Clause 2 (Hansard, 5 July 1968)

§ Mr. Prentice
I beg to move Amendment No. 3, in page 3, line 34, leave out 'any such body' and insert 'the bank'.
The Amendment is to make it clear that the institutions concerned are regional development banks, as referred to in line 17 of Clause 2 and defined in subsection (2). This is a purely drafting Amendment.

§ Mr. Braine
I beg to move Amendment No. 6, in page 3, line 42, leave out 'any region of the world' and insert: 'any developing country as defined by the United Nations'. The Committee will recall that on Second Reading I expressed the view that the provision in Clause 2 for the Minister to make a contribution to a regional development bank—as defined in subsection (2)—was far too wide. The subsection reads: In this section 'regional development bank' means an international financial institution having as one of its objects the promotion of the economic development of any region of the world. That seemed to us to imply that the provision applied to development anywhere in the world. It made no distinction between developed and developing countries, and it hardly seemed to us to be in line with what the Bill is designed to do, namely to bring aid to the developing or poorer nations. That is why the Amendment seeks to make it clear that we are concerned in the Clause with "developing countries", as these have been defined by the United Nations. In short, it seems to me that in order to justify taxpayers' money being invested in any regional bank, economic development should be the main and not just one of the bank's objects, and that it should be concerned specifically with developing countries.
1955 I appreciate that the explanation may lie in the fact that existing regional banks have constitutions or articles of association which lay down a number of objects or purposes, and that if we were to seek in our legislation to define what should be their main objective or purpose, we might be in difficulties, not merely over interpretation. Nevertheless, the debate today has made it clear that all aid activities are coming under much more critical scrutiny than ever before. I am sure that the Minister agrees that it is right that that should be so.
It is right, too, that we should be as precise as possible when we consider the provision of aid money. We do not wish to see taxpayers' money used in circumstances in which, given the right kind of encouragement, normal private investment would flow. It is our view that official aid, whether bilateral or channelled through a multilateral agency such as the I.D.A. or the regional development banks, should be devoted to infrastructure projects—to the creation of conditions which encourage normal economic growth. It is right, therefore, that Parliament should be very wary of any general power to invest in any regional development bank anywhere in the world.
I agree that there is a safeguard in that, if the Government wished this country to become a member of a particular bank, Clause 2(1) offers us the opportunity to examine both the objects and the purposes of the institution in detail when the Order comes before us for affirmative Resolution. That is all right as far as it goes, but such an Order would come before us only after the Government had made a decision, and I submit that it is essential that the principles involved are understood now while the Bill is going through the House. That is the purpose of the Amendment.

§ Mr. Prentice
The hon. Member for Essex, South-East (Mr. Braine) moved the Amendment in his usual reasonable was—so reasonable, in fact, that he gave most of the reasons why I must ask him to withdraw it or, failing that, for hon. Members to reject it.
There is no difference of principal between us because our intention in seeking these powers is that we should be able to assist economic development in 1956 developing countries. I am, therefore, only too willing to concede the point of the Amendment. The difficulty about the wording of his proposal is that it could possibly lead to some doubt about whether the Clause would allow us to operate in cases where, in the view of hon. Members and the Government, we should operate.
As the hon. Gentleman said, the regional development banks often have a list of objects. Indeed, of those development banks that already exist, the purposes and functions that have been included among their objects are the social development of members, the preparation of projects, the financing of investment, the promoting of investment by private capital, the provision of technical assistance, the promotion and orderly growth of foreign trade, the promotion of regional co-operation and so on.
There might be some difficulty of interpretation if we were tied down by the wording of the Clause in such a way that the object of the bank concerned had to be economic development. We want to draft the provision so that no artificial restrictions are created.
Similar considerations apply to the Amendment in which the hon. Gentleman seeks to deal with the problem of developing countries only. A number of regional development banks have highly developed countries among their members. Sometimes these highly developed countries are in the region and sometimes they are further afield. For example, the Asian Development Bank has among its members the United Kingdom, the United States, Australia, Belgium, Canada, Denmark, Germany, Italy, Japan, the Netherlands and New Zealand. The Inter-American Development Bank's largest member is the United States itself.
Where a developed country is geographically located in the region which the bank is designed to serve, its constitution would generally not preclude that country from the benefits available from the operations of the bank, even though in practice it would not be expected to benefit in the sense of receiving direct financial assistance from the bank. We do not want to run into any possible difficulties of interpretation, and for this reason I cannot accept the Amendment.
1957 The hon. Gentleman said that there would be a safeguard in the sense that we could never have authority to provide funds for the purposes of Clause 2 without submitting an order to the House and without it coming within the affirmative procedure. This will ensure that the House has a clear opportunity of examining the purposes we have in mind.
As I said at the outset, there is no difference of principle between us on this issue. It would be our intention to use these powers for the economic development of developing countries, and I hope that, in the light of this explanation, the hon. Gentleman will withdraw the Amendment.

§ Mr. Braine
In view of the reasonable explanation of the Minister, and since he seems fully seized of the importance of the motive which led me to table the Amendment, I beg to ask leave to withdraw the Amendment.

§ Mr. Onslow
In speaking on this occasion, I intend to set a model of brevity which both Front Benches may wish to emulate.
I take this opportunity to emphasise the essentially open-ended nature of the commitment which we are being led into in the sphere of aid. We are told that the sums to which we may be committed are unknown. At the same time, we are taking steps which will minimise the power of Parliament to control those sums. This is a blank cheque element in overseas aid with which hon. Members should be familiar. We should recognise how often we are giving blank cheques to meet demands which are insatiable.
This point is quite insufficiently debated, because very often we get the counter-argument from the protagonists of aid that there must be more aid: that where it has succeeded there must be more, and where it has failed there has clearly not been enough. That is one of the reasons why I think the House should fully debate the fundamental issues involved.
1958 The Minister was, I suppose I should say, predictable enough to have attacked me for speaking on this subject without making reference to the great moral issues involved. It is an odd thing that this is a subject on which one should apparently never speak without making reference to the great moral issues, but, since he invites me to do so, I shall gladly comply, because his response and that of some of his hon. Friends to the purely practical points I put was very revealing.
It is my experience, and I have had some experience of criticising the work of the aid protagonists over some years, that aid has a very powerful and vocal lobby. I remind the Minister that a great many people make their living out of aid. That is quite as important in this context as it is to remember that there are a great many people whose livelihoods depend on what can be done for them. The two things are not necessarily the same.
Even though that may be condemned as a sophisticated argument, I want to remind the House of some of the things I said and of some of the arguments I did not use. I did not use the groundnuts argument, and I did not use the gold bedstead argument. That is easy enough to do, but that is not the kind of ground on which I seek to attack aid. Again. I could probably have spoken much longer and so made it very much more difficult for the Minister to get his Bill today, but I have not tried to do that.
What I am seeking to do is to promote in the open forum a debate on the real issues involved. At the risk of being called a 20th century Scrooge I will still do so, because my desire is to see that the aims we set ourselves are achieved. There are two aims. The first is to do what it is always the duty of hon. Members to do—to protect the interests of the people they represent, who are the taxpayers. The second is one that we share as members of the human race, which is to do the best we can for one another. I attack the whole concept of aid because I believe that it is a positive barrier to the achievement of the second aim. I do so because I want to see more progress made.
I believe that the philosophy of aid, the bureaucracy of aid, the motivation 1959 of aid givers is a direct burden upon the potentiality for progress of people all over the world. I could produce much evidence in support of that view. It puts power into the hands of bureaucrats in under-developed countries. It makes their positions very covetable, but it does nothing for the poor, wretched peasants, and it is on behalf of the poor, wretched peasants as much as the British taxpayers that I seek to argue.
The Minister says, as many people say, that one is immoral if one attacks the concept of aid. I do not concede that point. Neither he nor I become more moral because some of the money we pay in taxes has to go on aid—

§ The Temporary Chairman (Sir Barnett Janner)
Order. The hon. Gentleman is straying somewhat far from the Clause. I would ask him to come back to the Question, That the Clause, as amended, stand part of the Bill. The hon. Gentleman is at present making more of a Second Reading speech.

§ Mr. Onslow
I do not think that I am the first to have strayed marginally out of order today, Sir Barnett, but I shall seek not to offend again.
The purpose of the Clause as a whole is to undertake an unspecified commitment in funds to various organisations which will use those funds for aid and it empowers the business to be carried on in a certain way. I attack this. The hon. Member for Portsmouth, West (Mr. Judd) is not here today, but on Second Reading he attacked one development bank as being preoccupied with quick returns. If there is anything to be said for a development bank it is that it should be preoccupied with returns and the quicker the better.
3.30 p.m.
If we are ever to close the gap between the haves and the have-nots, there are two ways of doing it, but we may agree that it should be done as quickly as possible. In this Clause we are presumably attempting to promote economic progress, which we all want. I do not yield paramountcy to the Minister on this, but I believe that there are two ways of closing the gap. We can either make the have-nots into haves or the haves into have-nots. The way which the Minister chooses and which the Clause 1960 and the Bill adopt and which the hon. Member for Oxford (Mr. Luard) would prefer, is a redistribution of taxation on an international basis.

§ The Temporary Chairman
Order. I must ask the hon. Member to speak to the Clause. He is going far from this in the argument he is adopting. This is a question about the regional development bank. If he speaks on that and explains how what he has been saying so far can be related to that, he will be in order but that I cannot see.

§ Mr. Onslow
If you had allowed me to go on for another three words, Sir Barnett, I think I could have explained it. The regional development bank is one of the vehicles for a redistribution of taxation on an international scale.

§ Mr. Luard
Will the hon. Member allow me to interrupt him, as he has referred to me? He is trying to develop the argument that economic aid is not necessarily in the economic interests of people who receive it. Will he explain this?

§ The Temporary Chairman
I am sorry, but the hon. Member for Oxford (Mr. Luard) is pursuing, or rather replying, to an argument which itself was not in order. If the hon. Member is referring to regional development banks and the Clause itself, that is an entirely different matter.

§ Mr. Luard
I am referring to regional development.

§ The Temporary Chairman
Regional development banks.

§ Mr. Onslow
It would seem more profitable if the hon. Member and I were to continue this discussion outside. If we continue it here I think we would both be out of order.

§ The Temporary Chairman
Outside the Chamber hon. Members may do what they like, but when they are speaking in the Chamber they are under the direction of the Chairman and I have to seek to protect the House.

§ Mr. Onslow
I am sorry, but if I replied to the intervention that would lead me further astray.
My interest, and that of my hon. Friends who have also criticised aid, is 1961 that we should seek to do the best we can. We criticise development banks and other establishments of aid on the ground that they do not do the job as well as we think it could be done.

§ Mr. Prentice
The hon. Member for Woking (Mr. Onslow) was wrong in suggesting that this is an open-ended commitment. No funds can be voted under this Clause unless an Order is presented to the House and is approved by an affirmative Resolution of the House. Therefore, of course, the House at that time can consider the Order and, if it thinks fit, it can reject the Order. Any provision, therefore, will be under the control of Parliament just as all the funds used for aid are voted by Parliament in one form or another.
I shall not pursue the hon. Member on this issue, except to say that I was not accusing him of being immoral. I may have said that he was amoral and was not giving sufficient consideration to moral issues, but I would be out of order if I pursued that further.