pledges our support for the action which is proposed by the right hon. Gentleman under Clause 6.

I welcome the introduction of an Overseas Service Pension Scheme. This was foreshadowed. as the right hon. Gentleman pointed out, in the White Paper of August, 1965. It seems to me that there is a very good case indeed for a pension scheme in respect of specialists, such as medical and agricultural specialists. I was not quite clear from the right hon. Gentleman's speech who is likely to be included in the scheme. It may be that my fears have no basis at all, but it seems to me that the case for inclusion is clearly stronger where the demand for such specialists—if it is in respect of specialists—is known and certain and more or less limited. I think that the case for a pensions scheme would be less strong in respect of other workers in the field. In the case of specialists it would be very strong indeed. I should be grateful if the Parliamentary Secretary would make it clear who will be included in the scheme.

So much, for the moment, for the details of the Bill. We are discussing a subject which is of greater importance in the long run to the future peace of the world than matters which make far greater and more sustained demands on our Parliamentary time. Humanly speaking, the provision of help, financial, technical and otherwise, by the relatively strong to the relatively weak is ultimately the most powerful force in the struggle for men's minds.

Most of us can name half a dozen corners of the world where this struggle will quicken during our lifetime and that of our children. In some places it will be settled by military force. In others, armed conflict will drag on drearily and with infinite suffering until the weary opponents meet together to settle their differences by compromise and negotiation.

But if we succeed in avoiding a catastrophe, with the might of the whole world trying to tear itself in pieces, then, in spite of a thousand setbacks, in spite of all the obstacles, some of which the right hon. Gentleman mentioned, and the already familiar agony of nations coming to maturity, we shall one day reap the reward. I say "we", but I do not mean we in Britain or we in the West, for the victory and the reward will belong to the world itself.

Many people in Britain today sigh for the glories of the past and others curse themselves and earlier generations for mistakes that might have been avoided. Some are shamed by the founding of an Empire while others deplore its change into a Commonwealth. I do not sympathise with either view, but I do take pleasure and comfort from the continued opportunity which lies ahead of us—an opportunity for this country, together with other powerful nations, to play a different part and, perhaps, an even more constructive part than we have played in the past.

I therefore welcome the Bill. When it becomes law we will keep a close watch on the use which the right hon. Gentleman makes of it. The Bill itself is not of such importance as the use which, in the years to come, is made of it. We will watch it closely, because the last 18 months have given us real doubts about whether some, or many, of the Government's financial policies will enable them to use the Bill as we think it should be used and will enable them, even more importantly, effectively to face the challenge which the world's undeveloped resources are now presenting to nations like our own.

7.23 p.m.

Mr. Frank Hooley (Sheffield, Heeley)

At first sight, the Overseas Aid Bill may not seem to have any very great bearing on the affairs of the City of Sheffield, one part of which I have the honour to represent. In a general sense, however, all citizens of this country, all taxpayers, make a contribution to overseas aid. Many of them do so through personal generosity to organisations like Oxfam, Christian Aid and the United Nations Association, while others contribute even more directly.

Sheffield makes a direct contribution to technical assistance through the work of its university which, particularly in the last two decades, has trained many hundreds of young men and women from overseas in mining, engineering, metallurgy, medicine, the law and many other professional skills which are in very short supply in overseas lands.

A year or two ago I took the trouble to count up the number of different nationalities of students in Sheffield, and I found that no less than 40 different nations and territories were represented among them. There may be more today. Not only in the training of young men and women from abroad, but also through sending distinguished academic teachers to serve overseas has the university made a contribution. Indeed, I often think that this country is able to make a better contribution by sending both young and experienced men and women out to the countries of Asia and Africa than even by inviting their nationals to come to be trained in institutions here, although both moves are extremely valuable.

I have had the pleasure of serving for a short time in West Africa, in Fourah Bay College, in Sierra Leone. I was pleased to see there in physical terms the scientific laboratories and other buildings which had been put up with Commonwealth development funds. I saw the immense value of this work to the people of that country. I was particularly impressed by the desperate need in West Africa—and this applies throughout the Continent—for trained manpower doctors, engineers, scientists, teachers, agriculturists and men and women of every possible professional skill. I am sorry to say that there was no dearth of politicians. There is not only the need for professional people, but a shortage at all levels, particularly of craftsmen and artisans—such as plumbers, electricians and carpenters.

I am glad to say that industry in Sheffield has played a part in the training of people at this level. Not only have the engineering and steel works of Sheffield provided important capital equipment and plant for the Indian sub-continent and elsewhere, but have given opportunities for young men to go into the works at the craft level and learn the skills of operating these great machines.

The overseas aid provided for in the Bill is not a form of international charity. As was said in the White Paper: We give aid because, in the widest sense, we believe that it is in our interests to do so as a member of the world community. I stress the phrase: … as a member of the world community. It is certainly to our long-term economic advantage to stimulate the growth of economies of other countries and to contribute towards a general expansion of world trade. It is also extremely important for our reputation, our influence and standing in the world that we should be seen to be making an adequate contribution to the great international effort towards raising the standard of living of poorer countries.

I need not remind the House that other countries are making a very powerful contribution in this sphere and that it is important that we should stand shoulder to shoulder with them so that our contribution is on a par with theirs, bearing in mind our economic resources. I scarcely need mention the contribution of France and the United States and the fact that the contribution of the Scandinavian countries is, per capita, in some cases greater than our own. Countries like Japan are now entering this sphere and are likely, shortly, to be making financial contributions which can rival the contributions envisaged in the Bill.

There is, of course, a price to be paid. There is a real transfer of resources—manpower, capital and equipment—when we provide for money to be spent on overseas aid. But this must be kept in perspective. To quote the White Paper: The sacrifice of resources which the aid programme may involve is not great in relation to our wealth. By the standards of developing countries we are rich, with an average income about 10 times the average of theirs. This cannot be too often emphasised. Twenty years ago we contributed £48 million, which then represented half of 1per cent. of our national wealth—or about 1¼d. in the £. Our contribution now is about £200 million, which is two-thirds of 1 per cent. of our national income and represents about ½d. in the £, so we are doing ¼d. in the £ better.

The Government, of course, are entitled to stress the problems which arise in balance of payments through provision of this aid, but I am somewhat disturbed that the National Plan provides for a very tiny increase in the next four years in our contributions. So far as I can see, it will provide a slightly smaller proportion of national wealth by 1970 than we are giving now. Fortunately, the plan is subject to review year by year. I hope that this aspect will receive very close and detailed attention, particularly as the 1960s have been designated by the United Nations as the Development Decade. That is a decade in which the nations of the world have pledged themselves to pay particular attention to the needs of the poorer countries and the need to raise their standard of living.

Finally, I quote a phrase used by the Prime Minister on 17th March, 1963. I hope that I have the date right, for am sure that he will not forgive me if I have it wrong. My right hon. Friend referred to providing the munitions of life, not the munitions of death to people in lands where life hangs all too often by a very slender thread. The Bill enables us to send out the munitions of life. I hope that, for that reason, it will have the ungrudging support of the whole House.

7.33 p.m.

Mr. Henry Clark (Antrim, North)

It has been remarked on a number of occasions in the last few weeks that the standard of maiden speaking in this Parliament has been as high as anyone can remember. It is a privilege to be able to congratulate the hon. Member for Sheffield, Heeley (Mr. Hooley) on the speech he made, which fully maintained the high standard to which we have become accustomed.

The constituents of Heeley have something rather more than a Member who has a ready-made election slogan. Those of us who have served in the Commonwealth will certainly welcome the hon. Member to our ranks and his experience will be of considerable value to the House. We look forward to hearing him on many future occasions on this and other subjects.

I cannot help feeling what an amazing occasion this debate would be to our predecessors of 20, 30 or 100 years ago in this House. Here we are prepared almost to give the Minister complete carte blanche for the spending of something in the region of £150 million. He can do just about what he thinks fit with it and need not worry at all. For once, the Minister's well-known smile is fully justified. He knows that every speaker will welcome the Bill, as I do. He knows that in Committee and on Report only constructive points will be made, and he knows that he can turn them down with the fullest Treasury backing.

By mid-July—if he is lucky, as I think he will be—the Minister will have finished with his work in this Chamber probably for the next 12 months, except for the trouble of answering Questions every five or six weeks. They also, I think we can be certain, will be constructive. It is not surprising that the Minister quitted the troubles of Aden and British Guiana and the foundering ship of the Colonial Office to slip up to the new ivory tower in Victoria when the opportunity came. No wonder that his predecessor moved on to the limelight of transport as soon as the opportunity came and she had had enough of foreign travel.

I believe very sincerely that before this House passes this omnibus enabling Bill we must find out more about the activities of the Ministry of Overseas Development. I believe very firmly that we must ensure that in debates we have a continuous stream of information about what the Ministry is up to.

In the 18 months that the Ministry has been in existence we have had precisely this interesting pamphlet, or White Paper, and we had one Bill last year which was about as uninformative as the Bill before us now. I do not think the House is getting adequate information about what has become a very considerable spending Ministry. It is rather similar to the Defence Ministry where most of the money is spent and most of the mistakes are made beyond the sight and experience of hon. Members. This House wants to be sure that the Ministry of Overseas Development knows what it is about and what aid is about.

This country has a great tradition of working overseas. We were the first country to set the fashion for overseas aid. I think we can say that we have more knowledge and experience of work in underdeveloped countries than the whole of Europe and, probably, America. It is absolutely essential that this country should remain in the forefront and continue to set the fashion in aid-giving for the rest of the world to follow.

Yet we find the opening paragraphs of this pamphlet defining the purposes of aid in a way which can only be described as a very unreal description of the problems. We find the same kind of thing in the reports of almost any of the international agencies. Probably this was copied from a report of an international agency. It is not a very deep survey of the problems of underdevelopment. Is not the Ministry aware that comparing per capita incomes as a basis for development is getting a little "old hat" and that statistically it is a very blunt instrument indeed?

Following the highly unoriginal preface, we have a description of the various agencies, bodies and categories of people who, for generations in some cases, certainly for many years, have worked for the Commonwealth and the underdeveloped countries of the world. We now find that they are working for the greater glory of the Ministry of Overseas Development. I want to be convinced that the co-ordination of these various agencies which are doing an excellent job will definitely create more results and not just more paper. Frankly, the impression I have got in the last 18 months has been that the Ministry, despite its elevation in rank, has lost some of the vitality which its predecessor, the Department of Technical Co-operation, had in its first years.

Thank goodness, one table has been left out, the international league table of who gives what and how much and when. That was one of the most unfortunate tables that could be quoted, although hon. Members opposite were very fond of it at one time. What we must establish very firmly in the British tradition of aid is that quality of aid rather than quantity counts. It is far too easy to measure aid in terms of money; far too seldom is it measured in terms of results. Quality is infinitely more important than quantity. A thousand pounds at the right time and place will be of far more use than £1 million too early or too late.

I believe very firmly that, based on our experience, this country leads the world in terms of quality. I can think of a dozen agencies in this country giving aid of unequalled quality. One I discovered the other day was the courses which the Bank of England gives to central bankers from under-developed countries throughout the world. That is a magnificent but hardly ever mentioned service. The principle of quality must be maintained in the forefront.

There is one aspect of the Bill and of the White Paper which I find optimistic. Clause 1(2) will grant the Minister money to employ people to engage in basic research into the problems of underdeveloped countries, poverty, and of creating development. Most people would agree that as a science the economics of developing countries is in its infancy. We shall not get a general theory of under-development or over development. What this generation sadly needs is a new genius to solve the problems of under-development rather as Keynes laid the foundations for the solutions of the problems of the developing countries in the 1930s.

With the money which the Minister will shortly have I hope some of this country's very fine economic brains will be put to work, with full facilities for research and travel, on solving the problems of under-development. I hope that Dr. Shumacher will no longer have to work in the National Coal Board but will be able to develop his worth-while theories on intermediate technology. It seems a complete waste to leave him merely dealing with coalmines when he could contribute so much to the whole world.

I stress one aspect which fully justifies deep research. On a trip to Uganda last year I was delighted to hear that a small ceramics factory was being built to supply that country's needs and also a small percentage for export. I was told that Uganda had got that factory only after a very long search. Every ceramics firm in this country had said that it was impossible to build an economic factory on the small scale required for the Uganda market. In the end they found one manufacturer in America who was prepared to make a plant for them. It is now in the process of getting going. It will supply the Uganda market.

This is an example which has very great implications. Almost all the underdeveloped countries want to manufacture their own less sophisticated consumer goods, but the scale of manufacture which has been developed in the advanced countries is too vast to be transplanted to under-developed countries. Anyone who travels considerably, as I have been fortunate enough to do, knows of countries which want ceramics factories, others which want cement factories, some which want small pulp mills, others which want small fertiliser plants or small scrap smelters. Time and time again one is told that it is impossible to build a plant sufficiently small to render it economical.

If the Minister would set up an institution to investigate throughout the world the demands for small-scale plants I believe that it would be found that probably 10 countries want a small-scale pulp mill, for example. It would be worth a manufacturer's time to design a small-scale pulp mill, put it into production, and sell it to 10 different countries, whereas it would never be economical to make such a factory as a one-off job.

There are many points of details which I hope we shall get a chance to take up in Committee. There is the odd factor that we are now to legalise expatriate local government officers, though strangely enough we refused to compensate expatriate local government officers with pensionable service some years ago and thus lost some of our more reliable officers.

There is the rather dangerous removal of the commercial incentive from C.D.C., which is essentially a commercial enterprise, by excusing it the necessity of paying interest in certain cases. We must be given full information about the extent to which loan repayments and pension payments to this country balance the amount of aid we are granting to various Commonwealth countries. There are many detailed points to examine. We shall do this constructively, but we want the time to do it.

I return to my main theme. This is a Ministry spending over £200 million, largely outside this country and largely away from the eyes of hon. Members. We have talked much of House of Commons reform. I do not think that anyone can doubt that a specialist committee would be highly suitable to keep an eye on the activities of this Ministry. I am not sure that we want to have specialist committees, but I believe that the House is entitled to demand that we should receive no less information from this Ministry than we do from the Service Departments. I should like an assurance from the Front Bench during the passage of the Bill that we can look forward to an annual White Paper and an annual debate on the affairs of this Ministry.

7.45 p.m.

Mr. Laurence Pavitt (Willesden, West)

The hon. Member for Antrim, North (Mr. Henry Clark) has asked for further and more regular information. The whole House will agree with that request. However, information comes when it is demanded. My right hon. Friend was down to answer Oral Questions today. Of the 115 Questions on the Order Paper only one was for my right hon. Friend. The interest now being displayed in the affairs of this Ministry has not been reflected in the number of Questions tabled to this Ministry over the last few weeks.

The hon. Member for Antrim, North fell into a trap into which many of us fall from time to time in discussing this important subject. We slip into paternalism. We speak of what "we" do for "them"—we the superiors, the developed. Perhaps sometimes we should talk of ourselves as the over-developed rather than as the developed. The Keynes whom the hon. Member hopes will arise is more likely to be somebody with an Indian-sounding name or an African name than someone from this country.

Most of this problem is bound up not just with economics, but with social and cultural aspects. When we pass a Bill of this nature, as I am sure we shall, it should be done in the context of not trying to export a westernised way of life or economy. We should try to build on the traditions, cultures, social background and way of life of the underdeveloped countries.

Mr. Onslow

I take it that the hon. Gentleman would agree with me that in attempting to identify the Keynes of the under-developed world Dr. Kaldor should be excluded from competition in this?

Mr. Pavitt

I have had the good fortune to have worked in India with a number of their economists. I am prepared to say that Dr. Keynes would have been able to learn a little in this specialised field from something of what is now going on in economic research in Bombay and Madras. I agree with the warm welcome which the hon. Member for Antrim, North gave to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), who made a first-class speech in a most interesting manner.

Like other hon. Members, I welcome the Bill because this is the Minister's attempt to get away from many years of sporadic and short-term aid and come on to a rather more systematic and long-term approach by giving statutory provisions to the kind of development which has been growing up in the various Ministries over the years. The Bill is a step in the right direction.

I agree that there is a still greater need for more co-ordination between that which we are doing and that which others are doing. I welcome the individual multilateral agencies attached to a specific project but, in addition the whole framework of the specialised agencies of the United Nations shows gaps and overlaps in what is being done. There are areas where our aid, Colombo Aid, the Point Four American scheme, I.L.O., F.A.O., and U.N.E.S.C.O. tread on each others' toes. There is a great need for more thinking about this and more concise action if our present plans and those foreshadowed by the Bill are to be effective.

As to our own co-ordination, one of the points where I am sorry that this Ministry seemed to give way to the Ministry of Labour was as to its representation on the International Labour Organisation, at Geneva. In most other international agencies the transfer of representation took place fairly fully to the Ministry of Overseas Development. Except occasionally, this Ministry very rarely is available at Geneva for the annual conferences and other assemblies dealing with overseas aid, yet the I.L.O. is one of the largest of the specialised agencies of U.N. doing overseas development work.

I share the belief of other hon. Members, especially the right hon. Member for Bridlington (Mr. Wood), in the importance of Clause 3, relating to the Indus Basin Development Fund. I had the good fortune to live for 2½ years in the Punjab, some years ago, and at that time this was the key question in every village that one visited, whether in the East Punjab on the Indian side or in the West Punjab on the Pakistan side of the border. The whole prosperity of that region rests upon its agricultural production, and this, in turn, depends on the waters from the five rivers.

I agree very much with the right hon. Gentleman that the £14 million is money well spent and well worth finding by the British taxpayer, because this is one of the first attempts ever made in trying to prevent war by dealing with the economic causes of war before it breaks out. If it is successful, if it is possible to solve the problem here, it can become the prototype or pattern to be taken forward in other areas where a little foresight can show where the tensions lie and reveal the underlying economic problems. In this way, as a result of this kind of multilateral scheme, it may well be possible to save further conflict and solve the political and economic problems by purely technical means. In this connection, I pay tribute to the International Bank for the tremendous efforts it made on the Indus Basin Scheme in the early days.

I have a special interest in the provisions dealing with matters within my own knoweldge, that is, technical assistance under the United Nations Expanded Programme for Technical Assistance. I refer to rural development and agricultural co-operative development envisaged under Clause 1 and educational development under Clause 6 of the Bill. I make a special plea to the Minister to support the great work being done in this country by the Co-operative College, at Loughborough. It is a two-way traffic. At present, Oxfam has launched a scheme for helping to develop in Bechuanaland this mutual self-help co-operative system. The registrar of co-operatives in Bechunanaland comes from the Co-operative College, a former lecturer there, Trevor Bottomley, and he will be able to ensure that the Oxfam effort will be used to best advantage.

Since 1947, first the Colonial Office and now my right hon. Friend's Ministry have used the Co-operative College to train from all over the world co-operative officers for rural agriculture and agrarian development by self-help movements. Five hundred and twenty-two students have now been through the college, coming from 50 countries, and at the present session one-third of the places—that is, about 40—are taken by people from overseas developing countries.

This is not a static provision. It is a live educational programme which is constantly altering. Now, together with Nottingham University, a two-year course for a diploma specifically designed for overseas students has been developed. A further innovation at the request of the Ministry of Overseas Development will come this summer with a 12-week special course for Latin America and another special course for Tanzania. Four Ministers in the first Government of independent Tanganyika were former students of the Co-operative College at Loughborough.

This has been the continuing provision and service by a voluntary organisation, the British Co-operative movement, co-operating with the Government so that both voluntary effort and State aid may be aligned to do a useful job for the world at large. I hope that the passing of this Bill will lead to an expansion of it.

As the Minister probably realised, my preamble leads now to the demand. I hope that there will be a good deal more support for work of this kind and that he will look again at the possibility of grant aid for the college at Loughborough. There is at present an urgent need for the appointment of a senior lecturer in agricultural economics. As I said before, it is extremely difficult to interpret the needs of agricultural growth and development in under-developed countries where the main requirement is for things like credit and thrift co-operative societies so that the peasant shall have enough money to buy seed when we look at these matters from a country which has a system such as ours, with agriculture more or less a full-scale industry scientifically and technologically organised to the last degree of modern development. When one is dealing with the 80 per cent. of subsistence farming which goes on in most under-developed countries, a different approach is called for. If we are to teach people the way to go about these things, a senior lecturer at this college in the sort of agricultural economics applicable to Asia and Africa will be an enormous help.

The recent Budget makes this request for a lecturer even more urgent because the voluntary side of the college's work rests on the willingness of the Co-operative movement in Britain to donate quite a large amount from its funds to subsidise it. I fear that the payroll tax, taking £10 million out of the surplus which Ls normally available, may well mean that the Co-operative College will suffer in the amount of donations provided. Morever, the tax will require the college itself to find another £2,700 in its annual bill.

I hope, therefore, that my hon. Friend the Parliamentary Secretary will answer a question which arose at Question Time today. I heard the Chief Secretary to the Treasury declare that educational institutions in receipt of public funds will be exempt from the Selective Employment Tax. In an indirect way, public funds are received from the Ministry of Overseas Development through the bringing of overseas students to the college. Does this mean that, as public funds come in in this way, the Co-operative College will he exempt from the payroll tax. [HON. MEMBERS: "No."] I say that with more optimism than hope that I shall receive an entirely favourable answer.

In asking for this help, I remind my right hon. Friend that he has already made a step in this direction with another very worth-while voluntary organisation, the Plunkett Foundation, which was recently given £15,000 a year for the next five years for a similar task in bringing people over to Britain and ensuring that others go back to assist in the development of co-operative and agricultural work in the developing countries. I hope that he will follow that precedent.

The Co-operative College is the only institution offering residential courses in this field. Of all the things we do, the helping of people to help themselves is the most important. The line between charity and aid is very difficult to draw. The two-thirds of the world's population who at present are the dispossessed will be able to raise themselves up only by their own shoe-straps. We must give the kind of aid which enables them to do so. We cannot do it for them. At village level, such work is to be seen in the Panchayat scheme in India and the village agricultural and industrial development scheme in Pakistan. In this way, people can make their own social and economic advance and improve the lot of ordinary men and women.

The Bill will give statutory basis to a surge forward in helping that large section of the world's population towards a decent standard of life. I hope that the Minister will not only be given this power, but, when he has it, will use it with vision and with imagination.

7.58 p.m.

Mr. Anthony Kershaw (Stroud)

It is a pleasure to follow the hon. Member for Willesden, West (Mr. Pavitt). I hope that his representations, which are more likely to be well received than mine, will have some effect on the Chancellor of the Exchequer. We all have great sympathy for the problems of the education establishment he mentioned, and we have in mind many others which work in this as in other spheres.

The Minister's explanation of the Bill disappointed me a little. I realise that he is to some extent bound by the terms of the Bill, but I had hoped that he would take the matter a little further on Second Reading and tell us how his Department envisages the administration of the Bill and the way its thinking has been developing over the years. Technically speaking, as the right hon. Gentleman will be the first to agree, our thinking on overseas aid has been developing in a good many ways over recent years.

In the first place, we have the problem of evaluating the aid given. My hon. Friend the Member for Antrim, North (Mr. Henry Clark) referred to the league tables of aid, in which we often indulge in this House, as a vain exercise. Nevertheless, they are always being quoted and we see to it that they are still issued. If they are not very well founded, we should know, as part of the evaluation methods now employed, the amount of aid which each country is giving.

It is not very meaningful, for example, to say that a certain sum of money has been lent until one knows the terms of interest and the length of time for which the money has been lent. One may find that quite a small sum lent for a long term without interest is fully equal to a much larger sum lent at a high interest in the short term. Possibly there are methods for evaluating and checking these sums and distinguishing between different types of aid.

Having evaluated the true value of aid we are giving, the next query is whether the type of aid being given is that which is really necessary to the recipient country. As the hon. Member for Willesden, West has made clear, there is no doubt that agriculture is the activity to which, in future, we should pay the greatest attention. Tremendous changes in social habits and in their legal systems and perhaps even in their religious beliefs will be necessary if these countries are substantially to increase their agricultural output. This type of aid should have considerable priority over the type we started off with—the provision of heavy industry for developing countries which has often proved to be not very helpful in the long run.

Then I should like to know what sort of discipline we expect receiving countries to exercise. We must expect them to exercise a certain amount of economic discipline. We must know what is happening to the money we disburse and that it is being well applied to the best purposes. We should know what is being done, because undoubtedly there is an opinion in donor countries that a great deal of aid has been misapplied. I do not wish to repeat corny old jokes about Cadillacs for African embassies, but, nevertheless, that opinion exists. It is harmful to proposals to give more aid if aid that has already been given has been wasted or has gone in corruption.

I want to know, therefore, what steps are being taken—I am sure that there are some—to ensure that aid is not wasted. We are entitled to exact also a certain amount of political discipline from the recipients. I cannot fail to remember that when we handed over Ghana to independence it had a full treasury. Now, for political reasons, that treasury is empty and it is necessary for us again to dig deep into our pockets, along with other Western countries, to rescue Ghana from the predicament into which Dr. Nkrumah cast it. It is reasonable to ask to what extent the political stability and political prospects of a country constitute a factor in the giving of aid.

According to the newspapers and to Answers to Questions in this House, we have decided to give £1 million to Indonesia. This cannot be regarded in any way as aid. I imagine that it is given under the auspices of the Minister of Overseas Development, but it goes against every possible rule about giving aid. It is given under conditions for purposes which we cannot control and under circumstances which lead us to believe that it will not be applied for the purposes for which it was given. In the early days of aid, this might have been the way to do it, but now no one, surely, would give any country except Indonesia £1 million to spend as it pleases. In view of the political confrontation that Indonesia is conducting with our allies I do not know whether this gift is a responsible act. It goes through the right hon. Gentleman's Ministry, but I am sure that he and his officials are are rather horrified by it. It is obviously a foreign affairs matter, but it is unsatisfactory and we should be grateful to hear what the Minister has to say if he is in a position to answer.

I should also like an exposition of the relationship between public and private aid. The right hon. Gentleman did not mention private aid. Perhaps it is not within the terms of the Bill. But it is important. Private aid totals almost half the aid to developing countries and is rising proportionately. We should, therefore, know what conditions we encourage or discourage for private aid.

Private aid to developing countries has some obvious advantages. It is inherently profitable, presumably—unless the judgment of the investors is wrong—and, therefore, is likely to last and meet a need in that country; it has a built-in technical education side, because one presumes that a private firm investing in such a country trains local people to take part in the enterprise and take over from its managers in due course. Private aid also stimulates local capital accumulation partly by the wealth that it generates and partly by producing profits which may well have to remain in that country because of local laws. In its own home country, it taps resources which would otherwise not become available for investing in developing countries.

The House may be aware of the enterprise launched from the base of the N.A.T.O. Parliamentarians conference, called "Adela". It was launched by Senator Javits, Chairman of the Economic Committee of the conference, with the purpose of channelling private aid to South America. It is doing so in an extraordinarily successful way. People went round developed countries trying to induce industrialists of great standing to promise to invest in this consortium for investment in South America. I am sorry to say that not many people in this country were very interested in it. But, with the great resources available to an American Senator, and with the great enthusiasm he has, Mr. Javits managed to get the consortium on its feet and today it is a thriving outfit with headquarters in Switzerland and assets of £40 million which it invests in aid to South American countries on a commercial basis. This is a way in which to channel aid to developing countries that should be examined further.

What progress is being made by the Government in schemes for the protection of investors in developing countries or for the mutual insurance of private investors against the loss of their investments? If that insurance could be arranged, we might find aid flowing more freely, although one can sometimes go too far in this direction because to protect a private investor completely from all risk is to sacrifice some of the advantages of private enterprise, some of the good features which I have been detailing.

Furthermore, even without investment protection it is not necessarily a good thing that the free money from private enterprise should flow not into the country of origin, but to countries abroad. That would lead to the home Government doing most of the investing at home. As a Tory, I am against the Government doing most of the investment at home. I want private enterprise to be able to take part, too.

What progress is being made in co-ordinating our aid to these countries with other industrial countries? I have mentioned the league tables, but some of the practices of our other friendly industrialised countries are not the same as ours. It may be difficult for the Minister to answer me here, even tactless perhaps, but we know that some of them insist on very much more onerous terms for the loans they make than we do and they make it more difficult for us, because the low-interest loans which we give may well be used for repaying the high-interest loans which our friends have already made. What degree of co-ordination has been reached and what can we do to stimulate our neighbours who have substantial surpluses to increase their aid?

Some of them have little or no colonial tradition. The hon. Gentleman the Member for Heeley said that the Scandinavian countries had a much higher investment per capita in developing countries than ourselves. I do not know where he obtained his figures, but they are quite wrong. The Scandinavian countries are well below us. They devote only about 0.2 per cent. of their gross national product to overseas aid whereas we devote very nearly 1 per cent., on any basis that one cares to take.

However that may be, both we and the United States, who are among the largest contributors, have balance of payments problems and it was the cut-back in United States aid last year which caused the greatest fall in the total amount of aid which has yet been seen. This is not surprising, because one must remember that the United States gives 60 per cent. of the aid which goes to developing countries, and the slightest dimunition in its very generous gifts causes a very large fall. If our balance of payments problems are not solved by international agreement, and we know that there are difficulties in this, I fear that the aid is likely to come down quite seriously.

I hope that without going out of order I may refer to the allied subject of trade. The United Kingdom has an extremely good record. The amount of textiles, for example, which we receive from developing countries is far and away beyond the figure which our comrades in Europe are prepared to take. We take as much as 30 per cent. of our textiles from the developing countries, mostly for the associated Commonwealth countries, whereas on the Continent they will only receive 5 per cent. of their textiles in this way. If they would open their markets a little more freely to help the developing countries, they would do more in this way than any amount of aid could achieve.

I learned the other day with some surprise that the amount of industrial exports which the developing countries have produced has risen surprisingly well and encouragingly recently. It was much better than was expected. If we could induce some of our neighbours to take down the tariffs which surround them, at any rate so far as the developing countries are concerned, it would give these countries a boost which is very badly needed.

The negotiations over the Kennedy Round will hold things back for the time being. The position has been frozen for so long that it is difficult to see how anyone will give way while these negotiations are in the offing. I would be very interested to hear whether the Parliamentary Secretary can hold out any hope of such a reduction in tariffs or whether conversations along these lines are taking place.

It is also true that the developing countries are taking more temperate foodstuffs from us, mainly in the form of tinned goods and proteins, exceeding the quantity that we expected them to be able to. This is very encouraging from an agricultural point of view and encouraging from their point of view, that they can afford it. It is likely to inflict fairly profound influences upon European agriculture if we find in the next few years a ready market for all the food which Europe can produce. This transforms what we thought was the position about over-production of temperate foods in this part of the world and may well transform our negotiations over our entry into Europe. Has the Parliamentary Secretary any observations to make about this?

I realise that I have asked a number of questions, to which it is difficult to be able to reply quickly, because there is no answer readily available. These matters are important and urgent. The food requirements of the developing countries, by reason of their rise in population are increasing all the time. Their imports of food are four times what they were four years ago and their desires are rising equally sharply. In the financial sphere they are starting to borrow to repay the interests on the first loans they obtained and this is a serious situation, because this means that they are borrowing money but doing nothing with it for their own country. This is a situation which the Western world must face as soon as possible.

In sheer volume of aid I would hazard a guess that we are doing as much as we can afford. There is no painless way of giving. If one gives one does so from one's assets. There is no way round it. It is true that we have found a temporary way round it. We borrow from the United States and give the money away. But we cannot go on like that permanently and, sooner or later, we must put our own house in order. If we are giving the maximum amount of aid then we can make sure that our aid goes further and is better applied. It is not only our responsibility to sustain the countries with which we have been so closely associated in the past—we have a special experience and special expertise to give. I know that we desire to do far more than we are doing and I am quite certain that if we channel our aid in the most expert way we will obtain the best benefits for what we give.

8.18 p.m.

Mr. James Johnson (Kingston upon Hull, West)

I am bound to say that we are listening to more and more fascinating speeches from the back benches opposite. As the night wears on they become more and more paternalistic and I can close my eyes and imagine myself listening to commissioners in former Colonies telling us how to administer the affairs of subject peoples. It is quite staggering. I have heard of the Licensed Victuallers Defence Association but I appear to have just listened to a speech by the Licensed Money Lenders' Defence Association!

What is this theory that we must tell independent Dominions upon what terms we shall give them loans and the way in which they shall spend the money? If they do not spend it in the way in which back benchers opposite wish them to spend it then we must cut it short. This is a fantastic theory, and I would warn hon. Members opposite that this is not the way to speak to emergent Dominions who have a full life to lead. I am shocked and staggered. "Paternalistic" is a very mild word for some of the language that we have heard in the last quarter of an hour.

Mr. Kershaw

Is the hon. Member then in favour of leaving a package of banknotes on the embassy steps and running away, without having any control over how it is spent? If we had all the money in the world and simply did not know what to do with it, that might be reasonable. Does he not think we have responsibilities to see that the taxpayers are properly protected?

Mr. Johnson

I have never left a packet of banknotes on anyone's backstep in my life. I would simply say, pay less attention to a few of these editorials in the Daily Express about Ghana and £3,000 bedsteads and the like and think of the bush, where I know many hon. Members opposite have been just like myself, and of the enormous numbers of schools, hospitals, piped water supplies and all the other things which make up decent living and compare it with the odd decimal of 1 per cent. which has been lost in peculation, nepotism, corruption, and putting into pockets of Ministers and others. I accept that this is human behaviour—what some Members opposite call human nature. Think of all the benefits given to people by schemes of this kind. Let us have a sense of proportion and little less of this paternalistic stuff, this Col. Blimp attitude which died in the 1940s.

I listened with a little more pleasure to my right hon. Friend the Minister. I enjoyed him immensely. I always enjoy his language, diction and sentiment. But I did not care so much for the content. I want to say something about the lack of meat in his speech. This is the annual statement, I take it, on behalf of the Overseas Development Department for assistance in 1965. The Minister spoke of "slowing down". There is a slowing down. It cannot be denied that aid in 1965 got bogged down on a plateau. The figure is oscillating—it is not even fluctuating—on a plateau of about £190 million. When measured against the needs and aspirations of the developing countries, this position is quite unsatisfactory.

The Minister spoke about the "have-nots" at home—pensioners and the like—and of poverty among the colonial peoples overseas. I happened to be in Geneva in December, 1964, when U.N.C.T.A.D.—the United Nations Conference on Trade and Development—was being held. If hon. Members opposite had spoken then, as sometimes they do, to African politicians about the state of their domestic economies in Africa, they would have got a sombre picture of the gap which is widening between the Western States and the emergent territories in Africa. It is quite terrifying to me to be told when wishing to compare the position in the United States with the position in Africa that in 1964 the United States added to their income the equivalent of the entire national incomes of all the States on the African continent, which is about 30,000 million dollars. This is the change in pace of the Western world compared with the under-developed territories.

We had an election, which I hasten to add we won, in October, 1964. There was a manifesto in which we spoke of establishing a new Department of Overseas Development. I want to consider its balance sheet. A number of very good things have been done. Interest-free loans constitute a good Socialist measure. It has been an enormous boon to these nations overseas. When we hear that the Sudan is spending between one-third and one-half of the money which it gets in loans in servicing past loans, we see how much a benefit an interest-free loan can be.

We certainly played a constructive part in the Geneva conference. The Minister has spoken about our collaboration with the Swedes in putting up the scheme for supplementary finance to offset unforeseen losses or shortfalls in the sale of their export goods. These shortfalls cause enormous instability and in some instances hinder the completion of their development plans. I cannot over-emphasise this. I should like the Parliamentary Secretary to attempt to tell us how we can mitigate the evil effects of what is happening. Since the early 1950s, much aid has been offset by the fall in the price of our imports, which are the exports of these developing nations overseas. This is the constant theme of African politicians. They feel cheated in this way of much of the help which we are giving them year by year.

The ideal solution would be if we could guarantee markets here for many of their goods. We did this at one time, but the only thing left is the Commonwealth Sugar Agreement. Mauritius, Barbados and Fiji thank heaven for the fact that we stabilise the market in sugar in this way.

I understand that there are about 1,500 civil servants in the Department. I also understand that about 1,000 or more experts—if that is the right word; I use it in the best sense—have been added to the Department and to the universities for work planning in order to get more efficiency and more value from the loans which we make overseas. But, for all this, I still cannot see the Department living up to the high hopes of October, 1964, or indeed of our last election pledges.

I listened carefully to the right hon. Member for Bridlington (Mr. Wood), who led for the Opposition. It seems to me that the Minister has not been allowed by his Cabinet colleagues to spend the money which he would like. The right hon. Member for Bridlington talked about the National Plan. I wish that I could deny what he said. I wish that I could say that the National Plan would help the Minister. But I cannot. Page 17 says that, while the aim is to increase our national product by 25 per cent. between 1964 and 1970, Aid to developing countries will be retained and the effectiveness of each £ of aid increased. Let us see if we can get the effectiveness of each £ of aid increased by more efficient and more effective planning in the Department.

We made pledges on this in our election manifesto. We stated: We will increase the share of our national income devoted to essential aid programmes. I know our difficulties. But if official aid to these territories overseas rises more slowly than our national income, we cannot keep pledges, whatever they may be. Our overseas fellow politicians, the leaders of these territories, note this.

Many questions have been asked by the hon. Member for Stroud (Mr. Kershaw). I wish to ask only one of the Parliamentary Secretary. Can he say how the Government will maintain our total of aid and investment over the period 1965–70? Is it possible to say that this can be done? I have said that interest-free loans are an enormous boon, but can the Parliamentary Secretary guarantee that the effectiveness of each £ of aid is being increased? If so, this will help people like myself, who are not too happy at the moment about the amount of aid being given.

Mr. John Biffen (Oswestry)

If the Parliamentary Secretary says that the effectiveness of aid is being increased, does not this imply that he is operating standards of judgment which were characterised as paternalism by the hon. Gentleman at the outset of his remarks?

Mr. Johnson

It simply means that the country has made mistakes in the past. There has not been sufficient manpower in the Department to examine the schemes tackled in the past. We can always learn from experience. I am willing to accept that we can have more efficient planning and more efficient aid for countries overseas.

Is it a fact that the number of personnel overseas fell by 1,000 in 1964? Can I be told what the figure was in 1965? This is not in the White Paper, but I understand that O.E.C.D. made this statement. I am delighted to see that the technical assistance figure has gone up from about £25 million to about £32 million. Given this increased financial aid, more effective value will be got. The value must be higher if the economic planning staff do the job that we hope they will do with their increased numbers.

I know that the Government shelter behind balance of payments difficulties, and this is an explanation that I accept for not bumping up our aid to the level that we had hoped. I admit our serious position, but it does not justify a Labour Government "taking it out of the poor" overseas. I ask that we should have the same attitude towards these poorer nations overseas that we have to the poorer segment of our own population. At home, we can help our old-age pensioners. Let us help more than at present the less happy people—I will not call them pensioners—in these overseas territories.

There is a need to educate public opinion. Goodness knows, we need some counterblast to the last two speeches by hon. Members opposite, and to the vituperation and mean-minded complaints of papers like the Daily Express about the waste of overseas aid to our Dominions overseas. We know the old gags and gossip about Ghana, but let us have a little less of that and more education of public opinion.

In the past, the main appeal to the British sense of decency and to the kindness of our nation to people overseas, has been left in the hands of voluntary societies. We all know them—Oxfam, the United Nations Association, War on Want, and the like. The public image has been given of overseas aid as another charitable organisation, perhaps additional to the church missionary societies of the 19th century.

Cannot the Minister of Overseas Development, together with his colleague in the Cabinet, the Secretary of State for Education and Science, do more in the way of publicity and mass communications with the public? The mere fact of my right hon. Friend the Minister being in the Cabinet is a token to me of the Government's sense of obligation to our former Colonies, but we must explain to the taxpayer at large exactly what we are doing and there is a need for much more education in this matter.

Mr. Cranley Onslow (Woking)

Does the hon. Gentleman realise that, if the taxpayer is to be persuaded of the advantages of aid, it will be necessary for someone to produce real evidence to show that it not only achieves the effect of promoting economic development but does so more effectively than any other means could? So for in this debate we have had no evidence from the Minister or from any hon. Member opposite to suggest that.

Mr. Johnson

Anyone who visited Africa and went into territories like Northern Rhodesia and saw the lack of schools and hospitals, and indeed the basic lack of jobs for the work to be done, which is the basis of the whole of a civilised and decent economy, would appreciate the need for this aid overseas. I have been there and know what is being done. The hon. Gentleman is now nodding his head and he, like myself, must have seen the enormous need for this to be done. I am asking for more than £194 million, if the Government can do this without adding to our balance of payments difficulties.

I will quote the predecessor of my right hon. Friend the Minister. On the 3rd February, 1964, in this House my right hon. Friend the former Minister of Overseas Development said: Nothing effective is being done to educate our people in this vital matter. This country is full of warmhearted people."—[OFFICIAL, REPORT, 3rd February, 1964; Vol. 688, c. 846.] I ask now that the Minister should perhaps think of educating the taxpayer and making him aware of the work being done, and the need for much more work to be done. This could be done by films for mass audiences, exhibitions, the free and widespread distribution of educational material, visual aids for schools and so on.

It is very important that we should give an image of this Department to the public at large, showing that it is doing the job. We should make the public as a whole aware of what can be done, and of what must be done much more in the future.

8.35 p.m.

Sir George Sinclair (Dorking)

This is really a tidying-up Bill. It gives legal sanction to procedures that are already established, it honours commitments that have already been made and, in addition, it throws in a much-needed pension scheme for contract officers. But although that is the purpose of the Bill it is not what this debate has been mainly about.

What matters far more than the machinery is the intention of the Government in this whole field of overseas aid. Clause 1 of the Bill gives the Minister wide powers to provide financial and technical assistance to overseas countries, but this will be of no effect unless the Government have the will to allocate the funds. The cold attitude of the Government is shown in the neglect of overseas aid in the so-called National Plan, in the Labour Party's 1966 election manifesto and in their discouragement of overseas investment. These are the facts.

What a contrast this is to the Labour Party's fervour of 1964. What stirring statements were then made about Britain's responsibilities towards developing countries. What imaginative promises were then made about increasing the share of our gross national product that they would allocate to overseas aid. Where is overseas aid now in the Government list of priorities? That is my first question to the Minister. In my view, it is falling very low in the list.

We hear the Prime Minister talking of Britain's rôle in the world. And yet he pays scant personal attention—in recent years, at least—to overseas aid. We have heard a quotation from what the Prime Minister said in 1963. Nothing like that has been repeated by him between 1964 and 1966. And yet this overseas aid affects a great part of the world, if we count people. It affects a great part of the Commonwealth. The effort that we are willing to make in helping the poorer countries is certainly a main element in Britain's world rôle.

One per cent. of our gross national product is not a great contribution to make. I am glad that the Minister, in moving the Second Reading of the Bill, conceded this. It is not a great contribution. So much of it comes back in trade, in repayment of loans, in the payment of our own people serving overseas and in payments towards their pensions. Indeed, so much of it comes back that it is not a major element in our foreign exchange problem. I am glad that the Minister went some way to agree with this, as his predecessor did before him. This applies both to official aid and to private investment overseas.

The Americans, too, have found that their vastly greater foreign aid programme is not as great a strain on their foreign exchange as some of their own experts had claimed. For them, too, much comes back in one way or another.

So the Government are not justified on grounds of foreign exchange in retreating from the promises their party made in 1964. Nor are they justified in abandoning the robust lead given by the Tory Government in 1964 at Geneva at the Conference on Trade and Development.

In spite of the present financial difficulties, this Government could do more. They should do more. The fact is that the Government have turned inwards and backwards on many of the issues affecting Britain's rôle in the world outside. They have now shown that they have lost the crusading spirit and will to bring more help to those parts of the world which need it desperately. But the need has not become less since 1964. It has increased sharply.

Britain should, I believe, maintain a leading part in solving one of the main problems of our age, which is the division between rich and poor countries. What is needed is that the Government should have the will to give a higher priority to overseas aid.

One major political step could help in two ways. If Britain joined the Common Market, we would have the opportunity to strengthen our own economy and our power to help other countries. We could help to persuade the Common Market, as a great economic group, to match the world-wide efforts that the United States are making in overseas aid. She could also help to open vast new markets to the exports of the developing countries.

The Minister of Overseas Development must know that all the efforts of his Ministry will be frustrated unless the terms of trade between the developing and the industrialised nations improve, especially through stable world commodity agreements and the opening of the richer mass markets to the primary and manufactured products of developing countries.

He knows also that his Ministry's efforts will be of less avail unless the Government change their policy towards overseas investment, because private investment overseas has a real and vital rôle in raising the standards of living of the developing countries. It is a rôle which many receiving countries themselves are beginning to understand better and to welcome more openly. So much for Clause 1. What is needed is a change of Government policy to make it work.

I turn now to Clause 4. I welcome this help to the Commonwealth Development Corporation. In recent years, that organisation has earned a splendid reputation for itself and done great credit to this country. It has been particularly successful in pioneering new patterns of economic partnership to meet the special needs of the developing countries, which are short of capital and of managerial and technical "know-how".

It has been associated in a wide range of projects with the Governments of the developing countries, with both overseas and indigenous private enterprise, and with many local co-operative organisations, of which the hon. Member for Willesden, West (Mr. Pavitt) spoke with such great experience. Some of its most spectacular successes have come in agriculture and rural betterment. I understand that the World Bank has sought the Corporation's help in spreading knowledge of the techniques which it has pioneered.

I should like to see the Government increasing their financial support for the Commonwealth Development Corporation. It is one of the best ways in which to make our aid more effective and more acceptable in the countries where it operates. Part of the good effect of this is the partnership between private enterprise, State enterprise, corporations, co-operative movements, and the peasant farmers. This, on the ground, is the way to help people to help themselves. This is why it is proving one of our best instruments in rural development, where the need is most urgent, the problems most difficult, and, in the end, the opportunities for advance greatest. It is for these reasons that I welcome the Clause and the power which it seeks for the Government to advance money to this Corporation to carry out long-term schemes and to defer payment of interest while those schemes are getting under way.

Before I sit down, I should like to say a word or two only about the new pension scheme. This is to fill a gap which has long remained a weakness in our care for those who choose to go overseas on contract to work in developing countries, and would like to go again, but feel that they must build up some reserves for their families against the time when they come back. The fact that they can now pay into a pension scheme, and that the Government will contribute as well, is an incentive to take up second and even third contracts, and it is in those contracts that the experience gained in their first years becomes most valuable for the country which is, for the time being, their host. This is a small but very important step forward, and I welcome it.

What I should like to see, though, in getting greater continuity for our people working abroad is even greater use being made in the universities, in technical colleges and in local government, of the additional posts which enable these bodies to send overeas some of their best people for periods—it may be one tour, it may be two—but then to offer them in this country a return to their own field of work. This will help them to maintain some continuity of effort, and, indeed, to make an enriched contribution in this country by spreading knowledge of the problems of the countries in which they have been working.

I believe that this is something which the Government can do through the University Grants Committee in even greater measure than they are doing at the moment. That this is a very important interchange in this field is also important: postings are often done between comparable institutions in the overseas territory and those here. In all this, there is no whiff of the paternalism which, quite unjustly, was thrown as a charge at some of my hon. Friends. People are not concerned with paternialism today, from whichever side of the House they speak. They are deeply concerned with trying to help people to help themselves. This is what whoever speaks in favour of aid to overseas countries is trying to do.

8.48 p.m.

Mr. Arthur Blenkinsop (South Shields)

I think that the criticism of the hon. Member for Dorking (Sir G. Sinclair) of the Government's aid to developing countries might have been rather more effective had he at the same time paid some tribute to some of the new developments for which my right hon. Friend and his predecessor have been responsible, particularly interest-free loans and other matters of this sort.

But I share the hon. Gentleman's concern, and, indeed, the concern expressed by many of my hon. Friends, about the way in which the aid appears to be in danger of slowing down, and I think it is right that our anxieties about this should be freely and openly expressed. I share the anxiety of many of my hon. Friends about the reference to this in the National Plan.

To take up the point made by the hon. Gentleman about the association of Britain with Europe as one means of making a greater contribution towards this whole problem, I would remind him of the comment made by my right hon. Friend the First Secretary, in answer to Questions in the House only a few days ago. My right hon. Friend was making precisely that point. He was eager to achieve a new association with Europe as widely based as possible, because it would enable a much more effective contribution to be made by Europe to the developing countries. The point of view expressed by the hon. Member for Dorking is shared by many of my hon. and right hon. Friends.

Sir G. Sinclair

I did not include the Secretary of State for Economic Affairs in what I said. What I regretted was the lack of leadership by the Prime Minister in this matter, and his failure to nail this priority somewhere near the masthead.

Mr. Blenkinsop

Surely the hon. Gentleman agrees that my right hon. Friend the Prime Minister has arranged for the Secretary of State for Economic Affairs to give special leadership on the whole question of Europe. One of the important factors in this matter is the achievement of a greater contribution by Europe to the developing countries.

I am sorry that the hon. Gentleman did not refer to the positive and valuable contributions that my right hon. Friends have made in this matter, at a time of great pressure. If we cast our minds back to comparable periods of economic pressure in the past—and pressure which in many ways was far less severe than we have been suffering over the last few years—we realise what very serious cut-backs there were in aid of this sort. In the past, our international contributions were some of the first to be cut back.

I know that some hon. Members opposite welcome that, and regard it as proper, but for those who do not welcome this—and I include the hon. Member for Dorking among them—it is clear that to have an expansion of aid we need to introduce some historical perspective into the matter. We must consider the way in which aid was cut back in the past and the extent to which, so far, the position has been held by this Government. I merely express some anxiety in case there is a danger of our falling back again in the immediate future.

I took part recently in an interesting debate in the Council of Europe Assembly on the very issue of European aid to developing countries. It is of some consequence that at that meeting, in which there was a very well-informed debate, great stress was placed on the need for our richer industrial countries not only to maintain but to increase their joint contributions to developing countries, and the necessity of trying to reach the target of 1 per cent. of our national income, to which we have so often referred in the past.

We should not congratulate ourselves too much. We must consider the real contribution made by France and other European countries. We have been inclined to congratulate ourselves too much, and to forget that many of our European partners have made equal if not larger contributions for many years.

Sir G. Sinclair

The hon. Member asks me to cast my mind back in history. I will do so. I remember the period of the Second World War, during which the foundations for the great aid system which Britain pioneered were fostered and developed.

Mr. Blenkinsop

I want to deal with one or two of the points which were particularly referred to in the Council of Europe debate. I welcomed the references made in the resolutions which were finally passed, when we discussed aid to developing countries, to the need to include a proper examination of the population growth problem. I hope that, in winding up, my hon. Friend will make some reference to the contributions which we are seeking to make, through our technical aid and the social services which we help to build up, to the health education programmes which are so urgently needed to work in co-ordination with the economic development programmes in so many of these countries.

It was a great tragedy that, in the past, the World Health Organisation, the body with one of the major international responsibilities for health education work, should have been denied the opportunity to offer advice on matters relating to population increase. I am glad that that restriction has now been withdrawn, but I am anxious that any assistance and advice should be offered by means of the health programmes of the countries concerned rather than as a completely separate and isolated item.

I want also to ask my hon. Friend to say something about the development of our overseas volunteer schemes. We are all very conscious of what we owe to the main voluntary bodies which have been assisting in organising voluntary aid overseas in the past years. We are very glad that the numbers of volunteers have been increasing, but there has been some criticism of the separation of the four main bodies concerned. It has been suggested that perhaps a more efficient organisation could be achieved if there was a rather closer link between the four bodies. I am not expressing an opinion, but I should like to know whether my hon. Friend has any comment to make.

I should also like to ask him whether, in this sphere of overseas volunteers, we have had any more success in getting volunteers who are non-graduates. As I see it, we not only need the aid and assistance of the young graduates, a great number of whom are keen to offer their services: we also need the advice of a range of young men from the shop floor, who have a great deal of practical experience and knowledge to contribute, which could, in many cases, be just as valuable as the academic training which other volunteers have to contribute. It has been said that we have, unfortunately, been unable to attract as many from this sphere as from among graduates. I realise that, in most cases, this will mean securing agreements with firms to release some of their staff and I realise how difficult this may be, but I should be interested to know whether any progress has been made in this direction.

Within the sphere of technical assistance, I have found abroad—particularly in health education projects—some extremely valuable assistance given by public health inspectors. We are short of these men in this country, but there is no doubt that their kind of practical experience is of immense value in developing countries. The Association of Public Health Inspectors made clear recently how eager it is to encourage its members to go abroad to join in practical projects. Can my hon. Friend say whether this offer is being taken up?

I join my hon. Friends in urging my right hon. Friend to continue to press for as large an allocation as possible for this work. My hon. Friends and I have given pledges involving the encouragement and development of practical schemes of overseas aid. We all feel that this is something which cannot be held back even in the critical financial and economic circumstances which face the country. Any steps which my right hon. Friend can take to get a larger slice out of the future national cake will have the very great support of his colleagues on these benches.

9.1 p.m.

Mr. Philip Goodhart (Beckenham)

The hon. Member for Willesden, West (Mr. Pavitt) asked who would be the Professor Keynes of the under-developed world. Most of us would agree that it is Professor Arthur Lewis, the distinguished West Indian economist.

Some years ago I ran into Professor Lewis when he was temporary economic adviser to Dr. Nkrumah. Professor Lewis was then in a state of some anxiety. Ghana had received a short-term windfall through an increase in cocoa prices and temporarily there was more money in the Treasury than had been expected. Consequently, Professor Lewis put forward well-reasoned plans for providing piped water in the villages, the development of schools and many of the other good things about which the hon. Member for Kingston upon Hull, West (Mr. James Johnson) was speaking recently.

These proposals went out of the Ghanaian Cabinet window and instead another battalion was raised for the Ghanaian Army, although perhaps Dr. Nkrumah now wishes he had not spent the money on raising that battalion.

Mr. James Johnson

I hope that the hon. Member will accept that a lot of this money went to most worthy projects. There is a Volta Dam. If he goes into the bush in Ghana he will see many social, welfare and educational schemes which are benefiting millions of Ghanaians.

Mr. Goodhart

I well remember Professor Lewis shaking his head as he described the battalion of the Ghanaian Army, with the barracks which would be built for them and the new hall to be built to take conferences which will now never take place. Professor Lewis left Ghana and went elsewhere, where his wise advice will be taken more readily. It seem to me that it is not arrant colonialism or paternalism to suggest that where countries show that they cannot manage aid, and put it to sensible projects, we should withdraw, just as Professor Arthur Lewis withdrew.

The present Government have been accused of a great many crimes in the 18 months they have held office. They have been accused of running away from crises, of running in the wrong directions during crises and of doing the opposite to that which they said they would do. I can make a unique charge against the Minister. It is to accuse him of not having thought of any political gimmicks and for not having used the channels of publicity as fully as he might, because I am struck by the way in which the glamour has gone out of this political sphere.

If we think back to the early 'sixties—to the foundation of the American Peace Corps, the formation of our Voluntary Service Overseas Movement and, indeed, to the incursion of the Communists into overseas aid—we realise that there was an air of excitement and enthusiasm which somehow appears to have gone sour in the last couple of years. No doubt it hasgone sour because of the reaction of some of the receiver nations, but we appear to have lost the enthusiasm which we once had.

I suppose that one good reason why the Minister does not beat loudly on the drum that he has available is that, if he did, he would lay himself open to the charges that have been made against him by hon. Members tonight about the way in which the increase in aid has slowed down; the way in which aid seems to have almost disappeared from the National Plan. Indeed, the right hon. Gentleman is not getting the resources that the Labour Party said it would make available—but that, of course, was said when hon. Gentlemen opposite were in an election frame of mind.

My hon. Friend the Member for Stroud (Mr. Kershaw) reminded us that this country has had a very honourable record of allowing in the products of other countries. We have had virtually no barriers at all against the import of goods from the Commonwealth, particularly manufactured items. But this has changed and the import surcharge has fallen most heavily on the newly developed industries of some Commonwealth countries.

The Bill refers to the Indus River Development Plan and we are all agreed that this agreement was one of the few bright spots in Indo-Pakistani relations since the war. According to the Bill, in 1966–67 we will be giving another £3 million to the Indus River Development Scheme. Largely as a result of the import surcharge, the amount which India and Pakistan have been able to earn in this country was reduced last year by £12 million, and it does not make sense to hand out small packets of aid and at the same time make substantial cuts in the amount that these developing countries can earn from us.

It is said that the import surcharge is to be removed at the end of November. Perhaps it will be, but if the economic situation continues to be as dark as it is at the moment there will be need for a new system of import control to take its place, and perhaps a direct import quota system. It is the job of the Minister of Overseas Development, when these new proposals—whatever they are—for import limitation are put forward, to fight for the interests of developing nations, in particular, developing nations of the Commonwealth.

Of course, there is much in the Bill which is perfectly worth while. No doubt it is a very good idea, as set forward in Clause 6(2), to recruit teachers from the Republic of Ireland and send them to the Commonwealth in Asia and Africa, but it seems a trifle outlandish to do so. The Minister will not be judged as to whether he is a success or not by his ability to get Clause 6 on to the Statute Book, but by his ability to protect the trade of developing nations from the barriers which the present Government so often want to raise against the free flow of trade.

There is one way in which the Bill truly represents the Government's aid programme. As it stands, it is a technical mish-mash and does not reveal any of the information we might reasonably expect to have. I cannot help contrasting this Measure with the annual aid Bill presented to the American Congress, which contains the full appropriations for the year and provides an opportunity for a full, searching debate by Congress on both the size of American aid and the way in which that aid is used—the strategy which lies behind the distribution of that aid.

This is a subject on which we are left completely in the dark by the Government. As a result, after the Minister's speech, after the Bill, after the White Paper and after Questions which the Minister has answered from time to time, we still have absolutely no idea of the sort of strategic thinking which the Government have on these problems. How do they decide between sending an expert in the growing of brussels sprouts to Sierra Leone and an equally worthy claim for a teacher of Sir James Pitman's new alphabet to Brunei? This is what the strategy of aid is all about. All over the world there are people who can use an unlimited amount of aid from this country. What the Minister and Ministry have to do is to make a choice between competing and perfectly respectable claims. As a result of this debate we are still no nearer to knowing how the Ministry makes up its mind about those competing claims.

Instead of these technical Bills which tend to come before us once a year, I am of the opinion that we should have each year a major full-dress debate on the Government's aid policy in which we could discuss both the size of the programme and the way in which it is to be used. I admit that I can understand the Government's reluctance to have much more debate on this subject.

9.15 p.m.

Mr. Cranley Onslow (Woking)

I am reluctant to say anything at this late hour which might spoil the cosy atmosphere of the debate as it has been conducted so far, but I must ask for a few minutes in which to express, with such force as I can still command, a minority view. The Minister introduced the Bill in a frame of mind which I would describe as starry-eyed and many of the speeches which have been made from both sides of the House I would describe as equally starry-eyed.

What strikes me is that throughout the debate, as I pointed out to the hon. Member for Kingston upon Hull, West (Mr. James Johnson), who, I am sorry to see, is not in his place, no one has asked himself, let alone attempted to answer, two crucial questions. The first question is: does aid in the form in which we are talking about it now actually promote economic development?—and this is one of the aims of the Bill. The second and linked question is: is there no other way which will promote economic development more effectively?

Until these questions have been asked and examined, it is a little naïve to take it for granted that there is only one way of tackling the problems of the underdeveloped world and that that is by means of aid. We have now some 15 years of evidence which can be examined, much of which is extremely suggestive. This evidence certainly does not justify the axiomatic assumption that aid is the only way, any more than there is anything magical about the 1 per cent. of the gross national product figure which we hear thrown about so frequently.

It is all very well for hon. Members who have been about the underdeveloped world to be taken in by the impressive dams, the ceramic factories and the schools. I, too, have seen them. These are not necessarily synonymous with economic development. They are not necessary proof that only aid can provide economic development. The House would make a great mistake if it assumed either of those two things.

I believe that the evidence suggests very powerfully that aid is in danger of becoming a sort of juggernaut and that if it is not checked it may well crush both the developed and the underdeveloped worlds under its wheels, because its economic consequences will be most damaging.

Mr. Pavitt


Mr. Onslow

No, I will not give way now, because others wish to speak.

I am not delighted that there has been an increase in aid in recent years. To my mind, the only good thing in the National Plan, if I took it at all seriously, would be the fact that there is no provision in it for a constant and open-ended increase in aid. I am not concerned here with the golden bedstead type of waste, the Daily Express criticisms. Let us ignore the fact that there are corruption, nepotism and inefficiency. Let us cast all that aside and examine aid on the assumption that it has been administered perfectly.

I believe that a very strong argument can be sustained against aid as we know it now. It has been very effectively summarised by an eminent academic working and specialising in this field, whom many hon. Members will probably know by name, Professor Bauer, of the London School of Economics. He said: The widely publicised type of large-scale, indefinite aid—what might be termed mainstream foreign aid—has not served to bring about an appreciable rise in living standards in under-developed countries, or to promote their economic development, despite the large sums that have been and are being provided. While foreign aid may, indeed, sometimes serve its commonly avowed purpose of improving economic conditions in the recipient countries, in general mainstream aid has not fulfilled and cannot fulfill the expectations which it arouses. Indeed, aid often damages the development prospects of the recipients. That is a very serious criticism, but it can be sustained. Obviously, aid alone is not enough. There have to be other qualities and conditions present in the country concerned if any progress is to be effected. Money alone is not everything. I imagine that hon. Members will concede that.

The other side of the coin is that aid as it is provided often prevents these conditions from arising. It positively hinders development. It has a bias towards the increase of governmental power. It encourages centralised planning. Countries providing aid very often insist that there shall be centralised planning carried out by the recipient countries, which have not in many cases the bureaucracy to maintain ordinary law and order. The provision of aid obscures the need for cultural change. It creates an impression that the money will come from outside regardless, and that there is no need for internal change. This must be damaging. It intensifies the struggle for political power because it increases the prizes of power, and this must be damaging. It encourages national insolvency because the means test upon which much aid is distributed, and necessarily so, raises the presumption that the more severe the foreign exchange crisis a country can show the greater is its chance of getting aid. This must be damaging.

Mr. Pavitt


Mr. Onslow

No, I shall not give way. There is not enough time.

Aid produces the situation in which we can all see the phenomenon of the graduate unemployed. This can be seen throughout the Far East, and it must represent a tremendous waste of resources. It produces a trend to pauperism. The progress of the Indian economy in the last 15 years has been summed up as a progress from poverty to pauperism, to a state of dependence on doles, a sort of institutionalised position in which the recipient is incapable of ever providing for himself by his unaided efforts again. I do not suppose that hon. Members opposite will deny that that must be damaging.

There are alternatives, but we so often ignore them. This Government discourage private investment overseas, yet, as my hon. Friend the Member for Stroud (Mr. Kershaw) emphasised, this is extremely important. Much more could be done in this way, but the more foreign exchange available is pre-empted by official aid programmes the less there is for private investment. The thing is self-destroying.

There is a great need for change at home, but this we persistently ignore. It seems ludicrous that £60 million of public money should be put into shoring up the Lancashire cotton industry at a time when we are maintaining quotas, and not particularly generous quotas, against imported cotton textiles. It would be much more good sense to divert £60 million or more to redeploying resources within our own economy, which would then enable us to take full advantage of the cheaper cotton textiles which could be manufactured in the under-developed world and which would provide their makers with much needed foreign exchange.

The Selective Employment Tax will have a similar effect. It will subsidise inefficiency in our own economy. I fail to understand how hon. Members can believe that we can make any contribution to economic development on a world basis so long as we are prepared to devote the taxpayer's money to subsidising inefficiency at home or abroad.

I hope that there will be chances to elaborate some of these points, which seem so to infuriate the hon. Member for Willesden, West (Mr. Pavitt). I shall gladly debate them with him in Committee. It is a great piece of self-deception and self-delusion for us to believe that we are achieving through aid many of the aims we set ourselves and which we rightly value highly. As much as anyone I want a world of peace and prosperity, but the world will never achieve peace and prosperity so long as we persist in ignoring reality—and this debate has ignored reality to a frightening extent.

9.25 p.m.

Mr. Michael Jopling (Westmorland)

I hope that my hon. Friend the Member for Woking (Mr. Onslow) will forgive me if I do not follow the line he has taken. Whilst all of us in this House appreciate and understand many of the shortcomings of aid, we feel that it is nevertheless doing a great job and is helping genuinely to increase the prosperity of many under-developed countries. I want to concentrate my remarks on agriculture, and I am glad that most hon. Members so far have stressed the importance of upgrading and developing the agricultural industries of these countries.

It does not need to be stressed here, of all places, that the first priority of developing countries is to improve their agricultural industries. It has been proved that more sophisticated projects must come second to this basic industry. This is a lesson that many underdeveloped countries have found hard and sometimes slightly degrading to accept. But the moment is coming when they will come to this way of thinking.

The way in which we and other developed countries can help most in agriculture is in an advisory capacity. I do not believe that there is great scope or necessity at this time for devoting ourselves too much to research because, I understand, the present level of research and knowledge would allow a 50 per cent. increase in yields in most of these countries. It is in an advisory capacity that our rôle is strongest.

In recent years we have come to the end of an era in assistance to agriculture. In that era, there were career agriculturists who devoted their lives to these countries. I want to quote some figures given in Answers in this House during the last 12 months. In the five years ended June, 1965, a total of 306 agricultural officers left Her Majesty's Overseas Civil Service. Some of them were re-engaged to go overseas again, but only a small proportion. Indeed, in the two years 1963 and 1964, I understand that only 24 agricultural officers were re-engaged for service overseas.

The lesson of this is that we have to rely, for this type of advisory work in the under-developed countries, very much more on people going abroad for short terms of service. This in itself promotes great difficulties and problems which we must face. The situation now is that the Minister makes no permanent appointments of any sort of agricultural officers to the under-developed countries and, of course, there are relatively few in the private sector.

Thus, many graduates in temperate agricultural studies in the United Kingdom, the United States and other countries go to under-developed countries to do advisory work but have had very little training in tropical agricultural studies. For example, I can quote from answers that I have received showing that from mid-1962 to mid-1964, of 113 appointments made in Africa by the Minister and his predecessors, only 36 had formal training in tropical agricultural studies. Again, of the 60 appointments the Minister envisaged making to the year ended July, 1966, in Africa he estimated that only 25 per cent. would have had a formal training in tropical agricultural studies. I quite agree that not every agricultural officer who goes abroad necessarily needs a training in tropical agriculture, but many more than the: present number going out are needed. This is enormously important.

I know from my own experience, being a graduate in temperate agricultural studies in this country, how utterly useless I would be if I went out to Africa, or a similar country, and tried to be helpful. I would not understand the immediate problems of pest control and crop production which are so important. I am convinced that the Minister must set his mind trying to set up more crash courses for these people going overseas for short terms of service. That is the way in which the Minister can obtain more use and value out of the short term which these experts spend overseas.

I know what is the usual answer to the points I am trying to make, because I have had it several times from the Minister. He says that there are already quite adequate facilities in the School of Tropical Medicine in Trinidad, at the University of the West Indies. I do not want to dwell for too long on this, but the Minister must know, without my going into detail, that all is not well in the School of Tropical Agriculture in Trinidad, particularly so far as education for those who are going to Africa is concerned. I do not know quite what the situation is now, but I know that only a relatively short time ago there were no teachers in Trinidad who had had practical experience in Africa. This is just part of the problem. On 3rd May, 1966, I received the following Answer from the Parliamentary Secretary: …familiarisation with local conditions is effectively achieved by posting to a specific job experts in tropical agriculture who have received their general training at such establishments as the Faculty of Agriculture of the University of The West Indies."—[OFFICIAL REPORT, 3rd May, 1966; Vol. 728, c. 1404.] That was a particularly fatuous reply, because may I first ask the hon. Gentleman where else people could go? The answer is virtually nowhere. Secondly, one must say that in the last five years there have been only 62 graduates from this country, receiving formal education in tropical agricultural studies at the School. If the Parliamentary Secretary thinks that an average of around 12 per year is adequate for the agricultural problems of the under-developed countries he must have another think.

What must happen is that establishments must be set up, particularly in Africa, which is a country to which I direct most of my remarks, providing short courses, enabling experts to familiarise themselves, for the short period of time which they are going to spend abroad, with tropical agricultural problems. When this training is received it is far better done in a relatively short time by a full-time course rather than a part-time course, in conjunction with other jobs. There is great scope here for us to combine with the United States, which has exactly the same problem. Will the Minister have discussions with the United States or at least ask the Americans if they would be interested in something of this sort? The conclusion at which I have arrived from talks with Americans is that they would be very interested in a joint project with this country.

I hope that the Minister will look at this matter again and not just sit back and be satisfied with the totally inadequate facilities in Trinidad. I trust that he will see whether it is possible, particularly in Africa, to set up an institution at which short courses of, perhaps, two or three months could be given for the agricultural experts who are going to the continent to help for short periods in increasing agricultural production.

9.35 p.m.

Mr. J. Bruce-Gardyne (South Angus)

I confess that I have found the part of the debate which I have heard—and I apologise to the Minister for being unavoidably prevented from hearing his speech—a little disturbing, because it seems to me that it has concentrated entirely on one end of the aid equation involved in the Bill. There are surely two aims: the receiving end and the giving end. What concerns me is what one might call the reverse side of the Bill—the impact of our aid programme on our balance of payments.

My only reason for intervening in the debate stems from an Answer which the Secretary of State gave my hon. Friend the Member for Banff (Mr. Baker) in c. 1403 of HANSARD for 3rd May, in which he said that the proportion of official bilateral aid which was tied to the purchase of British goods in the calendar year 1965 amounted to 43 per cent. directly and 16 per cent. indirectly. I understand that the right hon. Gentleman has said in this debate that the proportions which he anticipates under this Bill are roughly similar.

The Minister's reply to my hon. Friend's Question astonished me, because I had always assumed that virtually all, or at any rate a very large proportion of, the outgoings under the heading of bilateral aid by this country was tied to the purchase of British goods. If a substantial proportion of our official bilateral aid programmes is not tied, we cannot ignore the impact of untied aid and the aid programme generally on our balance of payments position. It is to that point that I wish to address a few remarks.

Some hon. Members opposite complain about the burden on our balance of payments of military spending by the British Government overseas. To some extent, I sympathise with them, but it is worth bearing in mind that, over the last five years, approximately 40 per cent. of our spending—rather more than £750 million out of nearly £2,000 million deficit on Government account—was accounted for by non-military items. I imagine that the vast bulk of it went on aid.

I had always assumed—and this is why the Minister's reply on 3rd May astonished me—that the bulk of the expenditure on overseas aid was fed back through orders for British goods to be supplied to the countries receiving the aid. I pointed out to the Minister, in a supplementary question, that the Brooking's Institute, in its monumental study on the American balance of payments published in 1963, calculated that approximately 90 per cent. of American aid, on bilateral account and multilateral account, was fed back by orders for American goods. I suggested to the Minister that this country could hardly afford to support a much smaller proportion. I had always assumed that the proportion of aid which this country offered, both through bilateral and multilateral programmes, which was fed back in terms of orders for British industry, must be at least as high as 90 per cent., and that is why I was so astonished by the Minister's reply.

I appreciate, of course, that estimates of the feedback are bound to be approximate. I have no doubt that the total feedback in terms of orders for British goods is substantially higher than the 59 per cent. which the right hon. Gentleman quoted to my hon. Friend the other day. I believe that, in view of the destination of multilateral aid programmes, so many of which go to Commonwealth countries, our feedback from our contribution to multilateral aid programmes is probably substantially higher than 100 per cent.

I would accept, and I have no doubt, that because of the destination of aid programmes, both bilateral and multilateral, this country might well stand that we can really afford to leave a far greater proportion of its own official, bilateral aid programmes untied to the purchases of its goods than the United States can afford to do. This seems to me to be economic lunacy in our present balance of payments situation. I found highly unsatisfactory the Minister's bland reaction to the suggestion that the proportion of our aid which was tied was too low in view of our balance of payments situation.

I accept that we need more information on this subject, so I asked a series of Questions of the Board of Trade and of the right hon. Gentlemen's Department during the last day or two. I noticed, from the reply I received from the Board of Trade, that a considerable volume of export business is also financed from untied and partially tied British aid, technical assistance and aid contributed in various ways by third countries, but that the value of this cannot be precisely estimated.

I recognise that it cannot be precisely estimated, but we ought to have some sort of answer from the right hon. Gentlemen's Department or from the Board of Trade. I do not believe that we can afford to distribute this money without having any estimate of the return we get, not only from our aid programmes but from the aid programmes of third countries. I agree that we cannot have a precise estimate, but it is not unreasonable to ask that we should have some estimate—a rough estimate, at least—of how much is being fed back in terms of orders for British industry.

I understand that the right hon. Gentleman has calculated that about three-fifths of the £140 million which is estimated to accrue from the Bill will be fed back in terms of tied aid. I wonder whether he has any figures for the estimate of feedback over and above tied aid, in terms of the current year's programme of £140 million.

We hear regularly from the Chancellor of the Exchequer that we cannot afford, with out balance of payments problems, to borrow short and to lend long, and I accept that. In the case of our aid programmes, however, given our present balance of payments situation, in effect every penny which we lend has been borrowed already. In this case, we are not merely borrowing short and lending long, but we are doing so and getting a very poor return.

9.45 p.m.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

I should like briefly to comment on the speech of the hon. Member for Woking (Mr. Onslow). I am glad that he was not followed in his course by the hon. Member for Westmorland (Mr. Jopling). The Liberal Party would like to see, if possible, 1 per cent. of the gross national product devoted to overseas aid. We recognise, of course, that this is a desirable objective which in the present economic situation may not be attainable. If this 1. per cent. were devoted to overseas aid, the amount which we would be spending in the current year would be more like £290 million, whereas the actual amount as it has steadily increased over the last two or three years is, I understand, about £225 million.

The hon. Member for Woking seemed to say that the Bill was highly dangerous in conception. He had a theory that aid was a bad thing, because this wealth coming into a country would produce a situation in which people would want to get power. If one takes the reverse of that argument, it means that if only people were to remain in poverty, that undesirable situation would not occur.

The hon. Member also used the word "dole" in referring to aid and suggested that it was a bad thing to hand out dole to these under-developed countries. In fact it is not dole in any sense, nor is it making those countries necessarily soft and unable to stand on their own feet. The whole point of the aid which is given by this country is that it should be channelled into useful sources—for example, the creation of major waterworks and dams, which produce power and irrigation for a country—and help to build up the infrastructure and enable the under-developed territories to stand on their own feet. Aid of this kind is the very opposite of making those countries soft or dependent upon other countries. It is purely an immediate attempt to make them independent of future aid from outside.

The general view expressed by the hon. Member for Woking—that in our present balance of payments situation we ought not, perhaps, to give aid to underdeveloped countries—was expressed to me by one or two people during the recent General Election campaign. I am certain that that is not the view taken by the Conservative Party or even by most hon. Members of the Conservative Party in this House, but it clearly is a view which finds favour in some cases and it was more or less expressed by the hon. Member for Woking. I hope that it is a view which is not very widely held.

I hope that just as in the course of time all parties in the House of Commons and all hon. Members have come to accept the responsibilities of the Welfare State, in which rich and powerful individuals in our society accept moral responsibility for looking after the poor and the weak, so they will come in time, perhaps, to a more enlightened frame of mind in which they accept that we must move towards a welfare world in which the richer and stronger nations accept a moral responsibility for looking after those who are poor and weak.

9.49 p.m.

Sir Frederic Bennett (Torquay)

During this debate, in which I have listened to every speech, there has been a division between those who think that we have a moral and ethical responsibility for helping the under-developed countries and those who seek to justify aid on more pragmatic grounds.

I should like to put another point of view, that there is an overriding self-interest, apart from pure economics, in trying to close the widening gap between the haves and the have-nots in our own essential interest as well as on any moral ground. One of the earliest remarks of Sir Winston Churchill which I read was when, as a very young man before the beginning of the century, he said that the era of the dynastic wars of kings was coming to an end, and they would be replaced by the ideological wars of the peoples; after that, and even more terrible, we might approach an era of conflict between races and colours.

It is an unhappy accident of history that the haves and have-nots are today divided along lines of race and colour, making the tensions greater than otherwise they would be. I suggest to those of my hon. Friends who cast doubt upon that that, whereas it is quite justifiable to argue how best to achieve the end, there should be no doubt about the end that we want to achieve, which is the prevention of that gap widening at its present terrifying pace.

I am deeply interested in this subject, and I wish that there was more time available. I should have liked to comment in great detail on the fascinating speeches, even though I have not altogether agreed with some of them, from both sides of the House.

I was impressed with the maiden speech of the hon. Member for Sheffield, Heeley (Mr. Hooley), because one of the remarks that he made was to emphasise the importance of technical assistance, rather than more ambitious aid programmes. I can think of many good reasons from our point of view why my economically-minded hon. Friends should think that there are great advantages in technical assistance overseas. First, it is the cheapest, and that is always an advantage. Secondly, it encourages self-help in the countries concerned, which is also an advantage.

I was impressed by the emphasis that the hon. Member laid on the need for a greater production of technical people and graduates in those countries—people like doctors, engineers, and agriculturists. That is a point which was made with great force and considerable wisdom later by my hon. Friend the Member for Westmorland (Mr. Jopling), who stressed the need in the future for a greater emphasis on agricultural experts.

I was amused to hear it said that one of the troubles about the under-developed countries is that they have copied from us the undesirable trait of having too many politicians and lawyers. Being both myself, I am still able to bring in a healthy air of condemnation of that practice in the under-developed territories. One thing which they could bring in with advantage is a selective employment tax on lawyers and politicians, because that might do something to deter their growth.

My hon. Friend the Member for Antrim, North (Mr. Henry Clark) was not quite right in saying that we were now losing all control over what the Minister will be able to do as a result of the Bill. He will be subject to his Vote being approved, and there are sharp and decisive ways of keeping control of the Minister's spending of this money. We are not giving him a blank cheque simply because we are codifying previous methods of giving aid.

There were many other trenchant criticisms made by my hon. Friend, and those need answering. They were the very real public doubts, not about the need for aid but whether it is being most usefully allocated and spent at the present time. The same point was made by a number of other hon. Members afterwards.

The most important point made by the hon. Member for Willesden, West (Mr. Pavitt) was to emphasise the need for the Indus Basin Development Fund to go ahead to the maximum extent. Outside economic considerations, it can be said that, without it, the friction between Pakistan and India would have been even greater than, unhappily, it is today.

My hon. Friend the Member for Stroud (Mr. Kershaw), in a very interesting speech, raised the question of the protection of private investors. There is at the moment the Export Credits Guarantee Department, and there have been recent improvements in it, but I say, both about this Government and about the last Conservative Government, that it is a pity that many of the improvements in the E.C.G.D., for which many of us have been pleading for some years, were not made much earlier, because it has now been found possible to make them without any great loss being recorded to that institution.

There are still further improvements to be made, and I add a plea of my own. There is an important rôle for private investment, which everyone has conceded, and I think that it is time we looked for some sort of insurance scheme when the E.C.G.D. does not apply, because of default on political grounds. Other countries are looking at this, and I think that there is a case for a serious examination into whether we can meet this, because this in itself would do more than any other item to accentuate genuine investment overseas as opposed to aid. A private investor is prepared to take risks with his money, judged on his own expertise, but in these days of cold war friction it is a little hard to expect him to take on unprotected the full risk of political upheavals in the countries into which he enters.

I do not think that the hon. Member for Kingston upon Hull, West (Mr. James Johnson), with whom I have exchanged shots during many Commonwealth debates over the years, was quite fair to my hon. Friends, because they have every right, and indeed we all have a duty, to try to protect the taxpayers' money in this country. I do not think that what they said was paternalism, but I know the hon. Gentleman very well. I know his technique. From the moment that he rose to speak he realised that he was going to be very rough with his own side, so to balance the situation he not unnaturally made an attack on our side to begin with so that it did not sound altogether too ferocious. He has done this before, and we accept it in the usual good humour with which he does it.

My hon. Friend the Member for Dorking (Sir G. Sinclair), with all his experience, made a very telling attack—and it is one that needs answering—on the real attitude of the Government to overseas aid. What is their attitude to priorities? I ask that because, as some of my hon. Friends have said, there does not seem to me the same priority now that they are in Government as there used to be when they were in Opposition. This is one of the most important aspects of planning for the future, and perhaps we shall get some reaffirmation of their attitude tonight.

The hon. Member for South Shields (Mr. Blenkinsop) brought up a new point on the question of greater European unity. He said that this in itself, apart from the other arguments in favour of it, would help more genuine investment to be made available to the under-developed countries and relieve some of the burdens from this country. The hon. Gentleman does not need much persuasion to convince us on these benches about the need and the desirability for closer ties with Europe and entry into the Common Market. He had better use his powers to persuade some of his hon. Friends who do not seem so convinced, either on this or any other grounds, about the need to go into Europe.

My hon. Friend the Member for Beckenham (Mr. Goodhart) introduced a note of reality when he said that some of the glamour had gone out of our sense of mission overseas. This is true. It is difficult to find the reasons for it, but I think that it is due partly to the disappointments and setbacks—and I shall come to these later—which have occurred. There is, to some extent, a growing sense of disappointment—I think that we have to accept this if we are to be realistic and not altogether starry-eyed—in this country, in America, and elsewhere as a result of some of the setbacks which have occurred. I am not saying that we should be discouraged by what has happened, but the fact remains that these disappointments are there, and I shall return to this in a little while.

My hon. Friend the Member for Woking (Mr. Onslow), who has drawn most of the fire today, represents—and it is fair that he should do so because many people in this country feel as he does, whether we like it or not—a point of view which has to be argued. There is genuine doubt about whether our method of helping overseas countries is the best one. The only point on which I disagree with my hon. Friend is when he says that private investment should do the whole job instead. No one is keener than I am that private investment should play its part from a business and every other angle.

The fact remains that with the shortage of private capital throughout the world money is not available for the real infrastructure of the developing countries. There is no money to be made for shareholders out of building roads and irrigation schemes. It is no good anyone saying, "Let us wait until the money is available", because one of the frightening things about the world today is that the under-developed countries are in a hurry—perhaps wrongly—and if they do not get a move on pretty quickly—

It being Ten o'clock, the debate stood adjourned.

Ordered. That the Proceedings on the Overseas Aid Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Lawson.]

Question again proposed, That the Bill be now read a Second time.

Sir F. Bennett

I was saying that the under-developed countries are in a hurry, and we have to take account of this, and from one source or another—whether multilateral or bilateral—we have to get the essentials going in some of these countries in order to enable private enterprise and private investment to play its proper part afterwards.

My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) mentioned the confusion that exists—which I share—as to the actual amount of aid or investment overseas which flows back in one form or another. I hope that the Parliamentary Secretary will be able to clarify our thoughts on this point. None of us is quite aware what the correct figures are in this respect, and we are entitled to know them, so that we can compare them with the figures of other countries, such as the United States, where they have been published in considerable detail.

I want to make two personal points. We talk about the creation of more banks. As someone who has had a little to do with banking I must point out that one of the biggest fallacies which is shared by both developed and under-developed countries is that if one creates a bank and then yet another bank it somehow makes more money available. The Minister knows the number of conferences at which pleas have been made for yet more banks to be created. In the end only a certain amount of finance is available. The same amount of money is subscribed, whether there is one bank or more. We must not be led astray by the idea that creating more and more development banks increases the amount of money available.

My other point concerns the question of birth control. There are some strongly held feelings on this subject, but we are entitled to say that in the interests of the great under-developed countries, whether there be religious inhibitions or not, much more attention must be devoted to this end. Otherwise, however hard we try and however dedicated we are, in the end we shall not achieve the necessary step forward. On some occasions we have stepped backwards in this respect by ignoring it.

I want to refer to one personal reminiscence. In East Pakistan I once helped to establish a pre-natal clinic. A year later I inquired what had happened. The clinic was established to try to preserve the lives of women who in many cases had had six, seven or eight children by the time they were 20 or 22. I found later that all that had happened was that the women were thus better enabled to bear even more children. So the village's population had increased, although the resources were the same, and hence by that gesture of international aid we had done nothing good for the village. This is a question which we must refer to more and more, because only by doing so will the aid that we provide be used to most effect for the people whom we are trying to help.

I end as I began. After we have argued whether something is financially justifiable, and have looked after our taxpayers' interests and everything else, we still have to decide our attitude to overseas aid on more than just those practical considerations. It is not starry-eyed to say that there must be a national ethic for us in this matter. We are living in an era in which we are often accused of concentrating too much on bread and circuses for ourselves. But one of the tests of a great nation still is whether it has a sense of responsibility for what goes on in the outside world. It helps our national character if we have that, and we would lose much if we gave up this sense of mission. This is not an argument for ignoring the need to use aid as carefully as we can. It does not ignore the need for us to safeguard our taxpayers, but there is a real need for us to have some form of national ethic in our attitude towards aid overseas.

Of course, disappointments are there and have been mentioned. Reference has been made to nepotism, to corruption, to adolescent nationalist manifestations, for example, of schools which have just been put up being burnt down. These are, of course, terrible things, but I comfort myself in any sense of disappointment by wondering whether the position would not be a great deal worse than this if we had not tried at all.

10.6 p.m.

The Parliamentary Secretary to the Ministry of Overseas Development (Mr. Albert E. Oram)

I believe that the hon. Member for Torquay (Sir F. Bennett) was making his maiden speech from the Dispatch Box. I heartily congratulate him on that position and join him in congratulating another maiden speaker, my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), who delighted the House with his speech.

I would say that my hon. Friend, coming as he does from Sheffield, comes from a city which has the interests of developing countries very much at heart. Indeed, it was only just over a week ago that I had the pleasure of visiting Sheffield to take part in a ceremony of handing over cheques to the Freedom From Hunger Campaign, and I had evidence then of the great interest which his constituents take in this matter.

We have had a valuable debate. Of course, hon. Gentlemen opposite have extracted the maximum party advantage which they could, but through it all I think that they would agree that on this question of aid for developing countries all parties are agreed, even though the occasional rogue elephant comes up from Woking and goes through the jungle. In so far as there has been controversy in the debate, it has been on the question of who can do this job best. There have been accusations from both sides that possibly the Government are falling behind in their anxiety to give the highest possible priority to our aid programme.

I assert without fear of contradiction that we have nothing to be ashamed of in our record of administering our aid programme. My right hon. Friend said that our programme for the forthcoming year will be £25 million more than last year's, which is an important indication of the way in which we see things. With official aid and private investment rising as they are, we have nothing to be ashamed of in this respect.

I was invited by the right hon. Member for Bridlington (Mr. Wood) and by some of my hon. Friends to look beyond the forthcoming financial year and to say what our thinking is. I do not propose to be drawn into giving specific figures for the coming decade, as the right hon. Gentleman invited me to do, but as my right hon. Friend the Prime Minister has made clear, and as is made clear in the National Plan and in statements by Government spokesmen, the aid programme is capable of review year by year in the light of our overcoming our economic difficulties. It would have been irresponsible for any Government to take any attitude other than that which has been clearly spelled out.

Before I go on to some of the general themes which have been raised in the debate, may I first answer one or two of the specific questions asked by the right hon. Member for Bridlington. He pointed out that the Asian Development Bank and Colombo Plan are, so to speak, coterminous and he asked what would be the relationship between these two organisations. Clearly, there will be a complementary existence between these two organisations. They are both means of collaboration between donors and recipients.

It is not possible, in these early days of the Bank's existence, to predict the exact nature of their relationship, but I assure the right hon. Gentleman that our contribution to the Bank is over and above the contribution which we make in South-East Asia to the Colombo Plan and that this contribution will be in no way diminished or affected adversely by the support which we have decided to give to the Bank.

Secondly, he asked me who would be included in the pension fund. He clearly welcomed this fund and said that specialists particularly should appropriately be members of it. I agree with him. But we have it in mind that membership of the fund should not necessarily be restricted to members of the corps of specialists or those designated under the Overseas Development and Service Act. There may well be other employment in developing countries which has a social purpose, but which is not subsidised by the British Government and which my right hon. Friend might well be prepared to approve for the purposes of this scheme. These matters will be dealt with when the regulations under the Bill are brought before the House.

Two hon. Members—the hon. Member for Antrim, North (Mr. Henry Clark) and the hon. Member for Westmorland (Mr. Jopling)—made in a sense similar speeches. The hon. Member for Antrim, North put forward the thesis which has come to be known as intermediate technology, and the hon. Member for Westmorland urged that much more attention should be given to the development of agriculture. I have the utmost sympathy with both of these theses. The hon. Member for Westmorland took me to task over some of the Answers which I have been giving him in relation to his suggestions about the training of agricultural experts in African techniques, but I assure him that I share his great eagerness that much of our aid should be in agricultural form and that it is not through lack of effort on the part of our Ministry that we are not able to send more agricultural experts, as he quite rightly asks that we should try to do.

Both the hon. Member for Antrim, North and the hon. Member for Dorking (Sir G. Sinclair) referred to the proposal in Clause 4 for relieving the Commonwealth Development Corporation from interest payments. The hon. Member for Antrim, North, in this connection, used the phrase—I think I have his words correctly—that the Corporation would there by be "exempted from commercial incentive" I should not have thought that the proposals of the Bill deprive the Corporation of commercial incentive. It is an easement of the terms under which it can borrow money, although the need to satisfy commercial tests will still be there.

It might be useful if, at this point, I clear up some points in connection with the Explanatory and Financial Memorandum to the Bill, paragraph 9 of which states: The amounts of interest foregone … are not expected to exceed £150,000 … a year … Since the fructification period of such enterprises may be as much as seven years, the remissions will be cumulative and, in theory, could amount in some future years to seven times as much. The figure of £150,000 in the Bill is illustrative and is not intended to represent a fixed limit or to determine the long-term ceiling, and similar considerations apply to the figure of £75,000 relating to Clause 5. Since the wording of the Memorandum may not be sufficiently clear, it is important to make that point.

My hon. Friend the Member for Willesden, West (Mr. Pavitt) developed two points; first, that my Ministry did not take over, from the Ministry of Labour, British representation in respect of the operations of the International Labour Organisation. I remind him that we did take over the responsibility in respect of U.N.E.S.C.O. and F.A.O., two institutions where the interests of developing countries are coming to be recognised as being more and more important in their operations.

The balance of work within the I.L.O. is not, perhaps, so clearly orientated towards developing countries as to make the transfer which my hon. Friend suggests necessarily appropriate. However, I assure him, because he raised this point of representation at conferences, that my Ministry is represented at appropriate I.L.O. conferences.

My hon. Friend's second point was about the Co-operative College and the value of the courses which are provided there for overseas students. He said there was need for increased aid to enable the college to have agricultural tutors, and so on. It was through the support of my Ministry for the course in co-operation for overseas students that the college was enabled to take on a specialist tutor two or three years ago, and I agree with my hon. Friend that that could be taken as a precedent to be examined further and that there is, perhaps, scope for development in this direction. My hon. Friend went on to complain about the effect of the Selective Employment Tax on the fortunes of the college. I am sure that he will not be slow in bringing this point to the notice of my right hon. Friend the Chancellor, and I wish him well in his representations.

The hon. Member for Stroud (Mr. Kershaw) aroused the anger of my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) when my hon. Friend used the word "paternalistic". This probably arose out of a few unfortunate introductory sentences used by the hon. Member for Stroud, when he urged that there should be discipline. Perhaps that was a rather unfortunate word for him to use, although I did not take exception to the rest of his speech, because he made some effective points and asked some valid questions. He kindly pointed out that he did not expect me to answer all of them, and he will not be disappointed in that respect.

In so far as the purport of his speech was directed to urging that there should be more effective management of aid jointly between ourselves and recipient Governments, I go all the way with him. I assure him that the operations of the Ministry are directed to making sure that the aid we provide for developing countries is effectively employed and that we and they get value for money.

During 1965 the number of representatives in overseas diplomatic posts who are specially expert in aid matters rose interestingly and significantly from 133 at the beginning of the year to 173 at the end. These people are there to achieve just the purpose which the hon. Member has very much in mind. We have recruited within the Ministry our Economic Planning Staff, one of whose main purposes is to discuss with the Governments of overseas countries their development plans This is another means whereby we can ensure effective deployment of funds. Additionally, there is the setting up of the Caribbean Development Division directed to these purposes in that important area.

Mr. Kershaw

I thank the hon. Gentleman for his kind remarks. Is he able to say anything about the Indonesian loan?

Mr. Oram

That was announced by the Foreign Secretary and questions on it would be more appropriately directed to my right hon. Friend.

The hon. Member asked what was being done about co-ordination of our aid efforts with other donor countries, referring particularly to the terms upon which loans are made and so on. Our efforts to get co-ordination are still in their early stages, but in the Development Assistance Committee in Paris we joined in the passing of a resolution last year which accepted that all donors should provide at least 80 per cent. of their aid at 20 to 25 years' maturity at an average interest charge of 3 per cent. The member countries of the D.A.C. are working towards this. This is the kind of effort at co-ordination upon which we are engaged.

My hon. Friend the Member for Kingston-upon-Hull, West and other hon. Members raised the question of the effect of declining commodity prices on the economic welfare of the developing countries. I assure them that my right hon. Friend, in close collaboration with the President of the Board of Trade, is seriously concerned with this problem. We are vigorously pursuing a scheme for supplementary finance and also taking an active part in negotiations for stabilising prices of commodities. For example, we are engaging in discussions in an international cocoa conference for this purpose. We shall be taking similar action in the U.N.C.T.A.D. conference later.

The hon. Member for Dorking, in a challenging but nevertheless friendly speech—we always welcome his first-hand experience of these matters and his warm friendship for the whole of aid projects for developing countries—was rightly anxious lest there should be any falling-off of enthusiasm on the part of the Government for these things. I indicated in my opening remarks that there is no such falling-off of enthusiasm.

The hon. Gentleman raised the question of the effect on the balance of payments. I agree entirely that aid is by no means all on the debit side in the balance of payments. On the other hand, he will agree that in the situation facing us we cannot entirely ignore that element that is adverse in the balance of payments account; we have to take this very much into account.

The hon. Gentleman welcomed, as I am sure the whole House does, the provisions for the setting up of a pension scheme. He pointed to the fact that this will enable to be done just what we want to achieve, namely, the encouragement of people to take up a series of contracts overseas. The fact that they will now be able to do this and qualify for pension is a splendid move forward.

My hon. Friend the Member for South Shields (Mr. Blenkinsop) raised the question of our volunteer programme. I personally spend a great deal of my time in trying to help forward this programme. I do not claim credit for the fact that there has been a considerable step-up in the number of volunteers coming forward. This credit is due to the activities of the voluntary societies to which he referred. My hon. Friend asked whether there ought not to be a more unified structure rather than the separate bodies engaging in this work. Although this is attractive from one point of view, I ask my hon. Friend to bear in mind that these voluntary bodies are very proud of their own approach to affairs—for instance, the United Nations Association having its particular angle on these matters. Therefore, however desirable a unified structure may seem, one has to take into account the variety of motives and philosophies.

My hon. Friend asked whether we had made any progress in recruiting more non-graduates, more people from industry and commerce. I am happy to be able to assure him that progress is being made. Only this afternoon I heard a representative of one society say that in the present programme they are recruiting 100 such people, as against only 50 last year. This represents a considerable step forward.

The hon. Member for Woking (Mr. Onslow) made the only really controversial speech. He has been answered by spokesmen from all three parties. Therefore, he should be satisfied. He may be surprised to know that there was one proposition he made with which I agreed, namely, his statement that aid is not enough. I am sure we can all agree that aid is not enough. What I do not accept and what I am sure practically the whole House does not accept is that it is a hindrance to development. If aid were completely indiscriminately given, without regard to the safeguards of management, such as I indicated in answer to the hon. Member for Stroud, it would be capable of doing harm.

Mr. Onslow—


Mr. Oram

The hon. Gentleman was not very generous in giving way to my hon. Friend.

Aid is only marginal in its effect on development in developing countries, but it is vitally marginal. It can make a vital difference. This is why we must carry on with the most generous aid programme that we can afford.

Then there was the contribution of the hon. Member for South Angus (Mr. Bruce-Gardyne), who took up the theme which he pursued at Question Time about tied aid. I have not any more specific figures to give him than those which my right hon. Friend gave earlier, except to say that there is no doubt that even untied aid can benefit—does, in fact, benefit—our trade. There is not doubt that when we make loans which are not specifically linked to purchase of goods over here, nevertheless much of that money is spent on goods over here, so that it is not just a case of seeing how much aid is tied and how much is not tied and saving this is good from the balance of payments point of view and this is bad.

I assure the hon. Gentleman that we will bear his speech in mind. This is a most important question, and we will have it in mind in consideration of the shape and size of the future aid programme.

Mr. Bruce-Gardyne

I take entirely the point that the hon. Gentleman is making; in fact, that was precisely the point I recognised—that, of course, tied aid is not only that of which part comes back or is fed back. However, I would ask him if he could try to do for our aid programme the same job, or something like it, which was done by the Brooking Institution, in the United States, three years ago and analyse the extent to which we are getting or are not getting benefit from the aid programme.

Mr. Oram

I accept the need for more detailed information on these points, and I certainly will give an undertaking that we will look at this proposition.

Mr. Henry Clark

I did ask that the House should be kept fully informed of the future progress of the Ministry. Could the hon. Gentleman say when we shall receive further detailed information of the activities of the Ministry of Overseas Development? Shall we have a White Paper this year, next year, some time, never?

Mr. Oram

We are only too anxious to publicise all the work we do in our Ministry. We believe that we are doing excellent work. We want hon. Members and, indeed the country, to know more of what we are doing, and so the hon. Member is pushing at an opened door in asking for information about our activities. Whether the best way to give it is by an annual White Paper I think is doubtful, but certainly, in so far as the hon. Gentleman can stimulate debates here—on Supply days or in other ways—he will not find either my right hon. Friend or myself reluctant to engage in them. Indeed, this Bill itself is one such opportunity, of which hon. Gentlemen have, quite rightly, taken full advantage.

In Clause 1 it opens up the whole of the aid programme for debate, and, as I said in opening, I think that the House has done well in having this wide-ranging debate on it. I would remind the House, in conclusion, that, in addition to Clause 1, there are a number of most important miscellaneous, but nevertheless significant, operations which are authorised by the Bill. There is the Asian Development Department, the Indus Basin Development Fund, there are the greater facilities we are providing for operations through the Commonwealth Development Corporation. There is the Overseas Pension Scheme and other provisions of the Bill which, I am sure, are most necessary instruments put at the disposal of this Ministry for the pursuit of the important work on which we are engaged.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills)