UNDER: DEVELOPED COUNTRIES (AID)

HC Deb 02 December 1968 vol 774 cc1045-106

Mr. Speaker

Order. May I remind the House that our next debate is short. It finishes at seven o'clock. Many hon. Members on both sides of the House are keenly interested in the first topic and are anxious to catch my eye. I hope that contributions can be reasonably brief.

3.52 p.m.

Mr. George Wallace (Norwich, North)

I beg to move, That this House recognises the value of the contribution made by voluntary organisations, the work of young people and the Ministry of Overseas Development and its associated organisations in the field of aid to underdeveloped countries; is of the opinion that continued aid to under-developed countries constitutes a vital factor in achieving a stable peaceful world; and calls on Her Majesty's Government to achieve the new target for the transfer of resources adopted by the United Nations Conference on Trade and Development at New Delhi early this year, as soon as the balance of payments permits. Since I tabled the subject for debate, the Report of the Estimates Committee on Overseas Aid has been published. As a member of Sub-Committee C, which made the investigation, I do not intend to make much reference to the Report, because the hon. Member for Aldershot (Sir E. Errington), the Chairman of the Sub-Committee, is present, and if he catches your eye, Mr. Speaker, he will no doubt refer to it. It would be in the normal traditions of courtesy in the House that. I should leave detailed observations on the Report to the hon. Gentleman.

A considerable body of opinion in the country would undoubtedly say that this is a most inopportune moment to raise the subject of aid to other countries, and particularly to call on the Government to achieve the new target set by the United Nations Conference on Trade and Development at New Delhi this year. The change of targets for nations from 1 per cent. of net national product to gross national product means a considerable increase in targets, which in Britain's case, I believe, amounts to about 25 per cent

Under present circumstances, it must be some time before Britain achieves its new target, and doing so will depend on a number of factors that could be outside direct Government control. Even so, Britain's record on the old target is good, and, even relating our performance on the old target in 1967 to the new target set in 1968, we are among the leading Western nations.

The Motion ends with the words: … as soon as the balance of payments permits". That is fair enough, but it must not be inferred that a reduction is called for. We must maintain our programme and ensure that our aid, whether voluntary or governmental, is rightly directed, efficiently managed and not used mainly for political considerations. Human need should be the governing factor.

The Ministry of Overseas Development, established in 1964, is doing a first-class job not only in direct Government aid programmes, but in maintaining contact with, and co-ordinating, the work of other bodies—voluntary and commercial. There is a tendency to regard the Ministry as a minor, somewhat Cinderella outfit. Not enough attention is given to its vital work. It is suggested in some quarters that it should be merged with the Foreign and Commonwealth Affairs Office. This suggestion should be strongly opposed, because such a move would only create suspicion that our aid had political motives alone. There is enough suspicion in the world without adding to it.

Aid to under-developed countries, whether it be on our part nationally or internationally through the United Nations, is essentially a positive and constructive defence contribution to world peace. Extreme poverty and illiteracy, the striving of peoples for the right to live, are factors leading to unrest and violence, leading on to larger powerful nations, motivated by political reasons, lining up one against the other, and then another threat of war faces the world. Is not this an all too familiar picture to us? Situations that have arisen in recent years have pinpointed the fact that the striving for the better life can, unless aided and properly guided, lead to unrest and war.

The world is crazy. Vast sums of money are spent on so-called measures of defence which, if used, can only be negative in terms of human life. Yet in matters to do with aid, so constructive in terms of human life, the enthusiasm is comparatively mute and the financial contribution limited compared with orthodox defence. To many people, aid to underdeveloped countries means giving money away to foreigners when it is needed at home. I hazard a guess that during the next few days I shall receive quite a number of violent letters—not that that worries me.

Much of Britain's aid is in the form of loans—perhaps too much. Nearly £60 million a year comes back to Britain by way of repayments, although I think that our friends in the Treasury swallow a lot of it. A good proportion of our aid means the supply of goods and services, providing employment in Britain to produce them. Raising the economic standing of under-developed countries means a higher standard of life for their people, and this leads to increased demand for goods and services, to our mutual advantage. Therefore, aid is an investment in our own welfare.

Here in Britain we have an immigration problem. Restrictions have been introduced, and, regrettably, in some quarters explosive speeches made and even repatriation threatened. One might ask: repatriation to what? Why do these people come here? It is simply because of the extremes of poverty and hunger and the lack of opportunity to work and to enable their children to look forward to a reasonable standard of life It is also a fact, well known to many of us, that many immigrants are sending considerable sums of money back to their relatives and families in their home countries.

I am not against families making their own voluntary decisions to take themselves away from another country so as to better themselves. Indeed, many Britons do it. While there is always ready sympathy for political refugees, innocent victims of man's aggression, very little thought appears to be given to the position of what I call economic refugees. A cure is available provided that mankind has the will and unselfishness to concentrate its scientific and economic resources to the problem.

I will give the House my own priorities in aid. They are simply food, education and birth control. Too much attention in world aid is concentrated on prestige projects with a political slant and not enough on agriculture and the production and storage of food supplies on modern scientific lines. Some two years ago I was fortunate enough to be a member of the British delegation to the C.P.A. Conference at Ottawa, and during the extensive tour prior to the conference some of us went to Nova Scotia, and there at Lunenburg we went into the Oceanographic Institute and saw scientists at work on the development of fish farming in order to provide a hungry world with more protein.

This sort of thing, unfortunately, does not get mentioned enough in the Press. I wonder what is happening to this research and whether enough assistance is being given to what is a perfectly feasible thing which could solve a great deal of the undernourishment in under-developed countries.

In the under-developed countries, too, there is real hunger for education. A little while ago I was privileged, with others from this honourable House, to represent you, Mr. Speaker, by going to Zambia and presenting a Speaker's Chair on your behalf. While we were entertained there, one had time to see one or two little things if one had the eyes and will to do it. One of the things which impressed me most in Zambia was the scheme there for literacy volunteers. Men who worked in the copper mines and other works went off to the villages in the bush when they finished work at night to teach both old and young how to read and write. This hunger for education must be met.

Britain is playing a real part in this field. However, in one aspect I feel that the British Council seems to be working on a shoestring as a sort of poor relation. The need for a greater supply of books is urgent. Valuable work is also being done—we must not overlook it—by the British Council in supplying teachers and help by means of the Voluntary Service Overseas scheme. But I still have the impression that there is a sort of poor relation complex, and this needs greater attention on our part.

I turn to the problem of birth control. Perhaps this is the greatest problem, because the fear of a world population explosion is very real and very great. We must accept the fact that no scheme of birth control can be forced on any one nation. The request must be made by the nation involved. We must recognise that religious bias exists. Great efforts a-e being made in countries like India, but no scheme of birth control can be effective unless tied to an advance in education. Religious bias apart, ignorance or illiteracy is the greatest handicap to success in this field.

Technical aid is very important if development schemes are to be effective and lasting in their achievements. Britain's record in this field is exceptional), good. Apart from Government schemes and Government aid, the contribution by British industry is invaluable. A great number of workers come to this country for training. I know that there is criticism in this respect. However, I would refer to the development of the heavy electrical factory at Bhopal. There, A.E.I., Manchester, has done a first-class job in training workers in this country and ensuring that the factory is developing along efficient and proper lines. A very significant factor was that the factory was crammed full of British-made equipment.

There is also the Mangla Dam, in Pakistan, a great achievement of British consultants. Also in Pakistan there was a scheme of railway electrification. The British Institute of Transport, the Ministry of Transport and other bodies have sent technical people there, and that is leading to orders for electric locomotives, signalling equipment, lines and the rest. So aid brings trade.

Our own universities, particularly our new red-brick universities, are providing invaluable help in the technical and general education fields through Government and voluntary sources. There is the Government-sponsored Institute of Development Studies, at Sussex University. It was a particular pleasure to me, as representing one of the Norwich seats, to hear praise at Beirut for the work of the University of East Anglia and is voluntary development scheme. We should take note of the work of Professor Ross, from that university, who is doing great work in this field. This work must be encouraged even more.

There are other authorities, too. Britain's local authorities are also doing a good job—but they are not well-publicised—in assisting in the training of people from under-developed countries in local administration. We must not forget either the work of our staff in this House, the Clerks at the Table and others, who have done such a remarkable job in assisting newly-emerged nations. I would add, as a loyal and regularly paid-up member of the body, a tribute to the work of the C.P.A. and its staff and refer to the wonderful opportunity that we have to get together and exchange our views on problems.

The Overseas Development Corporation has proved to he an effective body, but its field is limited. Serious thought should be given by the Government to extending its powers and field of operation. Commercial development can do a great deal, but I accept that Governmental aid and control at both ends is necessary.

I turn to the question of voluntary aid. The House must realise the tremendous significance which lies behind voluntary activity at home and abroad in that the bulk of the inspiration and work in this field is in the hands of young people. The vision, dedication and personal service is with youth. This is one of the most significant and hopeful signs for tomorrow's world and the world of today. Their target is not the spending of vast sums of money to reach the moon. It is the abolition of world poverty and the establishment of fundamental human rights. In this they are far wiser than some of the older generation.

The Voluntary Committee on Overseas Aid and Development co-ordinates the activities of a number of organisations, secular and religious, which in turn, cover the activities of many thousands of young and not-so-young people. I am not able to produce exact figures, but the financial contribution of their efforts total several million pounds annually. I understand that the figure is about, £6 million net.

Personal service also comes into the picture in Voluntary Service Overseas. Some of our best young people are rendering invaluable service abroad. 'This is a service to which all possible help and Governmental assistance must be given. Not only do these young people give practical help, but they acquire valuable experience both for themselves and for others. The nation stands to benefit.

A few weeks ago, some of my Norfolk colleagues and I received a petition at the City Hall, Norwich, calling for increased aid to developing countries. The signatures were collected during the summer on Norfolk beaches by the Norwich World Poverty Action Group. The final paragraph of the petition read: While convinced that the abolition of world poverty and the establishment of fundamental human rights can only be brought about by massive international aid effectively administered, we ourselves stand pledged to give whatever we are able for various world services and causes. That is the voice of today's youth. Its leader, a young and attractive girl, will shortly be carrying out voluntary service in Ceylon. She, among others, is a good example of action following words.

It was, indeed, the action of these young people that inspired my Motion. In my mind's eye as I conclude my remarks is the face of a little Pakistani boy I met at a wayside halt during Sub-Committee's C's tour of investigation. His brother was selling water and he was selling bread. Dressed in simple but ragged shirt and trousers, he had an appeal in his eyes and features. Language barriers were difficult. I did not want to buy his bread, but, as we drove off and he turned to walk back to his village, he turned and, with a beaming smile, stood waving his hand in friendly farewell.

That little lad and millions like him face a life span of short duration and a pitifully bare existence. Surely he has the right to as reasonable a chance of existence and opportunity as our own children. That child's life and the lives of millions of others matter, and this is what the debate is really about. I commend the Motion to the House.

4.13 p.m.

Sir Eric Errington (Aldershot)

I congratulate the hon. Member for Norwich, North (Mr. Wallace) with pleasure, because he has given us this opportunity to discuss overseas aid. I think that he will agree that we have got down to a great deal of hard work, because the topic, which is of great interest to everyone, is also very technical and is not easy to get clear in one's mind.

Another factor I am glad about is that the debate gives an opportunity for publicity. It is not always possible for the proceedings of the Estimates Committee to be discussed, which is perhaps a pity.

I shall not spend much time upon that aspect after what you have said, Mr. Speaker, but, nevertheless, such discussion would be of help to the House in understanding some of the problems. The size of aid is a substantial sum and neither during our discussions in the Estimates Committee nor in this debate do I intend to make a case for or against aid. I shall say what we found out.

The sum of £227 million, which is the amount for the estimates that we studied, is perhaps not the true cost of aid. First, sometimes aid is given—as in the case of Malaysia and Singapore—for special reasons. Secondly, there is a net cost to the country, first, because aid brings advantages of trade, which are very important, and, secondly—this is not generally appreciated, either—there is a repayment of capital and interest during the year which disappears into the maw of the Treasury and about which we hear little. These are things that the public should know. There is a tendency for the public to hear a big figure and believe that it is both the net and the gross figure.

The hon. Member referred to the United Nations Conference on Trade and Development, which met in Delhi. This is of great importance because there are two types of aid. There is multilateral aid arrived at by agreement between the donor countries to help recipient countries. That amounted last year to £25 million—a very helpful and considerable sum of money. Another course is aid through the International Development Association, to which we have contributed over the years about £59 million, or 12 per cent. of the total. The interesting fact here is that £89 million has been obtained by this country by way of procurements. That means that, for every £1 we have presented, we have received 30s. back. In this respect, I should like to refer to the tremendous enthusiasm of a very great man, the late Sir Andrew Cohen. It was a tragedy that he should have died in the middle of our work. He was always helpful when we asked questions and it was delightful to hear him enthuse about the advantages of multilateral aid.

The hon. Member for Norwich, North referred to the Mangla Dam and how it had provided great opportunity for the agricultural development of parts of both Pakistan and India which had not previously been used, but which had now become promising agricultural land, especially for small farming. The development of the Indus Basin has completed the work of the Mangla Dam and the question now is whether work should go on on the other dam, the Tarbela Dam, which would also be of great value.

Multilateral aid has one grave disadvantage, which is that there must be agreement among all the countries concerned, and that is not always easy to obtain. We have had this trouble with the United States of America. There is art interesting form of activity known as "pledging"—pledging help in multilateral aid—and it done on the basis of three years or so ahead. In America, however, the figure has to be decided finally by Congress, and if Congress does not agree to the advance the money is not forthcoming. As the American contribution is larger than the others, the effect is that work has to stop until Congress—now a new Congress—decides that the money should be paid. This is a problem, but, generally speaking, multilateral avid has been a very successful method of doing this important work.

Bilateral aid, which is annually a rather larger sum of £121 million, is budgetary aid and is not so satisfactory, but it is essential. Budgetary aid is not satisfactory because it is almost impossible satisfactorily to check the budget of a developing country. The Public Accounts Committee did its best to find out the position and no doubt sorted it out, but generally this is an unsatisfactory method.

However, it is essential, because a country cannot develop without the ordinary administration which every country needs. We subscribe substantial sums in bilateral aid to both India and Pakistan. The Estimates Committee rightly took the view that it is a mistake to have projects which are too large, particularly industrial projects, supported by bilateral aid. We had two examples at the Durgapur Steelworks, for which about £68 million has been advanced. As the latest report is not yet available, it is not possible to say whether that project should be further developed or written off.

We visited the Bhopal heavy electrical plant, where a great deal of help has been obtained from what was Associated Electrical Industries and is now G.E.C. It is not known whether that will be successful, although there were signs of improvement. The Committee felt that, on the whole, bilateral aid for heavy industrial projects was tending to die out and that it should be discouraged.

Substantial amounts are spent on technical aid in training young and older people for work in under-developed countries and on the provision of overseas service aid schemes and the topping up of the salaries of people sent there to work, the topping up including pensions.

The Commonwealth Development Corporation is a valuable organisation. It has developed on a loan basis and has the great advantage that it can work with private enterprise with which it provides a link which is most valuable. To my pleasure, if not my astonishment, I found that it made a profit—that is the nearest I shall get to making a political comment. I hope that the Minister will have something encouraging to say about this body, which is paying its way and doing a very good job at the same time. I hope that it will be extended to India, Pakistan and Ceylon, to which it was not extended by reasons of its charter when it originally started.

We were very impressed with the work of the development division in the Caribbean and the Middle East. The division in the Caribbean was able to spend about £25,000 without applying to home. The reason for this is that many small islands have small projects which are valuable to them, and this is not only an aid but a development organisation. We did not have the good fortune to go there. At one time, we thought that we might, because it would have been cheaper than going to India, but it was not so important as the work in India, where larger amounts were involved.

We saw in the Middle East a very elite body of people, under a very capable headman, who dealt with Middle East problems—and they were many. Arising from that, we gave thought to the question whether the African position would lend itself to a development division. We rather felt that it might be difficult, because of the considerable distances and the different types of people, but we did think that it ought to be considered.

The final matter was to do with pensions. We found that we had insufficient time to enable us to go into the question of the ordinary pensions of those who serve, and also into the topping-up question. We felt that it might be desirable, although we did not commit ourselves in any way because of the lack of time, for this job to be given to the Department of Health and Social Security. We thought that, subject to the moral basis of the programme, it should be concentrated on those countries which offered the greatest potential market.

4.30 p.m.

Sir Geoffrey de Freitas (Kettering)

I am grateful to the hon. Member for Norwich, North (Mr. Wallace) for raising this matter, and I wish to join the hon. Member for Aldershot (Sir E. Errington) in praising the late Sir Andrew Cohen, whose remarkable achievements I saw at first hand when I was working in this. and other fields, in West and East Africa.

I have fought seven Parliamentary elections and in each campaign I have stressed the need and importance of aid for the developing countries. Although I have always raised this issue at the elections, I cannot remember ever having had a suggestion that we should contribute less to the poorer countries.

My argument on this has always been twofold. First there is the duty which we as a rich, Christian, country owe to the less fortunate people of the world. Secondly, there is the argument of the enlightened self-interest of a trading nation. The second argument was summarised very neatly today in The Guardian by Mr William Davis, who said: … aid must not be confused with charity. As a trading nation, Britain cannot afford to brush aside the worries of the developing countries. They are our customers. The chief manufacturing industries in my constituency are steelmaking and footwear. I summarise my argument, when speaking to my constituents, in this way: You cannot sell steel products and shoes to people whose standard of living is so low that they live in a mud hut and go barefoot. This argument appeals to my constituents, who are go-ahead people and export-minded.

There is an old story in the shoe industry about the two salesmen who went to tropical Africa. One sent back a telegram saying: Everyone barefoot. No possibility of sales here. Returning at once. The other one, a Kettering man I am told, sent back a telegram saying: Everyone barefoot. Excellent opportunities for trade. The footwear industry is a very great exporter, with £17 million worth of exports last year, and over £15 million during the first nine months of this year.

My first argument was to do with the Christian duty of a rich country towards the less fortunate. We must not forget that by world standards there are plenty of rich countries in Europe. These are more and more recognising the fact that they have a duty to the developing world. In the European Assembly at Strasbourg, in May, 1966, we had a remarkable speech by the Secretary-General of the United Nations. U Thant argued that the problem of economic inequality in the world was now the principal threat to the peace, not only to the peace of the developing countries but to Western Europe. He described Western Europe as being secure in its "prosperous provincialism."

We have had other visiting speakers in the Assembly since then. Inevitably, most of them are European Ministers, but we have had Seneglese, Tunisian, Israeli, and Jordanian Ministers discussing what European countries can do to help in the economic development of these parts of the world, such as Africa and the Middle East. We have not had anyone from Asia yet, but next month the Indian Minister who presided over this year's U.N.C.T.A.D. will be taking part in the debate. We have had the Secretary General of U.N.C.T.A.D.

The Assembly has shown an interest in this matter under three main heads. Development finance is the first, and we debate this every spring. The basis for that debate is the annual survey of development policies prepared by the Development Assistance Committee of O.E.C.D. Apart from this annual debate, there have been special reports commissioned on questions such as debt burden and the various problems connected with private investment.

In the second place, there has been much interest in international trade among the Members of Parliament meeting at the Assembly—and remember that they represent 16 Parliaments. They have voted for the establishment, by the industrialised countries, of a general nondiscriminatory system of tariff preferences in favour of the developing countries. Although we here naturally tend to think more about Africa and Asia, there is also Latin America, where the prospects are appalling. We have also had speakers from Latin America in the Assembly.

The key problem in all this is the economic inequality between the countries. The problem is no longer as between Europe and Africa or Europe and Asia or Europe and Latin America, but between the industrialised West, of which Europe is only a part, on the one hand, and the developing countries, on the other. This is the basis in which U.N.C.T.A.D. is organised. The institutional forum through which the industrialised countries make their policy inside U.N.C.T.A.D. is O.E.C.D. A few years ago it was thought that our Assembly might become the official debating forum of O.E.C.D. But we are truly European, and O.E.C.D. includes North America and Japan. However, each year we debate the O.E.C.D. Report and in this way Members of Parliament from 16 countries are beginning to influence Western policy in U.N.C.T.A.D.

In this U.N.C.T.A.D. group the countries in the best position to increase their aid significantly, without jeopardising their own balance of payments or prospects of economic credit, are European countries. Until very recently, the European countries which contributed their fair share of development aid were the former colonial Powers. If one examines the O.E.C.D. figures showing the flow of financial resources from the industrialised countries to the developing countries, one sees that Belgium, Britain, France and the Netherlands have contributed substantially more than the average. In the latest figures, Germany has joined the old colonial Powers.

The explanation for this appears to be that the former imperial Powers continue to feel a sense of responsibility—there are other ties between the former colonies and the colonial Powers—even after independence, whereas other European countries which have never had colonies feel no such ties and hitherto have believed that they have no such responsibility. The situation is changing, and these regular debates, very much on the theme of U Thant in his speech in 1966, have played some part in this change. In the long run, it would be most undesirable if European aid programmes continued to be based on past colonial links.

One of the problems today is to get all Europeans to admit that development aid is not just a method of pursuing national political ends, but a common responsibility to be borne by Europe as a whole. In Strasbourg, we are encouraging developing countries to be heard in Europe, becauses any substantial increase in development finance or any significant degree of trade liberalisation by the West is politically dependent on all the industrial countries being prepared to make equal sacrifices. If the smaller European countries, which are sometimes the wealthiest per capita, fail to provide their fair share, this will affect the willingness of the larger countries to increase their aid.

One of the best ways for developing countries to influence Parliamentary and official opinion in the small industrialised European countries must be through European organisations. The Swedish Ambassador in India has written on this and has argued that the main contribution of the smaller European countries—and in this context Sweden is one of the smaller, although extremely rich, European countries—should be through international organisations.

We all know that relations between the West and the developing countries are going through a difficult phase. The West is disillusioned by the apparent ineffectiveness of much of the aid. On the other hand, the developing countries see with dismay the relative stagnation of Western aid and the maintenance of high trade barriers. I detect some cynicism and indifference on one side and bitterness and resentment on the other. There is no easy way to change this, but the worst thing which could happen would be for us to turn our backs on each other in disgust.

The Decade of Development is one of the greatest tasks of this part of this century. It will require a great deal of co-operation and the existence of strong institutions at regional and world level. The Council of Europe has a modest but valuable rôle to play because, as U Thant reminded us, except for North America and Japan, we are the richest part of the world. Together we are very big and powerful.

Last month, my hon. Friend the Parliamentary Secretary attended the International Voluntary Service seminar in Strasbourg and made a remarkable speech on the opening day. I know that he and his right hon. Friend are doing a first-rate job in their Ministry, and I trust that the Ministry will be able to escape the clutches of the Foreign and Commonwealth Office which, I am told, is hoping to make an assault on it. I hope that it will manage to resist this, because, as my hon. Friend the Member for Norwich, North argued, aid must be something more than a mere instrument of Government policy.

4.45 p.m.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

Like the right hon. Member for Kettering (Sir G. de Freitas), I congratulate the hon. Member for Norwich, North (Mr. Wallace) on choosing this subject for his Motion.

I disagree slightly with one thing which the right hon. Gentleman said. He stated that in, I think, seven election campaigns, he had had no questions about diminishing the amount of overseas aid. He must be very fortunate. Not only do many hon. Members receive such questions, but very frequently this point is made at the tail-end of constituents' letters. I had one this morning, and this is why I remember it. When a constituent raises a legitimate grievance about housing, pensions, or something else, very often the sting in the tail is "why should we send hundreds of millions of pounds to ungrateful foreigners" when certain problems cannot be put right at home.

This is a false judgment which is only too frequently and readily made. Not only is it made by people who, perhaps, have not gone into the question of over seas aid very fully, but it was made not long ago by Mr. John Davies, the Director-General of the C.B.I., when he described financial aid to developing countries as "an absolute busted flush". We must not lull ourselves into believing that there is widespread enthusiasm in the country for the subject which we are debating.

In further tribute to the hon. Member for Norwich, North, and in support of what I am saying, may I point out that an opinion poll was taken by the Sunday Telegraph earlier this year when the Government were going through one of their series of economic cuts. People were asked what they would like to see cut, and they were given a list of choices. No fewer than 60 per cent. headed the list with overseas aid. Only 10 per cent. opposed cuts in overseas aid. Therefore, I hope that I can dispel a little of the euphoria which has crept into the debate.

Dr. Hugh Gray (Yarmouth)

Does the hon. Gentleman think that the result of the poll would have been the same if it had been taken among those aged 18 to 21 years?

Mr. Steel

No. The hon. Member for Norwich, North mentioned this matter. One of the hopeful signs among the members of the younger generation is that they are far more broad-minded in matters of this kind.

I have begun with a note of disagreement, but I should like to agree with the concluding remarks of the right hon. Member for Kettering. I hope that the Ministry of Overseas Development will resist any take-over bid by the Foreign and Commonwealth Office. I was interested to read the comments of the Estimates Committee on the vice-like grip of the Treasury on the work of the Ministry of Overseas Development.

I have raised this point before, in debates on overseas development, but it bears repetition. After the 1964 election, the Prime Minister was able, with justifiable pride, to say that there was now a Minister of Overseas Development in the Cabinet. On the last occasion on which I spoke, there was no Minister of Overseas Development in the Cabinet, and there still is no such Minister in the Cabinet. What is worse, there are today two Treasury Ministers in the Cabinet. We appear to be moving entirely in the wrong direction. I hope that, if nothing else has the support of the Minister, this point will.

To go on congratulating ourselves about our efforts in overseas aid is all very well up to a point, but we must recognise that, for the first time since 1962, our overseas aid spending this year is down. I very much agreed with an article by Mr. Hugh Stephenson, in The Times of 26th September, when he pointed out that this was not peculiar to this country. Referring to the annual report of the World Bank, he said: It is a crisis of political will in the developed, western industrialised countries of the world over whether they have the stamina and commitment to see through the job to which they pledged themselves at the start of this Decade of Development. There was a time, and not so long ago, when development aid was 2. moral declaration by the haves' of their responsibility to help the rest tackle the crushing weight of backwardness, poverty and lack of resources. Some of the initial spark at the start of the Decade of Development has disappeared. There are two appointments which give hope for a recommitment to this endeavour. One is the appointment of Mr. McNamara, President of the World Bank, and the other is the appointment of that distinguished international Liberal, Lester Pearson, as a figure who will head the new committee which is looking into the effectiveness of aid programmes. In particular, I have watched with interest Mr. McNamara's pronouncements on the emphasis on the need to increase the programmes of population control. The fact is that every year our population goes up by 2 or 3 per cent. while food production remains static.

To see this in harsh reality, one must recognise that the income per head of the population of India is now less than it was in 1945, simply because of the "explosion" of population. We are getting ourselves into that vicious circle where the F.A.O. has forecast that we could be in a chronic situation of food famine in only 10 years' time. Therefore, I support very much what the hon. Member for Norwich, North said in opening the debate.

I would like to echo the remarks of those who call for less concentration on prestige projects in development. We all know the weaknesses of politicians in this respect. It is true that the political leaders in some of the emerging countries have wanted to point to a grandiose scheme such as a steelworks or a motorway where traffic density could not justify such expenditure. I wonder, however, whether the fault has been entirely theirs. I suspect that in one or two cases the fault has been partly that of the donor countries. Because of our programme of bilateral aid, there has been an equal temptation on the part of politicians in the donor countries to say that we in Britain, China or Russia, for example, have given such and such a project in a certain country.

I note with concern that our multilateral aid programme is still only about 10 per cent. of the total. I think that the balance is quite wrong and that, for this reason, we should be increasing, and helping in discussion other countries to increase, the proportion of aid, which we make through multilateral agencies.

An aspect which, so far, has not been raised very fully is the need to reform our international monetary and trading systems so that we do not vitiate our increased financial aid to overseas countries by having sudden drops in the basic commodity prices obtained by the developing countries for their produce. In Ghana, for example, which the right hon. Member for Kettering knows so well, a machine which is used by that country cost in 1953 the equivalent of 10 tons of cocoa, but as the basic commodity price has gone down and the cost of expensive machines has risen, the same machine in 1968 costs nearly 20 tons of cocoa. This is how we spoil, and allow to be spoiled, some of the great efforts which we are pumping into the developing countries.

In his Report from the Estimates Committee, the hon. Member for Aldershot (Sir E. Errington) pointed out that the paper budget of £205 million, even when one adds to it the special amounts for Singapore and Malaysia, is an exaggerated figure because by the time we receive the repayments of capital and interest from the developing world, our net outgoings are only of the order of £170 million a year.

As we approach Christmas, and our annual period of gluttony in this country, we should set our net outgoings of £170 million a year from the public presentation point of view against one or two items of expenditure in this country. We should set it, for example, against the fact that last year we spent about £40 million on various forms of slimming preparation. In other words, while so many people in the world live on or below subsistence levels, we spend the equivalent of nearly one-quarter of our total overseas aid budget on efforts to trim our own figures.

During the two years from 1965 to 1967, the total expenditure on alcohol and tobacco in this country rose from £2,843 million to £3,047 million, an increase which, by pure coincidence, is exactly £204 million, almost precisely the same as our total overseas aid budget in a year. These are the kinds of figures which we must repeat over and over again to people in this country so that as we approach Christmas time the right hon. Gentleman's assertion that we are a generous Christian, rich country, giving forth of our goodness, might be more justified.

Mr. John Farr (Harborough)

Is not the increase in the consumption of drink and tobacco which the hon. Member has given largely accounted for by the sharp increases in taxation during those two years?

Mr. Steel

I am not concerned with how it is accounted for. I am saying that that was our total expenditure in this country and I am relating it to the comparatively small amount which we spend each year on overseas aid.

4.57 p.m.

Mr. Lewis Carter-Jones (Eccles)

I congratulate my hon. Friend the Member for Norwich, North (Mr. Wallace), not only on the manner in which he spoke, but on the terms of his Motion. For once, we are talking about aid to underdeveloped countries without any apology. We are stating what we ought to do positively. The House ought not to run away from this problem and it should not regard overseas aid as a possible item to be trimmed in the future. I was grateful to the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) for making that observation about overseas aid.

In our correspondence every day, we get references to the problem of cutting out something in overseas aid. I go so far as to say that it is not a case of whether we can afford overseas aid. It is a case of whether we can afford to do without it, because the fact is that we cannot. If we start cutting the present figure, we will cause untold misery and suffering in some of these countries overseas. I would even suggest that it might be a good example of enlightened self-interest to think in terms of increasing our aid.

I notice that several right hon. and hon. Members have referred to two possible takeover bids which are going on for the Ministry of Overseas Development, both of which I would dearly like to see us resist. First, I am not particularly happy at the influence which the Treasury has in the Department. Some of the questions that were asked in the Estimates Committee revealed that we were not particularly impressed by the nature of the Treasury's activities.

The other night, I had occasion in this House to raise the problem of the compassionate application of technology to the aged and disabled. The trouble with the Treasury is that it can see only one side of the balance sheet. It is a bit unimaginative in terms of using value analysis. There is a tremendous amount of return which comes to us and it is high time that those of us who have been looking into the problem carefully should go on to the attack and stop apologising for the aid we give.

The second take-over bid which I would like to see the Department and this House resist is the attempt by the Foreign and Commonwealth Office to absorb the Ministry of Overseas Development. Aid should be given completely separately and in a completely detached manner without being involved in considerations of foreign policy. Aid is intended, if I may quote from the 1965 White Paper, to help developing countries in their efforts to raise living standards. Our purpose is therefore to promote social and economic development … The basis of the aid programme is therefore a moral one. The trouble is that we will find ourselves in difficulty if we have the Treasury, on the one hand, concerned with balancing a budget without thinking or weighing the other consequences, and the Foreign Office, on the other, trying, as it were, to force a policy upon a reluctant country by threatening to withdraw aid. There are risks which are attendant upon merging the Ministry.

I want to make a plea that we have not done nearly enough work yet to find out what returns we get for the aid we give. I say categorically that the withdrawal of aid would be economically disastrous for this country, and the sooner we face that the better—that the withdrawal of aid would have disastrous consequences for us. Perhaps I may be permitted to quote again. It is the last quotation I shall make, and it is from the White Paper: The provision of aid is to our long-term economic advantage" — which is undeniable. By helping to raise incomes in the developing countries we can provide expanding markets for exports and safeguard the supply of our imports and the return on our investment. I say to the hard-headed, hard-faced individuals who say that this is all outgoing, look carefully at this side of the balance sheet. The Treasury has got a sort of one-eyed view—a left-hand one; never the right.

The White Paper goes on: These are real advantages, and we should seek to secure them as far as we can. But they must be secondary to the primary purpose of aid. The advantage which multilateral aid, as shown by the International Development Association, has for the developing countries are in co-operation and encouraging the highly skilled nations to get together and plan for the benefit of other countries. This is extremely important. Another advantage of multilateral aid is that it is given impartially without prestige projects being taken into account. Careful analysis is made of the aid given.

On the question of the most efficient way of giving aid, it may be argued that it ought to be budgetary aid, but, like my hon. Friend the Member for Norwich, North and the hon. Gentleman the Member for Aldershot (Sir E. Errington), the Chairman of the Sub-Committee, I, too, am very critical about budgetary aid. It is far too open-ended and ought to be brought to an end, but, while I say that I would add at once that I should like to see an extension of the concept of Kipping aid. Before anyone has any misunderstanding about Kipping aid, I had better explain that it was a device evolved by Sir Norman Kipping on an investigation which he made in the East, where, he said, sometimes a shortage of foreign exchange meant that the replacement of parts vital to a large undertaking could not be purchased and therefore a large undertaking would be out of action or out of order because of the absence of a small amount of foreign exchange.

The great quality about Kipping aid is that one can be highly selective and can keep going plant and equipment which would otherwise fail; for a small investment we can get a maximum return. I would urge my right hon. Friend to consider most carefully the establishment of a contingency fund with the prime purpose of using it definitely and clearly for the aims advanced by Sir Norman Kipping.

As to the statements that aid is always outwards and always at a net loss, I would point out that a large number of my constituents work at A.E.I. Reference has been made to the heavy electrical industry at Bhopal. When we were at Bhopal we saw equipment supplied by British manufacturers; we saw a part of this country's exports going into India. If we had not supplied that equipment it would not have been a case of A.E.I., at Trafford Park, sending it; the equipment would have been put in by Japan and we would have had a total loss in trade.

These are aspects we have to take into account, and while I would justify further aid exclusively on moral grounds, nevertheless from time to time we have to go on the attack and say that there are very good economic reasons why we should give it.

I do not think that there is anyone in the House at present who would object to the idea of having overseas students in this country to receive technical training and technical assistance. We would say that this is good. I would accept this, but to those who are critical I would suggest that there is an economic fallout by training these people in this country. Thus we can get them used to handling British products and, therefore, potential British exports. Here we have an example of the enlightened self-interest I was talking about.

Another category of technical assistance and advice is in consultancies, and here we could be doing tremendously more than we are at the present. I think that I can speak for the chairman of our Committee and for its other members when I say that we were very impressed by the standards of British consultancies overseas, although we would have liked to have seen rather more of them. We can say to those who go overseas to do this work that they are doing both very important and highly moral work. It was very pleasant to talk to these people and to feel that they felt they were doing useful work.

There is economic fallout from this work also. If we have our consultants on the spot and our technical experts giving advice, there is a tremendous amount of economic fallout which comes to us by way of the type of goods and materials which they subsequently specify.

Another aspect of technical aid I would mention is that of stimulating, encouraging and extending our voluntary service overseas. The way in which the young of this country are attacked from time to time is quite remarkable, but it is wonderful to see them at work overseas in extremely primitive conditions. Nobody could say for a moment that they go out for the money. They lead rigorous, tough lives in the villages, and it is an extremely heartwarming experience to see them.

There are two benefits from this. It does them good, in the vigour of their lives, to be doing something useful for those in need overseas; but the manner in which they work—the hours they work, the sacrifices they make—has a tremendous effect on the opinions which the people among whom they work have of us. There again, there is a fallout advantage. I am sure that the chairman of the Sub-Committee and my hon. Friend the Member for Norwich, North will agree with the great tribute which was paid about the behaviour of our young people by British Council representatives and by the inhabitants of those overseas countries. If those people, in doing what is highly moral work, can, in suggesting technical progress, increase our exports to those countries, so much the better. It is another example of enlightened self-interest.

My final point is this. My hon. Friend said that aid to under-developed coun- tries constitutes a vital factor in achieving a stable, peaceful world. Reference has been made to the Mangla Dam in the Punjab area, with the five rivers flowing south, which has posed a problem of conflict between Pakistan and India. In the end, Pakistan and India agreed to resolve it, but the catalyst in allowing the peaceful solution to be achieved was money from the World Bank. I wonder whether anyone in the Treasury or in the Foreign Office has ever attempted a value analysis of how much bloodshed and suffering have been avoided, how much foreign currency has been saved and how much more food has been provided because someone, somewhere, had the intelligence and the courage to say, "This area is an area which needs help, and here a small sacrifice by the 'have' nations will bring peace to the 'have nots'."

5.11 p.m.

Mr. John Tilney (Liverpool, Wavertree)

The hon. Member for Eccles (Mr. Carter-Jones) referred to his fear of a Treasury takeover bid of the Ministry of Overseas Development and said that the withdrawal of aid would be a disaster to this country. I agree, but we must face the questions that are now being asked in our constituencies. Some will say that much of the aid that we give is wasted. I hope that they will listen to the words of my hon. Friend the Member for Aldershot (Sir E. Errington) on that; he made a first-class speech which ought to be widely read.

Others will say that Commonwealth students take their places in our universities at the expense of our sons, nephews or nieces, and that there will not be places for our own people, forgetting that many Commonwealth students in the near future will be going back to administer those developing countries, to be important people there, and they will be people who may be friendly to this country and able to influence trade in our direction.

Others, again, will see the lack of amenities of our Northern cities and complain that we have not enough money to reclaim the Dee, Morecambe Bay, or even The Wash. They will say how much more we could do with some of this money which is being spent on overseas aid, and ask why should we give so much and lend so much which will never be repaid. They will say that if we did only as much per head as Canada, a country much richer than we are, we would spend about £200 million less, and what a lot we could do with that.

The final argument that we have to answer is that if we improve our industrial base we will in five or six years' time have more money available to lend than now and when we are chivvied by the world at large to play our proper part in the aid programme, we could go back into the consortia.

These questions are being answered in today's debate and we should all be grateful to the hon. Member for Norwich, North (Mr. Wallace) for bringing this matter to the attention of the House and the country.

I believe that budgetary aid should be confined to the Colonies that remain to this country. We are trustees for them and we must see that they have priority. Historically, the Commonwealth as a whole must claim the bulk of the balance. Buy: it is as well to remember that we are halfway down the table of aid. We give very much less than France, and I suspect that we may have our priorities wrong.

I would suggest, first, what would be merely a bookkeeping entry. My hon. Friend the Member for Aldershot touched on pensions to ex-members of Her Majesty's Overseas Civil Service. In the annual budgets of many Commonwealth developing countries pensions to ex-civil servants now living in Britain or other parts of the erstwhile Commonwealth are debated year after year, and local people do not understand why they should pay those pensions. A short time ago the question came up in Tanzania.

How much better it would be if the money which we give to these developing countries were reduced slightly, and we took upon ourselves the charge of looking after these basic pensions, as we do in any case for topping up those pensions. The pensioners would feel more secure.

I know that the Government have always taken over pensions in case of disaster, but pensioners and their widows would feel secure if this were done, and cases would not then arise such as happened in Ceylon, where widows of ex-civil servants are now paid in depreciated rupees. It would mean reducing our aid at the most by £10½ million, about 5 per cent. of our aid programme.

Sir E. Errington

We were very much concerned about this matter. While we did not make a recommendation, we were anxious that the matter should be gone into fully, to prevent a recurrence of what happened in Tanzania.

Mr. Tilney

I am grateful to my hon. Friend. I hope that the Minister will look carefully at that suggestion.

Mr. Henry Clark (Antrim, North)

Will my hon. Friend allow me to make one point? He said earlier on that the Ministry always made up pensions when the country defaulted, and he mentioned the case of Ceylon, which was paying in devalued rupees. This is not entirely correct. In the case of Tanzania, we are not making up the pensions, we are making advances to the pensioners in devalued pounds which, if Tanzania were still paying, would be paid in full value pounds because Tanzania has not devalued by a shilling. We are doing our pensioners down by 14 per cent. of their pensions by this second-rate attitude.

Mr. Tilney

I am grateful to my hon. Friend. I hope that we may have the opportunity later of debating this, possibly on an Adjournment Motion, before Christmas, as there is much to be said about it.

My next point is a plea that private enterprise should be helped in the setting up of jointly-owned factories in developing countries. I would like to see at least 50 per cent. of the shareholding owned by local capitalists, and a quotation on a local stock exchange, with British industry producing the know-how. It is as well to remember that there is a great demand throughout the world for capital, but there is a fear of nationalisation in and the inability to remit profits from many countries in Asia and Africa.

Will the Minister tell us what discussions he is having with countries like the United States, Japan, Germany and others who have produced an insurance scheme of their own? If such a scheme could be introduced, together with a code of investment conduct, more private aid would flow to the developing countries rather than from the British taxpayer. I would refer to the International Association for the Promotion of Protection of Private Foreign Investments which has its headquarters in Geneva, and which has members from the leading companies in, I think, 16 capital-producing countries.

In a statement on 1st June, 1968, they said: The importance of the part played by private foreign investment in international commerce and in economic development is generally recognised. For the developing countries such investment and the technical know-how and managerial skills which go with it constitutes an essential condition for the promotion of trade and industry and the steady improvement of their standard of life. These facts were reaffirmed by both the first and second sessions of the United Nations Conference on Trade and Development in 1964 and 1968". and, of course, this possible scheme is referred to in the Committee's Report.

The statement also says: 'The World Bank staff prepared in November, 1966, using as basis an O.E.C.D. report of June, 1965, the first draft of Articles of Agreement of an International Investment Insurance Agency". I stress that this applies only to new investment. It is obviously impossible to insure the old. I suggest that it would be very much better to have an investment consortium for an insurance scheme of this kind so that one capital-producing country could not be played off against another.

My third suggestion is that we should endeavour to help the tourist industry as much as possible in many of these small developing countries. Why cannot there be cheaper air fares whatever I.A.T.A. says? I find that it is far cheaper to have a return fare London—Malta, than a single fare Cyprus—Malta—London. Is it not possible to spend some of our aid programme on subsidising air fares until the traffic is established in some of the developing countries? Just as the Commonwealth Sugar Agreement affects the West Indies and other countries, so the development of tourism would benefit these small developing countries, and also incidentally, our people who would like a holiday in the sun. Possibly the Commonwealth Prime Ministers' conference might consider this. I understand that some time ago the Secretary-General was deputed to look into the matter.

Finally, let us remember that, despite the population explosion, despite the much greater wealth and greater potential for wealth throughout the Western world, the rich countries are now giving no more than they did as long ago as 1961. The developing countries need help. They need it for project preparation, for the planning of statistics, and for public administration.

Why cannot there be a Commonwealth multilaterial aid scheme, under the auspices of the Secretary-General? As my hon. Friend the Member for Aldershot said, a scheme of this kind does good for Britain as well. We get 30s. out of every £. Such a scheme would be good for the Commonwealth, especially if the experts could have a special tie, or armband, or beret to show that they were Commonwealth Aid contingents. It would bring the nations together, and put some meaning into the Commonwealth. I hope that that, too, might come out of the Commonwealth Prime Ministers' conference.

5.24 p.m.

Dr. Hugh Gray (Yarmouth)

It is a great pleasure to support my hen. Friend the Member for Norwich, North (Mr. Wallace), especially as he introduced his Motion at the instigation of young people. Although it is obviously not the wish of many of their elders that development aid should be enlarged, I take the view that it is the wish of the majority of young people in this country that it should be. These young people travel much more, and they look on Europe and the world as their country. They do not hold the narrow, nationalist views of their elders. They think in a much larger and more objective way.

I intend to talk about India, because that is the country that I know well. Not only have I visited it on many occasions; I have had the pleasure of living there for more than a year in a rural area.

The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) suggested that the average wage in India had gone down since 1945. I take issue with the hon. Gentleman because I know that that remark will wound many Indian politicians and civil servants. Many economic experts hold that the indices in India, if one takes such material improvements in rural areas as bicycles, footwear, villagers drinking tea for the first time, and going into district towns to cinemas, and bearing in mind that this is not a monetised economy—it is in the towns and cities, but not in the rural areas, where people are paid also in kind—the standard of living in India has risen, although it remains extremely low.

Mr. David Steel

I am open to correction by the hon. Gentleman, who has far greater expertise on this matter than I have, but I did not talk about the average wage having fallen. I said that the income per head of the population had fallen, simply because the total income was now being divided among a larger number of people.

Dr. Gray

It is difficult to measure income as it relates to individual members of the population in a non-monetised economy.

I do not wish in any way to contradict the suggestion that the population of India is insufficiently nourished. I remember a doctor friend of mine, who worked in a district town, saying that whereas when he was working in Hampstead the majority of his patients suffered from stress diseases, in the district of Nalgonda they were suffering from nutritional diseases, and this is widespread. But in helping people one has to bear in mind their values. Nobody thinks of sending proteins in the form of meat to vegetarians. One continually hears the suggestion that the Indians should act in a more rational way and kill their cows, but I suggest that before someone makes that suggestion he should look carefully at his own cultural values, which may be quite different.

I remember seeing an Italian film called "Mondo Carne", in which some Chinese people were walking around and choosing dogs from cages. These animals were to be cooked and eaten, in the same way as we might choose trout in certain fish restaurants. This caused a certain amount of horror because people in this country regard dogs and horses in a slightly different light from that in which they regard cows. In India dogs are considered filthy, and most people would not dream of allowing them into their houses. Dogs are kept in the garden or on the verandah. We must always bear in mind other people's values.

There are no religious reasons why the population explosion in India should not be curbed. There are no reasons within Hinduism why pills should not be taken to control pregnancies. As my hon. Friend the Member for Norwich, North said, this is where education comes in. If one talks to Indian peasants, they say that the hands of children create more wealth than they consume in food, and it is very difficult to convince these people of the contrary. If one considers the families in which they live, one can understand their difficulties. If they lived, as we do in the West, in nuclear families, it would be easier to calculate the cost of one additional child. If one lives in an extended family or a large joint family it is difficult to do so, and to perceive the cost. Against the possible disadvantages of the joint family one has to count the advantages, such as the fact that it always has a place for old people. Indians ask with astonishment why in this country old people have to go into old people's homes.

I have observed aid programmes from the village level and know what villagers say about them when they arrive. India is a Parliamentary democracy, and I differ with a number of my hon. Friends and hon. Members opposite who have held that aid programmes should be nonpolitical. Western Parliamentary democracies should first of all help other Parliamentary democracies in underdeveloped countries. It is hypocritical to say that there are no political factors in the way that aid is given. What kind of aid programmes have we set up at the moment, for example, for the impoverished regions of China? What have we done for Cuba? It is only natural that we should first help those Parliamentary democracies, such as they are, in Ceylon and India where people can choose between candidates from competing parties, where there is a functioning democracy, where there is a Parliament at the centre, where there are State Governments, and municipalities, and where in 1959 a new system of rural government was introduced in Andhra Pradesh and Rajasthan.

In my own state of Andhra Pradesh there are councils at village level, councils at intermediate level called Samithis and councils at district level called Zilla Parishads. I mention these because they are the agencies which are responsible for the administration of development aid programmes.

Among the many transitions that one has witnessed in India since independence has been the transition of power at rural level from the administrators—the civil servants—to the politicians. It is the politicians who are administering these aid programmes. It is true that there have been accusations that this has led to certain kinds of political patronage, but why should we, who have recently heard accusations that the re-creation of the House of Lords would make for political patronage, say anything on that score? Of course there is political patronage. It is a political decision whether a road will pass a certain village, and it is a political decision where a health centre is put. All these things must be taken into consideration when looking at the power structure from both the political and the social viewpoint.

Far too many economic experts, both European and Indian, sit in Delhi, and sit in the State capitals, and talk of aid programmes in terms of practical returns. They think that because it can be demonstrated on paper that something pays people will automatically adopt it, provided there is nothing in their values that runs counter to it. This is not true. We must remember that 90 per cent. of the population of India live in villages, and the rural gentry, the country gentlemen, have emerged from their villages and have taken over not only district government but State Government. They have replaced the lawyers and the urban politicians in the Central and State Governments of India. They have not only material interests but power interests, and it is these power interests that they are determined to retain.

If a man is paying his employees partly in money and partly with goods he is not particularly interested in whether the Japanese method of cultivating rice will give a better crop if it means that the number of his dependants will decrease. If one is to introduce development programmes, one has to decide whether one is first to foster social revolutions, or accept the power structure as one finds it and work within it.

Apart from the rural gentry—the doras, as they are called in Andhra Pradesh—there are other social strata. There are, for example, the peasants. I remember that at the time of the General Election in 1962 a village peasant said to me: "Who wants roads? I will tell you. Politicians want roads, and our landlord wants a road so that he can run the paddy to the main road on his lorries instead of paying us to take it down to the road by bullock cart." We have to decide whether we are to destroy certain categories of workers by introducing new mechinery in the form of development aids.

All these problems need to be looked at very carefully, but often they have not been looked at very carefully. We know a great deal about what the planning commission decides to do in Delhi, we know a great deal about the aims and objectives of State Governments, but when we get down to village level we see that certain things cannot yet be done until a social revolution takes place. One finds the harijans—the outcasts—living outside nearly every Indian village. That means that if we are to sink new wells, we must give these people separate and equal facilities.

The villages are not yet socially integrated. It is true that industrialisation has introduced certain changes in caste. People eat together in factories, and ride together in buses. But in the rural areas very little has so far changed. People live the whole of their social lives within their castes. They marry within their castes. Intellectuals will tell you that caste has disappeared, but if asked whether they are married within their castes the answer is that they are. The only change is that people are now sometimes marrying within sub-castes of their caste.

These are all difficulties, and I could talk about them for a very long time. I plead with the Minister that in all aid programmes he obtains value for money. Research carried out in Nepal has shown that some of the smaller countries—Israel and Switzerland for example—get better value for money on projects than do the larger countries like the Americans and ourselves, because they establish small projects which they understand. They set up projects that will eventually make money for local employees and provide more food for those living outside. One does not necessarily have to send out people from the Ministry to make inspections" but one has to be assured that the projects suggested are practicable, not only economically but sociologically. This aspect needs to be much looked at much more seriously.

Not only do the rich get richer and the poor get poorer in all nations, but in an underdeveloped continuent like India the rich villages are becoming richer all the time because they have the men who understand the possibilities and take them up, who send their beasts for improved artificial breeding, and who will try out new varieties of seed. Meanwhile, the poorer villages sink further and further. One therefore has this problem not only from outside but also inside countries.

I hope that in the future we shall look to the views and ideals of the young, not to the old, and that we will increase our aid to under-developed countries, not decrease it.

5.40 p.m.

Sir George Sinclair (Dorking)

The Report of the Select Committee is a great tribute to the Ministry of Overseas Development and the improvement it has brought to the management of British aid. But, as I read it, it is also a personal tribute to the late Sir Andrew Cohen of whom my hon. Friend the Member for Aldershot (Sir E. Errington) has spoken so 'warmly.

His imagination had been fired by his day-to-day experience since the war in dealing with the needs of developing countries, and especially the needs of Africa. His experience came not only from the old Colonial Office but from his frequent overseas visits for consultations on the spot, from his experience in the field as Governor of Uganda, and from his work as a representative of Britain in the United Nations. His ideas, his restless energy and his drive in decision-making were all a major force in the development of the Ministry of Overseas Development. I say this having had the privilege of working closely with Andrew Cohen for many years.

What is the picture of aid today? It is primarily one of rapid population growths in developing countries holding back the improvement of standards of living—of the gap between the rich and poor nations growing wider and wider and, in many developing countries, especially India and Pakistan, of the standards of living of the peasant farmers—the vast majority of the population—hardly moving, with yawning gaps opening up between them and the better-off sections in those countries.

A second feature is the new emphasis being given to the need to improve agriculture. On this there is a growing consensus not only in the developing countries but also in aid-giving developed countries and in all aid-giving agencies.

A third and recent feature is the challenge to the developed world to increase development aid—the challenge issued by the World Bank in the face of growing disillusion about the usefulness of aid. It is a bold challenge, which Mr. McNamara and the World Bank Group have high-lighted by raising in 90 days on the world capital markets more money for development than the bank has raised in any year recently.

I want now to examine some of the suggestions made in the excellent Report of the Select Committee. Here I pay a warm tribute to my hon. Friend the Member for Aldershot and his colleagues. As to the Ministry of Overseas Development, one important recommendation was that there should be more decentralisation in the planning and management of aid. There are already two development divisions, one in the Caribbean and the other in Beirut, to cover the Middle East. They have been successful in bringing the planning management of our aid nearer to the countries for whose help it is designed. Will the Minister now consider a similar division to cover Lesotho, Botswana, Swaziland, Malawi and, perhaps, Zambia? I am sure that Britain's aid effort in that frontier area is of vital importance, and that it would bear closer co-ordination on the spot.

In the larger Commonwealth countries in Africa—countries such as Nigeria and Kenya—and in Asia, with India and Pakistan, development programmes are so far-reaching that Britain's contribution requires its own team in each country, under the High Commissioner on the spot. I have recently returned from Kenya and have seen what a great advantage to our aid programme there has resulted from the appointment to the High Commissioner's staff of an agricultural expert with wide and successful experience elsewhere in Africa. The High Commissioner there has begun to develop an aid team which works closely with the development authorities of the Kenya Government. Projects that the High Commissioner, after consultation with the Kenya Government, commends to Her Majesty's Government are likely to be more practical than schemes which have not gone through such a joint local scrutiny.

I therefore make a plea for the appointment of more agricultural advisers, with experience in the field in the developing countries, to the staffs of High Commissioners and, where appropriate, of ambassadors. This is better than centralising such advice in Whitehall and should be a measure of economy in getting better results from the same volume of aid. This is the more important and urgent because of the new emphasis on agriculture. And I suggest that career diplomats in their posts overseas will benefit from this advice, in which field experience is essential. I know that many of my farming friends in the House agree with this point.

I now turn to the Commonwealth Development Corporation, and join in the tributes paid to the Corporation by the Select Committee. It is one of the most effective and sensitive British organisations helping with development overseas It has achieved success in agriculture such as no other organisation in Britain or elsewhere has achieved. This has been recognised for some time by the World Bank. I hope that the Bank, with its new emphasis on agriculture, will make more use of the C.D.C.

The Select Committee recommends that the C.D.C. should now have its field of operations enlarged by the inclusion of India, Pakistan and Ceylon. If it can expand without losing the quality of its effort, well and good, but there is a case for its expanding its efforts in the Caribbean, Africa and the Far East, where it already has successful experience on which to build. There are still vast tasks in these areas which it is suitably equipped to tackle.

If, however, it is to operate in India and Pakistan, I would respectfully disagree with the Select Committee in its suggestion that the C.D.C.'s main contribution there might be in industry. I suspect that its best contribution would be in agriculture. There, the raising of peasant production in the rural areas has been a major problem, and it is in this matter that the C.D.C. has elsewhere made such unique contributions, in bringing farmers, governments, co-operative societies and private enterprise into fruitful association.

In view of the success of the C.D.C. in helping the developing countries and in doing this while making for Britain a modest profit on its investment, I hope that the Government will now increase the limits of the funds which it can raise as treasury loans or on the open market.

All hon. Members who believe, as I do, that there is in the developing countries an urgent need for increased aid, and who believe that it is in the long term interests of Britain, will welcome Mr. McNamara's recent speech on behalf of the World Bank Group. He has called for an increased effort by all donor countries and has begun to set a brisk example. He is, rightly in my view, putting the emphasis on control of population and increased production in agriculture. I am sure that Her Majesty's Government should aim to increase their efforts in both fields, both in research and in technical assistance.

Mr. Henry Clark

I am rather concerned about the tenor of my hon. Friend's remarks dealing item by item with a number of recommendations made by the Select Committee. I hope that he and the House will not say that this is to be the debate to which the House is entitled on the Select Committee's Report. Will my hon. Friend direct his remarks to the Select Committee's suggestion that we should have an annual White Paper followed by an annual debate for the adequate control of overseas aid?

Sir E. Errington

As I understand it, the position is that the Select Committee's recommendations will be put to the Ministry and that the Ministry will state what it is going to do on the recommendations. One recommendation concerns the point that my hon. Friend has mentioned—the question of the Report—so we shall get that information. Whether we shall be able to get another debate is another matter, but we shall certainly get the information.

Sir G. Sinclair

I strongly support the suggestion made by my hon. Friend the Member for Antrim, North (Mr. Henry Clark) whose experience in East Africa enables him always to make a valuable contribution to these debates. I should welcome a full-scale debate annually after an annual report on the aid situation, because overseas aid is one of the major responsibilities of Britain in the outside world, and I think that it should be debated by the House, because we are asking for an effort from our own people and they have a right to have it properly discussed and projected.

In conclusion, there is evidence that since the Department of Technical Cooperation was founded by the Tory Government and expanded by the Labour Government into the Ministry of Overseas Development, British overseas aid has been better planned and better managed and has been more effective. I am glad to know that the British National Export Council in its Annual Review for 1967–68 said this on aid: A good case can be argued for spending even more when we can afford it. I agree with the Council for the reasons that it has given and other reasons which I have often stated in the House. I strongly disagree with those who call for an end to overseas aid. I believe that this would be a retreat from Britain's responsibilities and a betrayal of the long-term interests of our great trading nation.

5.52 p.m.

Dr. Shirley Summerskill (Halifax)

I join hon. Members on both sides in recognising the valuable work of the Ministry of Overseas Development, which I hope hon. Members opposite will agree is one of the great achievements of the Labour Government. It is clear that it is here to stay. I would oppose any watering down of the Ministry by its amalgamation with the Foreign Office.

It is appropriate that during Human Rights Year and at this time of the year we should be concerning ourselves with the two-thirds of the world who will spend Christmas Day in hunger, poverty and sickness, and with no help forthcoming. The objective of the British aid pro- gramme is to help developing countries in their efforts to raise living standards. How can we do this when in 1965 world food production rose by 1 per cent. but the population increase was 2 per cent.? In 32 years' time the world's population will have doubled. Only Sweden and recently America seem to have recognised the extreme importance of population control.

We on our part seem to be guilty of trying to close the door after the horse has bolted. The problem of over-population is not dealt with only by economic growth but by knowledge of family planning. British aid in population growth and population control is still extremely inadequate. All of the under-developed countries, with the exception of some in Africa, have accepted as their national policy that there must be a policy on population. This has been made clear at the United Nations, so there is no point in our claiming that these countries have not expressed their desire for help. They are anxious to receive help from developed countries in this field.

Last year I attended the United Nations Status of Women Commission as the United Kingdom delegate. I shall be going there again next February. In New York the most stimulating and important debate at the Commission was that on family planning. The women deplored the fact that their countries are ignorant of family planning. The emphasis in the debate was on the fact that this should be available for those who voluntarily want the knowledge. There is no question of its being enforced in any of these countries. Lord Caradon, our representative, is in the forefront of the campaign at the United Nations for population control. I therefore feel that we should have placed far more emphasis in the debate on this aspect and perhaps a little less on the building of dams.

Family planning knowledge must be accepted by individuals and by nations as a fundamental human right. The right to space a family can determine the health, not only of the mother, but of the whole family. Is my right hon. Friend satisfied with the British Government's response to requests for help in this direction? The requests are increasing. What further measures will be taken, if my right hon. Friend is not satisfied? Will he tell the House of the progress being made concerning the population bureaux and the setting up of people with experience and knowledge of this subject so that we can send them to the developing countries at their request?

This aid must be given, not only hand in hand with, but to a greater extent than, aid in food production. At the moment there is no prospect of a growth in agricultural production sufficient to accommodate the rising flood of people, quite apart from the moral aspect that every woman wants to give every child born into the world some reasonable expectation of survival and some hope of living in dignity.

It seems hypocritical and unrealistic that the debate has reached this point without anyone having mentioned Biafra. This is an urgent, practical opportunity for the Government to provide desperately needed aid in the form of food, money and medical supplies. Public opinion has been roused by stories of starving Biafra. Unless there is an early cease-fire in Nigeria, a large part of the 7 million Ibo people beseiged in Biafra will die in the next few months. The deaths will occur mainly among children under 10 and pregnant women. Two hundred thousand Ibos died in October and 300,000 in November, mainly from protein deficiency. After next January the death rate will rise even more steeply when the people will also suffer from carbohydrate deficiency.

Let us transfer the well-meaning intentions of this debate into practical deeds. Or are we content simply to send arms there and not aid? One week before Christmas the International Red Cross will suspend its airlift to Biafra for lack of money. It needs £1 million to keep the planes in the air carrying food and medicine.

If this was a political airlift with political consequences, we could be sure that it would be treated with top priority by the British Government. It would rank as an international crisis among the great Powers. Fewer than 12 aircraft have been used in Biafra, but in the Berlin airlift in 1948 supply planes were landing and taking off at the rate of one every 90 seconds round the clock. When Rhodesia cut off Zambia's oil supplies, the airlift of fuel to Zambia by the R.A.F. cost Britain over £3 million.

What on earth is the point of a Ministry of Overseas Development if it is left to Oxfam and to the Disasters Emergency Committee to launch appeals in the national Press for funds to save the Biafrans? The public have never been so aware as they are today of the problems of the under-developed countries. One week of Christian Aid Week produced £800,000. The apathy which used to exist has been replaced by concern, largely due to the revelations of television, the radio and the Press. The young are more interested than ever. In April this year, the youth movements of the three main political parties combined to launch a campaign for increasing aid and trade to the developing countries. I should like to see more propaganda in sixth forms and among school leavers about the work which they can do overseas.

But money is not always the most effective form of aid. I was recently able to visit Peru, where I attended the Inter-Parliamentary Union conference at Lima. Plainly, in that country skilled experts more than monetary aid are needed, particularly in agriculture and technical education. It is a barren infertile land where the expectation of life is only 49 years.

It is said that we are short of doctors in Britain, but we have one doctor to every 830 people. Europe has more doctors than the rest of the world put together. On the other hand, in Morocco, for instance, there is one doctor to every 10,000 inhabitants.

I urge the Government to provide a far greater proportion of our overseas aid through the United Nations and its agencies. The United Nations can operate more economically in development work than any single national Government can. We all agree that national rivalry, prestige and political propaganda should not, in an ideal world, have a place in aid programmes, but we know that they have. In Uganda, I visited an extremely expensive girls' school provided entirely by America. On all the language machines in large characters one saw the Stars and Stripes and the legend, "This is a present from the United States Government".

Assistance given through the United Nations would free the recipients from the idea that aid is conscience-money paid by the rich to the poor. Furthermore, so vast are the problems facing the under-developed countries that they can be solved effectively only at an international level.

6.2 p.m.

Mr. John Farr (Harborough)

I hope that the hon. Lady the Member for Halifax (Dr. Summerskill) will forgive me if I do not follow the tenor of her speech exactly. My time is limited, and I wish to direct attention to a form of aid which was mentioned by my hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney) en passant, namely, the Commonwealth Sugar Agreement.

The Motion refers to aid to underdeveloped countries. In my view, it is often far more valuable and more conducive to self-respect to provide assistance by way of beneficial trade agreements with under-developed countries. This is what the Labour Government did in 1949 and 1950. The Conservative Government followed in 1951, adapting the Labour Government's plans and putting into operation the highly successful Commonwealth Sugar Agreement which has worked effectively now for nearly 20 years.

Many people think that the Commonwealth Sugar Agreement is a form of untrammelled and generous assistance from this country to the territories which produce the sugar, but nothing could be further from the truth. The Agreement has a two-fold function: the British housewife has the benefit of a certain guaranteed amount of Commonwealth sugar every year, and the Commonwealth producer knows that he can market a certain amount of sugar each year at a reasonable and fair price. The Agreement has worked brilliantly for many years. In 1961 and 1962, the world price of sugar soared to £80 or £90 a ton, yet the Commonwealth producers stood steady by the Agreement and continued to send their sugar to this country at the Agreement price of £43 a ton.

I have given an undertaking to my hon. Friend the Member for Essex, South-East (Mr. Braine), who is to wind up from our Front Bench, and I shall not transgress that undertaking. My concluding word is to urge both sides of the House, and the two Front Benches in particular, to remember the vast import- ance of the Commonwealth Sugar Agreement. There are difficulties in negotiation now. Let us renew the Agreement. Furthermore, let us think of extending it to other commodities.

6.5 p.m.

Mr. Bernard Braine (Essex, South-East)

I join those who have congratulated the hon. Member for Norwich, North (Mr. Wallace) on his good fortune in the Ballot, on his wisdom in selecting the important subject of aid and development, and on the manner in which he introduced it in an excellent speech which has led to an interesting and thought-provoking debate.

I agree with the hon. Gentleman that it may seem to be odd to some that we should be discussing how to give away substantial resources at a time when we are massive borrowers on our own account and are in the grip of serious economic crisis. Is it not a fact, one might ask, that the Americans, far wealthier than ourselves, are cutting their aid to poorer countries? Why should we not stop giving money away to other countries at least until we have repaid our debts?

Precisely because questions like that are being asked, I warmly welcome this debate. For it provides us with an opportunity to examine the whole question of aid, or as I prefer to call it, development assistance, to identify its purpose, to study its effectiveness, and to judge it in relation to the needs of both developed and developing countries alike.

Here, I pay tribute to the thorough and painstaking work of the Estimates Committee, whose admirable Report gives us so much valuable information and clears away so many misconceptions. In this connection, I pay tribute also to the late Sir Andrew Cohen, a great public servant who will be much missed.

True, the Committee was precluded by its terms of reference from pronouncing on aid policy as such. It could not say whether our aid should be increased, reduced or even abolished. It was limited to considering whether the present arrangements fulfilled the avowed purposes of the aid programme. The Committee's conclusion is clear: … the British aid programme is on the whole well conceived, well administered, and is fufilling its objects. There has been a marked improvement in its effectiveness since the formation of the Ministry of Overseas Development, and future trends are encouraging. All of us who follow these matters will endorse those words.

If, therefore, I have some criticisms to offer, it is not because I doubt the wisdom or necessity of a British contribution to development assistance but because there is so much to do at home and abroad with the limited resources at our disposal that we must scrutinise carefully how those resources are used.

The first requirement, surely, is to put the whole human predicament in some sort of perspective. I should be the last to minimise the grave difficulties facing the advanced, developed and relatively wealthy nations of the Western world. Plainly, as we have said on this side many times, it is a precondition of our being able to help the poorer nations, which constitute some two-thirds of the human race, that we put our various houses in order. But I sometimes doubt that there is even a glimmering of understanding of the appalling dangers which will confront mankind if the present gap between rich and poor in the world is allowed to grow wider—and, make no mistake, in relative terms it is growing wider all the time.

In a most interesting speech, the hon. Lady the Member for Halifax (Dr. Summerskill) spoke of the world's population growth. At present, the total world population is about 3,400 million, half of whom are poor indeed. By the end of the century, if present trends continue, the figure will be nearer £7,000 million. With every year that passes, the world population increases by an amount greater than the whole population of these islands. Within the next 30 years, most probably sooner, the human race must adapt itself to a numerical increase equal to that which has occurred since the beginning of time up to now, or it will face a catastrophe of unimaginable proportions. The world cannot be allowed to drift along without special effort being made to head off that threatened disaster.

I believe profoundly in the truth of Pope Paul's dictum that "development is peace". It is imperative that a sustained and massive effort is made by all the developed nations to accelerate economic growth in the poorer countries while there is still time in which to do it. In short, the poorer nations are faced with a time-scale the significance of which is not yet fully grasped by the mass of people in developed countries such as ours, where present affluence gives vastly more room for manoeuvre, induces appalling complacency, and tends to obscure the long-term dangers for all mankind.

Now, I am not particularly impressed by the argument as to whether it is our moral duty to provide aid or whether we should consider it only in the light of self-interest. That argument may even frustrate the cause of development. It tells us nothing about what sort of aid is needed, how much, and how it should be channelled and administered. As I have often said, the word "aid", with its overtones of charity, may itself be leading us down the wrong turning. For it does not readily convey the real intention, namely the provision of selective help in promoting economic growth of a kind which in the end benefits both donor and recipient alike, and, through them, the world at large.

I agree with the hon. Member for Eccles (Mr. Carter-Jones) that what is needed is a tar clearer idea of the purposes of aid and the criteria which should be rigorously aplied to both its giving and receiving, instead of the confused argument about whether the motivation should be one of conscience or one of plain self-interest. Why is there such confusion? One reason may be that the United Nations Development Decade was launched without a proper preliminary assessment of the real needs of the situation. As a consequence, methods of giving aid have all too often been haphazard and uncertain. Methods of utilising it have sometimes been wasteful. There has been too little coordination of programmes and projects. There has been an acute shortage of that skilled management which alone can ensure that resources are used to the best advantage. As one hon. Member said, loan terms have been imposed with too little regard to the capcity to repay, and until recently far too little attention has been paid to population control, though it is only fair to observe that the population explosion is caused not merely by a higher birth rate but by a higher survival rate, and there is nothing that we can do about that.

Against that background it is not altogether surprising that a cynical attitude has developed towards aid in the richer countries and a bitterness in the poorer countries which threatens what to many of us has been the most promising development in the post-war world, namely the recognition that the gap between the richer and the poorer nations was unhealthy and dangerous, and should and could be bridged to the advantage of all.

But none of this is an argument against development assistance. Rather is it a complaint about the joint failure in many instances to deploy resources as efficiently as we and other donor nations might have done. Indeed, as the Estimates Committee's Report makes plain, where aid has been properly applied notable results have been achieved. Hitherto, we have heard about the failures; we have taken little note of the successes. Of course, it is true that gross national product per head is rising much faster in the richer countries than in the poorer. The richer countries, on average, added about seven times as much to their income per head last year as the poorer countries did to theirs. But such global comparisons are misleading, because the good performance of some developing countries is offset by the far less successful efforts of a few very large countries where massive population growth tends to offset the benefits of any additional wealth that is created. I shall never forget Mr. Nehru's sad lament to me in 1963, when I led the British Parliamentary Mission to India, that because of the population explosion his country had to run very fast not merely to stand in the same place but to prevent herself from slipping back.

On the other hand, when we look at individual cases we see instances where development assistance has been producing most encouraging results. Within the Commonwealth, Kenya and Pakistan are striking examples. Outside it, Taiwan and, I believe, South Korea have now reached the point of take-off, where they can dispense with foreign aid altogether. As the President of the World Bank said recently, no doubt with such instances in mind, Let us make no mistake: aid does work; it is not money wasted; it is sound investment. Obviously there are lessons to be learned from this varying pattern of experience. But what are they? Why is it that some developing countries do better than others? Is it because they are more sensibly governed? Is it because they give more encouragement to the private sector? Is it because they steer clear of prestige projects and concentrate on the less spectacular, but much more vital, task of improving their agriculture'? Is it because they have attracted more multilateral aid, which most authorities seem to think gives more flexibility in planning development programmes? Or is it because—and nobody has mentioned this so far—that some countries have received a greater volume of aid per head than others, which has enabled them to plan more boldly over a longer period?

Is there special significance in the fact that countries like Taiwan, which have received vastly more aid per head than India, have grown faster and have reached the point where they can dispense with aid altogether So far, no authority has tried to find convincing answers to those questions. The Estimates Committee's Report helps to spark our thought in this direction, but so far there are no convincing answers. That is why we should warmly welcome the World Bank's decision to set up its own Commission of Inquiry under the distinguished chairmanship of Mr. Lester Pearson, with a view to examining past aid efforts and devising more effective techniques and policies for the future. But this does not absolve us in the House from the responsibility of evaluating our own aid efforts.

I agree entirely with the suggestion of my hon. Friends the Members for liar-borough (Mr. Farr) and Dorking (Sir G. Sinclair) that we should have an annual report. The Estimates Committee was rightly very critical of the lack of clarity in our statistics. For example, in paragraph 12 it says that the gross amount of official aid spent in the current year will be some £227 million. But if' we assume that the amount of money returning in amortisation and interest on past loans will be similar to that for 1966–67, the net cost comes out at £170, million. Of course, that is on the debit side of our national accounts. Of course, it is money found by the harassed taxpayer; it cannot be conjured up from any other source. But although it is difficult to quantify the benefits, these are considerable, and I shall refer to them later.

Even so, in the sense that aid is a straight transfer of resources from donor to recipient, it is clear that our programme is smaller than it is made out to be. On the other hand, if we are to include the return on loans we should also regard private investment overseas, which performs an indispensable rôle in promoting economic growth, as part of our total effort to speed the economic development of the poorer countries. One cannot have it both ways. Yet as far as I can discover the figure of £227 million is nowhere stated by the Ministry of Overseas Development, and despite the many detailed and helpful statistics that it publishes it is not immediately apparent, for example, how much was spent on the 75 per cent. subsidy to overseas volunteers or on the payment to retired officers of former British colonial territories. We should like to know what those figures are. I put these amounts at £1 million per annum on volunteers and over £12 million on pensions and compensation. I hope that the Minister will confirm or correct these figures when he replies.

Thus the Report is right to recommend that the Ministry should consider ways and means of giving Parliament and the nation more accurate information about the full cost of the annual aid programme, together with an assessment of our commitments for future years. Nevertheless, if I take the sense of the debate, it would be wrong to view the matter purely in budgetary terms. To those who question the wisdom of a country like ours, saddled as it is with a serious burden of short-term indebtedness, having an aid programme of any kind, my answer is that Britain is a net creditor on overall overseas account. Our future prospects are bound up inextricably with the extent to which world trade expands, and it is with the future that aid is predominantly concerned. Essentially, it is concerned with long-term objectives.

Mr. William Molloy (Ealing, North)

this could apply to the whole of Europe. Europe is a fantastically rich continent. Asia is fantastically poor. Is not the real problem the crazy, barmy international monetary system, which we have not been able to bring under proper control?

Mr. Braine

I agree with the first part of what the hon. Gentleman has just said. I thought he was going to lead in another direction. Most western European countries have a good record in regard to aid, as good as we have. I thought he was going on to argue that there should be greater international cooperation. There is a great deal already, but not enough. But here I am talking about the case for Britain continuing to make a contribution. Any active economic organisation lends and borrows at the same time, and to the extent, therefore, that loans or even grants are likely to promote future economic growth and future business, these are good investments.

As to future prospects, there are few countries which stand to gain more than Britain from policies designed to raise the living standards of the poorer countries since we do a higher proportion of our international trade with them than is the case with most of our competitors. It is because of this peculiar trading pattern that the bigger and the more widespread the international aid effort, the more the British economy benefits. I understand that, though we are currently providing about 8 per cent. of all aid from Western countries, our share of aid-finance and exports to developing countries is about 13 per cent. Contrary to a widespread belief, the benefit is most marked where untied aid is concerned, particularly in the case of projects financed by the International Development Association.

It is clear then that we, like the developing nations, have a direct interest in the maintenance of a sustained international aid effort. We on this side have supported the Government's policy of pledging renewed assistance to the International Development Association. Unhappily, there still seems to be some doubt about the replenishment of the resources of this worthwhile institution due to uncertainty about the intentions of its principal contributor, the United States. I say no more about that, but hope that the right hon. Gentleman will say something about it when replying to the debate.

I endorse wholeheartedly the Estimates Committee's recommendation that the scope of the activities of the Commonwealth Development Corporation should be widened. I agree entirely with what the right hon. Gentleman the Member for Kettering (Sir G. de Freitas) said on that score. Here is a proven instrument of development which gives assurance that resources will be sensibly applied. I hope, therefore, that the right hon. Gentleman will be able to tell us whether the Government propose to implement the recommendation of the Report regarding the Corporation.

There are those who say that what the developing nations need is trade, not aid. Such a phrase has a very respectable ring about it. But in the context of development it is misleading. I will tell the House why. While aid is no substitute for healthy and expanding trade, it does not necessarily perform the same function. If all developed countries were prepared to liberalise their commodity agreements, if we were able to expand such arrangements as the Commonwealth Sugar Agreement—I agree very much with what my hon. Friend the Member for Harborough said about that Agreement—to cover a whole host of commodities, we should not need to attach so much importance to aid. If all developed countries were prepared to abandon subsidies and other forms of protection for their domestic products, this would undoubtedly encourage the exports of developing countries, which would expand their earnings and thus reduce their need for aid. But U.N.C.T.A.D. showed clearly—if anyone had any doubts previously—how far away we are from a sensible trading pattern of that kind. Moreover, the crying need of the developing countries is for infrastructure development and technical assistance now in order to diversify their economic activities, thereby accelerating change and providing the precondition for self-sustaining growth.

Admittedly, the pace of development in these countries will be determined, as it was in our own, by the attitudes, the values, the skills, and the institutions of their people, and in many instances these have to be changed, and changed dras- tically. That is why aid must embrace not merely economic development but education and training if it is to do the trick in time having regard to the time scale which I mentioned earlier.

Mr. Carter-Jones

The hon. Gentleman has been speaking about aid and trade. But aid and trade are not mutually exclusive. Surely lie will agree that frequently they are complementary.

Mr. Braine

Of course. Aid properly applied in the economic field can do a great deal to improve the trading performance of a country. One must see the two together. I was endeavouring to answer the point that some people make, that what these countries need is more trade, not aid. I entirely agree with the hon. Gentleman: the two are complementary.

This brings me to a point to which we Conservatives attach great importance. In our view, it is a mistake to draw too sharp a distinction between official aid and private investment. The Estimates Committee's Report emphasised the vital part which private investment can play". That is almost an understatement when we consider that the flow of private investment accounted for some 40 per cent. last year of the total flow of financial resources to developing countries.

The Report echoes in this sense what was said by delegate after delegate at the recent Commonwealth Parliamentary Conference in the Bahamas in the course of a debate on economic growth in the Commonwealth—that their countries need, and welcome, the idea of more private investment.. I would have wished that the Committee had gone further on this. One can understand, however, that it was hedged in by its terms of reference. But it is no use paying lip-service to the partnership rôle which private investment is playing and can play in many developing countries. Investment overseas must enjoy an atmosphere of mutual trust if that partnership is to flourish.

It is astonishing to me that there should be so much reluctance on the part of the Government to seek to conclude investment-safeguarding agreements with developing countries when so many of our main competitors have done so. More than 90 such agreements have been concluded since 1958, but Britain has concluded only one. Why? Germany, United States, Japan, Australia, France, Denmark and Norway all provide Government guarantees to their own investors for non-commercial risks. Holland, Sweden and Switzerland have such schemes under consideration. Why not Britain?

I wonder whether this reflects lack of liaison between the Ministry and the Board of Trade or whether it is deliberate policy by the Treasury to discourage private investment overseas. Whatever the reason, it is the Opposition's view—shared, I suspect, by some on the benches opposite—that it is a short-sighted attitude which militates against the best interests of the developing countries.

It is often said that development is about people and by people. We can be proud of the fact that our country provides a very large number of technical experts in developing countries. I have seen them at work all over the world and one cannot fail to recognise their tremendous contribution to development and growth and to the improvement of the quality of life wherever they serve.

On our side we also want to pay warm tribute to the British volunteer programme, to the 1,500 or more young people serving under that programme with such great enthusiasm all over the world. I have seen them in Botswana, Lesotho and Borneo. Everywhere they go they are a credit to our country. They are carrying on that tradition of voluntary social service which is one of the greatest glories of our British way of life.

But we must not rest on our laurels. I understand that some developing countries, whilst grateful for the work done by these young volunteers, nevertheless would prefer to have more qualified people staying for longer periods. That is understandable. I hope, however, that this attitude does not in any way diminish the scope for young people and that the right hon. Gentleman will say something about this.

There should be far more frequent discussion of this subject. This has been a fascinating debate. It has ranged widely. It has been impossible for all those who wanted to take part to do so. There is a great variety of experience in the House and it should be heard. Surely it is in the interests of all to clear away current misconceptions about aid and to show it as it is—an instrument which can do much to better the lot of the poorer peoples of the world now and which, in the longer term, will benefit all nations. Development assistance, sensibly applied, is as good a recipe as any for making the world a safer and a saner place in which to live.

6.33 p.m.

The Minister of Overseas Development (Mr. Reg Prentice)

Speaking as a Minister who always prefers to be under pressure to do more, I welcome the fact that we have had such a vigorous debate and that so many right hon. and hon. Members on both sides have wished to speak and have made such well-informed contributions. My hon. Friend the Member for Norwich, North (Mr. Wallace) has joined the small and select band of right hon. and hon. Members who have won first place in the Ballot for Motions and have chosen this subject for debate.

1 claim to be the last but two in that roll of honour, having initiated such a debate in May, 1963. I think that two other hon. Members have fulfilled the same functions since then until today. So I accept the Motion gladly on behalf of the Government and join in the congratulations to my hon. Friend on the way he spoke and on the great sincerity which he displayed.

My hon. Friend has timed his Motion better than I and the other two hon. Members timed theirs, in that this debate is taking place so soon after publication of the Report of the Estimates Committee. Naturally and properly, a great deal of the debate has been about the Report and I want to refer to several aspects of it.

The debate confirms what is said in the last paragraph of the Report, in which the Committee gives enthusiastic endorsement to the aid programme, pointing out that it not only contributes to the development of the recipient countries but also that it considerably benefits this country in terms of good will and trade and that, by helping to bridge the gap between the richer and poorer parts of the world, it is contributing to stability, which is in the interests of the whole world.

That is a simple truth which all of us in this House at the moment would accept, and there is no need for me to labour it. But it is still not sufficiently widely appreciated in the country as a whole, and it is the job of all of us who share these views to proclaim them to our fellow citizens as vigorously as we can.

Sir G. Sinclair

It is important that the public should be correctly informed. I do not believe, however, that these efforts are leading to a bridging of the gap but that they are stopping the gap from widening faster and further. We must recognise this fact.

Mr. Prentice

I think that that is a fair correction of what the Estimates Committee and I have said, but my intention—and, I assume, that of the Committee—was to suggest that, if the gap were allowed to widen without an attempt to bridge it, the prospects for world stability and world peace would be very grim indeed.

The Motion is not controversial in any sense and I welcome what my hon. Friend states in it about the rôle of the voluntary organisations and the work of young people. One of the most encouraging things l have seen in the fairly short period in which I have been Minister of Overseas Development is the clear evidence or increase of interest and activity in the subject. The meetings which are held throughout the country—in universities, by the councils of churches and by various voluntary bodies—are getting larger and more enthusiastic attendances than even a year ago. This is something which all of us who believe in aid will welcome.

There is growing support for organisations already well established, such as Christian Aid, Oxfam, War on Want and others. There is also the growth of new bodies—the local World Poverty Action Groups and a number of bodies of young people such as "Unfed", "Youth Against Hunger", the "Haslemere Group" and "Young Abolitionists". Many of them are restless and impatient, quite naturally, and they all have an enthusiasm which I welcome. Many of the best of our citizens, compassionate and humane, are working for this cause and their ranks include a growing number of young people.

The other part of the Motion to which I want to refer is the reference to the new U.N.C.T.A.D. target. My hon. Friend does well to remind us of that target. As he has said, compared with the old target it is a shift from working to 1 per cent. on a basis of national income to that of the basis of gross national product, which has raised the target for us and for others by about one-quarter, so that we and other nations which fulfilled the 1 per cent. target under the old definition for some years are now failing to fulfil the target under the new definition.

As far as one can work it out, in the present year we are likely to achieve 0.8 per cent. But it is difficult to work this out because such things as the details of the private flow of capital do not come in until later. I can only repeat what I have said before—that I cannot be specific about the year in which we shall fulfil the new target. It depends upon the progress we make in dealing with the balance of payments problem, and this was recognised at New Delhi when we committed ourselves to using our best endeavours to reach the new target as soon as economic circumstances permitted. This is a commitment of this country and other countries which are not now reaching the target.

It is because there is this degree of uncertainty about the future performance of aid donors generally, not just Britain, that I support those who have welcomed the appointment of a commission under the chairmanship of Mr. Lester Pearson. I had the privilege of meeting him a fortnight ago and listening to some of his ideas on this subject, and I found it a most refreshing experience. There is now a case, for reasons given by the hon. Member for Essex, South-East (Mr. Braine), for a stringent stocktaking by an independent commission looking at the performance to date, at the success stories and the failures and the reasons for the successes and the failures, and then drawing from that experience lessons to guide the nations in the years ahead. I should like to take the opportunity to say how much I welcome the fact that the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) is to be a member of that commission.

I think that the whole House would like to congratulate the Sub-Committee on its work. It held many meetings and listened to a great deal of evidence which, as the hon. Member for Aldershot (Sir E. Errington) properly pointed out, was technical and complicated. The members of the Sub-Committee undertook an arduous journey at what in the countries they visited was the hottest time of the year, and they did a remarkable job. The details of their recommendations are being most closely and urgently studied within my Department, and we shall comment on them in detail in the usual way by presenting a White Paper in due course.

May I also join those who have paid tribute to the late Sir Andrew Cohen? Anyone who reads not merely the Select Committee's Report but the evidence which it took, particularly in the early stages, will read the views of Sir Andrew on so many of the matters which were raised. They gave fresh evidence, if we needed it, of his great clarity of mind and his great dedication in this subject. He was one of the most outstanding public servants whom this country had in the post-war period. He made a tremendous impact on our colonial policy in Africa some years ago, and in recent years on the formation and development of the Ministry of Overseas Development.

Perhaps I may say that the Ministry comes well out of the Report. There are criticisms, as one would expect, and I want to mention some, but the Report concludes that the formation of the Ministry has been helpful to the administration of overseas aid and has improved our performance in terms of getting the maximum value for the money spent—I mean value in terms of actual development on the ground. It is a conclusion which I am naturally glad to have on the record, and I think that it is an important conclusion. May I say to those who have expressed fears about take-over bids that I face the future with reasonable self-confidence? Hon. Members will have noted the recent reply which my right hon. Friend the Prime Minister gave on this subject. The Ministry is certainly to continue in its present form.

I turn now to some of the points raised in the Report and also mentioned in the debate. I apologise in advance to hon. Members who have raised matters which I do not cover. I accept that in the presentation of statistics there is an element of confusion, but there is almost bound to be. There are a number of different elements all of which have to be mentioned. We have spoken constantly of the basic aid programme of £205 million, which was the figure for last year, for the current year and for the ensuing year. However, the Committee drew attention to the fact that other items have been added.

One of the difficulties about translating that into an overall figure is that it is difficult precisely to gauge the timing of these extra items. For instance, the migratory aid to Malaysia and Singapore, which, of course, is related to the military withdrawal from the area, totals £75 million to the two countries, but the aid is to be committed over a period of five years, and in practice it will probably be spent over a period of rather more than five years. The programmes are being discussed with the two Governments concerned and certain decisions have been made and certain money is beginning to flow, but it is difficult to allocate it to annual amounts.

In a way, it is more accurate to speak, as we still tend to speak, of the £205 million programme with these certain additional items. I told the House in July that I thought that the total for the current financial year would be about £225 million, but I now think that the total will be rather less than that because of the delay in ratifying the I.D.A. agreement. I should not like to put a precise figure on this at the moment, although it is still true that we have this basic programme plus additional items.

Sir E. Errington

Does the right hon. Gentleman appreciate that the concept of pledging, which is very important, requires explanation in some form of pamphlet?

Mr. Prentice

I am anxious to see that the House and the public get as clear an explanation of the situation as possible. I am suggesting that whatever figure is taken as being the aid programme, there are inevitably qualifications to be made of one sort or another about the precise total.

Hon. Members have mentioned the return flow of capital and interest of development loans, now totalling about £60 million a year. This should certainly be seen as part of the total picture. For the normal reasons of public accounting, we do not present Estimates in the form of a net figure in cases like this. The gross figure of payment out appears, and payments back appear elsewhere. We have to accept that there are reasons for that, but certainly it should clearly be understood by those who study these matters that the return flow is an important part of the picture.

A number of hon. Members have spoken of the importance of multilateral aid and have asked for greater emphasis to be given to this form of aid. That is very much my own policy and that of the Department. I agree that the percentage should rise, but it should rise by stages. It would be a mistake to over-load the capacity of the various multilateral agencies all at once. It is a matter of getting greater emphasis and a greater proportion into multilateral aid year by year, and in recent months we have taken a number of decisions to that end. We have played a part in getting a higher commitment to I.D.A., a commitment for the three-year period 60 per cent. above the old figure, and Britain was prepared to go to a still higher figure if other countries had agreed.

We have recently increased our pledge to the United Nations development programme and to a number of smaller programmes. Last year, the proportion of our aid going in multilateral form was about 11 per cent. and this year it would be 15 per cent. if the I.D.A. Agreement had taken full effect as we planned. I cannot give the figure now, because there is some uncertainty, to which I shall refer, but it is a shift by a policy decision from 11 per cent. to 15 per cent. in the form of multilateral aid.

I welcome what has been said about the Commonwealth Development Corporation, which was mentioned particularly by my hon. Friend the Member for Norwich, North, the hon. Member for Aldershot and the hon. Member for Dorking (Sir G Sinclair). I agree that it is desirable that the Corporation should be able to engage in activities in a wider list of countries. The Report suggests that it should be active in India, Pakistan and Ceylon. My only reservation about that is that if it is to have any major impact in countries of that size, it would need much larger additions to its capital than will be possible in the next year or two. What we are thinking of is a more immediate line of progress which might be possible if its activities spilled into countries adjacent to countries where it is already active.

I can tell the House that legislation is under consideration. At the moment I cannot say more than that; I cannot give a date. However, the legislation is under consideration and it is intended to extend the powers of the C.D.C. to operate in other countries. I will keep the House informed on progress. Incidentally, the allocation of C.D.C. is up this year. It was slightly over £9 million last year, and is £10 million this year, which shows again the importance of this aid, despite the overall ceiling.

I agree very much with those who have spoken about the importance of agricultural development. We are already giving more emphasis here. We must remember that in all our aid programmes we are engaged in helping countries to pursue their own economic development, and most of the countries concerned are self-governing. Therefore, on a government-to-government basis what we do has to dovetail in with their development plans.

What has been happening over the last year or two is that developing countries, donor countries and the multilateral agencies are all trying to put a greater emphasis on agricultural production and on rural development as against urban development. This is a very wide generalisation, and the needs of each developing country are separate. I would not want to condemn industrial development in all cases. We are engaged in a race between resources and population, and the only thing that I would say today is that while there is no room for complacency, equally there is no room for despair.

Statistics of food production in recent years show a growth which is a hit ahead of population growth. I do not say that in any way complacently, but merely to show that we must not allow ourselves to get into a state of despair about the future. We now know a great deal more about the ways in which agricultural production can be increased. There is now no technical barrier to a much faster rate of growth of agricultural production than we are now seeing. New types of seed have been developed in certain areas for wheat, rice and maize which offer great opportunities, provided they are combined with good husbandry, fertilisers, water supplies and proper market opportunities. All these things are needed in order to get the sort of break-through in agriculture. There is reason to be hopeful about the future, although no reason whatever for complacency.

I welcome what the hon. Member for Halifax (Dr. Summerskill) said about family planning. If she asked me whether I am satisfied that we are doing enough here I should say that I am not. We are doing rather more than many other countries to bring this subject on to the international agenda. She has mentioned the work carried on at the United Nations by Lord Caradon. My hon. Friend the Parliamentary Secretary, who led the delegation to the Commonwealth Medical Conference in the summer, also made sure that this matter was discussed. As she knows, we have recently established a Population Bureau within my Department, to be the centre of our knowledge on this, and to give advice, and to try and find ways of improving our help in this important subject.

My hon. Friend the Member for Eccles (Mr. Carter-Jones) mentioned the importance of consultancies and feasibility studies. May I give the House some figures to show the importance that we attach to this. In 1964–65 we were spending £260,000 on aid in this form. Last year it reached £600,000, and this year it will be more than £1 million. We are putting great emphasis on this, partly because we now see quite clearly that this is a very effective form of technical assistance for the developing countries, and partly because there is often a commercial advantage to be gained indirectly as a result. We are in close touch with the Board of Trade, following up Lord Cromer's recommendations. The hon. Member for Essex, South-East asked me about the latest position on the replenishment of I.D.A. As he knows, the agreement does not become effective until sufficient countries have ratified it; the United States Congress, the last Congress, did not ratify it, and we will look forward to action being taken on this by the new Congress in the new year. Meanwhile, the President of the World Bank has made certain proposals for the interim replenishment of I.D.A. so that it has some funds with which to carry on.

Canada, Sweden, and Italy have recently responded to this and have pledged part of their share of the replenishment that would have been due under the agreement. I can tell the House that this matter is now receiving the urgent and sympathetic consideration of Her Majesty's Government. I cannot announce a decision today, but it is being considered very urgently. It is also being considered in many other donor countries. The House will appreciate that this is a matter in which, if it is to work effectively, a number of countries ought to be expected to come forward, not merely Britain.

I very much agree with the reference made to the importance of our technical assistance effort generally, and of the volunteer programme in particular. The hon. Member for Essex, South-East said that he understood that there was a demand in the developing countries for a large number of qualified volunteers and that volunteers should serve for a longer period. The British volunteer programme is working along these lines and proportions are changing from year to year.

In this respect, it is obviously important that those who go as volunteers should have something to contribute of direct value to the country concerned. The younger and unqualified ones have something to contribute, but clearly if a larger proportion had qualifications, then even greater value is obtained from this programme. This shift of emphasis is taking place. I can tell the hon. Member for Liverpool, Wavertree (Mr. Tilney) that we are studying what was said at Question Time recently about the importance to private investment, and particularly what was said about investment guarantees.

There is no lack of liaison between O.D.M. and the other Departments on this, and we are having discussions with them. It is fair to point out—and this is not simply a Treasury point but one which we should all recognise—that it is difficult, at this particular moment, for the British Government to encourage an increase in private investment overseas. The importance of the developing countries has been recognised in the sense that the measures taken by the Chancellor and his predecessor on private investment overseas have not been applied to developing countries within the Commonwealth.

It is very difficult at this moment to take steps that will lead to increased private investment in the immediate future. Nevertheless, this is a matter which we are studying and not only in this country. We are taking part in the World Bank consultations designed to produce a scheme for an international investments guarantee plan.

There are many other aspects of this problem on which I would have liked to have spoken. I have been torn tonight between my duty to give a full report and my duty not to take up too much time because other hon. Members want to speak. May I express the hope that hen. Members on both sides who have shown such an active interest this afternoon will follow this up at Question Time, and in whatever other way can be devised for debate, because I certainly share the wish that this subject should be frequently debated in the House. In the not too distant future this subject will have to come much more into the centre of the political stage.

It is not a subject that normally hits the headlines, but it is one of the really vital subjects of our time. It is part of the process of achieving a civilised relationship between the richer and poorer countries of the world. This civilised relationship has to include efforts by us to help the developing countries to help themselves. We have to see this not just as a temporary charity but as a permanent and essential part of our overseas policy.

Mr. Braine

Before the right hon. Gentleman sits down, can he say what he intends to do about the recommendation that his Department should produce an annual report?

Mr. Prentice

My decision on this will come out with the White Paper, which I promised the House, on all the recommendations of the Select Committee.

Question put and agreed to.

Resolved, That this House recognises the value of the contribution made by voluntary organisations, the work of young people and the Ministry of Overseas Development and its associated organisations in the field of aid to under-developed countries; is of the opinion that continued aid to under-developed countries constitutes a vital factor in achieving a stable peaceful world; and calls on Her Majesty's Government to achieve the new target for the transfer of resources adopted by the United Nations Conference on Trade and Development at New Delhi early this year, as soon as the balance of payments permits.