HC Deb 09 June 1971 vol 818 cc1135-98

8.0 p.m.

The Minister for Overseas Development (Mr. Richard Wood)

We come now to the debate on aid. This is not a debate specifically on the report of the Select Committee, but it obviously has a close connection with it and I would like to thank the Committee very sincerely for its work. I am sorry, as I believe a number of us will be, that its first chairman, Miss Herbison, is no longer a Member of Parliament and, therefore, unable to take part in our debates. I and my Department and, I think, the whole House are indebted to her, and to my hon. Friend the Member for Essex, South-East (Mr. Braine), the present Chairman, and those who worked with them, for the penetrating and thorough examination they made. Like other important examinations, this one had for us its painful moments, but my advisers take an admirably philosophic view, and they all assure me that they feel the better for it. It is the purpose of Select Committees, and now indeed for the Expenditure Committee, to make Departments sit up and take notice, and this examination has done just that.

As the House knows, my immediate response to the recommendations has been contained in the White Paper, Cmnd. 4687, which was published last week. The thoughtful and valuable analysis by the Committee of some knotty problems is, I am quite certain, going to influence thinking and action far beyond the scope of any immediate exchanges which we have tonight.

As the House knows, the Second Development Decade was inaugurated at the United Nations General Assembly last year. The strategy was set out and has been widely supported by a very large number of nations, but a great many countries, including Britain, declared certain reservations to it. One item of the strategy was the well-known 1 per cent. target, which is the measure of national net capital resource flows from developed to developing countries. By international agreement this now includes grants by voluntary organisations. To these voluntary organisations we have already paid tribute earlier today.

The voluntary grants from Britain in 1970 amounted to the impressive figure of £17 million. My right hon. Friend the Prime Minister last October announced the intention of Great Britain to do her best to reach the 1 per cent. target by 1975 in the expectation that private flows would go on making substantial contributions. Because of the high private flows both in 1969 and in 1970 we would seem—I think it is almost certain, although final figures are not available—to have reached the 1 per cent. target in both those years, 1969 and 1970. The private flows were unusually high in both those years. We are now taking steps, as the House knows, to increase official aid and also to stimulate private investment in developing countries.

The official aid programme is at present £245 million. In 1974–75 it will be £340 million, which is a 50 per cent. increase over the five-year period and represents a higher rate of growth than almost any other sector. It is obvious that official aid is vitally important because it has special characteristics which make it indispensable to the developing countries.

The Government have no intention, as I have said on a number of occasions, of accepting a separate target for official aid. We attach great importance to private investment as well, and we believe that the mixture between private and official flows will vary from country to country according to their particular circumstances.

The increasing programme makes it possible for us to undertake new initiatives which have not been possible before. We have still to look after dependencies and countries which are desperately poor as well as taking account of our historical links and perhaps historical obligations, but we intend to move into some new areas. We are planning an increasing programme for Indonesia, which I was lucky enough recently to visit. We are trying to develop aid relationships with Latin America, and there are other countries outside the Commonwealth, both in the Far East and and in Africa, where a British contribution would be both welcome and useful.

I sometimes feel that we put too much emphasis on the size of the official programme, important as that is, and too little on distribution and quality of the aid which we give. There are various aspects of this. I am convinced that multilateral aid is likely to form in the future a considerably increased share in the total programme. Immediately after this debate we are going to be considering two draft Orders to de made by my right hon. Friend. These concern at important multilateral body, the International Development Association. Through this association and other bodies we intend to continue to play our full part in making aid available for development.

There is the question also of budgetary aid. It has long been the Government's policy, as the right hon. Lady will know, to try to bring the provision of budgetary aid to an end, and perhaps most because it requires a degree of probing into the affairs of another country which does not always accord very happily with the concept of independence. Budgetary aid has been running down very considerably over recent years, and this can renew our faith in the whole development process. Malawi, I think, is an outstanding example, but there has been similar progress with the three small independent countries in Southern Africa which have been assisted by revision of their customs agreement with South Africa.

Another important aspect of the quality of aid which is now receiving international attention is the extent to which it is provided on an untied basis—in other words, the extent to which it is not restricted to procurement in the donor country. For many years it has been the general view of most developed countries and of developing countries that it would be helpful both to the effectiveness of aid and to international trade if all donors could agree to untie their aid, and Great Britain has throughout taken this view. At a high level meeting of the Development Assistance Committee last September the Government reaffirmed their view that contributions to multilateral institutions should not be tied, and that we were ready to work for agreement on untying bilateral development loans as long as enough other donors agreed. I am glad to say that there has been substantial progress on the form of possible agreement between donors covering full untying of multilateral aid and of all bilateral development loans.

Lastly on the question of the quality and kind of aid we give, I have been convinced since my arrival at the Ministry of Overseas Development, as it then was, of the importance of the technical assistance which we give in a vast number of countries round the world, because one of the most important contributions which, it seems to me, this country and other developed countries have to offer is the sharing of management and other skills which we have been fortunate enough to build up in our own process of development. I have been impressed, during my visits to a number of the developing countries, by the absence of what has been described to me as the human infrastructure and by our own opportunity and ability to fill that gap.

I have already informed the House of my plans for reconstituting the council with the very formidable name, the Council for Technical Education and Training in Overseas Countries, more cosily known as T.E.T.O.C. The object of the Council, as many hon. Members know, is to increase the aid for technical education, management, and practical training in industry. All these, I have found by my short experience, are immensely necessary if we hope to increase local industrial activity, and the Government hope that they will be particularly assisted by our own private investment.

The Chairman of the Council, Sir Frederick Pedler, who has a wide knowledge of industry and commerce both here and overseas, with the reorganised T.E.T.O.C. will build up a professional staff which will be able to estimate more accurately the needs of the developing countries and help to supply those needs in close co-operation with my Department. I have every confidence that the Council, drawing on its practical experience of industry, commerce and education, will be able to deal with what is going to be a very big task.

As the official programme grows and, I hope, as private investment also grows and the two become more closely connected, it is clear to me and anyone who knows anything about the operations of my Department that the aid management responsibilities of my Department will increase. Last March, in a debate on the Consolidated Fund Bill, initiated by the hon. Member for Islington, South-West (Mr. George Cunningham), I mentioned—I hope he thought frankly—the problem of the ability of my Department effectively to spend available money.

The Select Committee and the Public Accounts Committee have also drawn attention to this problem, which has existed for some time. There are two main aspects of it. First, aid programmes have up to now been fixed as gross annual cash sums which can be spent to the limit but not beyond. A total which cannot be exceeded tends not to be a target so much as a ceiling which it is difficult to reach without running serious risk of over-spending. I am glad to see that the right hon. Member for East Ham, North (Mr. Prentice) from his great experience, finds that familiar. Rapid changes which events sometimes force on an aid programme in the course of any one year make it exceptionally difficult to attain a precise out-turn while still maintaining the quality of the aid provided. The second problem is the permanent loss to international development—a point made earlier by the hon. Gentleman—of aid resources if the full programme is not spent in any one year.

In the light of these two difficulties, I consulted Treasury Ministers, and I am able, with their agreement, to announce some improvements. From this present year, subject, obviously, to Parliamentary authority for any necessary supplementary Vote, it will be possible for my Department to exceed the aid programme total for the year by up to £5 million. This should make that total more of a target than a ceiling and will increase our ability to come a bit nearer the target than we sometimes manage to do.

Moreover, Treasury Ministers have agreed that if the programme is still under-spent they will consider proposals, in the circumstances that exist at the time, to make good in the following year a relatively small under-spending which has resulted from the action or inaction of other Governments or international organisations. Normally, this would not be expected to be more than about £5 million in any one year. Again subject to circumstances, I should certainly be willing to consider with other Ministers the possibility of making good a larger shortfall over more than one succeeding year.

I believe that these arrangements will greatly improve the management of the aid programme as well as preserving for development, resources voted by Parliament. I would like publicly to thank those hon. Members who have been advocating courses of this kind, and I hope that the House will warmly welcome this change.

I turn now to private investment. I have already made clear the importance which the Government attach to the growth of private investment in developing countries. There are a great many obstacles in the way of a continuing increase in such private investment. This is one of the reasons why we decided to introduce the Investment Insurance Scheme and to offer where practicable to conclude investment protection agreements with overseas Governments in order to provide a more suitable and acceptable framework for private investment.

Another way we could help the private investor is by providing aid for infrastructure which would be necessary for the success of investment. We have already discussed this with the C.B.I., which has told its members of it, and the first tentative request for such use of British aid funds is being discussed in the Department now.

If this concept is to grow—and it is not new—I would expect to provide aid for purposes of this kind in agreement with the Government of the country concerned and on the normal Government-to-Government basis of official development assistance. We have also decided to adopt the practice of other donor Governments of offering financial support to firms for pre-investment studies of overseas projects. There would be no cost to the Government if the study led to investment, but there would be a payment of up to half the cost of the study if no investment were made. We are now preparing a detailed scheme, and on this and other matters we shall have further talks with the C.B.I, before the final schemes are announced.

I turn now to the Commonwealth Development Corporation. Many proposals in the White Paper covered detailed recommendations of the Select Committee on the subject of private investment. We obviously have been thinking on parallel lines, because we had made considerable progress with our work in the Department while the Select Committee was making progress with its work. Other proposals in the White Paper on private investment cover some of the recommendations which the Committee made on the C.D.C.

All of us—there is no difference of opinion in the House—agree about the immense importance of the Corporation's work. It has an unrivalled fund of experience of work and working conditions in many tropical countries in the developing world and, above all, in the Commonwealth, and its report for 1970, published last month, shows a general increase in new business and overall investments to record levels, I am glad to say, and a valuable spread of business over many countries. As the official aid programme continues to grow, I intend to make available to the Corporation increasing resources and hope to be able to provide it with firm figures for several years ahead in order to make possible long-term preparation and planning necessary for sound projects.

The White Paper saw a further possible rôle for the Corporation which my Department is now discussing with it. Many of the Corporation's investments are already undertaken in partnership with other enterprises, both British and local, but I believe that it has a special rôle in making both expertise and funds available in partnership with British firms with comparatively little experience of the possibilities and problems of business enterprise in developing countries. We hope by this means and by the active cooperation between them and the Corporation to encourage fresh investment overseas by British firms.

I shall now try to put what we are aiming together to do in the broadest possible context. The objective of the official aid programme and private investment taken together——

Mr. J. D. Dormand (Easington)

I am grateful to the right hon. Gentleman for giving way. I left my interruption so late because when he mentioned me I thought he might be dealing with the question of world population. I want briefly to put two points to him because I understand that he is now summing up all the matters with which he has been dealing. As he says, he and I debated this important matter on the Consolidated Fund Bill. I asked him two questions then that he has not dealt with today, although they are relevant to the date. Speaking about the Population Institute, he said that he would be prepared to continue discussion with those concerned who might be interested in the Institute making its home in this country. Has he made progress with that?

Second, as the right hon. Gentleman has today announced an increase in the allocation in several directions of the Government's programme, is he now prepared to say that the £1 million to be expended on solving population problems will also be increased?

Mr. Wood

I am glad that the hon. Gentleman has raised these questions. As he reminded the House, we had a debate about this earlier this year. With the leave of the House, I should like to have the opportunity at the end of the debate of replying to certain points which are raised during the debate.

I will answer now the two questions the hon. Gentleman asked me. First, the discussions about the Institute and where it should be are continuing. Second, the amount of our future aid to population activities will be announced in due course. As I pointed out in the previous debate, it has been gradually climbing, and I hope that it will continue to be so.

The objective of our official aid programme and private investment, taken together, is to quicken the economic tempo in the developing countries and enable them to escape from their present grinding poverty and, by their own efforts, provide a better standard of living for all who live there. The hon. Gentleman is right in saying that the problems are enormous and are made no easier by the rapid increase in population and by increasing numbers of young men and women wanting employment, both in rural and in urban areas.

The justification for our aid programme and the motives for which we give it support may vary from one to other of us. Some may consider it a moral duty; or, as a major trading nation, we may widely judge that an increase in world trading activity, brought about by development aid, is in our own national interests.

I find neither motive more respectable than the other, and I find that both these motives, and perhaps others, are interwoven in my own support for a substantial aid programme. I hope that this support is, and will continue to be, broadly shared by hon. Members who will continue to help me in discharging the final recommendation of the Select Committee, which was To make the aid programme more familiar to the public at large in a form which they can readily understand.

8.24 p.m.

Mrs. Judith Hart (Lanark) rose——

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

If the right hon. Lady has the leave of the House.

Mrs. Hart

With the leave of the House, Mr. Deputy Speaker. This is one of those days when, on a subject on which most hon. Members get too few opportunities to speak, it is necessary for us to ask for the leave of the House to speak more than once.

Reverting to the point raised by my hon. Friend the Member for Easington (Mr. Dormand), there are a number of us who are extremely interested to know what the next contribution will be to the population programme. As I announced the Labour Government's contribution of £1 million last summer, I am eager to hear that this amount is to be increased when the next contribution is made.

I was closely involved in the discussions concerning the Population Institute, as many people know. It will be extremely exciting if the result of all this is that Britain is able to make this part of our contribution towards population research.

This debate is necessarily a short one because of the debate which has preceded it. I welcome what the right hon. Gentleman said about the question of the ceiling and the under-spending and his final arrangements with the Treasury, which should help a great deal in the perennial problem which arises between December and the end of March.

As to the rest of what the right hon. Gentleman said, I know that normally the pattern of debates on overseas aid has been that both sides have been in very general agreement; there has rarely been any sharp conflict. On this occasion I believe that a sharpening difference of approach between the parties on the fundamental question of the relative emphasis to be given to official Government aid, on the one hand, and to private investment, on the other, will become increasingly apparent.

I can define the precise moment of time when this difference of approach can be first identified. It was on the occasion when the two party manifestos were issued a year ago this month. The Conservative Party manifesto was absolutely frank about it. It emphasised the rôle of private investment. It gave no undertaking that there would be a commitment to the official aid target which the United Nations was asking from donor nations. On the other hand, our manifesto accepted the official aid target and gave much greater emphasis to the official development assistance programme.

We are glad that the Government are nevertheless maintaining the increases in the official aid programme and have extended the increases that the Labour Government announced a further year ahead. It is obvious from all that the right hon. Gentleman has said, as well as from the White Paper on British Private Investment in Developing Countries which he has presented, and from what he has said about the C.D.C.—he is blunt and frank about it—that he clearly sees the rôle of private investment in development as one of much greater importance than we on this side of the House would give it.

I will devote most of my speech to this point, because it is clearly the fundamental one which will arise over the course of the next two or three years. It arises sharply on the White Paper on British Private Investment. Before I make my criticisms of this I will make one or two comments on the White Paper proposals in general.

Most countries have introduced the kind of insurance scheme proposed in the White Paper, and it is certainly appropriate that Britain, too, should do so. However, the insurance scheme is no substitute for the kind of bilateral agreement that the right hon. Gentleman mentioned. The country which has done most in this respect is Germany. It has been very successful in establishing agreements which cover its own private investment arrangements. Nor is the insurance scheme a substitute for firms acting wisely and entering into agreements with those developing countries which are anxious to attract private investment. It is for the decision of the developing country itself as to the degree of enthusiasm it wishes to express for the attraction of private investment.

It is open to firms to enter into agreements on such matters as joint ownership. Travelling a little, as I did at O.D.M., I was surprised how very ready the intelligent industrialist who had experience in developing countries and who was investing there was to enter into 49 per cent. ownership of joint projects and how strange a thought this seems to many investors in Britain who do not have experience in the developing world. There is that kind of arrangement. There are joint management arrangements and repatriation arrangements. There are general code of practice understandings. If a firm enters into such arrangements, it is able to make a contribution in terms of managerial and technical skills in an atmosphere of co-operation. This is much more of a guarantee for it than is even the private insurance scheme.

I come now to my criticisms. Paragraph 17 of the White Paper says that official aid is to be used for financial support for pre-investment studies"— as the right hon. Gentleman said, in cases where the enterprise does not proceed. This means that some element of the official aid programme is to pay some of the costs of private profit-making enterprises in the developing world. I cannot regard that as something which we can welcome. It is not right that a private investor, when he moves into a developing country, knowing that over the years he will take far more out. of it in profit than he puts into it in capital, should expect the British taxpayer, through the official aid programme, to subsidise that part of his investigations which leads to the possibility of his investment.

Paragraph 18 on aid from the official programme to cover infrastructure on a Government-to-Government basis associated with the private investment may not be new. Indeed, the White Paper indicates that it is not new. When I was at the Ministry—I do not know whether this was the experience of my right hon. Friend the Member for East Ham, North (Mr. Prentice)—I was never asked to approve project expenditure of this kind. Although it may not be new, it must be rare. I regard this as a most dangerous suggestion from the point of view of the developing countries, for this reason. A developing country plans its process of development on the basis of a plan into which there may come an extra element of private investment. It does not include private investment in making its development plan. It cannot do so, because it never knows when it is coming, in what part of the country it will happen, or what resources will be developed or exploited by private enterprise.

The U.N.C.T.A.D. Report of the second meeting at New Delhi and the reports of the international discussions between representatives of the developing countries say over and over again that private investment cannot be part of the development plan because it is unpredictable and the time scale makes it too difficult for the countries to incorporate it in the plan. Therefore, there is what amounts to a slight or greater degree of distortion of a country's development programme because the money it had relied on in preparing its programme, the project aid which it knew three or four years in advance it would get from Britain, is suddenly to be diverted in order to assist the infrastructure which private enterprise needs. I regard this as a danger to a developing country in that it may distort its development plan and it means devoting a new and larger element in a limited aid budget to subsidising, in effect, private investment. A new priority is entering into the allocation of the aid programme as between the kind of project aid that it is normally used for.

I wish to say a few words on why official aid is more important and why it is wrong to move the emphasis so much towards private investment. Why was the Pearson proposal in the United Nations target of .7 per cent. of official aid more important than the 1 per cent. overall target which included private investment? Many of us made a great mistake in believing that the 1 per cent. overall target was the one on which we should concentrate. We should have said that the official development aid target was infinitely more important, first, because, as I mentioned, private investment is unpredictable and cannot be taken into account in formulating the development plans of a developing country and, secondly, because it can include many non-productive activities.

The Minister has not mentioned that last year's figure for British overall aid, including private investment, touched 1 per cent., not because private investment had been carrying out any more productive activities in developing countries, but because the Bank of England had underestimated disinvestment which was purely commercial in character and did not have a single productive element in it. That was why private investment rose to such a height. Many elements in private investment may count in the private investment figures but are not productive and therefore do not make any contribution to employment, a higher standard of living, and the removal of poverty in the developing world.

Thirdly, the private investor cannot finance infrastructure. This is why we encourage private investment. The Minister says, "We will build the roads for you". This is not what private investment ever could choose to do. How could it? I quote from an article that appeared this month in the new business journal "Vision": The foreign investor is not often the ruthless exploiter which he is sometimes represented as. But still less often is he a charitable institution … he goes there for the sake of profits, not of humanity. That being so, he does not finance the schools, hospitals, roads, power supplies, health services and administration which are the main needs of the developing country in trying to break out of its poverty.

Fourthly, private investment demands markets for what it produces and this necessarily means that it does not go to the poorest countries. I quote here from the Uganda representative at the U.N.C.T.A.D. conference in New Delhi. A similar point had been made a little earlier by another very small developing country. It had done all the right things, it was prepared to enter into agreements with other countries to attract private investment, it was prepared to be constructive in its approach, to give guarantees, "Yet" said the Ugandan delegate: … we do not succeed in attracting private investors. Why don't we succeed? Because we cannot offer the markets. We are too small a country to be interesting to the private investor. The poorest countries are the least likely to benefit from the right hon. Gentleman's new emphasis on private investment; yet they are the countries which most need help for development.

Again, on the point of infrastructure, a country can devote a massive proportion of its available capital to roads, transport and so on. Afghanistan, one of the very poorest developing countries, with no prospect of attracting private investment—there is no market there and no way of getting stuff out of the country easily—a year or two ago devoted 44 per cent. of its gross development expenditure to transport and road construction. Here again, only official aid can help.

The figures of private investment that are shown by the Development Assistance Committee, the figures that go to the United Nations and measure the overall flow of resources from rich to poor countries are not net of private reverse flows; that is to say, the flows back from the developing country to the rich country. There have been many years in which the figures have shown that the profits flowing back to rich countries were greater than the capital investment that had flowed into the developing countries. Indeed, this is the general pattern. It is nobody's fault. This is what the private investor is there for—to make his profits and bring them back. In giving this new emphasis to private investors, let us not believe that we are doing anything other than giving a lesser priority for official aid and therefore a lesser priority to the real development needs of the poorer countries.

Mr. Alexander W. Lyon (York)

I am grateful to my right hon. Friend for giving way, since this allows me to make a point that I cannot otherwise make because, having spoken on Pakistan, I am apparently debarred from speaking about aid. Appendix V on page 305 of the evidence given to the Select Committee well illustrates the point which my right hon. Friend has been making about private investment. Any interested hon. Members can see from that what has been the effect of private investment in the developing world. It is completely sporadic as between one year and another, it is completely sporadic as between one kind of country and another, and this reinforces my right hon. Friend's point that there is no order of priority according to development needs. It is entirely a question of where private investors think there is profit to be made. It is, therefore, a completely unreliable tool for the ends which we thought the Ministry was designed to ensure, namely, real development in the poorest countries in the world.

Mrs. Hart

I am grateful to my hon. Friend for underlining my point so effec- tively. I must be careful not to imply, in speaking of giving a wrong new emphasis to private investment, that the Government are going back on their existing commitments to official aid. Of course they are not. I have already said that they are increasing those commitments, so it is not about that that I am complaining. I am complaining about their philosophy and the distortions of the official aid programme by the use of part of that programme to back up private investment, which I suggest is of much lesser value to the developing world.

If we had had a little longer, I had hoped to talk a little about trade. In our aid debates we often neglect the fact that the other half, probably the more important half, of the aid equation is trade, what is to happen to the primary products and so on. I welcome the Minister's assurance that progress is being made on untying, and the agreement reached last autumn on generalised preference. I hope that U.N.C.T.A.D. will move very rapidly towards the next stage of agreement on the many points put up to it by the developing world on trading questions.

I had hoped to say something about population, but that must go, and about education, but that, too, must go.

I have one final comment about which countries should stand highest in our aid allocations. One of the most difficult tasks of any Minister in this direction is to see where he wants to bring his own attitude to bear on the aid framework and the allocations. The impact that anyone can make in any one year is marginal, because there is a continuing programme and existing commitments. The emphasis one gives within the allocations, however, is a measure of the Minister's own attitude.

Added to that is the question of which projects within the countries concerned merit the greatest support. I am now much clearer in my own mind than I was when I was at the Ministry about what the criteria for allocation should ideally be. I am quite clear that one of the criteria which I reject is that of economic performance measured by rates of growth. It has become increasingly clear to me that the poorest countries, those in greatest need, are precisely those which are at too early a stage of development to be successful in achieving high rates of economic growth, because they need aid to get their infrastructure, to get their administration, in order to begin to grow. Therefore, I now reject the suggestion, which has been made on behalf of the British Government at international conferences, that a country which has shown its ability to use aid and shown its performance in growth has a moral right to aid.

Our first priority should be the poorest countries, a priority modified a little by their capacity to absorb aid. Obviously, that is a necessary pre-condition.

Further, if I must choose between the poorest countries, I choose those which are deliberately directing their policies towards helping the masses of the people rather than the few, to ending elitism, ending the latifundia, all those manifestations of privilege which very often we, the old imperialists, handed on to them.

As to the projects within those countries, I believe that the general tenor of that philosophy leads directly to concentrating upon rural development, because here is where we can do something to prevent increasing unemployment as well as achieving increasing production, and upon education.

These are the questions we should debate in an overseas aid debate. We must not be frightened of breaking a little the conventions of bilateral agreements between both sides of the House on these matters. I am not sure that it would not be healthy for public enthusiasm for aid if we had some rather sharp disagreements such as I have expressed tonight.

An Hon. Member

You have done your best.

Mrs. Hart

I do not say I have not done my best. I feel these things strongly. I believe that the programme is now beginning to take a wrong direction. I am bound to say these things and cannot be expected to approve and say "Well done" when I believe philosophically that this is wrong.

I end by mentioning something which we can all agree about, but on which perhaps we need to be cautious. We must remember that development is not to be calculated in annual statistics of growth, but in terms of lifting the poverty levels of people. I believe that if the right hon. Gentleman keeps that in the forefront of his mind he will get his priorities right, and he may get his policies right.

8.46 p.m.

Mr. Bernard Braine (Essex, South-East)

It is a sad reflection on human affairs that people's interest and compassion in the plight of others is often only fully aroused when some appalling tragedy, such as that which is taking place in Bengal, hits the headlines. Rightly, horror is expressed at the immensity of the suffering, and there are angry reactions to the inadequacy and slowness of relief. But what is happening in Bengal stems from conditions of deprivation and poverty which have existed for decades and which have long demanded outside sympathy, understanding and practical help.

Those hon. Members, including myself, who visited the Indian sub-continent some 18 months ago to study the British aid programme there came back convinced that East Pakistan was heading for disaster anyway unless urgent action was taken by the aid consortium to get development under way and aid more effectively co-ordinated, and we said so at the time. What is happening in Bengal, therefore, is a frightful warning to the world community of what could happen elsewhere if the long-term problems of economic development and population control are not handled with more sense of urgency by both donor and recipient Governments. It also underlines more eloquently than I can say the need to sustain and improve our own long-term aid programme.

It is with this in mind that I turn, as the Chairman of the Select Committee on Overseas Aid, to say a few words about our report and about the Command Paper in which my right hon. Friend makes his observations on our recommendations. I should like first to pay a personal tribute to my colleagues on the Select Committee, to the Clerks and specialist advisers who served us, and especially to my predecessor as Chairman, Miss Peggy Herbison, whose dedication to her task was an inspiration to us all. We were a very happy team. When we came together over two years ago we represented many different points of view but shared a profound belief in the contribution that aid, properly administered and co-ordinated, could make to development, and as our investigations proceeded that belief became strengthened.

I wish also to thank my right hon. Friend for his kind remarks about the Select Committee and its work and to express my satisfaction that he has either implemented or is in process of implementing a good many of our recommendations. In particular, I am pleased with the prompt response he made to those of our recommendations which were designed to encourage a greater flow of private investment to those developing countries where it is welcome. I am convinced that the Government's decision to introduce a scheme for insuring new investors against non-commercial risks and to conclude, wherever possible, bilateral treaties with developing countries will bolster confidence and lead to an increased flow of private investment and all the benefits it can bring. The advantage of investment treaties of course, is that they protect existing as well as new investment and they also involve the developing country itself.

Those who have read the report will have noted that we did not spend much time in making what might be described as the moral case for aid. It surely goes without saying that the appalling poverty and deprivation suffered by millions of our fellow human beings is an affront to human dignity and is a challenge to the conscience of us all.

What our Report did say was that we all lived in one world, that it was in the interests of all that the physical and, even more important, the human resources of the poorer two-thirds should be developed as rapidly as possible, and that in this high endeavour our neighbourly duty and self-interest combine. I quote a few words from the Report: We can neither afford to waste the potential contribution of knowledge and ideas which the undeveloped countries can eventually make, nor neglect the opportunities which their growing markets can provide. In short, we saw aid as investment, not as charity, as an instrument for expanding wealth and wellbeing in the world in a fair and sensible way, not as a palliative. In this sense perhaps the word "aid" is misleading. After all, the developing countries have been finding more than 80 per cent. of their investment requirements out of their own export earnings and savings. Aid has been only marginal—crucial but only marginal. What we are talking about tonight, I hope, is partnership in development.

The Select Committee was concerned not only with the reasons for Britain having an aid programme, but with the way in which British aid was organised and used. Obviously, so great are the demands upon our resources at home and so much needs to be done in the developing countries overseas that it is imperative to ensure that our aid is effectively administered and applied at every stage.

The General Election of last year had one unforeseen result for the Select Committee's work. Had it not come when it did, then, armed with the knowledge we had acquired in our evidence-taking sessions, we should have asked the then Minister, the right hon. Lady, to give evidence before we reported. In the event, the change of Government not only delayed reappointment of the Select Committee, but our new terms of reference precluded us from taking fresh evidence. It also led to the merger of the Ministry of Overseas Development with the Foreign and Commonwealth Office. Thus, although some of us were concerned that this step might weaken aid administration, we were prevented effectively from cross-examining my right hon. Friend on the subject.

It is hardly surprising, therefore, that the Report should express strong reservations on the new arrangements and should stress that if the quality and quantity of British aid and its high reputation in recipient countries were not to suffer, it would be essential to keep the former Ministry's organisation intact within the new enlarged Department. In our view, it would be incredibly short-sighted to disperse so unique a concentration of development expertise.

On this crucial point my right hon. Friend makes no observations in his Command Paper, and I know that he will forgive me if I now ask him two questions which the Select Committee might have wished to put to him had we been empowered to ask him to appear before us. First, is it intended to keep the Overseas Development Administration intact, or are there any plans for hiving off part of it to other Departments or bodies; for example, the British Council?

Secondly, now that the O.D.A. is part of the Foreign and Commonwealth Office, will it be able to prevent diversion of aid funds to serve political rather than purely developmental ends? I ask this question because, in reply to our recommendation that the cost of assistance given for purely political reasons should not be included in the cost of official development aid, we got the somewhat extraordinary answer, in paragraph 7 of the Command Paper, that it is not possible to distinguish between the two. Why not?

Our point in the Report was that it was quite wrong to use aid for short-term political ends, however justifiable these might be, regardless of economic priorities. Where this happens, there is a danger that funds may be denied to another country whose developmental need is greater. Clearly, those questions are pertinent if we are to maintain the present high standards of aid management, and if our aid is to be used, as the Select Committee thought it should be, for developmental as opposed to political, purposes. I hope, therefore, that my right hon. Friend will be able to answer them.

I now turn to my right hon. Friend's observations set out in the Command Paper. In answer to the Select Committee's suggestion that aid statistics should be presented in a form which shows the true cost of aid, my right hon. Friend says that he is satisfied with what is being done at present. I fear that on this my right hon. Friend is running against the tide of Parliamentary opinion. The Estimates Committee in 1968 took exactly the same view as we did. It is a fact that the man in the street—who in the last analysis provides the money for the programme—believes that the aid programme costs more than it actually does. He does not read the small print in the statistics. If, therefore, we are to carry public opinion with us, as we must, it is essential that the Minister looks at this again.

As regards the level of British aid, I note my right hon. Friend's statement that the Government have undertaken to do their best to reach the 1 per cent. target for total net financial flows to developing countries by 1975", and their refusal to be drawn into any specific commitment in regard to the percentage of official aid. I understand that. It is better not to promise more than one can faithfully perform. I welcome very much my right hon. Friend's announcement tonight of the improvements in the aid programme, but I hope that he does not overlook the fact that the Pearson targets were minimal.

By 1975 our total net financial flows may well exceed 1 per cent. g.n.p., while the level for official aid remains below 0.7 per cent. The point that I want to make—and here is where I agree with the right hon. Lady—is that the two elements are not the same—they have different, though complementary purposes—and official aid should not be limited merely because private flows exceed 0.3 per cent. Indeed, as my right hon. Friend knows, a pre-condition of increased private investment is an adequate flow of official aid to provide the necessary infrastructure.

This is not in any way to minimise the rôle of private investment, and here I part company from the right hon. Lady. The Select Committee saw such investment as making a unique contribution to developing countries, especially in the more modern form of joint ventures. After all, it is accompanied by managerial and technical skills, which the developing countries often lack and cannot acquire in any other way. It provides the training and employment opportunities which they need. It introduces new ideas and new processes, develops new markets, contributes to local tax revenues, and encourages the growth of indigenous business and industry. It is no wonder that the Pearson Report laid so much emphasis upon the contribution that such enterprise can make to real growth in the developing world, and it is good to see the Government ready and eager to encourage more investment of this kind.

As to priorities, the Select Committee attached the highest importance to rural development. The population explosion in many developing countries is now intensifying rural and urban unemployment, with all its attendant poverty, social distress and malnutrition. In India alone at least 10 million people are officially out of work, while estimates made by the Inter-American Development Bank suggest that 30 per cent. of the total labour force of Latin America may be unemployed or under-employed. It is hardly necessary for us to dwell upon the social and political consequences of allowing this terrifying situation to drift.

Our Report showed that urban industrialisation does not provide a quick or easy answer, and that the way ahead lies through improvement in agriculture and the development of the rural areas, where, after all, the majority of the people in the developing countries still live. To this end, we made a number of recommendations. I am puzzled by my right hon. Friend's response to some of them. For example, we recommended that aid to economically sound rural development projects should not be inhibited on account of local costs. Does my right hon. Friend's answer in the Command Paper mean that a valuable project may have to be rejected where the developing country concerned cannot afford the local costs involved? If it does, I suggest that some drastic revision of policy seems to be required.

Then again, in response to our suggestion that intermediate technology should be energetically applied to rural development programmes financed by British aid, all we are told is that the O.D.A. is supporting research into the theoretical and practical possibilities and so far such studies have cost £100,000. There appears to be little sense of urgency here: nor are we told what results have flowed from such expenditure.

This seems a poor response to the carefully reasoned argument in the Report that advanced technology is not the answer yet to the problems of any developing countries and that what is needed is not sophisticated equipment but tools and techniques of a kind which are within the reach and understanding of the people whom we are trying to help. Therefore, I hope that my right hon. Friend will be able to expand on what he has said in the Command Paper.

Nor am I happy about the response to our suggestions about improving the opportunities for British consultants to take a hand in overseas development, especially as there is ample evidence of the very high value of such consultancies not only to the developing countries but to British business interests.

My right hon. Friend infers that present arrangements on this score are satisfactory. That is not what the Select Committee was told by the British Consultants Bureau. We feel that the Government should take a more positive line. In response to our suggestion that the fund available to the Department of Trade and Industry for financing consultancies should be increased., my right hon. Friend said in the Command Paper that the fund is being operated for an experimental period but he does not say whether it is serving a useful purpose, or how long the experimental period will be, or whether the matter will be reviewed. I hope he will take the matter up with the Secretary of State for Trade and Industry and ask him, if necessary, to inject a little more dynamism into the system.

That brings me to one of the great success stories of the British aid effort, the Commonwealth Development Corporation. Here there is certainly no lack of dynamism. The Select Committee was of the opinion that this organisation makes an invaluable, indeed unique, contribution to the economic growth of developing countries, especially in the field of rural development, and we were anxious to see that contribution increased and extended to more countries. Moreover, here is a perfect example of aid conferring mutual benefits since the CDC. can not only point to a wide variety of successful ventures round the world but it pays its way and promotes substantial exports from Britain.

Precisely because of this I am disappointed at my right hon. Friend's response to our recommendation that the C.D.C. should be given firm commitments at least three years ahead regarding the amount of money it will get from the Treasury. My right hon. Friend says that discussion on this is now taking place, but, with respect, this battle has been going on for a long time and it is not further discussion that is needed but decision. Are we to interpret what my right hon. Friend has said tonight as meaning that a decision has been taken or that one is imminent?

Development, of course, is not just a matter of money. It involved finding the right people to work overseas, and keeping them. If our aid effort is to be sustained, British experts in the field must feel that their interests are not forgotten. This is why the Select Committee specifically recommended that recipient Governments should be asked, as a condition of our supplying experts, to appoint British officers in their Government departments to be responsible for the welfare and conditions of service of our expatriate British staff in the field.

I welcome the excellent example set by the Zambian Government, which recently appointed two British officers to their Ministry of Establishments. I hope that everything will be done to encourage other Governments to follow suit. It is not good enough to leave our people's interests solely to the good offices of our diplomatic staffs, especially in countries where there are large numbers in the field.

Similarly, I hope that my right hon. Friend will consider carefully our recommendation that when Her Majesty's Government assume responsibility for the payment of expatriate officers' pensions, no pensioner shall be worse off. I recognise the difficulties, but it should not be beyond the wit of man to devise a scheme which is fair to all concerned.

Finally, I come to the Select Committee's last recommendation; namely, that special consideration should be given to presenting the aid programme to the public at large in a form they can more readily understand. My right hon. Friend's answer in the Command Paper is that it is best for his Department to concentrate on those groups and individuals who are, in turn, conducting extensive publicity and educational activity in this sphere. With respect, I suggest that that is short-sighted; it helps only the converted.

Tonight my right hon. Friend has been a little more forthcoming. Does he agree that the time is now ripe for a campaign to excite the imagination of ordinary people to make them aware of the purpose of the aid programme and of what is really at stake, not simply for this generation but for the future in a world whose population will double within 30 years?

I venture to make a few suggestions. Why not commission a really good film of documentary award-winning standard? Why not arrange exhibitions in city centres? Why not organise a professional market study of the communications problem with the mass media? It is not enough to publish facts and figures; they must be explained so that widely differing audiences can grasp what the challenge and adventure of development is all about.

I said at the outset that we all live in one world. Clearly, what is at stake here is whether in the long run a world in which the majority live in conditions of wretchedness will be worth living in for the rest of us, and whether in these circumstances our civilisation can survive. If we really believe in the need for action—and I hope that the Select Committee's Report makes it clear that some of us do—then it is surely our duty to inform and enthuse as many people as possible, and to do so while there is still time.

9.10 p.m.

Mr. Laurie Pavitt (Willesden, West)

It is a pleasure to follow the hon. Member for Essex, South-East (Mr. Braine) because it enables me, as a member of the Committee ever since it was first set up under the previous Government, to underline the points he has made and, in particular, to thank him, not only for his chairmanship in the last session which we had but because, as he rightly said, as a Committee we were able to do a considerable amount of constructive work across the barriers of the two sides of the Committee, and the hon. Gentleman, in his rôle as vice-chairman, perhaps did even more to that end than he did as Chairman.

I underline all that he said about the work which was carried on in the Committee, thanks to the Clerks, and especially to the number of witnesses and the number of organisations that presented ream upon ream of interesting and very factual documentation and who spent hours being cross-questioned by the Committee.

I suppose it is usual, after having a hard slog like that, that we are inclined to know each other a little better. But we came out of the Committee convinced that we had only just started the job, and we very much regretted that, owing to the reorganisation of the programme of the House, it was not possible for the Select Committee to be reconstituted in a similar form in order to carry forward some of the ideas which emerged and which were published in the report.

I again underline some of the words of the hon. Gentleman, which arose also from the right hon. Gentleman the Minister's opening comments, that the Committee were very concerned about the change from the old Ministry of Overseas Development to Overseas Development Administration under the Foreign Office. However, Governmental changes have taken place, and many of us will be watching with great interest to see the final result. I hope that when the right hon. Gentleman replies to the points made about how much of the expertise, organisation and administration of the previous Ministry is to be retained, he will remember that when we on this side of the House win the next General Election, I shall certainly be one of those strongly pressing to revert to the idea of a self-contained Ministry having the responsibility within its own right on this extremely important part of governmental responsibility.

I also take up the point of the hon. Gentleman's opening remarks about emergency aid, which although not within the remit of the Committee is certainly within the remit of this debate, and I refer to the question which has arisen under the United Nations and the report which will be given by U Thant in July on the whole question of world stockpiling.

On behalf of the British delegation of the Inter-Parliamentary Union at Caracas at Easter, I had the privilege of presenting a document and drafting a resolution, which was carried unanimously and which will now go to the world conference in September in Paris. I am pretty certain that there it will receive the unanimous support that it did in Venezuela. What it demands is the use of our computerised organisation and administrative skill in order to alert nations that within 24 hours emergency aid can be on its way. Not physical stockpiles—because for a number of reasons this is a wasteful way of ensuring a speedy use of men, materials, medical equipment and supplies—but it is quite possible to pledge, in the same way that United Nations specialised agencies now pledge that certain financial resources shall be available for the I.L.O., F.A.O., and World Health Organisation every year at their pledging conference, that also this could be done with material, men, supplies and, most important, logistics, under the auspices and control of the United Nations.

As a result of the statement made today in the previous debate and of the pressures that have come from the House as a result of this last tragic disaster in Pakistan, I am hopeful that there will be an added impetus to the organisation to centralise control at the United Nations for the speedy ability to deal with the kind of thing that has happened in the last few months in Pakistan.

I speak with some feeling about Pakistan, and on this subject I speak with a little experience. I lived there for two years. I served for three years as a technical assistance expert under the United Nations programme, and I am aware of some of the real problems, with which we had some difficulty in the Select Committee in translating them into words of documentation. Human problems are sometimes extremely difficult to express in the kind of language or jargon which we seem to have to use in the documents which we present to the public. In this connection, I very much welcome the hon. Gentleman's closing observations about the need to give a better public interpretation and the use of mass media of the realities of the situation.

I wish to draw attention to one or two of the awkward questions with which the Select Committee dealt, and I take, first, the whole question of land tenure. The Committee spent some time on this issue, which is one of the hottest chestnuts in the whole field of overseas aid and development. It is basic to a country's economy, especially when that country has largely an agrarian and subsistence economy, and, if it is not tackled, a lot of the other aid one can give is abortive and simply cannot achieve the results for which one hopes.

I welcome the Government's statement on this section of our Report to the effect that they will look further at the possibility of British expertise being used to help tackle the problem of land tenure, which is primarily a political problem, but I hope also that the Minister will look into the fund of experience which we have. In this connection, I refer to our experience in India at the beginning of the century when, under the British Government of that day, there were many development schemes under way. Development schemes are a popular form of multilateral aid because they are imaginative, one can see the areas of land involved, one can see the number of people involved, one can see hydroelectric schemes, water and irrigation schemes, and so on, all in one neat package.

Under the development scheme at Lyallpur at the beginning of the century, one was able to see in progress developments of the kind which we have been trying to set on foot in recent years under our more modern development programmes. A whole area of land was reclaimed and resettled. Within two generations, however, in those days, the whole thing became entirely absorbed into the generality of poverty because the system of land tenure and inheritance in India was such that the original plots of land, which were viable agricultural units, became fragmented into units too small to be satisfactorily worked.

The whole question of land tenure and land consolidation into workable units, tough as it is, and overlaid as it is with political considerations, must be looked at far more closely, and the Ministry must accept some of the evidence which the Select Committee had before it, so that we may play a far more active part in seeking to solve the problems which still confront us in the developing countries of the world.

I was particularly interested in the Select Committee—and also because this was my job in Asia—in the whole business of rural development by means of auto-activity. There are a number of names for schemes of this kind, the most popular being co-operative systems, cooperative agricultural societies, co-operative credit and thrift societies, co-operative irrigation societies, and so on. In other cases, they were known as village A.I.D. schemes or extension schemes. Basically, however, whatever the name, it always comes down to the same thing: one is trying in a local area to get the people themselves to organise themselves and lift themselves out of their own poverty.

Whatever good will we may generate in other quarters of the world, we still come back to that basic principle, that only the people themselves can do the job for themselves. What we are trying to do, therefore, is to move away from the paternalistic approach of previous generations to an approach by which the people in developing countries accept their responsibility and we for our part accept a measure of responsibility to give a fraternal helping hand in the job which they are doing.

In this connection, I very much regret that, in spite of the evidence which we took in the Select Committee, which showed that there has been considerable development in this area and considerable research, when I asked the Minister the other day to establish a central coordinating apex research institute, so to speak, for the amount of research, documentation, experience and expertise which is now available in these matters, he rejected that suggestion and said that he was certain that enough was already being done.

A tremendous amount has been done and is being done, but the trouble is that a good deal of it is being duplicated, and a good deal is being done in different ways in different parts of the world. We need some centralised co-ordination so that the results can be used in the most effective way. I am speaking here not so much of research in terms of general study to find out more but of applied research so that, as a result of information received about what is going on throughout the world in agrarian and rural development, there can be a follow-through enabling one effectively to gear aid programmes to take practical advantage of the findings of the research.

Vital to all aid programmes is the whole question of education. One of the things which emerged in the Select Committee, especially when looking at the 80 per cent. rural areas as opposed to the 20 per cent. industrial areas and modern towns was that education did not mean simply seeing how many people could get through a schools system finishing at university. In large areas it is a question of adult education, practical education, a question of what can be done with people who have very little literacy to begin with and have to be shown how to organise their social and economic life to overcome their difficulties.

The hon. Member for Essex, South-East quite rightly drew attention to the fact that one of the great problems was that as a result of the understandable desire of the developing countries to have the best possible university standards, graduate after graduate was being turned out into an environment where there was not the type of job available for them. As a result, there is not only unemployment in the villages; there is a total of 10 million unemployed in India, including many highly educated graduates, because the economic system is not yet organised in such a way as to be able to absorb them in the type of jobs capable of using the knowledge that they have acquired.

I would like to refer to the excellent papers which the Select Committee received from the Industrial Co-operative Training Centre at Loughborough and the International Co-operative Alliance and to the voluntary work that has been going on throughout the world under the leadership of these organisations. Since Creech Jones was Colonial Secretary there has been continual support for this kind of practical educational training at Loughborough. I am glad to say that this Government have continued with that.

I should like to pay tribute to the way in which practical work is going on to help overseas students in agricultural cooperatives. It is not only right that they get to know how a co-operative farm should be administered but it is right too that students under the overseas aid programme should undergo a six-month period of practical experience.

I emphasise the comments made by my right hon. Friend the Member for Lanark (Mrs. Hart) about the Minister's remarks on investment and trade. These can only be complementary to our job, they cannot be a substitute for it. I cannot emphasise too strongly the evidence that we received on this subject in the Select Committee.

We were dissatisfied with the progress being made by U.N.C.T.A.D. There should be a great extension of its work and more support for it. We were disappointed with the New Delhi conference. We felt it should have gone further. We had quite a lot of evidence on this in Committee and are pressing the Government to be more forthcoming in giving greater power and support to this body.

The question of trade ties up with another question before the House—whether Great Britain is to enter the Common Market. I would be out of order if I were to go into that now, but our trade with the developing countries and the Commonwealth is still much greater than it is with Europe and it would be a tragedy if because of the change of circumstances in this part of the world, there was a diminution in our trade with the developing countries. It would be a greater tragedy if the pattern of trade in the developing countries became such that those countries were merely the drawers of water and hewers of wood—the providers of the primary products. While we in the West are struggling to get two cars to a family these people are struggling to get two bowls of rice a day.

On the population problem I pay tribute to what has been done in India wih the propaganda campaign. One cannot move anywhere without seeing that famous advertisement of a wife and two children and saying in Hindi "Children by choice and not by chance". Millions of rupees must have been spent on this campaign, and all credit to them for doing so. I hope that other countries seek to help in this way.

The problem of population is not simply one of many births but because we have been so successful medically that we have been keeping people alive longer. The most graphic illustration which I have seen of the population explosion was one by Professor Boeke, of Leiden University, an authority on socio-economics in Asia. This demonstrates the population increase over 2,000 years since the birth of Christ. If that increase were measured by distance in this Chamber, roughly from the Bar of the House to Mr. Speaker's Chair, then the population has been so rising over that period that by the time the line of growth reached Mr. Speaker's Chair it would have risen two inches; and the rise in the last 30 years would bring the line almost to the top of the Press Gallery. That is a graph of the population explosion we are now facing and that is the problem with which we have to deal.

The Select Committee took evidence from many devoted people who have given their time, attention and energy to this problem. What we tried to bring home to the world was what poverty really means. Let me put it quickly in two ways. Tomorrow an hon. Member may be entertaining two or three friends in the Strangers' Dining Room. What that meal will cost him is what many a family of eight have to live on for a month.

The most tragic situation I had to see when I was in Asia, in Indonesia, Burma, India, and in Pakistan, was the situation where a family had to decide what to do to escape starvation. The question is not whether a child of the family should be an engineer or a doctor to earn a living. The decision is that he should be a beggar and by this profession support the family. Because of the pressure of poverty a mother will take her child and quite deliberately break both its arms and legs so that it can sit in a little trolley on four wheels and so go and beg enough to keep the rest of the family. That is poverty. That is poverty in its extreme form. And this is the problem which overseas aid is trying to overcome.

The pressure from the Churches last year was successful, and I hope that it will be doubled in the next year. The organisations which came to the Select Committee urged us to do more. I hope that they will double their presure. I hope, with the hon. Gentleman the Member for Essex, South-East, that the television and all public media will do all they can to arouse the conscience of the people. I hope the Government will give far more cash, far more resources, and far more energy to the problem.

9.28 p.m.

Mr. Douglas Dodds-Parker (Cheltenham)

I was particularly interested in the point which the hon. Member for Willesden, West (Mr. Pavitt) made about land tenure. It seems to me absolutely fundamental to what is happening in the world at the moment, and what it will be for the next 50 years, whether in Siberia or other areas.

It is of the utmost importance not merely that land should be owned in certain ways but that it should be cared for. If we are to produce the food which is required, it is essential that we should undertake the proper care of the land. Having studied this matter in a number of lands, in this country and around the world, I think the system in north-east Africa, whereby the land belongs to the community but an individual keeps it, and it is passed on from father to son, is one of the best. If the one who keeps it goes away elsewhere, then the land reverts to the community. I think the Russians have studied land tenure in Siberia from something I read in Pravda some time ago. It is essential that we all look after the land.

I do not want to take up many minutes of the time of the House, but to make one or two points. First, I congratulate my right hon. Friend the Minister on his first year in office, and particularly on the reorganisation of his Department. It is good to have a Minister responsible for overseas aid in the Foreign and Commonwealth Office who is fairly free to go abroad and, in going around, finds, as I know he does more and more, that economic development aid is of growing interest and in many countries of greater importance than the political problems with which they are also faced. The establishment of the Minister within the Foreign and Commonwealth Office is good, and I hope that as time goes on the move will be accepted more widely. I do not take the cynical view that aid is given only in order to further foreign policy. I believe that, whatever Government are in power in this country, aid will be part of our overseas policy.

The hon. Member for Willesden, West mentioned the population explosion over the last 25 years in particular. I think we made a mistake in the years after the war by stressing too much industrialisation as being the first priority. In retrospect, it seems that the production of food was really the primary task. Following that, of course, is the problem of education, in broad terms. My right hon. Friend mentioned technical education—the growing amount of telecommunications equipment, pumps, generators and vehicles which one finds all over the world, although there are seldom enough technically trained to keep it all working well. There is also need of administrators, without which these technical skills cannot be put to good use. But I believe that, within all this, it is the production of food that is the basis of the wellbeing of the people of these countries.

I was delighted to hear my right hon. Friend stress "management". Capital is in short supply, but good management is in even shorter supply.

I add my tribute to the Commonwealth Development Corporation, which has done a wonderful job. It is continuing to fill the gap between State-owned industries and commerce, and free enterprise, and has often got operations going which would not otherwise have got going, at least not as quickly. I have always welcomed increases in the activities of the C.D.C. My hon. Friend the Member for Essex, South-East (Mr. Braine) mentioned Ethiopia, which he knows so much about. I hope that before too long the Sudan, in which I have always had a particular interest, will, when circumstances allow, be brought within its scope.

A method which the C.D.C. has been increasingly using is the employment of consultants. This, again, is part of the change from the supply only of capital to include the supply of management. By employing consultants, it is very often easier to find managers through whom to train, over a shorter period, local people who can take over managerial responsibilities in due course.

I also welcome what my right hon. Friend said about what I call insurance against political risks. He called it the investment insurance scheme. A number of us on both sides of the House have been pressing for this for some time, particularly my hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney), who did a great deal of work on this with the Conservative Commonwealth Council about 10 years ago. I am sorry, and he regrets, that he is unable to be here today. I have always regarded him, with his practical business experience, as knowing more about this subject than anyone else I know.

We are making progress on these lines. West Germany, Japan and the United States have, I understand, done most in this way; for a relatively small outlay it can often produce a disproportionately greater result. In 1962 the Chancellor of the day said that this was a good idea but we did not then have the resources for it. I am not sufficiently technically qualified to know just where one such scheme runs into another, but the extension of the activities of the Export Credits Guarantee Department possibly covers some of the area to be covered by insurance against political risk.

Top priority should be given to the still dependent territories. When Arthur Creech-Jones once invited me to join a committee there were 42 dependent territories. Now there are about 18, all of which except one are very small. As they are very remote, these territories deserve speial attention. The right hon. Lady the Member for Lanark (Mrs. Hart), when she was Minister, gave special attention to these territories. I stress that as long as we have sole responsibility for them we should do our utmost to help them to an even greater extent.

The International Peacekeeping Association can be of great assistance to aid. This group was initiated by a number of former officers who had commanded United Nations Forces. General Rikhye played a very prominent part in the original thinking. There is to be a conference in September to consider the possibilities, mainly on the military side. It has also been suggested that for a comparatively small outlay a conference should be held to study the feasibility of using such forces in disasters, using the same personnel.

I ask the Minister to consider whether help for such a conference would not be worth while, in view of the most recent example of the disaster in East Pakistan. We should consider establishing forces having signals, engineers and medical teams available. Such personnel must be more readily available than they are at present, as the events in East Pakistan in the last few weeks have shown. There was a good response from Singapore when the cyclone hit East Pakistan a year or so ago. I see no way of organising people and having them standing by in readiness except on some military basis.

I agree that this should be a United Nations' overall responsibility, possibly based on a regional set-up. In the past, the Congo was at first a disaster area rather than a political problem. The existence of such a group which could go into a disaster area and take immediate action might help to prevent this disaster from becoming a political problem.

In view of the lateness of the hour, I shall not comment on all the remarks made by the right hon. Lady. She and I disagree fundamentally. The Socialist outlook, which she stated in a classic form, is different from mine. I believe in the place of government and in letting others create wealth within the overall control of government.

The right hon. Lady spoke about people taking more out in profits than they put back in capital. That does not offend me. I am not talking about Coca Cola. I am talking of a place like the great Gezira scheme in the Sudan. Over 25 years free enterprise management under Government control probably took out twice as much as it put in in capital. Today, on the balance of payments, it is probably earning three or four times as much every year as it originally put in in capital. Those who live in the Sudan and run this great project would not feel that this was wicked capitalist exploitation from this country. There are a number of such projects, including mining developments. Large losses are often sustained. Profits are not always made all the time. When the right hon. Lady was Minister, she probably did not practise many of the things that she has told us about this evening.

Mrs. Hart

The hon. Gentleman and I share many interests, including an interest in the Turks and Caicos Islands, with which he and I are probably the only two hon. Members who are familiar. The hon. Gentleman must not be unfair to me. I was talking about the difference between the Government attitude towards official aid at the end of, but during, my time in office and the present Government attitude towards official aid compared with private investment. I practised what I preached when I was at the Ministry.

Mr. Dodds-Parker

It is a question of a swing of emphasis rather than the change of policy which has taken place under the present Government. I support what the Government are doing and hope that it will be successful. We should use every incentive possible to encourage people to manage businesses and developments well and to carry on with the creation of wealth for the greater happiness of all those who live in developing countries.

The Minister spoke about motivation and why we are doing these things. The slogan with which Livingstone fought the slave trade over 100 years ago was "Christianity and commerce". It was a good slogan then, and it is a good slogan now.

9.42 p.m.

Mr. Reg Prentice (East Ham, North)

I begin by joining those who have congratulated the Select Committee on the work it did and particularly those hon. Members who are present who shared in it, like my hon. Friend the Member for Willesden, West (Mr. Pavitt), the hon. Member for Beckenham (Mr. Goodhart) and others. The Select Committee did a first-class job. I should like, in particular, to join in the tributes paid to Margaret Herbison, whom many of us remember as a very able and charming colleague.

Having as Minister of Overseas Development persuaded my colleagues to establish the Select Committee, I should like to claim a small fraction of the credit. I took the view, which was not the universal view of Ministers, that it would be good for the Department that the work which it was doing should be examined, and I believe that that has been borne out by the result.

I have mixed feelings about the timing of this debate. In one sense, it is appropriate that we should be discussing these broader problems immediately after debating the situation in East Pakistan and North-East India. Public opinion in Britain and in the affluent countries generally has a selective conscience in these matters. We rightly become very concerned and compassionate about a sudden crisis of this kind, but we lose touch with the situation immediately it leaves the headlines. It is a vital postscript to our earlier discussion today that we should remind ourselves that the conditions of cholera epidemic, of threatened famine and of homelessness are very close to the normal conditions of life in that part of Asia and to the conditions in other parts of the developing world, and it is essential for us to think much more of the long-term problems than we normally do.

At the same time, it is inappropriate that this debate should be taking place in only a three-hour period at the end of the day. The House should manage every year to have at least a full day's debate on overseas aid and development. It was right to have an emergency debate on the situation in Asia, but another day should have been found for this debate. The last time that we had a debate on overseas development in Government time was when I was Minister. I spent a long time persuading the Leader of the House to provide time for it. On that occasion half the day was taken up with an emergency debate on Gibraltar. This seems to be the fate of debates on this subject. Supposing we had an emergency debate on Northern Ireland in which we discussed the conduct of our troops there, no one would think it possible to push the debate into three hours at the end of the day, following the annual debate on the Defence White Paper. Our priorities are hopelessly out of date. The other place has shown a better sense of priorities, in that it has had three debates on overseas development this year.

We go through the same ritual year by year. We spend the same number of days on the Budget and the Finance Bill and the same number of days on the Defence White Paper. Overseas Aid concerns our relationship with two-thirds of the world. We hardly ever debate it, and when we do we have to do it in a rush with inadequate time.

I should have liked to have made a number of comments on the White Paper, but I will confine myself to two general observations. My first is an attempt to bring together a number of subjects on which I should have liked to have made more detailed comments, and to make a general abservation about priorities within the aid programme and within the general framework of development.

As we look back over the large number of reports and studies of the last few years, we find that many of the assessments made have been too optimistic. For example, the important and distinguished report of Mr. Lester Pearson's Commission in many of its conclusions appeared too optimistic and in many of its recommendations appeared too modest. I still think that it was an excellent report which contained a great deal which we need to study and apply, but it took too easy a view of the progress made in the 1960s and made rather too optimistic assumptions about the progress that could be expected during the 1970s and over the rest of the century.

At the same time, some of those who have criticised the Pearson assessment have gone too far in the other direction in suggesting that the whole of the development effort is along the wrong lines. I take a view somewhere in between. We need a considerable shift of emphasis in development, but that does not mean that everything that has happened so far has been wrong. We should be learning the lessons, and the beginning of the Second Development Decade is particularly a time to be taking stock.

In our recent experience we can claim that a number developments have been successful and others have not. On the one hand, we can look back on the 1960s as a period in which the developing world achieved on average a growth rate of 5 per cent. per annum in gross national product. This is a faster rate of growth than most of those countries have ever had before. It is a faster rate of growth than we had in Britain at a similar stage of our development, and it is a rate of growth that is mostly due to the efforts of the developing countries.

All the aid programmes in the world plus all the private investment in the world amounted to only about 15 per cent. of the new capital generation in the developing world during the 1960s; 85 per cent. came from the savings and sacrifices of the developing countries. This is a success story. But we have to set against that the fact that the crude measurement of economic growth is only one of the indices, not necessarily the most important one, for judging the situation in these countries. At the same time we have seen an appalling growth of unemployment and under-employment, which is likely to become more severe in the years ahead. We have seen in many countries in the developing world a greater division between those who are relatively well off and the bulk of the population, and the enormous growth of shanty-town slums, in many of which 50, 60 or 70 per cent. of the people are unemployed. We have seen the explosive growth of population to which other hon. Members have referred.

It is vital that we draw the correct lessons from this situation. We should not draw from it any message of despair, any conclusion that the development effort should be slackened in any way. We should draw the lesson that a number of shifts of emphasis are required. I shall put them as headings, because of the lack of time, though I should have liked to develop them.

There should be a considerable shift from urban to rural development. I am very glad that the Select Committee had a good deal to say on rural development. There should be a shift from large-scale projects to intermediate technology. There should be a shift from capital-intensive development to labour-intensive development. There should be a shift in the education programmes from more conventional forms towards vocational training and education related to it. There should be a shift in the development of health services from large hospitals towards smaller clinics in the villages. These are merely examples of a kind of general shift in the direction of the grass roots.

There is nothing new in what I am saying. All of it has been said by many people observing the development scene over several years. At least some of these shifts of emphasis are already to be seen in the development plans of developing countries and the aid programmes of donor countries. The shift is beginning to happen, but it is not happening fast enough.

I have a general criticism of the Government's White Paper commenting on the Select Committee's Report. I do not think that its message is sufficiently bold and dynamic in the general direction I have tried to indicate. Above all, we must make certain that our own rules applying to our aid programme are not an obstacle to the shift of emphasis which is needed.

I was very glad to hear what the right hon. Gentleman said about the possibilities of an agreement on the untying of aid. The progressive untying of aid could make a real contribution. But so also could a greater readiness by the Government to pay for local costs in certain cases. Whereas I think the Minister was forthcoming about the untying of aid, he has not been so forthcoming about the payment of local costs.

The insistence, not only by Britain but by aid donors generally, on such a large part of aid being spent on the kind of capital things we can easily produce and want to export has to some extent been a distorting factor in the development plans that have been brought forward. It has encouraged not necessarily wrong development but development that is not of the highest priority, not of the kind that is needed to a great extent.

I should like to say something about the size of the aid programme. The right hon. Gentleman said that there had been rather too much discussion of this. With great respect to him, when we can reach agreement on it, when we can see our country fulfilling its pledges in respect of the aid programme, we can cease to talk figures and our debates can concentrate entirely on the content of the programme and the priorities within it. But we have not reached that stage.

I was very interested in what my right hon. Friend the Member for Lanark (Mrs. Hart) said about the balance between private investment and official aid. Broadly speaking, I agree with her. My emphasis might be a little different. I am a little more friendly to the White Paper on private investment than my right hon. Friend is, but I think that the Government are moving in the wrong direction in their over-emphasis on private investment. But above all I agree with what my right hon. Friend said, for all the reasons she gave, that it is no substitute for aid growth in the official aid programme.

I want to add one further argument to those which my right hon. Friend put to the House. I do not believe that we can honestly tell the United Nations that we shall carry out the 1 per cent. pledge unless we also have an official programme that reaches the 0.7 of 1 per cent. target. I would remind the House that the official aid programme at the moment amounts to approximately 0.4 of 1 per cent. On the aid figures contained in the White Paper on Public Expenditure last autumn making certain likely assumption about the growth of gross national product by 1974–75, the aid programme is likely to be 0.45 of 1 per cent.

I put it to the House, as I have put privately to the Minister for Overseas Development and to the Prime Minister and others, that this is not consistent with our pledge which is to provide at least 1 per cent. of resources. The 1 per cent. is meant to be a floor rather than a ceiling. This is not a pledge to achieve a varying performance, that may reach 1 per cent. when we have a good year for private investment, such as occurred in 1969 and 1970. It is a pledge to achieve a total of at least 1 per cent. Private investment can be as low as 0.3 of 1 per cent. as it was in 1968 or as high as 0.6, or a little more, as occurred in 1969. On top of all the other arguments, I believe that the two figures go together. This was part of the logic of the Pearson Committee's recommendation and of the inclusion of the official target in the resolution approved by the General Assembly last autumn.

If the Government say that they are not to achieve this situation by 1975, the question is still open as to whether they might do so later in the 1970s. The Pearson Report said it should be done by 1975, but that in special circumstances there could be a delay until 1980. The Labour Party manifesto during the General Election spoke of reaching the target for official aid during the 1970s. Some countries, such as Canada and New Zealand, have said that they could accept both targets, but not the date. It is still open to the Government, if they wish, to have a programme which goes later into the 1970s and which takes us to this target, even if they cannot commit themselves to it at the moment.

We shall watch closely the aid figures in the public expenditure White Paper this autumn when a new year will have to be written in, the financial year 1975–76. We shall expect to see a further rise on the £340 million figure by 1974–75, and it ought to rise as an exponential curve so that the increase in each year is greater than that in previous years. I will not carry the argument further, because other hon. Members want to speak. We are bound to concentrate on this question of aid volume since the performance of our country remains so disappointing.

I do not criticise this Government alone. I felt critical of the Labour Government's performance in this respect as well, although in that connection I would remind the present Government that, among those who criticised the Labour Government programme, arising out of the debate on the Queen's Speech in the autumn of 1969, were the present Prime Minister, the present Foreign Secretary, and the present Chancellor of the Exchequer, all of whom spoke from the Opposition Front Bench in that debate and all had something to say on this subject. The logic of their criticism then means that they should be doing better now.

I do not criticise this country. I believe that the rich one-third of the world generally is failing to measure up to the modest targets which have been accepted in principle at successive conferences. We are at a critical point in the struggle for world development at a moment when we have learned something of the lessons of development. Therefore, in the 1970s every pound, dollar, frank or mark of aid can do more in human terms than at any time in the past. The question that faces us is that which is posed in the first chapter of the Pearson Report, a chapter entitled "A Question of Will". It remains to be seen whether this country and others have the will to do what is necessary in this situation.

It being Ten o'clock, the Motion for the Adjourment of the House lapsed, without Question put.

Ordered, That proceedings on any Motion for the Adjournment of the House moved by a Minister of the Crown may be proceeded with at this day's Sitting, though opposed, until Eleven o'clock.—[Mr. Fortescue.]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fortescue.]

10.0 p.m.

Mr. Philip Goodhart (Beckenham)

The right hon. Member for East Ham, North (Mr. Prentice) speaks on this subject with immense knowledge and dedication, and we are always glad to hear his observations. I am particularly grateful that he should have been instrumental in setting up the Select Committee on Aid, which I had the privilege to serve latterly under my hon. Friend the Member for Essex, South-East (Mr. Braine), who led us with such skill and drive.

Perhaps it is in keeping with the way in which our Committee conducted its affairs that the debate should be pushed into three hours this evening, because we tended to get buffeted around as a Committee and one of the buffets we received was the General Election and our dissolution, and then, when we were reconstituted, the fact that we could not take further evidence. I regret that we were unable to call the Minister before us to explain some of the reorganisation of the administration of overseas aid which is planned.

This necessarily gave the Report which we produced a backward-looking aspect, but, at the same time, we managed to produce a substantial number of sensible suggestions. It seemed to me that, certainly on the subject of private investment, our suggestions were sensible, and I am delighted that the Minister has seen fit to accept almost all of them.

I was appalled to hear the right hon. Lady the Member for Lanark (Mrs. Hart) on the subject of private investment. She talked about profits being taken out of the country; she talked about planning; she talked about infrastructure. I listened to her closely, and in this passage of her speech she never once used the word "jobs". The great problem facing so much of the underdeveloped world in the next few years will be a desperate shortage of employment, and private investment in the under-developed countries can make a tremendous contribution to solving this problem, even if it does not fit so tightly into a plan.

Having attacked the right hon. Lady, I am glad that when she was Minister she appeared to be wholly converted to the importance of creating new development divisions overseas. This was a view which the Select Committee endorsed. I am rather sorry that, in paragraph 35 of the Command Paper, in response to our suggestions in paragraph 126 of our Report, the Minister did not appear to be as forthcoming as he might have been in this whole subject of creating new development divisions and the importance of seeing that more specialist staff were available to missions overseas with extensive knowledge of the actual administration of aid, because I am sure that this, alas, is a weakness at the moment. I hope that the Minister will be converted to that view very soon.

It does not seem to me to be wholly inappropriate that this debate should be held on a day on which there has been not only a debate on the East Pakistan refugee problem but a substantial statement from the Chancellor of the Duchy of Lancaster on the possibility of this country going into Europe. Many hon. Members believe—indeed, some hope-that we shall soon be a member of the European Economic Community.

If we join the E.E.C., clearly this will have a profound effect on our aid programme. Both France and Germany contribute substantially greater proportions of their g.n.p. to overseas aid—anyhow statistically—than we do, and I wonder what the implications of joining the Community will be on the aid programme. We know that they are planning much greater economic integration than there is now. Is it foreseen that our aid programme over the next 10 years or so will progressively be integrated into a European aid programme? Presumably some thought has been given to this question in the Foreign and Commonwealth Office just as, presumably, thought is being given to it in the Commission in Brussels.

I believe that if the Community is ever to have a foreign policy of its own, this could well come about through trying to hammer out a joint and integrated aid policy, and it does not seem to me beyond the realm of possibility that if we go in, within 10 to 15 years we shall have a European rather than a British aid programme.

I think, too, that it is appropriate that we should be debating aid in its general sense today after the emergency debate on the Pakistan refugee problem, because this surely drives home to us all the fact that overseas aid is essentially a political matter. I had the greatest sympathy with the Minister when he rather slapped us down in his paragraph 7 by saying that since aid is given on a Government-to-Government basis, political considerations are bound to be taken into account. It seems to me that the idea that one can look only at development considerations and ignore politics is inaccurate, and the Pakistan crisis has brought us back to the reality of this position. It reminds us that the giving of aid has immense political implications in the recipient country, and that political actions in a recipient country can undoubtedly be influenced by the giving or the cutting off of aid.

The Minister's reply to the debate on the Pakistan refugee problem was both humane and sensible, but I would ask him to bear in mind all the sentiments of anguish that are aroused in many inhabitants in this country who have relatives and friends in East Pakistan and feel that the money which they pay in taxes may indirectly go to bolster up a regime which they believe is repressing their friends and relatives.

There is considerable justification for thinking that at least part of the aid which is earmarked for Pakistan might be diverted to the direct aid of refugees along the frontier. This problem has reminded us that aid is a political problem, that it is also a matter of life and death, and that the question of how much aid we give in this country can affect the lives and health of millions overseas.

10.12 p.m.

Mr. Nigel Spearing (Acton)

For a relative newcomer to the House, I detected two distinct strands of debate this evening. Members of the Select Committee have on many occasions shown an identity of knowledge and concern. It appears that the nearer one comes to the ground in this matter, the more agreement there seems to be; the nearer one gets to office or past office the greater the difference. It is on the difference that there has been in the two Front Bench speeches that I want to concentrate.

The difference between private and public capital is a very important distinction which we should look at closely. There has been a difference of emphasis, produced perhaps by the Government publication "British Private Investment in Developing Countries", Cmnd. 4656. I would suggest that one of the great differences between these two forms of capital injection is that private capital is concerned particularly with the return which it will bring. Clearly, if there is a greater return from project A, the more likely will it be to attract capital. It is this matter of distribution which is crucial to the difference between the two sides of the House.

Many hon. Members have emphasised the importance of agriculture and food production, and of smaller-scale enterprises. We sometimes forget that most countries need an efficient and flourishing subsistence economy, and in this sort of thing capital return cannot be measured, because subsistence production is, of its very nature, outside the money economy of the country and cannot be accounted for in conventional terms.

It is possible that it would be better for many countries to have a flourishing subsistence agriculture or economy which may not be measured but would provide a good basis of life for people in those countries, and have perhaps a smaller money economy than one where the money economy was nominally larger but living conditions were much worse. We must bear this in mind when we look at the pattern of distribution of capital in any one country.

The only rational way to look at this is to see what are the needs of the country. Having established those on basic principles, we would then see where private and public capital could fill in the structure we have erected out of first principles. The hon. Member for Essex, South-East (Mr. Braine) will be familiar with this principle in another context—that of regional planning. The two are not inconsistent.

The difficulty is that the White Paper suggests that private capital is good, but it presses that suggestion too far. I agree that it can be good in certain conditions, and the difference between the two sides of the House on this issue arises because the Government have pressed the point too far.

Paragraph 18 of the White Paper says: Further positive steps will be taken to bring to the attention of potential investors the readiness of the Overseas Development Administration to consider providing aid for basic infrastructure projects associated with particular private investment plans in the developing countries"— and it adds where this is acceptable to the host government". It goes on to give an example by saying that Such aid … would be provided … to … cover the provision of infrastructure such as a road or power supply essential to a British private investment project and which the investor could not himself be expected to finance". It is, of course, difficult sometimes to mix these factors satisfactorily with the countrywide needs that have already been established in an overseas territory. In other words, there could be a clash. The Government qualify the paragraph by saying where this is acceptable to the host government but the pressures on the host Government to accept extra capital and so boost the total amount of capital going into the country may be so great that they may distort the pattern of capital development which the country requires. It is those pressures which will now be brought to bear on countries which should not have such pressures inflicted on them.

Paragraph 17 says: If as a result of the study"— the terms of the study are mentioned earlier in the paragraph— he"— the investor— decided to invest there would be no further Government involvement but if he decided not to invest he would be able to claim up to 50 per cent. of the final costs incurred in accordance with the terms of the agreement. In other words, we will be subsidising—a word I use with care in the House—the search for outlets for private capital in these areas. We will, by this means, be placing greater weight on finding out where private capital can be placed rather than on making an overall assessment of the total needs of the country. That could distort the real pattern of capital investment that the nation concerned requires.

My right hon. Friend the Member for East Ham, North (Mr. Prentice) emphasised the point about trade rather than aid. I agree with him. One might liken the world situation to the nineteenth century in Britain, when quite a large number of people with plenty of capital and relatively good living standards had a great many others dependent on them. The vast majority earned extremely low wages, however hard they worked. That is the world picture today. Wages are equal to world trade prices.

Consider the Commonwealth Sugar Agreement. It is likely to change in nature. The Agreement has given stability of price, at a price marginally higher than the world market price. That sort of arrangement is needed if we are to provide not just aid but good terms of trade. It seems, however, that the Agreement is to be cut back rather than enlarged. We cannot talk in one debate of world aid and in another debate about new economic forms which we may have throughout the world.

This has been a short debate, and I join my right hon. Friend in regretting the lack of time that we have for this very important subject. I stress to the Minister the dangers of pursuing the policies which the Government have set out, the new change of emphasis in encouraging, perhaps in a rather unbalanced way, British private investment in developing countries in the future.

10.20 p.m.

Mr. Frank Judd (Portsmouth, West)

Among everyone who has participated in the debate—we always feel sorry for those who have sat through it and not had the opportunity to speak—there will be general agreement that this has been characteristically thoughtful for an aid debate, and it has been useful to draw on the mixture of genuine concern and commitment and of practical field and managerial experience which contributes real substance to what we are discussing.

We have heard a good deal more difference of emphasis in the remarks from both sides of the House than has been characteristic in the past. I do not believe that this augurs badly for our aid debates. If we are to generate meaningful and valuable concern, both amongst our colleagues and in the country as a whole, it is important to be able honestly to discuss how our different political evaluations come into play in issues of major world concern.

Obviously, this debate has been truncated as a result of the debate on Pakistan. None of us would dispute that we should have had a debate on Pakistan. The horror, the crises and the tragedy of that situation demand all the time that we can spare for it. But it is a striking commentary on our political system that we could have that debate only at the expense of some of the time available for the debate on general overseas aid and development matters. It has been pointed out to me that in the past five weeks we have spent seven hours debating Pakistan, but that in the past year we have spent, in full debates in the House, about three hours in discussing major aid and development programmes.

The cross-examination conducted by the hon. Member for Essex, South-East (Mr. Braine), in his capacity as former Chairman of the Select Committee, on which I had the honour and joy to serve under him, illustrated just how much material there was for us to go into in detail in a full debate and at least a daylong debate. In the House and in the country as a whole there will be people who feel that their worst doubts when the independent Ministry was abolished and an overseas development administration was established within the Foreign Office have been more than fulfilled, and that this important aspect of the nation's affairs and the Government's programme is losing priority all the time and is not receiving the sort of constant attention, analysis and criticism that it deserves from the House.

No one could suggest that credit has begun to be given to the work of the Select Committee in the course of the three hours at our disposal this evening. If we were asked to pick out from the debate the most crucial issue facing us, I am certain that we should all agree that it is the problem of population growth. This was well illustrated in the context of the First Development Decade which has just finished. Hon. Members on both sides of the House will remember that the object of the First Development Decade was to see 1 per cent. of the national income of industrialised countries being devoted to developmental programmes, in the hope that a 5 per cent. growth rate could be generated in the developing countries. If one allowed for a modest 3–3½ per cent. rate of population increase in the developing countries, this would have meant a 1–1½ per cent. per capita income rise in the developing countries if the First Development Decade had been entirely successful. This would have meant that it would have taken 30 to 35 years to double living standards, and at the end of those 30 to 35 years the average per capita income in India would still have been about £50 per annum.

That drives home to us all the magnitude of the problem which confronts us, but, if these general statistics are not bad enough, there are more specific statistics which have been made available in recent years, particularly from the International Labour Organisation. We now know that, excluding Communist China for which we have no accurate statistics, there are at least about 70 million people unemployed in the developing countries, with unemployment rates in specific developing countries as high as 30 per cent.

In his annual report two years ago, the Director-General of the International Labour Organisation warned of even more serious problems to come. He told us—it is there for all to read, and I commend it to right hon. and hon. Members—that during the next 10 years, the so-called Second Development Decade, we can expect an increase in the population of working age in the developing countries—again excluding China—of about 226 million. Even if we were overnight to introduce thoroughly effective population policies—and there is no indication that that would prove possible—it would be impossible to prevent that particular addition during the next ten years to the size of the population of working age. None of us can ignore this problem.

In the context of a recent debate at the Council of Europe in which I was able to participate, we had from the International Labour Organisation, a body not usually given to melodramatic assessments of world situations, a message which told us this: Development with benefits for the few, visible but unavailable to the vast majority, is unlikely to breed domestic stability. This has implications which stretch far beyond the prospects for the developing countries themselves to the international community. The world is one because every part of the world is promptly aware of and increasingly sensitive to the effects of events in virtually every other part. Growing unemployment in the developing parts of the world will not only adversely affect the trade and investments of the developed part of the world. It can destroy the fabric of national societies, as it once did in Europe, and thereby threaten world peace. That is a sombre message which shows that we cannot simply think of these as abstract statistics comfortably remote by several thousand miles. They represent potential social and political crises which could engulf us all, and, quite apart from the moral challenge which we all accept, enlightened self-interest demands that we give priority in our political considerations to seeing how we can tackle these problems.

How are we to tackle these problems? Hon. Members on both sides have put forward practical suggestions during the debate. But one point which has been repeatedly made—it was emphasised by my hon. Friend the Member for Willesden, West (Mr. Pavitt) and my right hon. Friend the Member for East Ham, North (Mr. Prentice)—is that we must recognise that the days of paternalism are gone and that this is really an operation of partnership between the industrialised world and the developing countries.

I sometimes believe that if we could put this over more successfully to the British public in its real dimensions we might have a more positive response in public opinion towards the important issue of overseas development. The striking fact brought out by Pearson and so many others is that 80 per cent. of the resources for development in recent years have come from the people of the developing countries themselves. Our contribution in the industrialised world has been 20 per cent., a vitally significant contribution, but marginal none the less. If we could get this point across to our constituents they would begin to see that they were not being asked to shoulder the whole weight, as I am sure many of them believe, of bringing developing countries to economic fruition. They would see that they are being asked to share in a joint enterprise in which the developing countries are playing more than their full part.

If we accept that point about partnership and if we accept that we are living in a post-imperial age then we should have no hesitation about being prepared to spell out to individual developing countries the terms on which we are ready to enter into partnership with them in development programmes.

This is utterly logical. I do not believe that any of us should go to our constituents and ask them to contribute taxes to development programmes if we cannot show to our constituents that these programmes are really in the interests of the majority of the people. We are not here to shore up élitism, or socially repressive or regressive systems in whichever part of the world it may be.

A good deal has been said about private investment and my right hon. Friend the Member for Lanark (Mrs. Hart) dealt with this at some length in her opening remarks. The hon. Mem- bers for Beckenham (Mr. Goodhart), Cheltenham (Mr. Dodds-Parker) and my hon. Friend the Member for Acton (Mr. Spearing) spoke of this. Let me say, in support of what my right hon. Friend said, that it seems self-evident that what takes private investment to a developing country is the prospect of adequate and good returns on resources invested. It seems self-evident that this will not always be synonymous with the most urgent social priorities in a country. None of us suggests that there is no room for private investment, but there are grounds for real concern lest the Government should begin to argue that we are fulfilling our obligations and reaching the targets spelled out by the United Nations Conference on Trade and Development or the Pearson Report if we add an increasing share of private investment. It has its rôle but it cannot tackle the social investment so desperately needed.

One point which has not been touched upon much, except by my hon. Friend the Member for Acton—and I am not sure it would have been mentioned in more detail if there had been time for a fuller debate—is the commitment to trade. What so many of the developing countries are concerned about is not the level of charity from the industrialised countries but the commitment of the industrialised world to ensure economic justice for the developing world in dealing with its problems.

On several occasions the Government have emphasised that the needs of the developing countries are high on their list of priorities as they prepare for entry to the Common Market. To date I would suggest that their concern seems to have been limited almost exclusively to the problems of those producing primary products such as sugar. Sugar is a life and death issue for many of the communities which produce it and it is right that we should give it careful attention.

It is not convincing—and we heard this earlier in the House today—to be told that the agreements worked out between the Government and the sugar producing countries have simply been "received" by the E.E.C. negotiators because we know what "received" means—it means nothing at all in terms of guarantees or commitments. However, any attempt to examine the effect of the E.E.C. common agricultural policy on the developing countries as a whole has been conspicuous only by its absence in statements by Ministers.

As the Select Committee has stressed, and we have heard this several times during the debate, the one main hope of immediately beginning to grapple with the acute social and political crisis caused by the population explosion in the third world and likely to engulf us all, is to expand agricultural production and related rural-based industry. The common agricultural policy which Britain and the other new applicants for membership of the Common Market have been told they must accept deliberately sets out to protect high-cost European agriculture from the competition with the outside world and even subsidises dumping of surplus food on world markets. Even worse, the tariff structure is designed to discourage the import of processed food products or textiles. In other words, the Common Market works against the overriding priorities of the developing world.

Against this I know that it is sometimes argued that a number of Commonwealth countries, in advance of British entry, are already voluntarily seeking associate status with the Community and that this demonstrates that they have no objection to British entry. I suspect that it proves nothing except that they have no alternative. If the market is there, they have to have some sort of relationship with it even if that relationship perpetuates the second-class status of the purveyors of basic commodities to a sophisticated élite on terms to be dictated by that élite.

Similarly, arguments about the high level of aid and technical assistance from the existing members of the Community to developing countries prove little in terms of effective commitment to development. This was starkly put by a report from the Economic Affairs and Development Committee to a recent meeting of the Council of Europe. It said: Whatever theory we may generate on the appropriate policy for financial aid, the biggest test of the degree to which the industrialised countries genuinely wish to co-operate with the developing world is not the amount by which they are prepared to increase their financial and technical assistance—though this is of course vital—but their willingness to agree to the re-organisation of world trade on the basis of greater justice for the less developed countries The most crying injustice has been the deterioration in the terms of trade between the developing countries, 85 per cent. of whose exports are composed of primary commodities, and the industrialised countries from which they import capital equipment and other industrial goods. This has meant in practice a progressive transfer of real resources from the poor to the rich countries which in some cases has been more than equivalent to the total financial resources received in aid. Within the developing countries this deterioration in the terms of trade has had unfavourable repercussions on agricultural prices and hence on rural incomes, while the benefits of much of the investment in expanding production or improving productivity have accrued to the industrialised rather than to the producer countries.

These are points we have obviously to examine carefully at this juncture as we approach possible entry to the E.E.C. We have to recognise that the reduction or elimination of trade barriers affecting primary products would have its impact on the employment situation through the expansion of exports and the resulting increase in output, since most commodities, especially in the agricultural sector, are highly labour-intensive. The increase in output would be reflected in increased demand for labour, thereby reducing the extent of open and disguised unemployment.

Indeed, with the expansion of agricultural productivity as a result of what has been called the "green revolution", it is clear that increased international outlets will have to be found if rural employment and incomes are to benefit. The report to the Council of Europe concluded that the question … is how far the industrialised countries are prepared to modify their present policies … as far as agriculture is concerned, there is no sign of any willingness on the part of the E.E.C. to reconsider its protectionist agricultural policy, while the prospective enlargement of the Community threatens to deprive several developing countries of their traditional access to the British market. I wish the right hon. Gentleman would make it plain to his colleagues in the Government that it is not enough to talk about the problems of developing countries simply in that limited context of the problems of the sugar producing countries. We have to look far more seriously at the wider implications of the common agricultural policy as such.

The hon. Member for Essex, South-East (Mr. Braine), who chaired the Select Committee with such distinction—and I am sure that he will agree that a lead was given in that respect by Miss Peggy Herbison—made it plain that we live in one world. Basically, what I believe is that the lesson that must be derived from all this is that, if we want stability and security for our own community in this increasingly small world, we cannot have it unless we are prepared to give the highest possible priority to seeking economic and social justice for the majority of the people of the world and for the developing countries in the world.

10.40 p.m.

Mr. Wood

I am not clear, Mr. Deputy Speaker, whether I should ask for leave, or whether you will allow me——

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

There is no need for the right hon. Gentleman to ask for leave. We are on a fresh Motion for the Adjournment.

Mr. Wood

I apologise for making a second speech. I regret to have to say that it is not my last before midnight.

The right hon. Lady the Member for Lanark (Mrs. Hart), the right hon. Member for East Ham, North (Mr. Prentice) and the hon. Member for Portsmouth, West (Mr. Judd) were all, to various degrees, critical of our failure to accept the 0.7 per cent. target for official flows. Possibly one of the reasons for their criticism was that they were all critical, again to varying degrees, of our support for the rôle of private investment.

When the right hon. Lady was speaking I began to be rather regretful that I had given her the credit during her tenure of my office in 1969 and 1970 for reaching in each year the 1 per cent. target, because she will remember that this was very largely dependent on the contribution which private investment made in those years. When the right hon. Lady became ruder and ruder about the rôle of private investment I began to regret that I had given her the credit for this great achievement in the past two years. This difference in our philosophy, which has been echoed in a rather minor key, if he will forgive me for saying so, by the right hon. Member for East Ham, North and by the hon. Member for Portsmouth, West, and which has been brought out by what my hon. Friend the Chairman of the Select Committee—the Member for Essex, South-East (Mr. Braine)—and my hon. Friend the Member for Beckenham (Mr. Goodhart) said on the other side, is probably rooted in our different political philosophies. Therefore, I dare say that we shall have to agree to differ.

I was rather sad that the right hon. Lady devoted almost the whole of her speech to this subject and omitted these important questions which I was hoping we would hear from her about rural development and education, but, as she and others pointed out, we have been limited in time and, obviously, there is not time for more than one or two important subjects to be aired.

My hon. Friends the Members for Essex, South-East and for Cheltenham (Mr. Dodds-Parker) and in my absence, for which I apologise, the hon. Member for Willesden, West (Mr. Pavitt) talked about the merger between the former Ministry of Overseas Development and the Foreign and Commonwealth Office. Indeed, when the merger was announced as part of wider changes in the machinery of government there was, as the House will remember, a good deal of anxiety expressed from both sides of the House about a possible risk to the integrity of the aid programme and its undue influence, as some hon. Members suggested, by political considerations.

The White Paper which was produced last autumn made clear that the new overseas development administration would remain as a separate wing of the enlarged office with the Minister, by delegation from my right hon. Friend the Secretary of State, in full control. Indeed, my right hon. Friend the Prime Minister has himself confirmed that the criteria for aid remain unchanged.

The evidence of the last seven months since the merger took place has convinced me, and I hope that it will convince others, that these perfectly natural and justifiable fears have turned out to be unjustified.

My hon. Friend the Member for Essex, South-East asked specifically whether there are any changes in mind for the overseas development administration. The rôle assigned to it in the White Paper on the Machinery of Government remains unchanged, but I must say frankly that this obviously does not mean that my Department—the overseas development administration—will not be subject, like any other civil Department, to the normal manpower studies of its organisation and methods and possible action on the basis of those studies.

In this connection there is the question of the possible political direction of aid. My hon. Friend has shown himself mildly dissatisfied with the reply which I gave about the difficulty of measuring political factors. I did not express myself as clearly as I should have done in the White Paper. I do not believe that, under the criteria on which we all work, there could conceivably be cases in which purely political factors are involved. Every activity of my Department must be developmental in purpose and clearly affecting a developing country or countries. Therefore, it is inconceivable that there can be such a thing as purely political aid. It is a contradiction in terms.

What I was trying to express, probably very badly, in the White Paper was the difficulty of dividing the different considerations which might enter in to the matter. My hon. Friend the Member for Beckenham has pointed out—and it is vivid in my mind, having listened to almost the whole debate on Pakistan—and it has been urged on me frequently, particularly by hon. Members opposite, that there should be a closer connection than I should like to apply between politics and development. Although, obviously, the concept of purely political aid is nonsense, it is very difficult to differentiate between the various factors which make up the decision whether to offer aid in any particular case.

My hon. Friend raised the question of aid statistics. This is a complicated matter, anyhow for me. I understand that the aid statistics published by my Department set out the net figures in detail. On the other hand, we have the memorandum of my hon. Friend the Chief Secretary on the Estimates which shows in the overseas aid table both the capital repayments on earlier loans and the interest received. The figures are there to be seen. It is only the net capital figures which count for international target purposes. But I appreciate what my hon. Friend said about the need properly and popularly to present these matters. I will see, if necessary in discussion with him, whether we can make any improvement in this respect.

The right hon. Member for East Ham, North as well as my hon. Friend the Member for Essex, South-East raised the question of local costs. The right hon. Gentleman, with his experience of the Ministry, will support my contention that, in general, overseas aid is intended to meet the external elements in the cost of a project, leaving the local costs for local financing. But I would not argue either to him or to my hon. Friend that this was an irrevocable principle. Both under the right hon. Gentleman's Administration and certainly at present real difficulties over local cost financing are sympathetically considered from project to project. There is, therefore, no irrevocable principle involved. I shall take into consideration what my hon. Friend said, and we shall continue to look very carefully at particular projects if they involve a considerable amount of local cost financing.

My hon. Friend also raised the question of intermediate technology, and seemed dissatisfied by the amount of research being done. I shall write to him, as Chairman of the Select Committee, in greater detail about what is going forward. It is not an easy subject on which to give definite answers in a very short span, which the White Paper was. The studies are going ahead, and if they show that more can and should usefully be done I shall be prepared to consider a much larger effort than the £100,000 I mentioned in the White Paper.

My hon. Friend was a little dissatisfied on the question of consultancies. The technical assistance funds provided for consultancies have grown every year for several years past, and are now fairly near £2 million a year. We should be prepared to look at further increases if we received suitable requests from recipient Governments.

I had expected more discussion on publicity, a question that was in fact not very generally raised, though the Select Committee found it very important. My hon. Friend mentioned it, and I know that it is in the minds of many right hon. and hon. Gentlemen because they have mentioned it to me privately. My hon. Friend suggested that we should provide a really good film. There are in fact some films which the right hon. Lady will know about, and two of the major television channels are working up what sound to be very promising programmes for showing in series before very long. I shall certainly examine my hon. Friend's suggestion about exhibitions in city centres.

He also mentioned the question of a professional market study. We ourselves made a study, at about the time of the General Election, when public opinion polls were in rather low repute. But I believe that this public opinion poll, which was based on a considerable sample yielded useful results, and I should like to make them more available if the House in general felt that it was worth while.

The hon. Member for Willesden, West, whose speech I regret I missed, and I think my hon. Friend the Member for Cheltenham stressed again a matter which was mentioned in the earlier debate this afternoon—the need for a centralised organisation under the control of the United Nations to deal with emergencies. I should repeat, because I am not sure whether the hon. Member for Willesden, West was here earlier, that I suggested putting in the Library the memorandum which my right hon. Friend the Foreign and Commonwealth Secretary has submitted to the United Nations which I very much hope will form a basis of such a centralised emergency disaster relief unit. I believe that the kind of things mentioned in the memorandum are the matters very much in the minds of a number of hon. Members.

Mr. Pavitt

I heard the right hon. Gentleman's original comment. Because I moved the motion in the Inter-Parliamentary Union, I have followed very carefully all the representations and the fact that the United Kingdom sponsored the original United Nations Resolution. What I am now pressing for is that there shall be expedition of the matter, instead of just the report in July, so that, in the light of the recent circum- stances, there can be a greater emphasis on the report that is about to come out.

Mr. Wood

We shall certainly try not to lose time. It will be discussed in July, as I made clear earlier, and I hope that substantive decisions will be taken at the United Nations General Assembly this autumn. I hope that we shall now make progress.

The hon. Gentleman also mentioned questions of land tenure probably being the basic problem in developing countries and the question of education and the large number of graduates and others who have educational qualifications but are without jobs.

This brings me to a question which was mentioned by the right hon. Member for East Ham, North and others—the major problem facing all of us—the provision of jobs for the young men and women who will be joining the labour forces in the next few years in vast numbers. Unless we make what the right hon. Gentleman called the various shifts which he was kind enough to admit were not original and which a number of us have been discussing, it will be very difficult to meet anything like the demand for this vast number of jobs. This led my hon. Friend the Member for Beckenham to suggest that the criticism which had been levelled by the right hon. Lady and others about the relative un-desirability of private investment was a little wide of the mark because private investment would at least play its part in the provision of jobs, the most urgent problem which we have to face.

My hon. Friend the Member for Beckenham said that he was dissatisfied by my rather lukewarm reply about the new development divisions. It was not meant to be lukewarm, or even evasive. It was merely that I was not able to give him the answers he wanted at the time. However, I sincerely hope that before long I shall be able to give him a more satisfactory answer because I agree with him that this is very important.

My hon. Friend and others had in mind the effect that our joining the European Economic Community would have on our relationship with the third world. I have always felt—I have said it in the House from time to time—that one of the reasons why I believe it is most important for Britian to join the Common Market is that by the increase in prosperity which I expect to result we shall be in a better position to assist the third world.

I have always been in doubt until recently about whether the enlarged Community would be inward-looking or outward-looking. I have always realised that there was a danger that it would be inward-looking and merely build up its own prosperity and relatively forget the third world. But I do not now believe that this is so, and I think that the agreement which we have reached on sugar, and the interpretation which my right hon. and learned Friend the Chancellor of the Duchy of Lancaster has made with the Commonwealth sugar countries and the acceptance of that by the Community, has finally convinced me that the enlarged Community will be an outward-looking body which will increase our connection with and our usefulness to the third world.

I join with others in regretting the shortage of time in which we have had to deal with this vast subject. I had hoped to have longer, and we should have done so had we not had the emergency debate. However, it has been an extremely useful debate. It has given me a number of new ideas. I should like again to thank my hon. Friend the Member for Essex, South-East and other members of the Select Committee for producing what I consider to be a valuable document which, as I said at the beginning of my speech, will not be merely discussed and dismissed tonight but will for a long time order our thinking and, I hope, led us to more constructive paths.

Mr. Keith Speed (Meriden)

I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

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