Overseas Aid (Policy)

HC Deb 02 February 1967 vol 740 cc754-6

21. Mr. Fisher

asked the Minister of Overseas Development to what extent he is prepared to reduce the tying of aid if other donor countries would do the same; and whether he will initiate discussions with the principal donor countries with a view to bringing about such a change in aid policy.

Mr. Bottomley

Agreed progress in this direction would be welcome. Various countries' balance of payments problems, including our own, have inhibited recent discussions and make it difficult for us to give a lead.

Mr. Fisher

Would the right hon. Gentleman agree that most donor countries pay lip-service to the idea of untying aid but that nobody seems to be prepared to do much for fear that others will not? Will he, therefore, initiate discussions with the main donor countries with the aim of securing a common change of policy which would be helpful to the beneficiaries?

Mr. Bottomley

I assure the hon. Gentleman that at the Colombo Plan meeting and at the Asian Development Bank conference I did discuss these matters. We can only hope that discussions among the various delegates to these conferences will, in due course, bear fruit.

24. Mr. Henry Clark

asked the Minister of Overseas Development what is the net cost to this country in foreign currency of the Government's programme of overseas aid, taking into account interest and loan repayments, payments to pensioners living in this country, and exports resulting from tied grants and loans.

Mr. Bottomley

It is not practicable to calculate the foreign currency cost of the whole aid programme. We have made estimates of the foreign exchange cost of marginal changes in the programme, which might affect decisions on its size. As is made clear in paragraph 61 of Cmnd. 3180, only about one-third —or rather more in certain circumstances—of a change in the size of the programme would have a direct effect on our balance of payments.

Mr. Clark

Would not the right hon. Gentleman agree that before cutting the aid programme on the grounds of balance of payments difficulties, one should conduct a careful analysis into the foreign currency costs of that programme?

Mr. Bottomley

The difficulty is that we cannot say what other use might have been made of the goods and services supplied as aid. It is on this basis that we must try to find out the true situation, and it is really impossible to do it.

25. Mr. Henry Clark

asked the Minister of Overseas Development how the net total of overseas aid in the current year, allowing for interest and loan repayments, compares with the net total in 1960–61.

Mr. Bottomley

The net total of Government aid in 1960–61 was £126.5 million. The outturn for this year is not yet known. The latest year for which we have a figure is 1965–66, when it was £153.7 million.

Mr. Clark

Does this very small increase over this five-year period make good the considerably increased salaries involved in overseas services in the last five years, also bearing in mind the increase in the price of goods which go to make up aid?

Mr. Bottomley

I repeat, regarding the question of aid generally, that the interest payments in the past coupled with the present reduction in interest receipts, means that, in the aggregate, more aid is being given.

27. Mr. Onslow

asked the Minister of Overseas Development what consideration he gives, in negotiating agreements for the provision of tied aid to developing countries, to the relative economic efficiency of the British industry which is to supply the goods concerned.

Mr. Bottomley

We try to ensure that development needs are met by the supply of goods and services which are well and economically produced in this country.

Mr. Onslow

In that case, would not the right hon. Gentleman agree that it would be most dangerous and wasteful if money used in tied aid were ever to become a subsidy to inefficient industry and a barrier to necessary structural change in our economy?

Mr. Bottomley

I agree, and our endeavour is to see that that is avoided. The countries concerned, which place the orders, not only see that the right tenders are accepted but that the types of goods they require are supplied.