HC Deb 26 April 1971 vol 816 cc24-6
34. Mr. Tilney

asked the Secretary of State for Foreign and Commonwealth Affairs whether the Government have yet decided on the measures to be taken to encourage private investment in the developing countries.

Mr. Wood

The Government's decisions are described in a White Paper that is being published today. They include the introduction of a scheme for insuring overseas investment against noncommercial risks, and various proposals for using official aid in support of private investment.

Mr. Tilney

I congratulate my right hon. Friend on adopting a policy which has been urged on successive Governments by some hon. Members for many years.

Will the premium be based on business rather than on political principles, and will it vary according to the treatment of old investment in the developing countries?

Mr. Wood

Questions relating to the investment insurance scheme should be put to my right hon. Friend the Secretary of State for Trade and Industry, who will be concerned in the next few weeks with working out the precise details.

Mr. Prentice

Does the Minister agree that although these proposals might be useful in stimulating private investment, this will still fluctuate, for reasons outside the Government's control, that they are no substitute whatever for meeting the target for official aid approved by the United Nations, and that we cannot guarantee to reach a total flow of at least 1 per cent. of G.N.P. until we reach the target for official aid of 0.7 per cent. of G.N.P.?

Mr. Wood

As the right hon. Gentleman will see when he reads the White Paper, the proposals are directed to increasing the flow of private investment. That in itself must be good, and I think he would support it. Questions about the size of the official aid programme can be tabled, and I shall do my best to answer them.

Mr. St. John-Stevas

Is not the important thing to increase the flow of aid, which the Government's measures are intended to do, and, all things being equal, is it not more desirable to have this flow from private rather than from public sources?

Mr. Wood

My view is that both sources are important and that one can do things which the other cannot.

Mrs. Hart

Will the Minister explain why on this important White Paper, which contains at least two or three new policy proposals, one of which we very much welcome—the proposal for investment insurance is sensible; as he knows, it was under study in our time, but the others are distinctly controversial—he has not chosen to make a statement so that we can question him thoroughly, and will he indicate to the Leader of the House that this is an urgent reason for a debate on these matters?

Secondly, by what criteria will developing countries be defined for the purpose of pre-investment help and official budget aid for infrastructure as outlined in the White Paper? Will they be the countries to which we give aid—[HON. MEMBERS: "Too long!"] Mr. Speaker, if the Minister chooses not to make a statement when he issues a White Paper—

Mr. Speaker

Order. That is not good enough. The right hon. Lady's question must be fairly brief.

Mrs. Hart

If I may continue to put my second question to the right hon. Gentleman, may I ask by what criteria the developing countries will be defined? Will the countries be those to which we already give aid, or will the criteria be the generally internationally accepted criteria according to the level of income, which would mean that we could be giving pre-investment help to private investment in Greece and Spain?

Mr. Wood

The length of the right hon. Lady's question has demonstrated that there should be an opportunity of debating this matter, perhaps on the Adjournment one night, when I should be delighted to give a reply. My right hon. Friend the Lord President of the Council will no doubt have heard, or will read, her question and will make his decision.