HC Deb 22 March 1976 vol 908 cc22-3
37. Mr. Brocklebank-Fowler

asked the Minister for Overseas Development what further consideration he has given to the rôle of ODM in stimulating private investment in developing countries; and if he will make a statement.

The Minister for Overseas Development (Mr. Reg Prentice)

I have decided to revive the Pre-Investment Studies Scheme, whereby aid funds may be used to underwrite up to one-half of the cost of pre-investment studies, subject to a maximum of £50,000, in respect of development to which the host Government attach priority.

Mr. Brocklebank-Fowler

I thank the right hon. Gentleman for that reply. Will he reconsider publishing a Green or White Paper to replace the policy as set out in the White Paper of 1971, which was ditched by his predecessor? Is he satisfied with the liaison between his Department, the Foreign Office and the Department of Trade in matters concerning private investment in developing countries?

Mr. Prentice

Many aspects of the White Paper to which the hon. Gentleman referred were maintained by my predecessor and have been in continuous operation. There has not been a great demand from the private sector for them. The scheme that I have mentioned was suspended by my predecessor, and I have decided to reinstate it. I do not think it is on a large enough scale to merit a White Paper on its own. I hope that private investors will take advantage of it as soon as it is offered.

Sir Bernard Braine

Is the right hon. Gentleman aware that the decision that he has announced will give great satisfaction to British industry and will help to harness British industry to the essential task of development which private enterprise can fulfil?

Mr. Prentice

I am grateful to the hon. Gentleman. I share his view that private investment has an important part to play in developing poorer parts of the world. I know that the hon. Gentleman would agree that this is no substitute for official aid to the developing world. More of both types of aid is needed.

Mr. Grylls

May I ask the right hon. Gentleman what he is doing—in addition to the initiative that he has just announced—with his EEC colleagues to encourage industrial investment in the developing world by Western European countries? Is he prepared to consider taking an initiative in Europe, to help?

Mr. Prentice

I have considered that. In general, private investors make their own decisions in the expectation of profit. This is a decision for them. Private investment is a useful part of the flow of resources. What the Government can do in these matters is marginal. I hope that what I have announced will be of such assistance.