HC Deb 01 July 1968 vol 767 cc1245-66

Order read for resuming adjourned debate on Question [28th June], That the Bill be now read a Second time.

Question again proposed.

11.27 p.m.

Mr. Frank Judd (Portsmouth, West)

In resuming our debate on the Bill, all of us who are concerned about the subject would like to express our appreciation of the extra time which has been found for the debate. We are sad that the extra time had to be found in this way, in a scramble at the last moment. It is our belief that the subject is not receiving the degree of attention which it deserves, and, as has been shown not only in the context of this debate, but in the context of what happened in the last debate on overseas aid and development, it is clear that we ought to be thinking more about the possibility of establishing a Select Committee which, among other responsibilities, could look at this important sphere of the Government's work.

There are two other reasons why I welcome the Bill. First, the International Development Association has established beyond doubt an outstanding record of achievement in development work. Secondly, the fact that the Government are presenting the Bill to the House is yet another piece of evidence of the Government's commitment to the overseas aid and development programme. No one should underestimate the degree of respect and admiration which has been won both abroad and in this country from articulate leaders of opinion by the stand which the Government have made in their determination, following devaluation and the economic measures subsequently introduced, not to cut down the aid and development programme beyond the impact of devaluation itself.

We ought to recognise that the Bill has fairly moderate objectives, because the operation of replenishment aims to raise a total of only 1,200 million dollars —about 400 million dollars annually— whereas not very long ago George Woods, while still President of the World Bank, pointed out that in terms of absorptive capacity the developing countries were in a position to use effectively 1,000 million dollars per annum over the next few years.

It must be observed, in connection with the Bill and the operation of replenishment, that the proposals in effect must be endorsed by the United States Government. I hope that the Minister will give an assurance that even if this endorsement is not forthcoming, Her Majesty's Government will take a lead in making a stand to ensure that the operation of replenishment for this vital organisation succeeds in at least some form. In reviewing the relevance of the Bill and the operation of replenishment, we must consider the matter against the background of a number of vital considerations in the whole approach to development these days, and I will refer briefly to eight of these vital considerations.

First is the motivation, or attitude, of the Governments of the recipient countries, an aspect which we do not often consider. I am referring to the sort of lead which has been given by the Government of Tanzania, who pointed out in their Arusha Declaration that external assistance, whatever its form, cannot of itself guarantee development but that development depends in the final analysis on the will and determination of the peoples and Governments of the territories concerned to see progress and that external aid must be judged according to how it fits in with that will and determination.

In view of this significant breakthrough in thought about development and the lead given by the Government of Tanzania, I am perplexed by the decision of Her Majesty's Government to cancel all aid and technical assistance to Tanzania. Apart from the issue of pensioners, and on this we seem to be continuing a scheme which has no virtue and which should have been revised long ago, it seems that a social democratic Government are standing on their head if they are not giving priority in their development programmes to co-operating with a Government who are committed to such a philosophy of inter-dependence and are putting so much stress on self-reliance.

Secondly, a vital consideration at present when considering the whole sphere of development is the problem of loans, and this is not unrelated to my first point. With the vast deadweight of capital and interest repayments round the necks of so many developing countries, their motivation and will for development is being crippled because their Governments and peoples are increasingly feeling that they are working harder all the time simply to pay off old loans. We must seek a solution to this problem.

Thirdly, we must consider in depth the question of tied and untied aid. When considering countries which are at a critical stage of evolution, it is extraordinary that we, the developed countries, should be working out with them policies for development which are forcing them into making economic decisions on anything but sound economic criteria. Unfortunately, these developing countries are being forced into patterns of economic activity through tied aid which are distorting the growth of their economies.

Fourthly, the lack of co-ordination in the development of a country too often, through unco-ordinated aid coming in on bilateral programmes, causes fragmentation in an economy at a time when there should be harmony. Too often there are unrelated, separate programmes of aid arriving from sources of origin thousands of miles away which pay lip-service to the principle of local planning Ministries or Departments but which basically yet again distort the economy because they are not being co-ordinated into practical, overall economic programmes based on the priority needs of the country.

Fifthly, of vital importance in the development of a country is the need for a greater emphasis on regional development. There is the need for infrastructure and trade within regions of Africa, Asia and Latin America.

Sixthly, we must look at the need for longer term planning. At the moment, many developing countries go through great difficulties because they are not able to plan with confidence in the long-term, as they are so dependent on the annual budgets of the donor countries, on the fluctuations in the financial well-being of those countries—as we have seen with the case of Tanzania—on the political relationships with individual donor countries. We must look at this aspect, because if we are talking in any real sense about assured development in developing countries those countries must be able to plan with some longer-term certainty.

Seventhly, if we are to have any sense in the programme at all we must look at the vital need for the export earning potential of the developing countries. It is nonsense to be involved in giving aid and technical assistance if we are to deny those countries as they develop the opportunity to export their goods and materials.

Finally, we must look at the need to get the right balance between labour intensive and capital intensive development, and here the whole philosophy of intermediate technology is vitally relevant.

Looking at these considerations, and others could be mentioned, we can immediately demonstrate the proven value of the International Development Association. The Association provides a forum in which the developing and the developed countries can participate together. There is a sensible distribution of the demands made upon the developing and the developed countries. The developing countries are only asked to make 10 per cent. of their contributions in convertible funds.

Here we have an operation in which it is seen that the developing countries have their part to play, and are expected to play it. Also, in this operation we see a forum for objective and sensible interplay of the experience of the developed countries with the felt needs and views of the developing countries. We also clearly see in I.D.A. a means whereby the loans to which I have referred can be made available on sensible and not on crippling terms. Incidentally, we also see a system which establishes a fair basis for contributions by the developed countries themselves.

In I.D.A. we see the machinery for co-ordination to avoid the fragmentation I have mentioned. We also have the effective and authoritative framework for sound competitive tendering for projects to make sure that the developing countries are not being lead up the garden path in this respect.

Here, immediately, are some proven advantages of I.D.A., but we should put on the record four reservations about the present situation. First of all, what is very sad in this operation of replenishment is the insistence of the United States on tying all its contribution. This is a retrograde step, and we should make it clear that we are very unhappy about it. Secondly, we must accept that whatever we do in respect of the replenishment of I.D.A. we must match it by a determined effort to move forward from the last U.N.C.T.A.D. in terms of progressive policies on tariffs so that we really open up markets for the developing countries.

Thirdly, we must look at the degree to which I.D.A. and other agencies have, perhaps, tended to concentrate too much on capital intensive projects, and see how it could work more effectively on labour intensive projects as well. We must accept that complementary to any operation of this kind is the need for technical assistance—that is to say, the education and preparation of manpower to build up in any developing country the local resources necessary to make it genuinely able to manage its own economy.

The Bill refers to regional development banks. These have a potentially very significant part to play in regional development, but the potential of the African Development Bank and the Asian Development Bank is far from being fulfilled. The African Development Bank, at the moment, has virtually no resources and the Asian is preoccupied, unnecessarily perhaps, with a quick return on capital investment. There is need for great effort on the part of our Government to see these problems overcome.

In generally welcoming the Bill, we would do well to remind ourselves of the objectives of aid and why the Bill and replenishment of I.D.A. fit so well into the programme. Two primary objectives must be to see developing countries reaching genuine independence and reaching as rapidly as possible the point of self-generating economic growth. If we accept that these are laudable aims, a question which is frequently asked is: can we afford it? If we argue for aid and development in terms of charity, something we do to help other nations at our own expense and which we can afford to do only when we are relatively well-off, people may argue that in time of economic difficulty it is rather odd to be concentrating on aid programmes and giving them the priority which the Government continues to give to them. I think that these traditional charitable concepts are misleading and not very sound. As a nation, we cannot afford not to give high priority to aid and development.

We have seen in recent months, perhaps more clearly than ever before in Britain's history, that we are utterly dependent on the international community for our economic well-being. As a trading nation which for its prosperity and for maintaining, let alone increasing, its standard of living, is dependent on the economic well-being of the international community as a whole we have to build up world purchasing power. Paul Hoffman has argued that in his days in industry he had always said that it was nonsense to set aside less than 4 per cent. of one's annual budget for market development. At this juncture, this is something which Britain has to take extremely seriously. It is not only that we want to build up world purchasing power, but, as a country so dependent on world stability, we have to try to lessen tensions. Probably one of the most fundamental tensions in the international community in the immediate future, and stretching beyond it, will be the problem of the gap between the affluent and the less affluent sections of the world's population. The majority of the world's population, which is less affluent, is increasingly aware of this gap which separates it from the privileged minority of which we are a part.

The majority of the world's population, the under-privileged, happens to coincide in broad terms with the coloured section of the population. We have seen the tensions and the potentially explosive forces represented in racial conflict. Not only in terms of building up our markets in the long-term, but also in terms of overcoming the basic tensions which could undermine international stability, we have to give priority to closing this gap. If we do not achieve this, the uncertainties surrounding the future of the international community will very directly affect our well-being.

For these reasons we have a very simple answer to those who argue that because of our present economic position we should be reviewing how much we are doing in terms of aid and development and that we should not be doing so much. We should say to them that if we are to avoid a recurrence of the sort of situation we are in at the moment in an even more aggravated form, we must give aid and development the highest priority. For this reason, if we look at our dependence on the international community, in our conduct of foreign policy, we shall have to work increasingly through international organisations.

For another thing which we have seen clearly in recent months is that we are no longer a great imperial power, able to police our interests alone and able to go round the world ordering things as we would ideally like to see them. Therefore, we must club together with other nations to work out our destiny in terms of practical interdependence. It is for that reason that a Bill such as this, concerned with giving practical support to one of the most effective international agencies, is so much to be welcomed.

11.45 p.m.

Sir George Sinclair (Dorking)

I join those who have from both sides of the House supported the Bill and given it a warm welcome. The International Development Association has now a fine record of success behind it. I believe that, even in a time of financial stress, it is right that Her Majesty's Government should support the replenishment of the funds of the I.D.A. at the proposed higher figure. I am glad that the Bill has complete support from both sides of the House. At a time when Britain is hard up for funds, it is right that our own people, should know that the funds we are able to transfer to developing countries through I.D.A. are being properly used and are serving, not only the developing countries but also—here I agree with the hon. Member for Portsmouth, West (Mr. Judd)—our own long-term interests. The skill with which the I.D.A. has managed its funds and chosen its projects should be a reassurance to those who are responsible for putting the Bill before the House and seeking additional funds.

I believe that the speech made by the Minister last Friday, when I was away in another country, established good ground on which those who believe in aid could stand against disillusioned attacks on the whole principle of aid. The work of the I.D.A. is a success story. I believe that we should give more publicity to it, not only in general terms, but in some description of the projects that it has made possible—the real advances in the infrastructure of many developing countries that have been financed through this fund.

Apart from the sucess of the projects themselves, there is the valuable procedure—the careful vetting of the projects put forward, the discussion between the Association and the developing countries and the joint agreements on how schemes shall be carried out.

The other feature which I think is probably the most important of all is that projects under I.D.A., are jointly financed. They cannot be undertaken unless the receiving country itself puts a high priority on the project and is prepared to pay half the cost. This is the litmus test, and it is important, because it means joint involvement. Having myself been involved for a number of years in trying to put in action just this principle that central government funds should go most readily to projects in which those who are benefiting from the schemes are prepared to commit themselves to meeting up to half or even more of the cost, I believe that these I.D.A. programmes have real social benefit; they require involvement of both sides and a bridge of common action between the affluent world and the developing world. This is a range of schemes, under the right kind of administration, which Great Britain should support.

When we add to that the fact that, in recent times, for every £1 spent by Her Majesty's Government on I.D.A. 30s. has come back to this country in orders, we are on firm ground, even at a time of financial stress, in asking our country to support a transfer of resources of this kind.

And so, I strongly welcome Clause 1 of the Bill, which deals with the replenishment of the fund.

Even more, perhaps, I welcome Clauses 2 and 3. They provide for assistance for regional banks which draw on local resources as well as on resources from the developed countries. This is a partnership in action to which all countries involved contribute as they can. Anyone familiar with the working of the Colombo Plan and the attitude it has engendered of exchange of benefits— drawing away from the idea of charity but developing the idea of joint participation in projects in the regions themselves—is bound to welcome the general pattern of careful and constructive support for regional banks drawing upon the resources of the area as well as from the industrialised countries.

I welcome Clause 3 because it brings a financially strong territory, Hong Kong, into the development of Asia, where Hong Kong's great markets may lie in the future. This is in the long-term interest of Hong Kong. It will bring collaboration between that outpost of successful free enterprise and the mixed economies of South-East Asia. That is the kind of partnership which anyone on this side of the House must welcome.

Clause 4 ties up some loose ends in helping to make more attractive and secure the work of some of those who are engaged in technical assistance, one of the most important services which we render today and will be rendering for years to come to the developing countries.

I would ask the Minister to tell us what steps he is taking through the I.D.A. and his aid programme generally for the better co-ordination of public aid and investment from the private sector. These should be considered as part of a total transfer of resources from this country to the developing countries, and one sector should take careful note of what is happening in the other. They should as far as possible be made to support one another. I have been critical—as the Minister is aware—of what was done or rather not done by Her Majesty's Government in consulting private enterprise on the spot in Singapore and Malaysia at the time when we were considering the terms of compensatory aid after the planned withdrawal of our armed services from Singapore and Malaysia. There, I believe, we failed to secure a proper co-ordination of the opportunities of private enterprise and the programmes of public aid which were being discussed. This lack of consultation could lead to waste and to loss of opportunities for free enterprise, on which the return on overseas aid largely depends.

The terms of aid have already been fully dealt with. I agree that we must be careful about the terms we offer, especially for capital-intensive projects, so that aid is made effective and does not produce a growing burden which the countries cannot pay off without wrecking their development programmes. The hon. Member for Portsmouth, West dealt with the problem of planning our aid ahead. We should, I believe, commit ourselves for four to five years ahead in these programmes. This is important to the receiving countries. We should be prepared to bind ourselves, as certain other countries are already doing, to a progressive movement towards achieving the new and increased U.N.C.T.A.D. target of 1 per cent. of our gross national product in total aid to the developing countries. We should commit ourselves for four to five years ahead to an increasing programme until we meet that target. It is of great assistance to the developing countries if they can rely for four or five years ahead on a stable and measurable amount of aid coming not only from the international agencies but though bilateral aid, which must always play a major part in the transfer of resources.

I agree with the hon. Gentleman that I.D.A. funds should no longer be concentrated on capital-intensive infrastructure projects, but should now take greater cognisance of the overwhelming needs of the agricultural sections of most developing countries. The developing countries themselves are increasingly coming round to this point of view. Technical advances in agriculture by the use of water, improved seed, fertilisers and new techniques of cultivation are making possible advances in the supplies of food which are of crucial importance not only to the health of these countries but to their internal stability and the saving of foreign exchange through doing away with the need to import food.

With our great experience of agriculture overseas hon. Members can still offer a great deal of technical assistance here. I hope that not only through bilateral aid through the public sector but also through the I.D.A. we shall put greater emphasis on helping agriculture in the developing countries. I join in the plea that the Intermediate Technology Development Group, in which, once again. I declare an interest, should be given rather more robust support by the Ministry than they have given up to now. I am sure that the Minister and the Parliamentary Secretary are now both well aware of the impact of this movement, which is winning wider and wider support in international circles. It has an important contribution to make where perhaps progress can still be most spectacular—in the agricultural sector and in the rural areas, helping people at very little cost—this is the essence of the scheme—to raise their own standards of living.

I welcome the Bill and would encourage the Minister, who has fought a strong battle at a time of great domestic difficulty in Britain, to persist in his efforts to keep up the level of aid. In particular, I hope he will succeed this evening in increasing the funds to be put at the disposal of the International Development Association.

12.1 a.m.

Mr. John Lee (Reading)

I join hon. Members on both sides in welcoming the Bill. I echo the words of my hon. Friend the Member for Portsmouth, West (Mr. Judd) in expressing gratitude to the Government and the Chief Whip for providing extra time for the debate. It is interesting to see how an upsurge of wrath quite impartial in its ideological origins should have produced this situation. But it is only fair to say that the Minister and the Chief Whip gave way graciously, and that I think the House has been the gainer for what has happened.

I express profound gratitude because when the package deal was brought before the House last January overseas aid was spared the axe. I can say this as one who spent most of last week staying out of my normal Lobby and on one occasion voted against it. In spite of my dislike of package deals, this was one of the factors which put me in the Government Lobby last January at a time when there was considerable controversy about the subject.

As to the scope of the scheme, we were treated to a very critical speech at the end of the debate on Friday, and there seemed to be a threat of others. The hon. Member for Shipley (Mr. Hirst) spoke rather slightingly of the scheme. At the same time, he drew attention to one or two problems that excite legitimate criticism. He drew attention to the paradox of our own position as a debtor nation borrowing short term in many cases and lending long, not a procedure which commends itself as being financially sound. He also drew attention to the paradox of the situation whereby money is being provided for the Government of India and a specific portion of which is to repay interest on loans of capital previously provided.

One must accept that this is a criticism, but it is only a peripheral matter. Most of us would say that, although these paradoxes are tiresome, to concentrate on that kind of criticism is to lose sight of the important aspects of the programme. Hon. Members on this side of the House are grateful to the hon. Member for Essex, South-East (Mr. Braine) for his very sympathetic and generous aproach and the helpful speech that he made, which commended itself enormously tho those of us who have an interest in these matters. If he excited a little displeasure from some of his more Poujadist hon. Friends, I hope that he will bear their strictures with fortitude.

I agree with the suggestion by my hon. Friend the Member for Portsmouth, West that there should be a Select Committee to investigate and supervise the disbursement of overseas aid from this country. If we cannot have an adequate debate on overseas aid more than once in two years—which seems to be the case—the least we can hope for is a Select Committee at a time when the House is gradually proliferating Committees.

I welcome the provision in Clause 4 of the Bill in relation to pensions. It will help to do what one is always hoping will be done in this country. It will make it easier for people to transfer from one occupation to another. There has been much talk of the desirability of people being able to move to and fro between the Civil Service and industry and of the need for greater trans-ferability between the home and overseas Civil Services. This would benefit both the country and those involved by providing them with a wider range of experience. It has been said of the Civil Service—and the Fulton Report confirmed it—that it is narrow in outlook. This proposal should provide a countervailing influence and widen the interests of civil servants.

The hon. Member for Essex, South-East suggested some kind of analysis or stock taking of the progress made with overseas aid in the last 20 years. I am sure that we would welcome that. In accepting terms, no doubt the results in many cases have not been as great as we hoped or expected. But this cannot be said in general. Although criticisms, which I do not echo but understand, have been made of the aid programmes in general, I do not think that, in this case, it can be argued that the aid is not subject to the most stringent control that the most fastidious accountancy mind would demand, and it is not a bad thing that in some areas of aid there should be financial discipline.

A sharp distinction should be drawn, therefore, between aid of an emergency kind, such as that offered by Oxfam, and the kind of economic aid designed to strengthen the economies of the recipient countries. This distinction was drawn long ago at the time of the Macpherson Report on Welfare in the West Indies, just before the Second World War. I looked up Andrew Shonfield's book "Attack on World Poverty", published seven or eight years ago, in which he said that we are more likely to make the greatest impact by concentrating our aid upon those countries nearer to the point of break-through.

Sir G. Sinclair

indicated dissent.

Mr. Lee

I think that there is a case for saying that, at any rate, given our limited resources, one would rather like to see it concentrated in the areas where the greatest impact is likely to be made. This is in complete contrast with the situation of the Commonwealth Development Corporation, whose assistance is, for obvious reasons, spread over a very wide range of countries and projects such as those concerned with hotels, tourism, and airports, which are not so easy to justify as the kind of aid included in this programme.

Sir G. Sinclair

Would not the hon. Gentleman agree that the Commonwealth Development Corporation itself exercised just the kind of scrutiny which is exer- cised by I.D.A. and as over as wide a range of projects, but nevertheless brought a reasonable return to this country, enabling it to go on financing new projects, and did this very successfully in territories far from take-off point, but at the stage of being most in need of help?

Mr. Lee

Yes, I would accept that. I was not criticising its lack of financial discipline. I am glad that the hon. Gentleman has given me the opportunity to correct that impression. I think that it was a matter of too many projects in too many places. If he thinks that that is too harsh a criticism, perhaps the hon. Gentleman will accept that there is an argument for it.

But I agree that, despite the unhappy start in many ways, the Commonwealth Development Corporation has done yeoman work in many places and has been able to provide assistance which has been genuinely economically useful. I should add, in fairness, that since its more recent activities have been concentrated on a number of island communities —and the great majority of the few dependent territories left within our control are, of course, of that category— it is only natural that its activities should be directed to tourism, and so on, because there is very little else to be done.

Nevertheless, in the context of the Bill, we should be thinking about aid which has a wider impact, not necessarily or specifically about the Commonwealth aspect, and it would be right for the aid to be concentrated on countries where, on the whole, the greatest impact is likely to be forthcoming.

On Friday, the hon. Member for Essex, South-East drew attention to the extraordinarily wide terms of reference of the regional banks which seem to permit them to invest in countries far from being under developed. This is an absolutely valid and pertinent criticisim. I should like to take up this argument and say that we would be in a better position to assist countries overseas if we could control capital movement much more than we do.

Hon. Members on the left of my party have made the criticism that we have lacked capital control. That criticism has been largely directed to the fact that the absence of these controls has hazarded our economy even more than has been avoidable, but one could add the further criticism that, because capital has been allowed to be taken out and invested in developed countries like Australia and New Zealand, that has denied the more deserving countries, in this context, capital which they would otherwise have had.

Mr. Braine

The hon. Gentleman is dealing with a most interesting subject. Is he aware that it has recently been asserted by the C.B.I, that the return on capital invested in under-developed countries is marginally higher than the return on capital invested in developed countries, and that there seems to be considerable advantage in encouraging the flow of private investment to underdeveloped countries?

Mr. Lee

I am delighted to have that support. The hon. Gentleman and my hon. Friends below the Gangway and I may be able to get together.

The free convertibility of sterling which the Conservatives disastrously introduced about 10 years ago has not helped us to control capital movements, but this is not a particularly partisan occasion and I am grateful to the hon. Gentleman for his assistance. However, the hour is late and it is appropriate that I draw my speech to a close.

I hope that this scheme will not be stultified by the requirement that the 12 nations shall make 950 million dollars available before it gets off the ground. When the Parliamentary Secretary replies I hope that he will be able to say something about this. The crucial date for this to be implemented is very close. If we do not have any news of ratification by sufficient nations to form a quorum for the agreement, there will have to be a lot of rethinking, and maybe some other changes if we are to make the true contribution that we ought to be continuing to make, for the benefit of the under-developed world.

12.15 a.m.

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

The speeches in the debate, partly on Friday afternoon, and partly this evening, have been of two kinds. There have been those of the hon. Member for Essex, South-East (Mr. Braine), my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), and a great deal of the speech of the hon. Member for Dorking (Sir G. Sinclair), which have been largely directed to the specific purposes of the Bill. Other hon. Members quite rightly, took this as an opportunity to discuss wider aid matters, more general than the specific Clauses in that Bill.

I will reply to the second category first, and I shall have to do so more briefly than I would wish since I have a number of specific points related to the Bill to which I must reply. The hon. Member for Dorking explained why he was not present on Friday. If he had been here, I doubt whether he would have used the phrase "complete support of the House" for the Bill. The atmosphere on Friday was somewhat different from that this evening, as my hon. Friend the Member for Reading (Mr. John Lee) pointed out.

The hon. Member for Shipley (Mr. Hirst) particularly attacked the Bill and it was evident that there were other Members opposite preparing to do so. It is worth emphasising, as the hon. Member for Essex, South-East did, that in this matter of the replenishment of the International Development Association's funds, apart from a small minority in the House, there is overwhelming support for the action of the Government, and overwhelming support for the work of I.D.A.

The hon. Member for Shipley, who, unfortunately, is not here this evening, said that this country was in economic difficulties, and therefore we could not afford to help those worse off than ourselves. He illustrated this, when challenged, by a simple exercise in business ethics, by saying that his firm would not have prospered if it had to lend money to customers to enable them to pay the bills sent to them by the firm. I would counter that homely illustration with an equally homely one of my own, from the ethics of neighbourliness, rather than those of a strict business code. If a man is buying his house on mortgage, and is having difficulty in repaying to the building society, this does not preclude him from lending his neighbour a few pounds, if that neighbour happens to be out of work and his children are sick and hungry. This is an analogy on the world scene which we should have in mind. It is true that we as a country need to borrow. But it is also true that many countries would be only too eager to have our problems rather than theirs. We must recognise that in this two-world situation of the "haves" and the "have nots" we are definitely on the side of the "haves", and it is our moral duty to do what we can to help the "have nots".

I am by no means saying that the case for overseas aid rests solely on its moral justification, important though that is. There is a very great deal of mutual benefit in aid giving, and a number of hon. Members have stressed it. My right hon. Friend made this very clear on Friday, as he did even more fully in the debate on 7th May. Therefore, there is no doubt that, as my hon. Friend the Member for Portsmouth, West (Mr. Judd) said, we cannot afford not to give aid.

The only other two general points which I need take up before turning to some detailed points were made by the hon. Member for Dorking, who referred to the need to help agriculture, and by my hon. Friend the Member for Portsmouth, West, who spoke about the need to encourage labour-intensive developments in developing countries. This is a thesis which we have been able to discuss on earlier occasions, and I know that the hon. Gentleman and my hon. Friend recognise where my sympathies, and those of my right hon. Friend, lie. Far be it from me to detract from the credit of the Intermediate Technology Group, to which tribute has been paid. However, a good deal of the work which the Ministry has been sponsoring under other titles is of the same order as the kind of activity which the intermediate technologists urge us to engage in. Much of the work of the Tropical Products Institute is kindred to the kind of projects we are being urged by Dr. Schumacher and his associates to sponsor and encourage.

Relating what the hon. Gentleman said about agriculture to the work of I.D.A., I can assure him that in recent years I.D.A. funds have been increasingly devoted to help both in agriculture and in education, and less to the basic infrastructure on which it perhaps concentrated in its earlier years. Referring to the total I.D.A. commitments up to date, of 1,730 million dollars, about 300 million dollars have gone to agriculture and forestry, and that 300 million dollars has been dispersed within the last three or four years. This emphasises that the policy is directed in the direction which I think the hon. Gentleman would wish.

The other point which the hon. Member raised concerned the coordination of bilateral and multilateral aid and private capital. We are very much aware of the importance of this matter; we are constantly concerned with it. There is co-ordination in the work of the international consortia and the consultative groups under the World Bank. We have in our Ministry an aid co-ordination department which is constantly in touch with other Departments in Whitehall to ensure that in our aid there is the right kind of beneficial mix between Government capital and private capital and technical assistance in the kind of combination which the hon. Gentleman rightly advocated.

I now turn to some of the points raised by the hon. Member for Essex, South-East in his helpful and constructive speech on Friday. Some of the details, as he will recognise, we can take up more readily in Committee. He chided us about a wrong date. I agree that there is an error and I am sure we shall have his support in putting that right.

I can confirm the point he asked, that replenishments will be effective only when at least 12 contributing countries with an aggregate contribution of 950 million dollars have given formal notification of their agreement to this, and the hon. Gentleman will find this set out in paragraph 20 of the White Paper, Cmd. 3599. This requirement emphasises the overriding importance of the American contribution to which a number of hon. Gentlemen have called attention. We must all hope, as my right hon. Friend said, that American ratification will not be long delayed. We certainly want to set what example we can in this House and country, and that I am sure we are about to do.

The picture is not so black with other contributors as the hon. Gentleman feared on Friday. He asked if it were true that only Denmark had so far ratified. We understand that eight countries, including Germany, have already ratified and that two more are well on the way to that point and that their pledged contributions, excluding our own, come to 240 million dollars. This is not what is required but it is an indication of considerable progress so we should not be pessimistic.

I notice that my hon. Friend the Member for Portsmouth, West when referring to negotiations for replenishment, used the word "tying" in relation to the agreement reached. I hope he recognises that he must have been using the word loosely, in that the agreement does not tie I.D.A. funds in the way that we usually use the words "tied aid". My right hon. Friend explained the end-of-queue treatment of contributions on Friday and if my hon. Friend reads my right hon. Friend's speech he will find that we are a long way from having the tying of I.D.A. funds.

On Clauses 2 and 3, the hon. Member for Essex, South-East raised the question of definition of a development bank, saying that the provision was too loosely worded and that this might enable development to go on in North America and Australia and so on. He said that this was a Committee point and I hope that he will agree that we can take it up next week.

On the next point—

Mr. Bernard Braine (Essex, South-East)

There was a point which puzzled my hon. Friend and me. A moment ago, we understood the hon. Member to say that the funds of the I.D.A. are not normally tied, whereas, if he consults col. 1031 of the OFFICIAL REPORT for last Friday, he will see that his right hon. Friend said: The funds of the I.D.A. have always been tied."—[OFFICIAL REPORT, 28th June, 1968; Vol. 767, c. 1031.] I am sure that this is a misprint for "untied" and we should get this straight.

The Minister of Overseas Development (Mr. Reginald Prentice)

I am reported as saying that. I hope I did not, and I have taken steps to have it corrected and the word "untied" inserted in the Bound Volume.

Mr. Braine

I have a clear recollection that the Minister, who speaks with extraordinary clarity on these things, said "untied". The OFFICIAL REPORT is wrong here—and our words here are going to be carefully weighed.

Mr. Oram

We are grateful to the hon. Gentleman for pointing that out. It is important to get it correct.

Mr. Judd

While we are on the point, I should like to get clarification. My remarks referred to the contributions by the United States. I understand that until 1971 the contributions made by the United States must be used in terms of purchases within the United States. This, I understand, is tied aid, but I may be wrong.

Mr. Oram

There is, in that sense, an element of tying in the earlier stages, but the whole of the United States' contribution will be available in a free form within the period of three years. This was explained by my right hon. Friend on Friday.

The hon. Gentleman raised a point on Clause 3 about the guarantees that Britain would be required to give under the articles of the Asian Development Bank. He asked whether it would include Hong Kong. I am sure that he has gathered from the subsequent speeches that Hong Kong is included. Indeed, the main purpose of the Clause is to cover the membership of Hong Kong. Hong Kong wishes to be a member, and by the terms of the agreement Britain must guarantee Hong Kong's subscription. The amount of subscription is currently under negotiation.

The hon. Member thought that there could not be other possibilities than Hong Kong. I assure him that there are two others, Brunei and Fiji. Britain is responsible for the external relations of those two territories. They are both associated with E.C.A.F.E. and, therefore, are potential members of the Asian Development Bank.

The last point raised by the hon. Member on the Bill was the reason why it was expected the Clause 4 would not require any extra money. The point is that Government expenditure under this pensions scheme relates only to the Ministry's corps of specialists or technical assistance officers while they are in Government service, and the Clause in no way increases the number of these people who will be employed. It simply includes people from the Channel Islands and the: Isle of Man as people who are qualified to serve in this way. It does not increase the numbers and, therefore, does not increase the funds which will be needed.

The hon. Gentleman raised the much broader question of responsibility for overseas pensions. He recognised, I think, that the Bill does not by any means directly affect this question. As he said, this is not the occasion to go into this matter in detail. I assure him, however, that my right hon. Friend has recently given careful reconsideration to this issue but has not felt able to bring about any change of policy in this matter. A major difficulty is that we are operating within a well-known stringent aid programme, and to take over responsibility for pensions would involve either finding new aid money, which in present circumstances, regrettably, we cannot find, or taking it out of the existing programme. This would mean that we would almost certainly need to rob poor nations to relieve richer nations of responsibilities which, at present, they are able to fulfil.

The only other point that I need make in reply concerns Woods' appeal for a "grand assize". The hon. Member for Essex, South-East asked for a British initiative in this. He said that my right hon. Friend had often uttered sympathetic noises, but he wanted something more forthright than that. I can offer not much more than sympathetic noises tonight, but I would make this point and I am sure that the hon. Gentleman will recognise this. If this concept of a grand assize is to have real value, it must be, and must be seen to be, over and above Governments. It must be independent of Governments. We therefore welcome the fact that it was the then President of the Bank who made the suggestion, and we feel that it is right that the initiative should come from there. It is our duty to indicate, as we have done, that we welcome this initiative from the Bank and that we should willingly co-operate in the work of this grand assize, but we feel that that is how it should be formed, with the initiative on the side of the Bank all the time.

I welcome the speeches made tonight and on Friday which described in general terms the high value of the work of the International Development Association. The hon. Member for Essex, South-East, in particular, spelled out some of the Association's achievements and the soundness of the principles upon which the Association works. I join him thoroughly in that commendation. It is because my right hon. Friend and the Government see great value in the work which I.D.A. does that we confidently ask for the endorsement of the Bill by the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. loan L. Evans.]

Committee this day.