THE COLONIAL DEVELOPMENT CORPORATION

HL Deb 13 June 1951 vol 172 cc55-93

3.52 p.m.

Debate resumed.

LORD DOUGLAS OF BARLOCH

My Lords, I am glad that noble Lords who have so far spoken on the Colonial Development Corporation have not questioned in any way the value of that institution and its necessity for the purpose of helping the Colonial territories for which we are responsible. The Corporation was set up with the assent and good will of all Parties in the House, which I hope it will continue to receive. Neither has there been any suggestion this afternoon—as, unfortunately, there has been in the Press and elsewhere—that the Corporation is failing in its purpose by reason of the fact that the accounts up to this pint do not show profit. That, of course, was always understood by anybody who considered the nature of the task which the Corporation was called upon to perform. Great undertakings of development in these times involve large capital expenditures upon plant, equipment and other matters; the period during which that preparatory work goes on inevitably spreads over a number of years, according to the size and complexity of the undertaking; and during that formative period, of course, it is quite impossible to expect that there will be any profits. In an undertaking such as the Colonial Development Corporation, which as it goes along is embarking upon more and more projects, it is clear—and this, indeed, was pointed out most definitely in the two previous Reports of the Corporation—that there must be a period during which there is in total an accumulated loss, although it may be that even in the earlier years some of the smaller undertakings will begin to reach the profit-earning stage. I mention this point because it has been the subject of so much misunderstanding among the general public, which has not done justice to the management of the Corporation.

Let me now turn a little more closely to the Report which is before us to-day. In some ways it is a remarkable document. In my experience, official papers are not usually written in such a nervous and staccato style—indeed, I can recollect only one which may possibly have been written by the same hand. But perhaps that is a matter of taste. What is more surprising about this Report is that there appears to run through it—and particularly through the general and introductory pages—an attempt to denigrate the Corporation's achievements under its previous management. This would not have appeared so strange if the whole of the membership of the board of the Corporation had been changed. But why should the continuing members be so anxious to belittle their own competence and what has already been done?

If one reads this Report, it is clear that the preliminary pages paint a very black picture of the Corporation's prospects. They emphasise the rising costs with which the enterprises are faced at the present moment. They say little about the rising prices of the products which the Corporation will be responsible for producing, but a great deal about the increase in the cost of capital equipment, and so on. That seems to me to present a somewhat unfair picture of the situation. It is undoubtedly the case that prices are rising; but it is also clear that the price of primary products is rising even more rapidly than the price of capital equipment. Therefore, looking at it in a broad way, the inference ought to be that the prospects of some of the undertakings upon which the Corporation has embarked are, in fact, from a purely financial point of view, enhanced by the circumstances which have since arisen and which, of course, are largely due to the pressure of rearmament upon the economy, not only of this country, but of the United States and other countries, as well. That is part of the circumstances under which every commercial undertaking has to conduct its business at the present time.

I am also a little surprised that the Report, in its introductory pages, should create the impression that most of the Corporation's schemes are of an experimental and, by inference, of a dubious character. A great deal of emphasis is laid upon the risks involved, upon the large capita] expenditure, and so on. But when one comes to look at the more detailed matter in the latter part of the Report, where an account is given of the individual undertakings for which the Corporation is responsible, a somewhat different picture appears. There are altogether some fifty undertakings for which the Corporation is responsible, and in the detailed account of these there are only seven or eight cases in which any adverse comment is made, and, in many cases—and this applies particularly to some of the larger ones—it is said that the prospects are definitely good; that the project should be a commercial success, or that it will justify itself in the course of time, and so on.

Looking more closely at those cases in which some adverse comment is made, what do we find? If I understand this correctly, the total capital commitment involved in all the projects upon which the Corporation is engaged is of the order of £50,000,000, and the expenditure which has so far actually been authorised by the Secretary of State is £32,000,000. The small number of schemes on which an adverse comment is made in the Report account for the expenditure of £1,874,000, of which £843,000 relates to the Gambia Poultry Scheme and to the Associated Gambia Farms. That leaves £1,000,000 expended upon schemes which are subjected to some degree of criticism. Now what is the weight to be attached to this criticism? That, I think, is to be tested by Statement No. 6 to the Report, in which there is set out the provision for special losses and for depreciation of investments which the Corporation has found it advisable to make. That provision amounts in total to £776,000—quite a small sum in relation to the totality of the Corporation's undertakings—of which £450.000 is allocated to the Gambia Poultry Farm, together with another £250,000 which appears to be bracketed with it, presumably for the same purpose, making £700,000; and the remaining £76,000 represents the provision which the Corporation, in its wisdom, has thought right to make f or possible losses upon its undertaking.

In the narrative of the Report, the Corporation says: Provision—deemed adequate—has been made against losses … Therefore, I think we, and the general public, are entitled to assume that this figure is the measure of the degree of risk to which the Corporation thinks that its undertakings are exposed at the present moment. I venture to think that there are few commercial undertakings carrying on business upon a large scale in very diverse circumstances in many countries, which would not feel happy if that were all the provision against the possibility of loss which they felt obliged to make in their accounts. I therefore venture to suggest that the idea which seems to have been so sedulously fostered in certain quarters, that the Corporation is in great difficulties, that its schemes are misconceived and that it requires some genius brought in from outside in order to reorganise it from top to bottom, is not in fact borne out by the internal evidence of the Report itself.

The noble Lord, Lord Rennell, said that in the last Report of the Colonial Development Corporation he was unable to find the guiding principles upon which the Corporation was being conducted. I have a certain amount of sympathy with that view. But if noble Lords will turn to the previous Reports of the Corporation, I think they will find set out very adequately and clearly what the guiding principles were at that time, at any rate; a survey and appraisal of the circumstances in which the Corporation had to operate; the economic conditions with which it was confronted and the many factors which had to be balanced in coming to a decision as to the kinds of investment it should or should not undertake. In view of the way in which the Corporation's affairs have been conducted until recently, I believe it is doing a great deal less than justice to suggest that it had no guiding principles or to suggest, indeed, as appears to be one inference to be drawn from this Report, that it had no adequate organisation for conducting its affairs. Quite the contrary. In the Report for the previous year, 1949, I find the then organisation of the Corporation clearly set out, with a diagram showing the devolution of power. In the present Report, I detect that some change has been made in the organisation, but it is very difficult indeed to find out the nature of that change, or to discover what the present scheme of organisation is.

Those of us who have had commercial experience know very well that it is a great deal easier to make a good organisation into a bad one than to build up a good organisation. I say once more that it is clear from an impartial reading of this succession of Reports that the affairs of the Corporation were conducted with purpose and with a clear idea of its responsibilities and of how they were to be attained. I hope that nothing will be done which will in any way impair the organisation which has been built up and militate against the possibility of achievement which still lies ahead, and which is so essential for the benefit of the peoples of the many Colonies who are in difficulty at the present time. Economic circumstances have changed. It is no longer possible for us to allow them to continue to live in conditions of extreme impoverishment. So long as we remain responsible for the affairs of Colonial territories, it is our duty, so far as lies within our power, to see that their economic circumstances are improved, so that they can become capable of supporting life at a higher level than they have been able to do in the past.

The Corporation was created with that purpose in view. It was not intended that it should undertake things of the kind which, in the normal way, would be done by private enterprise for the sake of private profit. If that had been the intention, it would have been a superfluous and unnecessary step to set up this Corporation at all. That was not the idea. It was intended to be a pioneer and to take a certain kind of risk; and it should not be criticised if, in a reasonably small proportion of cases, the risk should prove to be a bad one and there should be a loss—provided that in total the Corporation fulfils the purpose for which it was set up.

4.13 p.m.

LORD TEVIOT

My Lords, my reason for taking part in this very important debate is that I have spent a considerable number of years of my life in various parts of the Commonwealth; and what I am going to say is the result of my experience over a great many years. First, I should like to compliment my noble friend Lord Rennell on his comprehensive speech. I find myself very much in agreement with the constructive side of his speech. I do not propose to go to-day into the question of the failures; I will not mention groundnuts, or Gambia, or any of the other schemes: I want to try to be constructive and helpful—as I know all noble Lords are trying to be with regard to this matter. My reading of the functions of the Colonial Development Corporation is that they were intended to help backward territories towards economic stability by broadening the basis of their economies and by enlarging their scope. In my view this object should receive the support of everyone. I want to look only at the present and the future. I am confident that, with administrative ability, high purpose, imagination, and sound business methods, the Corporation should achieve great success in their operations. A divergence of views has arisen, not so much concerning the ultimate objects of the Corporation as over the best means of achieving their end. Attention has been drawn, here and elsewhere, to the comprehensive range of the Corporation's planned activities—indeed, they cover every aspect of economic development. I do not quarrel with that, but I do wonder whether the way in which the matter is being approached is the right and wise one. It seems to me that the organisation is top-heavy, and that overhead expenses will increasingly hamper its operations.

Your Lordships will remember that the Corporation were founded not to supplant but to supplement private enterprise. They were also charged with the duty of working in close association with the Colonial Governments concerned. I assure your Lordships that my criticisms are intended to be purely constructive. My information is that the Corporation have not so far made adequate use of the knowledge and experience of private enterprise, nor have they sufficiently enlisted the support and practical sympathy of local Colonial Governments. After all, local partnership is essential, unless the Corporation are to become just another big commercial body and a kind of supermonopoly, controlled externally from London and not associated in the minds of the people in the Colonies with themselves and with their own interests. This local partnership is necessary in order to enlist the interest of local communities and to convince them that the benefits will be theirs—in fact, to create an esprit de corps in every undertaking. It would indeed be a strange and an anomalous position for a Socialist Government to find themselves in—while busily denouncing Imperialism, to be building up an economic empire with a vast apparatus of control outside Parliament in London.

The lessons to be learned from the last three years seem to me to be threefold. Firstly, heavy decentralisation is desirable. Secondly, both private enterprise and local governments should be taken more extensively into active partnership. Thirdly, far more preliminary investigation on the spot, and consideration of local experience before any scheme is launched, are most desirable. I deprecate the emphasis on big schemes, to the exclusion of small ones: it is in the small schemes particularly that local peoples are likely to be willing and able to participate. It seems to me undesirable for the Corporation to enter into business or to finance operations when the backing and the money could be obtained from private enterprise sources. As has often been pointed out, there is ample room for all in the vast task before us. The total capital available to the Corporation is only a chop in the ocean of Colonial needs. We have had three years' experience of the working of the Corporation. Some of that experience has been bought at a very heavy price. I do not wish to go into that matter; but I do urge that we should not be dogmatic or obstinate about it, and that we should be willing to learn. Some people will never admit that they have been in the wrong—only really great people can do that. I hope that those who are looking after the schemes will not fail to admit the faults, and will see to it that a great improvement is brought about.

We must ask ourselves whether the overall policy of the Corporation is the right one. Is it operating on the right lines in building up a large London headquarters, being in direct management of so many diverse undertakings all over the world? I believe this to be a profound mistake. In my view the Corporation should become more and more like a finance house (the noble Lord, Lord Rennell, has already referred to that idea), helping to initiate and develop schemes to a certain point, and then hiring them or selling them, preferably to private enterprises or to local governments. Such a policy would preserve a measure of fluidity in their available capital, and would facilitate the introduction of local capital and local government partnership. If the Corporation is to continue running on the lines of the past three years, it seems to me, judging by results, that it will collapse of its own top-heaviness. If the past general policy were to be pursued, I should advocate breaking up the Corporation into a number of regional corporations because, if effective control is to be retained in London, I doubt whether even the most ruthless decentralisation will be adequate to secure the utilisation of local knowledge, the stimulation of local interests and a sense of local proprietorship. This, I feel, is of great importance.

I am confident that the course ultimately chosen will be to adopt the finance house analogy which, as I have said, has already been referred to by my noble friend. I have tried to offer constructive comment. I am sure the right way is to work through and with the technical and professional departments of local Governments, and not to build up a vast number of experts, advisers and executive personnel into a large and expensive staff of the Corporation themselves. The Corporation embody an ambition, an idea and an ideal which are altogether laudable, and which we can all support. We cannot afford to let the effort fail, because disappointment and disillusionment would do damage far beyond our good name. It would undermine the faith of our Colonial peoples in our ability, capacity and intention. I hope, therefore, that the Government will take this criticism as a constructive contribution to an agreed end. Finally, I believe that the work of the Corporation can be instrumental in strengthening our good family ties with the Commonwealth. I beg to support, with the greatest of pleasure, my noble friend's Motion.

4.25 p.m.

LORD TREFGARNE

My Lords, as the first Chairman of the Corporation who had, in some part, to create the organisation, and to supervise the launching of their first forty-five undertakings, I have, as your Lordships may imagine, listened attentively to the remarks which have been made to-day. If I may say so with deference, I felt that the speeches we have heard so far showed not only a wide knowledge—because that is expected in this House—but also a deep understanding of the problems as I lived with them for three years. That is not to say, of course, that I accept the validity of all the solutions for those problems which have been so far proposed. The Corporation, quite properly, have had to operate under the vigilant eye of Parliament, and under the lash and spur of criticism. I myself was reviled (if that is not too strong a word) for not paying enough attention to suggestions which were made from outside. I wonder whether your Lordships have always appreciated how conflicting were the suggestions and exhortations addressed to us during those formative years. Truly, it was a difficult thing to know what to do, and we were often in the dilemma either of choosing to disregard some of our most vociferous advisers or of doing nothing at all. However, we moved our plans actively forward, according to our lights, and tried to carry out faithfully the charge which Parliament laid upon us. Did we make too many mistakes? Some of your Lordships have been eager to say "Yes," but I say: "Let time show."

I certainly do not intend to set myself up as the defender, point by point, of the Corporation's work during my chairmanship, much less to adjudicate upon the qualities and work of my successor. Your Lordships would have to sit a long time if I were to express my thoughts upon, at any rate, the former of those two subjects. I will say only this: that nothing that has happened since my resignation, not even the avalanche of publicity which has fallen upon one of the undertakings, has altered my confidence in the organisation as I left it. For myself, I am prepared to await with composure the development and fructification of these undertakings. Of course, if every time the Corporation are thought to have made a mistake their staff have to go through the experience of the last three months, that indeed would endanger the Corporation as an instrument of Government policy.

Perhaps I may be permitted just one cautionary note. It was true in my time, and it will be true for many years to come, that any attempt to make the Corporation's undertakings fit too precisely into grandiose regional plans is bound to fail. I hope that was not what the noble Lord, Lord Rennell, had in mind when he complained, I thought in some respects with some force, of the lack of theme in the Corporation's work. The meaning of the word "opportunism" has been debased, but nevertheless I affirm that a predominant criterion for the acceptance of an undertaking by the Corporation must be "opportunity." Do they sec their way to do it? Good opportunities to launch productive enterprises in the Colonies are none too common in relation to the scale of the need. In my view, they ought not to be subject to the complex tests imposed by the various prolific works of authorship on Colonial development. To allow the Corporation this measure of free choice certainly does not mean that no tests will be applied other than the test of commercial viability. In my time, there was a good qualification test. I hope that something like it is still in force, simple, not overelaborate, and under a few heads: need of the Colony, wishes of the Colonial Government, dollar-earning or dollar-saving possibilities, world supply of the product, administrative load on headquarters, availability of management, availability of labour, and availability of communications.

The noble Lord, Lord Rennell, talked about making the Corporation into a finance house. Believe me, finance is not the most difficult part of a proposition. The supreme difficulty is to find competent management. The aim of the Corporation in initiating these direct produc- tive undertakings was to ensure competent management to handle them. Every noble Lord with experience in the City will bear me out in saying that if one can find a good manager for an undertaking, that is the first and most important step. I do not claim that the Corporation were invariably successful. It is an inexact science to judge by the record or by repeated interview the capacity of a man; but nevertheless, it is a fundamental part of new enterprise in the Colonies.

In the early years, the Corporation had to decline to take "on their plate" what was called the implementation, for example, of the Evans Report. I had one or two discussions on that subject with the noble Lord, Lord Ogmore, in which our views were not always identical. At that time he was a Minister at the Colonial Office. The Corporation wished to decline to accept that, not out of any lack of sympathy with the policy involved, but because they were not equipped alone to implement overall economic plans, with their gigantic underlying problems of communications, housing, and even resettlement of populations.

A suggestion has been made by The Times newspaper, and by the spokesman of the Conservative Party, that the Corporation were rash to launch fifty undertakings in three years. I reject that pusillanimous suggestion. If it is to be followed, in my view Parliament was wasting its time when it passed the Overseas Resources Development Act. If the suggestion were to be accepted, the Corporation would have to move at such a pace that it would surely be left behind by the march of events in the Empire. The launching of fifty, or even a hundred, undertakings will not break the Corporation, if the Corporation are allowed within broad principles to undertake what they can see their way to carry out. But once set the Corporation to undertake a grandiose plan, worked out by author-economists, and you are certain to drive the Corporation into confusion and failure. Therefore, I say, look upon the Corporation as the operator of selected projects. If it can see its way to plan and manage a scheme selected by the common-sense tests which I have named, the scheme should be required to pass only the smallest number of external criteria imposed upon perfectionist lines.

The whole purpose of the Colonial Office in setting up the Corporation, as I understood it (and I suppose that I ought to have as much understanding of it as anybody) was to separate it from the purely official methods, and to enable it to employ, in some measure, commercial techniques—not that the sole tests should be commercial. I must say, in fairness, that neither the Colonial Office nor the Treasury, once their general policy was formulated, sought to deny the Corporation that indispensable advantage. It has been implied today that the Corporation's record compares unfavourably with that of private enterprise, because they have made one or two mistakes. Some of the managers of private enterprise that I have met in recent years would smile to hear that claim. Every noble Lord who has knowledge of finance and commerce—and there are many here today—is aware of the high percentage of casualties in joint stock companies and private enterprise. I have not the figures with me but the statistics would certainly astonish many people.

The noble Lord, Lord Rennell, referred to his own experience in finance houses and in commercial concerns. Were it so minded, any such concern could produce a report which would give your Lordships just as much food for speech as the Report now before us. Most of us here can remember a few pretty big commercial blunders made in the last few years. There is all the difference in the world, especially in the Colonies, between running an old-established business and starting a new one. I have tried both, and I doubt whether a single voice of experience would deny that enterprise is characterised by risk, and by trial and error. That means that occasionally there must be a failure. It is the whole justification for the rewards of private enterprise, and if any noble Lord feels that the Corporation must take less risk than private enterprise, then I hope he will tell us in plain language.

LORD TEVIOT

I do not want to interrupt the noble Lord but I feel sure he would not for one moment suggest that any private enterprise in a very long time has had losses amounting to £30,000,000-odd.

LORD TREFGARNE

Nobody has ever suggested that there are losses amounting to £30,000,000-odd in the subject which is before us to-day. There may have been losses of £30,000,000-odd in the history of other enterprises. But we are discussing the Colonial Development Corporation, and drawing an analogy between that and commercial enterprises; and my contention is that the proportion of loss hitherto suffered by the Colonial Development Corporation, despite its statutory duty to initiate risky undertakings, is not inordinately large, compared with the mistakes made by private enterprise. That is no criticism of private enterprise; indeed, it is the reverse.

My Lords, it was always my earnest desire that the Corporation should not have to operate in the "No Man's Land" between the fire of two political Parties. The noble Viscount, Lord Swinton, who sits on the Opposition Front Bench, has spent a large proportion of his public service to date in the service of the Colonies, and no one would deny that he did great work in the capacity of Secretary of State for the Colonies and during the war in another ministerial capacity. I hope, if I may say this with deference to him, that he will not allow the siren voice of political controversy to make him forget the principles on which he initiated his economic plans at the Colonial Office and in West Africa. I earnestly hope that the atmosphere of the last few months will not become the normal. It was always my aim that the Corporation should be an instrument equally available and adaptable to whatever political Party were in power. I think it fair to say that the Labour Government, on whose initiative the Corporation was founded, did not oppose that aim. It is good that these matters have attracted the interest and study of your Lordships' House with its great insight into Colonial affairs, and I have every hope that the Corporation, so young in the Colonial field, so vigorous in its youth, will steadily earn the confidence, and even the commendation, of the United Kingdom and the Colonial peoples whom it was set up to serve.

4.40 p.m.

VISCOUNT SWINTON

My Lords, it is a matter for satisfaction that the noble Lord, Lord Trefgarne, has just addressed us in a more moderate speech on a more appropriate occasion than when he last addressed the House on this subject. I feel bound, in my official capacity, to say—and I know that in what I am about to say I shall speak with the full approval of the Leader of the House, who, alas! is not here, but who I hope will soon return to us—that when the noble Lord, with the leave of the House, made what he called "a personal statement," he used that occasion in a manner completely at variance with our practice in this House and in a way which was really an abuse of our privilege. I think it right and necessary to say this because though in this House we—wisely, I think—do not lay down in writing many rules, there are certain conventions which, through the years, and, indeed, through the centuries, we all observe. And in this matter of personal statements the rule about them, or the convention about them, is really identical in this House and in another place. By convention and tradition they are of two kinds. A retiring Minister is always accorded leave in either House to make a rather full statement and an apologia on his departure. But the noble Lord, though departing, was not, as yet, in that superior position. For others, like myself, who occupy a purely private position as a member of the House, the immemorial tradition has been that a personal statement shall be made only when a Peer's personal honour has been attacked and he seeks to refute the attack upon his personal honour. I felt it only right to say that. I know that I express the view of the Leaders of the Government side, as well as of my own Leader. I am sure that I shall also carry with me all members of the House.

LORD TREFGARNE

Would you allow me to say a word about that?

VISCOUNT SWINTON

Certainly.

LORD TREFGARNE

My Lords, I am not going to interrogate the noble Viscount, but it occurs to me to wonder whether he has secured the consent of the noble Viscount the Leader of the House for quoting him as giving his approval to the statement which has just been made. Secondly, is it not the custom of this House, if a rebuke of that rather lofty kind is proposed to be administered to another Peer, that notice should be given of the intention to do so?

VISCOUNT SWINTON

I certainly take full responsibility for saying that I feel sure that in what I have said I spoke the mind of the Leader of the House. The House knows me well, and I would not say that unless I was very sure. As regards giving the noble Lord notice, he is in his place. As he insists on pursuing this matter, may I say that I am not aware that on the last occasion when he thought it right to use the occasion of a personal statement to make a violent attack on the noble Lord, Lord Reith, who is his successor, he gave a word of notice to Lord Reith that he was going to do so.

LORD TREFGARNE

I did give notice.

VISCOUNT SWINTON

I was well aware that the noble Lord had given notice that he was going to speak on this occasion. He must know that when he is here things may be said about him. I will say this to the noble Lord: I am not saying that to attack him in any personal capacity. But there are conventions of both Houses, particularly on these personal matters and matters of personal statement. In each House, the traditions of the House should be observed. For what I have said, I leave myself in the hands of the House, and I am quite sure that all your Lordships will agree with the general opinion I have expressed.

I turn now for a very few moments to the more important subject of the debate. I think the debate has been valuable, for if it has been critical it has also been constructive, and, I hope, helpful to the Corporation. Very often, when we have felt that we must criticise the action of the Government or their agencies, it has been on the grounds that they have done too little and done it too late. Here, my criticism would be that the Corporation have tried to do too much and have done it too soon. In spite of experience which their sister Corporation—if that is the right expression—had in Tanganyika over ground-nuts, under the late régime, they plunged into a mass of undertakings without pilot schemes, without soil tests and, above all, without, expert partners. The most shocking example of this, of course, is the Gambia project, which was the noble Lord's special pet, as I understand. There £800,000 was expended and lost. I hope that where gross losses of that kind have been incurred, and there is no chance of recouping them, the Corporation will not hesitate to write them off. One of the hardest things to do is to make up your mind to cut your losses, but it is one of the most important decisions that can be taken.

The Report says: a fundamental of the scheme was the growing of enough feeding-stuffs to support a poultry flock of the size planned; no trials were made to discover the potentialities of the soil and the proper methods of treatment; … the board now learn that the land could never have produced more than half what was originally expected of it. Not only was £800,000 lost, but actual damage has been done to the land. The Report continues: the scheme cannot be continued in its present form; equally the land denuded of trees and impoverished cannot be left as it is; decision on future policy awaits the results of current investigations of possibilities. There was also the comparatively small matter of £10,000 written off on the Gambia River Farms. On these the Report states: The farms were under the management of the Poultry Farm; they were neither properly planned nor supervised. This is not confined to Gambia, although that is the most striking example. There is the Bahamas Development Undertaking, dealt with in paragraph 19 in the Report. The Report is very frank: I wish all reports presented to Parliament were as frank. Here the expenditure was £570,000. The Report says: the value of the Eleuthera estate as an agricultural proposition in itself arid its possibilities for residential and tourist development have yet to be proved: operating results to 31.12.50 were disappointing. I should like to ask the noble Lord whether the gentleman who was in charge of the affairs of the Corporation in the Bahamas is the same gentleman who was so singularly successful in Gambia. I hope he will be able to tell me that that is not so. I ask this question so that he may have an opportunity, if it is not so, of saying so definitely. I should be delighted to hear that the gentleman who made such a success in Gambia is finally out of the employ of the Corporation. Then I should give my felicitations to the Government and the Corporation. I endorse what has been said already: that the tourist traffic in the Bahamas is an enterprise which hardly needs the British taxpayers' money.

Then there is the Honduras Fruit Farm, dealt with in paragraph 26 of the Report.

We have spent £172,000 on that. It was an uneconomic unit to start with. What is so remarkable is that though this was a business to grow bananas, no one who knew about bananas was apparently concerned with the transaction. I should have thought that if we were going into the banana business, we should get a banana man—I believe there are many of them about. But the Government seem to have said: Let's all go down the Strand; have a banana! That was a song in my youth. The Report says: Recently it was decided that the Corporation should acquire its partners' interest in the Company with a view to resale to other partners with expert knowledge of the banana business. We find the same sort of thing in the Tung Estates. That may be a good proposition in essence, but it is admitted in the Report that it was badly handled. When we come to Tanganyika Roadways, Ltd., that is described (in Paragraph 63) as "an unhappy experiment." It certainly was. Once again I thank Lord Reith for his frankness about this business. Only £150,000 has been spent here so far. The Report says: The accounts were grossly inaccurate; earlier liabilities came to light; they fell on the original shareholders but showed the rosy operating picture to he false; the Corporation had brought a job lot of assets (with a trading connection of a sort thrown in) at much too high a price. In cruder words, they had been "sold a pup." The Government having been "sold a pup." I should like to ask where the accounts were so misleading and wrong. Can anything be recovered from the vendor, or was it a case of caveat emptor?

I am glad that the Report is as frank as it is, because when a thorough mess has been made of things, it is better to be perfectly frank about it, and then try to clear up the mess, because not only is that sort of thing a waste of public money but it brings Government partnership into disrepute. I believe that the lessons of these unhappy experiments have been learned. From an earlier paragraph of the Report I see that an organisation which ought to have been in existence at the start is now being set up. Paragraph 7 of the Report lays great stress on the importance of pilot schemes—a fact which is elementary—and stress is equally laid on the importance of investments by the Corporation attracting other capital. I am sure that that is the secret of the way the Corporation ought to work. There are good examples of how this has been done. I want to be fair, and I think that the Nigerian projects, mentioned in Paragraphs 46 and 47 of the Report, where there is a partnership with the Nigerian Government, are exactly on the right lines. I could not agree more with my noble friend Lord Rennell, that we should not accept schemes put up by local Governments, or anybody else, unless they put money in the schemes. Governments can put up wild-cat schemes just as anybody else can. But … where your treasure is, there will your heart be also. I would not take a scheme from a Colonial Government, or from anybody else, if they are not prepared to "back their fancy" with their own money.

In my view, the Nigerian schemes are excellent; and the Malayan cocoa scheme, where there is the partnership of Harrisons & Crosfield's and Cadbury's seems to be exactly on the right lines. I very much like, too, the projects in Bechuanaland. where we see the cooperation and partnership of Southern Rhodesia. Those schemes seem to me to be on the right lines—for this reason. When the Corporation go into these ventures, surely the essential thing to do is not what the noble Lord, Lord Trefgarne, said: go and find a good manager—and, incidentally, he does not seem to have been very successful in that search. In any event, most of the good managers are already employed in the good businesses. I have not the same experience as my noble friend Lord Rennell, but I have some experience, both in Government and business, of financing enterprises in different parts of the world. If I am going to put my money into a new business what I want to find is not a manager, but a good expert partner, one who will go into the business with me, and put in his money with mine.

I believe that is the fundamental error which has hitherto been made in a great many of these schemes. The Corporation have tried to go into business on their own, and find managers—and they could not find them because the best people were already employed—instead of seeking the right partner, either in local Governments or in private enterprise. I am not saying that the Corporation should refrain from undertaking what may be risky business, or business which will not give remuneration rapidly, provided that what they do is the breeder of sound trade. I remember during the war having an interesting talk with President Roosevelt about Colonial development. He said to me: "I think both your country and mine, your Treasury and mine, have made the same mistake. In financing Colonial enterprise they have tended to look for an immediate return on their money—3 per cent. and their money back. Provided what you are doing is essentially sound, and is going to be a trade breeder, and will greatly improve the prosperity of a Colonial territory, you are well justified in foregoing your interest for ten or twenty years, and getting your money back without interest at the end of that time."

Such enterprises do not include a speculative enterprise over bananas in the Bahamas. The test must be whether the scheme is going to be a trade breeder in a Colony in the future. I should not quarrel with that sort of expenditure. I would, however, say to the Corporation: "Do not hesitate to cut your losses, and to shut down if one of these enterprises is a 'dud'"—and there are sonic "duds"still in the portfolio. I would say: "Do not hesitate to experiment." But I would also say that you cannot hurry nature. And, above all, I would say: "Go into businesses with the right partners. You may have to take a large share of the risk initially, but have the right partner, whether it be the Colonial Government or a commercial firm." If the lessons are learned, and Corporation work on those lines, then I believe they may retrieve the past and do good work in the future.

5.5 p.m.

LORD LLOYD

My Lords, at this late stage in the debate there is not a great deal which has not already been said, and I apologise to your Lordships in advance if I touch again on a few points which have already been made. In the first place, I feel that my noble friend Lord Rennell has rendered a great service in giving us an opportunity this afternoon to discuss Colonial development, because, to my mind, it is one of the most important subjects today. It is vital, because without it there can be no rise in the standard of life of the Colonial people; and without that material advance there can never be that stability which is the very basis of true democracy and true independence. If I may say so, I believe that if we have made a mistake in the past, it is that we have concentrated too much on political advance and not sufficiently on economic advance. One notices it particularly in the educational field. Not so long ago, I went to a meeting of Colonial students, and it was astonishing to find how many of them were training as sawyers. and how few were training as technicians and as people who would be useful, in economic development. I am sure that lawyers are admirable people, and are most necessary—I give that without any reservation to the noble and learned Viscount on the Woolsack—but a country entirely peopled by lawyers is not likely to be a great financial or economic success. It must have other people as well. The whole emphasis has been on the political side, because the law is a great training for the political arena.

I am sure that we are all sympathetic towards this vital question of economic development in the Colonies. Certainly I read this Report entirely in that spirit. I thought the Report admirably lucid, and could not agree with the noble Lord, Lord Douglas of Barloch, who seemed to complain about what he called its "nervous and staccato style." Indeed, I thought it a rather welcome change from the heavy drone which we get from so many official documents nowadays. The Report gives us a clear picture of the Corporation's activities, and we can see clearly how they have progressed, as regards success or failure. But what is not clear from the Report is what are the long-term objectives of the Corporation—and, to my mind, this question of long-term objectives is most important.

It is no good looking upon Colonial development from the short-term angle; it is a long-term project. Many of the schemes will take a long time to mature; and everybody wants to know what his job is. We need to ensure that, so far as possible, people have stable conditions; that they know roughly what the laws are going to be, and will not suddenly be told that under Section 32 of the Finance Act they cannot export any of their money from this country. They want to know, if the business is built up on the basis of its products being marketable through the preferences being given, that the Government will, irrespective of Party considerations, maintain those preferences. Otherwise, the whole scheme will fall to the ground.

Further, the Government, who are always telling us about planning, seem to have embarked upon the work of this Corporation largely without a plan. This was admitted by the Minister in the other place a few days ago, when he said: It is true that when the Colonial Development Corporation began its work three years ago there was no overall plan. There was no regional plan. There was urgent work to do, and there were demands from all the Colonial Territories for schemes to be established and to he operated by the Colonial Development Corporation. He went on to say: The fact is that in 1948 the need was so urgent that there was no time to sit down and prepare a plan. I do not think that is the way to deal with Colonial development on long-term schemes; therefore, you should have a plan. I am glad to say that this time in the debate in another place the Minister threw some light on the general position. He said: In the work we are seeking to do to raise the standard of life and improve the conditions of the people in Colonial Territories we have, as a Government and as a country, developed two instruments in recent years. There is the Colonial Development and Welfare Fund and there is the Colonial Development Corporation. It is interesting to compare how they work. I think it is impossible to lay down a rigid line and to say, 'This is the field of the Colonial Development and Welfare Fund and this is the field of the Colonial Development Corporation.' But I believe, broadly speaking, that the Colonial Development and Welfare Fund is used to provide social services in the broad sense of the term, and also public services like communications, roads and railways. The Colonial Development Corporation, on the other hand, was intended from the outset to establish economic enterprises with a view to diversifying the economy of all the territories. That is a very useful statement, and gives us a much better idea of the overall development plan for the Colonies. It not only tells us what the Colonial Development Corporation are supposed to do, but it also tells us very clearly what they are not supposed to do. Quite clearly, from the Minister's statement they are not supposed to provide social or public services—in other words communications, roads, railways, et cetera. That, so far as I can see, should be the job of the Colonial Governments assisted by the Colonial Development and Welfare Fund.

If that is the case—and I think it should be—then I agree with other noble Lords who have said that the Corporation were on the wrong line in financing projects like the Central Electricity Board in Malaya. That ought to have been a scheme backed by local finance. I do not think finance of that kind should have been taken on by the Corporation. I certainly do not think they ought to go around building hotels everywhere. I do not know whether hotels are social or public services, but they are certainly not development, and that was quite a wrong project upon which to embark. If the Corporation are not to provide social services and communications, I do not think that that means that those needs lack urgency in any way. On the contrary, I believe that they are the most urgent needs of all. They are the basic step towards development, because without communications there is no hope of attracting that outside capital which is vital to large-scale development. I hope, therefore, that, parallel with the work of this Corporation, the Colonial Governments will go ahead as rapidly as possible with the provision of communications.

The Minister, in his statement, talked about social services and communications, and personally I hope that the emphasis in the first instance will be upon communications and not upon social services. After all, social services are what we hope to get when we have the money to pay for them. Sometimes, as we find in this country today, we have not the money to pay for them. We must first of all build up the economic side of the Colonies before we start on elaborate social services, and I am quite sure that the money ought to be spent by the Colonial Governments in the first instance on communications, which are absolutely basic for the whole of development planning. Of course, the policy of Colonial Governments is going to make them dependent upon the Colonial Development and Welfare Fund. In those circumstances, I feel that most of the money which His Majesty's Government have available—with the overheads of the Welfare State in this country there will not be a great deal of money available—will probably be eaten up in work of that kind in the immediate future. Therefore, the need for attracting private capital from outside for industrial and agricultural schemes is essential. We ought not only to consider private capital from this country. I think we should also try to get private capital from the United States, if we can.

One of the difficulties of getting private investment capital from this country was emphasised by noble Lords in the Economic Debate last week. The amount of capital accumulation in this country is steadily decreasing under high taxation, and that is a very important factor to bear in mind when Colonial development is under consideration. Much has been said about the amount of capital which will be required for the development of our Colonies, and attention has been drawn to the small sum that the Colonial Development Corporation have with which to do an enormous amount of Work. For that reason, I am certain—and I should like to support my noble friend Lord Rennell and others who have advanced this view—that it is essential that this Corporation should be regarded as a piece of machinery for priming the fund. It has to be something which starts people off; puts its investment in and then, when the scheme is going, takes it out again. It is a revolving credit. If we try to operate it in any other way, it is not going to achieve very much. I am convinced that that is the right scheme.

At this late hour, I do not propose to say a great deal mere, because most of what I had to say has already been said. But there is one point I should like to make. A great deal of criticism has been voiced about the financial results of the Corporation up to date, and certainly there have been considerable losses. I do not think that any of us wish to be unfair to the Corporation. It has to engage in a number of things which are, by their very nature, experimental. Again, I do not agree with the noble Lord, Lord Douglas, that merely because something is experimental it is necessarily dubious, although I think that some things which are dubious are also experimental. In this particular case I do not think that necessarily a great many of these experiments—as my noble friend Lord Swinton pointed out—are in the least dubious. They may turn out very well. We all wish to be fair to the Corporation and none of us. wishes to attach unfair blame to them in this matter.

On the other hand, when one reads through these schemes and sees the comments in the Report, it is clear that the planning has been faulty. In one scheme involving about £1,000,000 we are told that "operating results were disappointing"; in another that there was "miscalculation and lack of foresight"; in a third -that "original estimates were incomplete, management has been un satisfactory and the whole project is being reorganised under new management and is unlikely to show a profit"; in a fourth that "the high capitalisation makes this a doubtful project"; in a fifth that it was "an irritating, regrettable episode," and in a sixth that "the experiment has been stopped," and so on. It makes one feel that perhaps all is not as well as it might be. In any case there is only a very little money to play with—only £100,000,000. We have to be rather careful how we spend it. That is all I wish to say. Personally, I have every confidence. I am sure that this is the right thing to do, and I am certain that if we do it in the right way it can be a very great thing—perhaps the greatest thing in Colonial development that we have ever done. I hope that, as my noble friend said, those in the Corporation will not be afraid to face up to the mistakes they have made; that, knowing that we all wish them well they will try and put matters right, and that next year we shall have a better Report.

5.19 p.m.

LORD CHORLEY

My Lords, I shall take up very few moments of your Lordships' time in commenting on a remark made by the noble Lord, Lord Lloyd, in the course of a very interesting speech. I thought that it was an important point when he emphasised the tendency of peoples in these areas with which the Development Corporation are concerned to become lawyers. Certainly what he said is true of many of the African Colonies; and having spent a substantial part of my working career in educating in the law men coming from these different parts of the Colonial Empire I have been impressed with the same point. I have made inquiries from time to time as to why that should be so, because I agree that it is a completely one-sided development. And unless we can get a much larger proportion of able men from the Colonies to occupy themselves with commerce, business, industry and agriculture, the chances of success in the all-round development of these Colonies are not as bright as they should be.

I think the reason of this preference for the law is that the profession of the law is a very individualistic one, in which a man works on his own: he is not working under other people. A man can have a successful career as a barrister in an African Colony in a way which is not open to him if he goes in for commerce or industry, because (or this is the view which is put forward by men from these territories) after they have risen a comparatively short way in such careers they are confronted with the colour bar; and in one of these large business organisations which control industry and commerce in these regions it is not possible for these men to make much progress beyond a certain point. Whether that is the accepted policy or not, the fact remains that their progress in the hierarchy of commerce and industry does not go far if they take to that kind of career. I do not know whether it is possible for the Development Corporation to take any steps to try to break down that feeling. When one looks at the eminent names on the Corporation one does not see the name of any person emanating from one of these areas. I suggest that if, in the course of carrying out their work, the Corporation could encourage the native people by giving them promotion to positions of high executive responsibility in the various projects which they control, it might do a very great deal to break down this attitude, which I feel is militating against the best prospects in the development of the territories.

5.25 p.m.

LORD OGMORE

My Lords, I am sure we are all grateful to the noble Lord, Lord Rennell, for having put down this Motion this afternoon. Sitting on these Benches, listening to him and to the speeches of other noble Lords, I felt that he and all noble Lords who spoke were sincerely anxious for the success of this Corporation. I felt that in every case. I think this debate has been very valuable to the Corporation; certainly it has been valuable to the Government, producing, as it has, many points which will certainly be considered, and may be adopted. I believe that this is the sort of debate that can be most valuable in the life of the Corporation. May I put the noble Viscount, Lord Swinton, out of any anxiety that he may have by saying at once that as regards the Bahamas and Gambia the gentleman concerned is no longer connected with the work of the Corporation, either in the Bahamas or elsewhere?

VISCOUNT SWINTON

I am delighted to hear that.

LORD OGMORE

I should like to turn now to the main current of the debate, and comment on something which the noble Lord, Lord Rennell, said at the beginning. He said early in his speech that he was under the impression that when this Corporation was set up it was to be largely a finance Corporation, which was going to finance development in the Colonial territories. If the noble Lord received that impression, it was certainly not an impression which was widely received. I myself wound up the debate on the original Bill in another place, and I thought that in that place we had made it fairly clear that that was by no means the function of the Corporation, and that it was to have a much wider field of activity. In fact, the then Colonial Secretary, Mr. Creech Jones, said that the object of the Corporation—I quote: … will be to establish or assist any enterprise in the Colonies which is designed to increase their general productive capacity. It was our idea that this Corporation was brought into being to improve the standard of living of the Colonial peoples, by increasing their productivity and wealth.

The noble Lord, Lord Lloyd, said that only recently a new light appeared on the scene, and that last week or the week before the Colonial Secretary in another place defined the scope of the Corporation. But I am sure that that was rather a recapitulation than a formulation of policy. From the beginning we have defined the work of the Corporation in much the same light: in fact, only recently, when I moved the Second Reading of the Overseas Resources Development Bill in your Lordships' House, I made much the same formulation or declaration of policy as the Colonial Secretary has done. I want to clear up that point, to show that no new policy is being adumbrated and that we are, in fact, carrying on along the lines which we originally intended.

I am sure your Lordships will all agree that there is great need for this Corporation, and that its setting up may well prove to be one of the most valuable things we have done in this field. Standards of living are deplorably low. Measured against productivity per head of population, and taking the net national product per head in the United Kingdom as 100, the index of productivity in the Colonies ranges from less than five in African Colonies to twenty-five in some of the West Indies. The amount invested per head in most developed Colonies is not more than 10 per cent. in United Kingdom investment, and in Africa less than 2 per cent. I am glad to say, however, that progress has been made in recent times and the average annual value of the total imports and exports has gone up tremendously, and is now somewhere about six times the pre-war level.

When this is Corporation was formed I was in the Colonial Office, and I can, therefore, speak with some personal knowledge. We realised that there was a lack of local capital in some Colonies, and Colonial development will do a great deal in this respect. There are, however, some Colonies where there is a good deal of local capital. Malaya is one case in point; Singapore and Hong Kong are others. As a rule, these Colonies can finance a good deal of local development, but there are other Colonies and Protectorates where there is no local capital or, if there is local capital, it is in the form of camels or dates, or something of that kind, and is not highly liquid. So, when we talk about the Colonies and the capital in the Colonies, we have to realise that there is an enormous difference between them; it is hard to make a general rule applicable to them all.

We realised that in some Colonies there was this lack of local capital, and in most of them there was a low level of agricultural technique and mechanisation. There were also adverse circumstances of climate, soil, disease, ignorance and lack of incentive to work. En Africa, particularly, labour was poor in education and, physique. Malnutrition was widespread. I think it was the noble Lord, Lord Rennell, who said that in many places in Africa there is a lack of labour; it is difficult to get labour, and there is considerable competition for what labour there is. In fact, when I was living in Malaya, it was alleged that at certain times managers of plantations used to go out at night with cars and steal labour from other plantations. The labour situation had at one time descended to that level. So here again one cannot make a general rule or a general principle, for in some places there is a lack of labour and in others, as in the West Indies, there is serious unemployment.

In those circumstances, as we envisaged it, the Corporation's task was to blaze the trail for others to follow. We intended the Corporation to provide finance, technical assistance and capital equipment. We intended them to operate in conjunction with Colonial Governments, municipalities and companies, or private individuals. In fact, they had a very wide field. I think the noble Lord, Lord Trefgarne, rightly, was always anxious that he should not be unduly impeded, en the commercial side of this task, by Government direction. In fairness to the noble Lord, Lord Trefgarne, because a good deal has been said—not here, but elsewhere—which has not always been fair to him, I want to say that in the early days he was under a tremendous pressure from all sorts of people, particularly from the Colonies, when some extraordinary wildcat schemes were put forward. If he had adopted half the schemes put up to him, the losses would have been enormous. It was a question of carefully selecting and sifting them. The complaints that I received, particularly from Africa, when I was Minister in the Colonial Office, were that the noble Lord, Lord Trefgarne, was far too cautious. In East Africa I think he had the reputation of being a sort of economic "Stonewall Jackson." So we must realise, first of all, the tremendous pressure upon him at that time to get on with things, pressure which often came from some parts of the Press in this country, but which came particularly from the Colonies, to get a move on in this particular direction. The urgency of the problem, the ever-increasing population on a continually decreasing soil fertility, was, and still is, in all our minds.

We see the same kind of thing happening in India, in many parts of the Middle East, in Africa and in the West Indies. The noble Lord, Lord Hailey, whom I do not see in his place now, referred to Bechuanaland. I will mention that in a moment. Let us take Basutoland, which is another of our responsibilities. The yield from an acre of maize in Basutoland is one bag—and one bag of maize is 200 lb. That is a pretty low average yield. The noble Lord said that in Bechuanaland, the average area needed to sustain one cow, one head of cattle, is twenty acres. In other places, it is as much as thirty acres. There is a great need, by demonstrating improved methods of agriculture, or by mechanisation, to induce better methods of farming and increasing food yields. I hope that at some time we shall have an opportunity to go into that particular problem, especially the cattle problem in the area of which we have much information, and we should like to give an account of it. It would be worth while at some time to consider that particular problem from the point of view of the impoverished soil and the need for draining off cattle from it.

Your Lordships know that fifty schemes have been started, and that in the main they deal with matters of primary production. The noble Lord, Lord Rennell, has made three suggestions. First of all, he said that we should start with smaller schemes: that the schemes which we have started are too large and involve too much money. There is a good deal in that suggestion, but I do not agree that we should not have started the big schemes. I am not one who believes that the importance and value of a scheme are determined by the amount of money invested in it. I am sure that the Corporation will devote their attention to that suggestion of the noble Lord, Lord Rennell. Often quite small schemes in a Colony produce very good results. One scheme with which I had something to do in its initial stages has been mentioned more than once—I refer to the cocoa-planting scheme in Malaya. It was the Colonial Office who started the scheme, and we did it for two reasons: first of all, because we wanted to get away from the two-crop economy of Malaya, and wanted an additional cash crop to diversify the economy; and, secondly, because of the great prevalence of some of the crop diseases and virus infection that had hit cocoa, particularly in West Africa. Therefore, we established a nursery on an island off the coast of Malaya, and prepared our own seeds there. That is what we intended to do, but the scheme may have been altered slightly since then.

The second point raised by the noble Lord, Lord Rennell, was that we should provide finance only. I do not think that is the purpose of the Corporation; and, in fact, it would not satisfy the needs of the Colonial people. The noble Lord, Lord Chorley, has just instanced the difficulties. I do not know whether he is right or wrong. Obviously some of the Colonial people feel that what he has said is the fact, but to restrict the Corporation's activities to finance would not help the Colonial people to a very great extent, particularly in these days when there is a good deal of finance available in some of the Colonies. What they need is managerial experience, technique, capital equipment, all the "know-how" which we possess and they do not. That is one of the great objects of the Corporation, to provide for these people the "know-how" that this country can supply in a great measure. The third point made by the noble Lord, Lord Rennell, as I understood it, was that the Corporation should sell profitable schemes and recoup themselves out of capital gains, instead of trying to do it out of income. That point will no doubt be considered. I do not know how that idea will appeal in some of the Colonies, but I have no doubt that that whole principle which the noble Lord mentioned will be considered. We shall certainly look into it when the time arises. I do not know whether there is any great capital appreciation in many of the schemes. They are too young still for us to know, but when the time arises no doubt the noble Lord's views will be carefully considered.

The various schemes have been mentioned. I do not propose to go through them, because I think the Report deals fairly well with them, and, in any case, the Government do not interfere in the commercial management of these schemes. But there is one issue on which I should like to do battle with the noble Lord, Lord Lloyd. I think he said that he did not see why the Corporation should go in for hotel keeping. This is one of the great difficulties which arose just after the war in the development of the Colonial Territories, particularly in West Africa, but to some extent in East Africa. Time after time when we tried to get people to go there, private enterprise firms and the like, they would say, "This is a really terrible place. There are no hotels for our managers to stay in. Even if we send a traveller out he cannot stay there. We cannot get any food or accommodation, and there is no hope of getting any help in that way." Therefore, perhaps wrongly—and I must admit that I was one of those who felt this way—we thought that in these places where there were no hotels at all, or at any rate no hotels up to European standard, it was desirable, in order to encourage people to go there and get on with the development, to set up an hotel if private enterprise was not able to do so. I feel perfectly certain that the Corporation were not anxious to go in for hotel keeping, but they were advised by some of the Colonial Governments that it was almost an essential priority and preliminary to development in their area.

We quite agree that the co-operation of the Colonial people is of the utmost importance. As noble Lords will see, in eight undertakings the Corporation are in partnership with governmental or statutory bodies, and in ten with private enterprise. They intend to accelerate the pace of regional devolution, and eventually to transfer to local ownership some of the schemes as economically and technically sound businesses under competent management. I know the present Chairman of the Corporation is (as I am sure the late Chairman was) very anxious to do everything he possibly can to associate the Colonial peoples with the work of the Corporation. He has an organisation which deals with this particular aspect, and we are rather anxious that the people of the Colonial territories should feel that this Corporation has been set up for their benefit and that their co-operation is urgently desired by us.

Pilot schemes were mentioned. Again, I cannot but wholeheartedly agree that to produce the scientific and technical matters involved and to train staff it is essential that we should have pilot schemes; and it is immensely important in agriculture, where soil surveys, cropping tests, improvement in methods of agriculture and organisation of administrative headquarters are vital before large scale operations begin. I want to say just a word if I may on the High Commission developments, because part of the High Commission territories has come into the news a great deal lately. The noble Lord, Lord Hailey, mentioned the Bechuanaland and Swaziland schemes. As your Lordships know, conditions in Bechuanaland were not good at all. In many ways they are not good now. They are a little backward in certain respects. I think it is fair to say that the Usutu Forestry Scheme, which Lord Hailey mentioned, does look promising. The prospects of the irrigation scheme, he said, were not quite so optimistic, but my information is that that also looks quite promising. The Lobatsi Abattoir scheme is not at all dependent upon the ranching scheme, although no doubt it will benefit from it. After all, Bechuanaland has 1,000,000 head of cattle, and it has an annual draw-off of 7 per cent., so quite a number of cattle will have to go through the abattoir. The whole point about this scheme, however, and why it is of great importance, is that the South African Union, which is the main customer, now takes the cattle at the wrong season of the year from our point of view. The cattle are off colour, and in the long trek down on the hoof they lose at least 100 pounds of meat per head. Then occasionally foot and mouth disease breaks out and we cannot sell any cattle at all. If we can establish this abattoir, we shall be able to sell our cattle in this area at a time when it is most convenient, and they will not lose meat on the long trek clown on the hoof. Furthermore, the Union will probably take them even if there is foot and mouth disease—at least we hope they will.

The ranching scheme is a very big project and involves a great amount of inquiry. I am not quite so confident about it. I want to be entirely open with the House. We thought that the original scheme was far too grandiose, and this scheme, which is the second or, one might say, the amended scheme, is much more humble. I think it is more workable. As Lord Hailey says, it will take about eighteen years to complete. But, as noble Lords know, in this part of Africa so much depends upon the depth below the soil of the limestone layer. People go out to Africa and often lose a great deal of money because they think that by getting water into some depression and sinking wells they will obtain a growth of grass for their livestock. But sometimes in this part of Africa the limestone layer is too low below the ground for the grass roots to get down and suck up the nutriment. People go to Africa and see large amounts of scrub, and they think they have only to sow grass and they will have fine ranches which will solve the meat problem of the world. But the point is that scrub will grow there only because it has long roots, and it sucks up the water, which grass cannot do. Therefore, if you take away the scrub you are left with nothing but desert; you will not have the soil, or the scrub, or the grass. That is a matter that has to be proved, and I am not going to make any definite promise as to how many head of cattle are going from this particular land until I know how low, below the surface, on the average, is the calcrete layer, and whether the grass roots can get down to it. That is the sort of problem that one is up against.

Noble Lords have commented upon the importance of having tests before embarking upon these vast schemes. Certainly in my short period in the Commonwealth Relations Office both the Secretary of State and I were very anxious that we should not create a desert in Bechuanaland, and that if any scheme was to be introduced it should be one that had a good basic chance of success. There are several basic difficulties facing the Corporation. The first is, that, quite naturally, many of the new projects in the Colonies have already been adopted by private enterprise or by the Colonies themselves and a good deal of the cream has been skimmed off the milk. The second basic difficulty is that many of them cannot be profitable for many years to come.

Quite a large expenditure is often needed for non-commercial undertakings. As I said in the debate on the Overseas Resources Bill, so many of the things which, in the Colonies, have to be done either by the Corporation or, for that matter by private enterprise, are done in this country by the Government or by statutory authorities or by local authorities. Frequently none of these facilities is available to the person who wishes to initiate some sort of undertaking in the Colonies. I am sure that the noble Lord. Lord Tweedsmuir, with his knowledge of Uganda, realises well that a great deal has had to be done entirely on their own account by people wishing to develop that country. The cost of these things, and the cost of pilot schemes, has now to be borne presumably by the Colonial Development Corporation. In one instance, in North Borneo, the cost was borne partly by the Corporation and partly by the Government of North Borneo. That was a scheme with which we were very anxious to push on, because of the grave shortage of rice in the Far East just after the war—one of the gravest shortages ever known there. Your Lordships will remember the Rice Board in Singapore which was set up by the Coalition Government, and which undoubtedly saved many millions of people from starvation in that area. We were anxious to increase the supply of rice and we therefore wanted to have a pilot project in the mechanisation of rice growing in North Borneo. I am now speaking not as the result of accumulated wisdom or from the collective wisdom of the Government. but in the light of my own uncertain or fallible apprehension. I am not at all sure to what extent we can expect the Corporation to go in for pilot schemes of that nature.

It may be that some system by which the Corporation would finance schemes which are of great importance but which no commercial firm would undertake may have to be worked out. On the particular scheme of which I have been speaking, the North Borneo rice scheme, we lost a comparatively small sum—something like £8,000, if I remember rightly. But it was a scheme that if it had proved successful would have been of immense value. If it had proved possible to grow rice in that area by mechanical means, instead of by hand cultivation, clearly the growing of rice throughout the whole world—most certainly in the Far East, at any rate—would have been revolutionised. In the case of a scheme of that kind, a scheme of great importance which had never been tried before in that area, though I understand that it has been tried in America, then, although I do not know what the Government's view is, I am not sure that it would always be fair to expect the Corporation to put up the money. But no doubt that is a matter which will be considered in due course, and the necessary arrangements will be worked out.

A question has been put to me by the noble Lord, Lord Rennell and also by the noble Lord, Lord Teviot, with regard to the reorganisation of the Corporation. This has been in hand for some time, and the new executive management board which has been set up consists of the chairman, the deputy-chairman and the five senior officers. It meets twice weekly; minutes are kept, and are given to the directors. Under the new system, all affairs and all staff have their focus of decision, responsibility and authority in one or the other of its functional members. All divisional managers and heads of departments have one controller to whom they are responsible. The executive board has a collective managerial responsibility and also puts things in better shape for the statutory board. At this point, I should like to answer a question which was put to me by Lord Chorley. There is one member now who comes from the Colonial peoples. He is Doctor Lewis, a very distinguished economist. I understand he is a professor of economics in, I think, the University of Manchester. He was born on one of the Caribbean Islands—St. Kitts, I think—but I am not quite sure upon that point.

These regional controllers, resident abroad, are to be appointed, and there is to be devolution of authority and responsibility as considerable and as speedy as individuals and circumstances permit. Regional controllers will, in general, be responsible for the operation (through project managers) of projects in their region. Perhaps in their early development period projects may be directly guided by the divisional expert at headquarters, and a few, for technical reasons, may even be retained when the scheme has come fully into being. The regional controllers will be responsible to the executive management board and to each individual member of it in his particular sphere. The Board feel that there can be no absolute and comprehensive definition of devolution of authority or responsibility. Matters of policy must, of course, be referred to head office where their importance warrants it. Devolution will, however, include authority to initiate preliminary inquiries into possible projects and the cost thereof; to submit schemes to head office; to prepare and administer plans and budgets for the region and to spend up to a fixed amount without prior approval from head office where time does not permit; to carry out local recruitment and administration of personnel, and to award contracts and purchase material within limits. In general, the regional controller would be responsible for the relations between the Colonial Development Corporation, the Government, the public and the Press. It is evident that the Corporation should appoint only individuals about whom it is tolerably certain. Men of the requisite calibre and experience are naturally hard to find, but strenuous efforts have been made to find them, and four appointments are now imminent.

LORD RENNELL

May I ask the noble Lord something upon that point? Will the regional controllers be assisted by what might be called local or regional boards or other advisers, or will they be single individuals acting on their own?

LORD OGMORE

In the original Act, as the noble Lord will recollect—I think Section 11 is the relevant one—theoriginal intention was that these boards should be set up in every area. I imagine that my right honourable friend the Secretary of State, and, I am sure, the Chairman, who is most anxious to secure local cooperation, would wish to set up these boards as soon as possible. But we shall see what, happens in due course.

One further word before I come to what I want to say in conclusion. Much of the criticism voiced by Lord Rennell, and by some of the other noble Lords who followed, related to the wide variety of types of undertakings and projects. If hope that I have shown to the House that in the circumstances of the time there is urgent need to get on with matters. The terrible pressure of events, very often the impatience on the part of Colonial peoples themselves, and the fact that this is an entirely new field, all add up to a necessity to treat almost every Colony separately. Colonies differ very much; they may be tiny pinpricks on the, map of the Pacific, the Caribbean or the Indian Ocean; or they may be vast territories, such as Nigeria, with its population of 30,000,000 and an, area larger than Germany and France put together. Tanganyika, incidentally, is even larger, though it has nothing like the same population. The Colonies include also commercial settlements, such as Singapore and Hong Kong. Therefore, in view of all their different needs, if we are to have a Corporation which is to operate at all, we must have a Corporation which can operate schemes of great diversity.

Often, one type of scheme will be of use to only one or two Colonies. We have to make up our minds whether we want a Colonial Development Corporation which is going to be of some use to almost every Colony, or a Colonial Development Corporation which is going to be of use only to one or two of the great Colonies. The Corporation as it now exists represents our attempt to solve this problem. I think the best epilogue I can give is to repeat two paragraphs of the Conclusion of the Report. There is both achievement and failure in this record; encouragement and disappointment. Failure and disappointment are inevitable in the work the Corporation was set up to do; inevitable also that these should attract more attention than any success. All these words are very true, and none more true than the last.

I should like, before I sit down, to pay a tribute to the staff of the Corporation, from the late Chairman down, who have worked under these novel conditions, often in very trying circumstances. I should also like to pay a tribute to the present Chairman and his staff. In the fullness of time, when the results are put in proper perspective, I am sure we shall find that the success of the Corporation has been due to the efforts of both the Chairman who started these projects and of the Chairman who continued and, in some cases, extended them. I want to warn the House and the country frankly that there will be more failures and more losses in this field. I also want to point out that the development of a great Empire cannot be undertaken in a mean and pettifogging spirit. Unless we do things courageously and warm-heartedly, we had much better not do them at all. I believe that this great country of ours will once more show its greatness by shouldering its burden and developing these under-developed territories, which present one of the greatest challenges of our time.

6.3 p.m.

LORD RENNELL

My Lords, I should like to thank all noble Lords who have taken part in this debate, which has been a source of gratification to me. In particular, I would thank the noble Lord, Lord Ogmore, for his extremely sympathetic reply. I find little in what he said from which to differ, except possibly on matters of emphasis. I believe that the ultimate answer will be found in devolution from the Corporation, not only to regional controllers and local boards but possibly to local or regional development corporations. Administratively, that will make the success of the policy on which the Corporation have embarked a great deal more probable. I remain unrepentantly of the belief that the right development is that the Corporation, in partnership with other people, should concentrate on providing finance for development and should not undertake direct management and direct interest to the extent that they have done. I agree that the Corporation's interests cannot be limited to small schemes. My main complaint was that there had been an apparent craving for the grandiose, rather than recognition of the value of the small and useful. I hope we shall see, in the programme shown when the next Report of the Corporation comes out, a great many more small schemes undertaken and not quite so many large ones.

I do not think that my ideas about the policy which the Corporation should follow differ in any way from the definition laid down by Mr. Creech Jones. In the words quoted by the noble Lord, Lord Ogmore, he said that the Corporation were to establish and to assist the development. That is one of the main functions of the provision of finance for enterprises. We have other examples of Corporations set up in recent times to provide finance for enterprises, both large and small. One of them, with which the noble Lord, Lord Piercy, whom I see in his place, is connected, has not entered into direct management any more than it could help. That has been the right line, and the success of that enterprise is due to its adoption of that policy. I will not comment on any of the other speeches, except to mention one point on which I find myself much more in agreement with the noble Lord. Lord Ogmore, than with the noble Lord, Lord Lloyd—namely, hotels, I cannot see that a country club in the Bahamas is a good idea, but a few Good hotels on the West Coast of Africa would be of immense advantage to everybody. They would certainly lead to more people with commercial and industrial interests going to have a look round, even though they have no particular scheme in mind. With renewed thanks to the noble Lords who have spoken, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.