§ Q1. Mr. Tugendhatasked the Prime Minister what plans he has to discuss with other Heads of Government the proposed scheme for insuring British overseas investment described in the White Paper, British Investment in Developing Countries.
§ The Prime Minister (Mr. Edward Heath)I believe that this scheme will be generally welcomed in the developing countries, and I expect to discuss it with other Heads of Government as and when suitable opportunities arise.
§ Mr. TugendhatDoes my right hon. Friend agree that direct investment is often as useful as foreign aid in helping developing countries? What benefits does he expect to flow from the scheme?
§ The Prime MinisterI agree that investment is as important as aid. I have always regarded it as part of aid and just as important as other forms of aid, such as technological aid. The benefit of the scheme is that it will encourage the private firms and the private investor to invest in the developing countries, which in turn is helpful to us as a country, because it is an indirect way of improving the balance of payments and securing orders for firms in this country to carry out investment in the developing world.
§ Mr. PrenticeIs the Prime Minister aware that while it might be desirable to increase certain kinds of private investment in developing countries, it is no substitute for reaching the official aid targets approved by the United Nations General Assembly last autumn?
§ The Prime MinisterThe right hon. Gentleman and I have had correspondence about this matter. We must agree 633 to differ, because he believes that we should accept the figure of 0.7 per cent. of G.N.P. as official aid and we have always taken the view that we would do our best to reach 1 per cent. by 1975, taking official and private aid together. I see no reason why we should say that that figure must come from official aid. What is important for the developing world, surely, is that it should get the total aid which it requires.