HC Deb 21 December 1967 vol 756 cc1453-5
2. Mr. Wingfield Digby

asked the Minister of Overseas Development how much has been paid out by Her Majesty's Government in the last three years in overseas aid to Governments which were not in diplomatic relations with us.

Mr. Prentice

The amount was £8.2 million in the period October, 1964-September, 1967.

Mr. Digby

Will the right hon. Gentleman adopt a more robust attitude in cases where rudeness is brought to the point of breaking off diplomatic relations? What are these countries to do, short of war, to forfeit their aid? Will the Minister favour, rather, those countries which remain loyal to us, whatever reservations they may have about some parts of our policy?

Mr. Prentice

In fact, the breaking off of diplomatic relations does have an effect on aid. It almost inevitably means a tapering off of aid. It does not necessarily mean that at that moment one ceases to disburse money under loan agreements already made. Of the figure I have indicated, the major part, £7.7 million, went to Tanzania and Sudan and most of it was released under agreements to which we were already committed before the breaking off of diplomatic relations. If there had been a sudden stoppage of that flow of money, it would have damaged trade in this country as well as in the two countries concerned.

5. Mr. Boyd-Carpenter

asked the Minister of Overseas Development whether it is the policy of his Department to provide further aid to countries which have broken off diplomatic relations with, or defaulted in their financial obligations to, the British Government or to individual citizens; and which countries in either of these positions are at present in receipt of aid.

6. Mr. Tilney

asked the Minister of Overseas Development to what extent when granting aid to developing countries he now takes into account the action of those countries or their subdivisions in taking over the assets of United Kingdom-registered companies without compensation.

Mr. Prentice

As my hon. Friend told the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) on 24th November, 1966, we take into account all relevant factors, including those mentioned in the Questions, when considering new aid commitments. On aid to countries which have broken off diplomatic relations, I have nothing to add to my reply on 9th November to the hon. Member for Woking (Mr. Onslow). Those countries in default on financial obligations currently receiving aid in the form of technical assistance are Argentina, Brazil, Burma, Mexico, El Salvador, Syria, Tunisia, and the U.A.R.—[Vol. 736, c. 1561–62. Vol. 753, c. 177–8.]

Mr. Boyd-Carpenter

In view of that Answer and the one to Question No. 4, does not the Minister think it better to help those countries to whom we have repudiated obligations by devaluation rather than those which have repudiated their obligations to us? How does the right hon. Gentleman supervise the administration of aid in countries which have taken the step of rupturing relations with us?

Mr. Prentice

As I said in an earlier reply, it does not necessarily make sense automatically to sever all aid or trade links with countries if diplomatic relations are broken off. In the nature of things, trade and aid will taper off, and new aid commitments are unlikely to be made, but if there is a sudden severance it might be bad for interests in this country—to people concerned with the provision of goods, and so on—as well as in the countries concerned.

Mr. Tilney

In spite of the helpful attitude of the Government of India towards overseas investment, is the Minister aware that the Government of West Bengal have forced on the Calcutta Tramways Company loss finance as a first charge by that Government; and that this is the first case of virtual expropriation without compensation of a British company in India?

Mr. Prentice

I am aware of that situation, but I might be in trouble if I attempted to answer in detail. If the hon. Gentleman cares to write, I will give him a reply.

Mr. Mikardo

Can my right hon. Friend tell me what part of the aid which he mentioned in his Answer as going to the U.A.R. is designed to help that country to release British ships which are locked in the Canal?

Mr. Prentice

As I said originally, the aid is in the form of technical assistance to the U.A.R. I think that Questions about the future of the ships are better directed to my right hon. Friend the Foreign Secretary.