HC Deb 14 February 1972 vol 831 cc26-7
31. Mr. Oram

asked the Secretary of State for Foreign and Commonwealth Affairs what proportion of British aid in the last financial year was tied to the purchase of British goods and services; what proposals he has for changing this proportion; and what steps he is taking to seek to persuade other donor countries to act in unison in this matter.

Mr. Wood

On the basis explained in our memorandum to the Development Assistance Committee, the proportion in 1970 was 64 per cent. I have no immediate proposals for changing our tying rules, but we are considering with other members of the committee what action might be possible now that negotiations for general untying have been suspended.

Mr. Oram

As balance of payments difficulties were always one of the main reasons for the tying of aid, and since those difficulties have now been largely overcome, is there not an opportunity now drastically to reduce the proportion of tied aid, particularly as projects in developing countries with a large element of local cost tend to be neglected under the present arrangements, even though they may be best for those countries from the development point of view?

Mr. Wood

If he examines what we have recently been doing, the hon. Gentleman will find that we have been reasonably flexible in relation to local costs. I recently discussed this with the Tunisian Government and the Mauritian Government and on both occasions we were fairly forthcoming on the local cost question. In general—I have said this publicly many times—I should like to see progress in untying, but I do not believe that it is possible to do this unilaterally; it is something upon which all donors have to agree together, and then it will be to the advantage of both this country and the developing countries.

Mr. Normanton

Will my right hon. Friend give an assurance to the House and to British industry that in negotiating aid to developing countries generally, and to Pakistan in particular, he will not sacrifice the interests of British industries and those who work in them in pursuing this highly laudable aim?

Mr. Wood

The interests of the developing countries and of British industry are both extremely important, and neither must be neglected.