COLONIAL DEVELOPMENT CORPORATION

HL Deb 30 July 1953 vol 183 cc1189-237

4.38 p.m.

LORD WINSTER rose to ask Her Majesty's Government whether they have formulated any views on the last Report of the Colonial Development Corporation; and to move for Papers. The noble Lord said. My Lords, I have to begin with a short apology. I have been having some trouble with my throat, and if I consulted my own wishes I think I would have wanted to postpone my Motion. But I felt it would not be right to disrupt the Business of the Horse or to put to inconvenience those noble Lords who are proposing to take part in the debate. I hope, therefore, that if I get into difficulties, or cause difficulties in hearing, I may have the indulgence of the House. I have no wish to raise the temperature in this matter by anything I may say, or to indulge in any harsh criticism. On the contrary, I think that the noble Lord, Lord Reith, and his colleagues who serve with him on this Corporation have an extremely complicated and difficult task to perform and no possible criticism of neglect or lack of energy in its pursuit could possibly attach to them.

Nevertheless, it would be useless to deny; that very grave misgivings exist about this Corporation. It was founded by the Act of 1948, but it had, in fact, begun to function in 1947. The Secretary o State for the Colonies is responsible for the Corporation, and with his approval the Corporation may borrow up to £100 million with Treasury consent, and another £10 million in temporary loans or overdraft. But the Corporation is required by the Act to balance its revenue with the charges on revenue, and in the course of its existence it has never done so. It had invested up to March 31, 1953—the end of the financial year, 1952–53—some £44,500,000 in Colonial industries, but by the end of the financial year 1951–52 its consolidated loss was over £8,250,000. And of those losses, £3,500,000 are represented by losses on abandoned projects. In his Report for 1951, the noble Lord, Lord Reith, expressed the hope that the year would be the worst in the history of the Corporation. But—and it must have been very distressing and a great mortification to him—he had to agree that the year 1952 had turned out to be even worse. That year eight more projects were abandoned, and the accumulated deficiency rose by over £3,750,000. I feel that, on those figures, we must conclude that more than two years of new outlook and financial discipline are required to shake off the effects of an unsuccessful start. If that is not the case, the alternative conclusion is that the work of the Corporation is more difficult than Lord Reith believed on taking office.

As the result of these unfortunate figures, many voices are raised in favour of the liquidation of the Corporation. My opinion is that the Corporation ought to be given a longer chance, but I shall have something to say later as regards my view on whether an inquiry into the work of the Corporation may not be necessary. I shall suggest that as a well wisher of the Corporation, because it seems to me beyond doubt that if losses are to continue on the scale which I have quoted, they can only lead to disaster for the Corporation. I would mention here that in view of these losses I think the reports on the 57 projects which the Corporation are operating, given in their Annual Report, are too brief to give adequate information.

Other points which have aroused my attention refer to the board of directors. The Secretary of State may appoint up to ten directors from persons who have had experience in and show capacity in primary production, industry or trade, finance, science, administration and the organisation of workers or welfare. Further, it is laid down that experience should be available to the board "from directors who had obtained their experience in Colonial territories." I do not think there have ever been more than two out of the ten directors with such Colonial experience, and at times there has been only one, so that it is quite clear that the intentions of Parliament, as laid down in the Act, have been disregarded in relation to the board of directors. In the quotation I have just read, "primary production" was given priority amongst the qualifications required for the directors. For eighteen months Sir Frank Stockdale was Vice-Chairman. He died in August, 1949, and since then there has not been an agriculturist on the board although many, if not most, of these projects are bound to he agricultural in character. If this goes on, it will look like the end of agricultural settlement schemes. As State enterprise and private enterprise are often contrasted in this matter, I must say that I do not see private enterprise raising the standards of agriculture in Africa. These facts about the Board being so, I think the Secretary of State ought to pay more heed than he appears to do to the intentions of Parliament as laid down in the Act. The board has consisted of men from many walks of life—science, finance, administration and the organisation of workers—but they have not been men with Colonial experience, and, except for Sir Frank Stockdale, certainly not with experience of tropical agriculture. I cannot help feeling that in these facts possibly lies an explanation of many of the failures which lie at the door of the Corporation.

The matter goes further, because the Act also enjoins co-operation with people in the Colonial territories. There was to be the appointment of committees to study and keep the Corporation informed of the circumstances and requirements of the territories where the Corporation proposed to operate. When they were set up, these committees were to be guided by persons with experience of the territories in question. I beg to ask the Minister who is going to reply if any such committees have been set up by the Corporation during their years of existence. If not, we would have to say that the Corporation have ignored the law framed for their guidance I have one last word to say on the board. A good deal of attention has been given to the resignation of Professor Lewis. I was rather surprised by his resignation. The statement has been made that he was not dismissed, but I understand that he asked that he be retained. I do not know if Professor Lewis was asked to resign, but I know he was anxious to remain a member of the board.

I want to say a word about welfare, since it was laid down that one member of the board at least should be someone experienced in the organisation of workers or welfare. I see from the Report that these fifty-seven projects employ some 19,000 workers, of whom only four per thousand are trade unionists. Only twelve of these projects have joint machinery for the discussion of labour and welfare problems. Twelve employ part-time labour and welfare officers. There are five full-time doctors employed, thirty-seven projects have housing schemes and four of them have hospitals. I should think that there is room for an extension of workers' organisation and of welfare organisation, but I will not stress that point because I am not acquainted with all the facts and circumstances involved. I call attention to it, nevertheless.

Voices are raised in criticism of the Corporation to say that the State cannot develop such projects successfully, and inevitably groundnuts are immediately quoted in support of that statement. The groundnuts scheme certainly failed, but a case cannot be established on one instance. Private enterprise has also frequently failed in Colonial territories. In Nigeria you will see a large tannery decaying. In East Africa various mining enterprises have failed. In Trinidad a large bamboo plantation was established hut its products were never used. In British Honduras projects by private enterprise to use the cohune nut and the cassava starch failed. In British Guiana mining enterprises, sawmills and earning plants have all failed. I could quote many more instances. So that if State enterprise has had its failures, undoubtedly private enterprise has had some very startling failures, too.

As against the failure of the groundnuts scheme, I should like to quote a State enterprise which has succeeded, I think I may almost use the adjective, brilliantly: that is, the Cameroons Development Corporation, which was formed to take over the German banana plantations. They were bought for £850,000. The Corporation now has 75,000 acres under bananas, rubber and oil palm. In 1950, it made a working profit of £472,000—I am quoting round figures—and in 1951 of over £623,000. That Corporation pays export and income tax; it has contributed as much as £50,000 in one year to local welfare schemes; it pays 3½ per cent. on a borrowed capital of £1½ million, and the profits are retained to benefit the indigenous people of the area where it works. There we find, on examining that story of success, that the first chairman was Mr. F. E. V. Smith, who had long Colonial experience to his record, and there were also directors with much experience, such as Mr. G. R. R. Sharp, from Jamaica. There we find directors of great Colonial experience, evidently pursuing good methods in their administration; and they have achieved success. I feel that the facts and figures about the Cameroons Development Corporation would well repay study by the Colonial Development Corporation; and I may say, too, that I believe useful experience would be gained from the facts and figures about certain corporations in Porto Rico must repeat that I hope something will be done to strengthen the board of the Colonial Development Corporation in regard to having directors with more Colonial experience. I could mention several names of men with that experience who would be well qualified to serve on that Board, but who do not seem to have attracted the attention of the Secretary of State.

I spoke about the brevity of some of the information which is given. In this Report of the Corporation for 1952, the fifty-seven projects I have mentioned in operation, exclusive of eight which have been abandoned, are covered in sixty pages; that is to say, just a trifle over one page per project. That is all the information the taxpayer gets as to the expenditure of his money. I think information about the projects which have been abandoned is particularly scanty. There are many flings one would like to know. Why was the cocoa-growing in British Honduras abandoned? After all, the cocoa plant originated in that neighbourhood. After the Corporation decided to try to develop cocoa production in British Honduras the Governor of Trinidad advertised 25,000 disease-resisting cocoa plants for sale. These plants had been bred by the Trinidad Department of Agriculture. Of those 25,000 disease-resisting cocoa plants Dutch Guiana bought 4,000, Ecuador bought 21,000, and the Colonial Development Corporation bought none. I wonder why they felt there was no attraction for them in that advertisement. Again, one would like more information about the Seychelles Fisheries. Then there is the project at Andros in the Bahamas to grow market garden produce. I should have thought that those islands have emerged far too recently in geological time for adequate soil to have formed there; indeed, it has been found that sea-water seepage renders the soil there infertile. I think that was a misguided project. The only question I should like to ask about it is: What expert advice was obtained before that project was embarked upon?

There is no getting away from the fact that many of these projects seem to call for examination and comment. There is the Fort George Hotel in British Honduras, with forty bedrooms, built at a cost of £260,000. That sum has now been written down to £150,000, and we are told that it should show a reasonable profit on a reduced capital. If you reduce your capital, and keep on reducing it, probably you can show a profit; but it is not good finance. However, good judges tell me that they see little prospect of that hotel ever functioning at a profit. The history of the hotel is interesting. The building of that hotel was, I understand, recommended by the Evans Commission; they recommended the building of an hotel costing not £260,000, but £50,000; and they recommended its erection for housing the staffs of the industries which the Commission had recommended should be established in British Honduras. Those industries were recommended, but they were not established; but an hotel to accommodate their staffs was erected, as I say, at a cost of £260,000. I am told that the normal traffic in British Honduras would never justify a hotel of that accommodation. So the Fort George Hotel does not seem to have been a great success. On the other hand, the Corporation had a successful hotel in Uganda, which apparently was making a profit, but they have sold it. It seems to me that they sold the wrong hotel. The prices charged by the Fort George Hotel are extremely high, being some £3 a day, and £1 for the trip out to the airport. That is far too expensive to attract people to the hotel.

Other things have been happening in British Honduras, and we do not seem to have been very lucky there. I hear, on good authority, that some Texan ranchers who were negotiating with the Government in British Honduras called attention to some failures of the Colonial Development Corporation, and they specially mentioned this project of the stock farm; an expenditure of 200,000 British Honduras dollars on a farm with forty-five head of cattle and an aeroplane. In connection with that project, machinery was bought abroad, and shipped to Britain, where it paid customs dues of thousands of pounds; and, being for tropical use, would have to be shipped out again. I should have thought that that machinery would have been held in bond for re-export; but apparently large sums were paid in customs dues. The aeroplane was bought for communications with the site of this stock farm, the Great Mountain Pine Ridge. But as there is apparently perfectly good road communication with Pine Ridge, I am riot sure for what purpose this aeroplane was bought—and whether it has been used or not, I do not know.

Then there was another scheme there, a banana scheme that failed because the plants were planted in a locality known as the Stand Creek Valley, where the United Fruit Company had failed thirty years previously. The valley happens to be quite suitable for citrus fruit, but not for bananas. The Evans Commission, to which I have made reference, made a recommendation for planting bananas in the Toledo district, where the banana industry was started some way back in the 'eighties. Sir Charles Evans, the Chairman of the Commission, had been Chairman of the College of Tropical Agriculture in Trinidad for many years, and those who planted bananas where failure had previously been recorded by private enterprise ignored his advice and went ahead, with the failure which has been recorded.

I do not wish to tell a tale of unmitigated woe, and in all fairness I want to say that, of course, there are many projects which have a good story attached to them, projects which are hopeful—the Palm Oil Estate and Building Society in Malaya, the ore mines in Kenya and the goldfields in British Guiana. I have not enumerated them all, but those are projects of which one may fairly say that good hopes can be entertained. As I have spoken about these abandoned projects and failures, I should like to call attention to what I think is possibly the most important point which I shall raise in the course of my remarks. Under the constitution of the Corporation it cannot write off its losses. I do not feel that the Corporation ought to have to use its successful projects to finance the unsuccessful, to pay interest and repay its losses. I think I am right in saying that the position about interest has been met—that the Government are now waiving the interest. I believe that is so. But it is my firm and considered opinion that the Corporation should now be allowed to write off the losses themselves. instead of these losses remaining, like the albatross round the Ancient Mariner's neck, to cripple and hamper its operations. I would beg the Minister, if he would be so kind, to bring to the notice of his right honourable friend the strong opinion which I have ventured to express: that the Corporation should be given powers to write off these accumulated losses.

Having said that, I should like to look for a moment at the Secretary of State's views on the subject of the rules which should guide the Corporation in embarking upon its enterprises. The Secretary of State says that the Corporation …should go into enterprises and incur great risks, but always where there is a prima facie possibility of making a profit. That seems to me rather like having the best of both worlds. He goes on: We should not permit development of projects on which we know there is likely to be a loss. He added: We cannot promote Colonial development by a series of losses. I interpret those statements of the Secretary of State only as saying that profitability is to be the test of the work of this Corporation: the Corporation must makes schemes pay; it must recoup itself for past losses, and it must work in association with private enterprise. Profit is to be the test. I do not believe that, wren the idea of this Corporation germinated, "Safety first" was ever intended to be its working motto. But that, apparently, is what the Secretary of State now thinks. It is to go into these projects which we know are likely to result in a loss, yet there must be a possibility of making a profit. I would say that what the Secretary of State is saying to the Chairman of the Corporation is what the old lady said in the nursery rhyme: 'Mother, may I go out to swim?' 'Yes, my little daughter, But hang your clothes on a hickory limb, And don't go near the water' That is really the Secretary of State's advice to the Corporation.

THE EARL OF MUNSTER

May I interrupt the noble Lord—only to ask him if he will clarify or expand the remark which he has just made. He said that he did not think the Corporation was ever set up to work on a "Safety first" basis. Is he advocating that the Corporation should enter into schemes of all sorts and all kinds, with complete disregard of whether the scheme should pay and of the fact that the taxpayer is finding the money?

LORD WINSTER

I was on the point of answering that question, but I was going to answer it in the words of the noble Lord, Lord Reith, the Chairman of the Corporation. I repeat what I said, that I am sure "Safety first" was not the original idea when this Corporation was established, and I think that projects of the kind which the Corporation was set up to put forward must inevitably be risky. But I think the noble Lord, Lord Reith, was far nearer the original idea when he said: The Corporation should be able to finance projects of great value but unlikely to be profitable such investment; should be recorded separately and judged on another than a profit basis. I am quite willing to answer the noble Earl's question in those words used by the noble Lord, Lord Reith. In using them, I think he has pot near the original idea.

The Corporation was undoubtedly intended to pioneer, and not merely to invest money against good security. As one reads the Act, the Corporation must try things that have not been tried before, or try things which have been tried before but try them in a different way. It must also take long views about profits. It must do speculative things if it is to comply with the original intention. It must tackle things which, for one reason or another, private enterprise has been unwilling to tackle. It must initiate pilot schemes, and must provide technical assistance and training in areas where otherwise, without the Corporation, such assistance and training are unlikely ever to he provided. Possibly the noble Earl and many other noble Lords do not agree with me, but those are my views, and I think what I regard as the real duties and functions of the Corporation are really incompatible with insistence on showing a profit on every project. I believe that the prospects of the Colonial Development Corporation cannot be rosy unless it has the good fortune to function under Secretaries of State who have faith in it, and who intend to back it with their faith. I must confess that sometimes I am not quite sure that Mr. Oliver Lyttelton has that faith in the Corporation. If he has not, then that lack of faith must militate very strongly against the prospects of success.

I wish to touch briefly upon one other matter. Of course, there has been criti- cism about the fact that Lord Reith has been given permission to take other directorships. I do not wish to express an opinion about that; I think it is too personal a matter. It is an affair of conscience whether the Chairman of the Corporation feels that he can take other directorships or not. To my mind, that is an affair of conscience for the Chairman; and, if he will allow me to say so, I believe the noble Lord, Lord Reith, to be a conscientious man. I leave it there. I must say that I thought the sense of timing was bad which allowed the unfortunate announcement of the heavy losses incurred by the Corporation in the last financial year to come out at the same time as the permission granted by the Secretary of State to Lord Reith. I felt that perhaps it might surprise some of the staff who are contending with great difficulties in the field to pull the affairs of the Corporation round: I felt that they might have thought it rather surprising that the work of the Corporation is not regarded as a full-time job. But there is one thing about which I want to express an opinion. I see that any criticism of the Secretary of State for having given this permission has always been met with the reply, "But the previous Government allowed Lord Trefgarne to take other directorships." There is one good reply to that; it can be expressed in the words of the Chinaman who said to his wife: "Two Wongs do not make a a White." I think that if it is considered wrong that Lord Trefgarne could take other directorships it is, perhaps, no different in the present instance; you cannot have it both ways. It is no answer to these criticisms to say that Lord Trefgarne also held other directorships.

Reviewing it all, I feel that the main lesson we have learned is that the Corporation spread its wings too far afield in the beginning, instead of concentrating, as I think would have been wiser, on creating a solid nucleus somewhere and then working outwards. Because of that diffusion of energy in the early years, during the last two years the board's energies have, I feel sure, been almost completely absorbed in a cleaning-up process which is taking them longer, perhaps, than they anticipated when they embarked upon it two years ago. It is very dull to spend your time clearing up other people's mistakes and never having the fun of making your own. Probably that is a feeling which is very widespread among the members of the Board: that their time and energy have been almost completely absorbed by this cleaning-up process. But it will come to an end, and we must not repine about the past; rather must we look forward to the future.

I said something at the beginning of my speech about opinions which are put forward about an inquiry into the working of the Corporations. I said that I thought the Corporation ought to have a longer term yet. Under its new board and Chairman it should have a longer run, to show what it can do. If these losses were to continue, and more projects were to be abandoned, the call for an inquiry into the administration would undoubtedly grow stronger; and in certain circumstances I think it might be very difficult to resist such an inquiry. After six years, the overall picture is certainly one of failure; and it might be found by inquiry that the methods of administration need to be improved. I myself am quite willing to leave that question for some time yet, in order to see whether, one of these years, perhaps soon, we may get a more satisfactory, a happier, picture of the work of the Corporation. Certainly I think that lessons are to be learnt from the Cameroons Development Corporation. The method of appointing the directors should be carefully inquired into, as I have already said, in the hope of getting men with more Colonial experience on to the Board.

But the final conclusion to which I have come, after the inquiries and study which I have undertaken—I hope that I have been accurate in what I have said: I have certainly spoken in complete good faith, and given what I believe to be accurate figures—is this. Capital investment in the Colonies is about £2 per head. In highly developed parts of the world it is £500 per head. My mind goes back to something which Sir Stafford Cripps said in 1947. He said: The whole future of the sterling group and its ability to survive depends upon quick and extensive development of our African resources. It is with that statement in mind, and against that background, that we should look at and consider the work of this Corporation, for it is a Corporation which has possibilities of forwarding that work which Sir Stafford Cripps in my opinion so correctly diagnosed as work of the highest importance, not only in the Colonies themselves but, as he said, in the sterling area. It may be that the possibilities have been exaggerated, and that certain assumptions have proved unsound; but the experiment of establishing that Corporation has, I consider, proved justifiable. And when more experience has been gained, I think the results that it will have to show may be very satisfactory indeed. I am sure of this: that the noble Lord, Lord Reith, and his board can rely upon the encouragement and support of this House in the very worrying but also very important task which they have in their hands. I beg to move for Papers.

5.17 p.m.

LORD BALFOUR OF INCHRYE

My Lords, I am sure we are all indebted to the noble Lord, Lord Winster, who, in spite of his vocal disability, has given us a broad review of the Colonial Development Corporation. Ashe said, this is a House of well-wishers to the Corporation. Though our criticisms may be varied and wide we all have one purpose in mind, which is to help forward the work of this Corporation. Therefore perhaps I may be allowed to make one criticism at the outset of my remarks. Before doing so I, too, should like to echo the tribute paid by Lord Winster to the great work and public service that the noble Lord, Lord Reith, has performed and is performing.

My complaint is as to the form of expression of this Report. It is not only—and I agree in this with Lord Winster—too brief in its explanation of previous losses. It is also unusual and irritating in its form of expression. The staccato sentences, the constant references to "Corporation does this," the omission of the verb, the omission of the article, and sometimes of the pronoun, do not lend any weight to the value of the document. We all know men who wear exaggerated clothes, extra high collars, extra sloppy collars, or flowing ties—always in order to create an impression that they are something which they hope the world will accept them to be. Unfortunately, the world does not always do so; and it is the same with this Report, in its desire to portray to the world a picture of a dynamic efficiency and a highly organised body. I always understood that Government publications should be models of English, so far as they can be made so. This Report is far from that. I suggest, for greater clarity, a message, in the form of the Report, which I hope may be conveyed to the Board. This is the message: Advise cease next year attempt impression ceaseless efficiency typified clipped sentences. Let us have something a little more normal next year, and it will not meet such a critical reception in that form as this Report has met with in the Press here and elsewhere.

I want to say one word about a matter upon which the noble Lord, Lord Winster, touched—that is, about the acceptance by the Chairman of outside directorships. I was not going to say anything about it except that I am at issue rather with the noble Lord. He said it was a matter of conscience. I do not think much of that idea. If it were a matter of conscience, then I would agree wholeheartedly with the noble Lord that Lord Reith was free to accept any directorship, because we know he is a man of high integrity. I think it is a matter of administration and organisation and structure. I entirely support the idea that a Chairman should not he tied absolutely to executive work. I am glad to see the Chairman has outside interests, and he can decentralise his executive responsibilities to his senior executives in order that he may be the fountain of thinking on policy matters. So I come to the same conclusion as the noble Lord, Lord Winster, but I cannot agree that it is entirely a matter of conscience. The Secretary of State is right to make it an organisational matter.

The Colonial Development Corporation is, as I see it, part of the general picture of the civilised world-wide responsibility for upraising the standards of backward peoples; and in particular it is part of our Colonial development policy. I agree with the Secretary of State that he is right to confine the Colonial Development Corporation to its proper rôle of embarking upon enterprises that have, if not an immediate, at any rate an eventual, prospect of profitability. I did not agree with the noble Lord, Lord Winster, when he read out the definition of the Colonial Development Corporation's purposes according to, I believe, Lord Reith. I prefer the Secretary of State's definition, because there are other organisations that must be considered at the same time that we consider the Corporation. There are the United Nations Agencies; the Colombo Plan; the Commonwealth Investment Corporation; the Overseas Food Corporation and the Colonial Development and Welfare Fund. Each of those has its particular function, and I believe that the Colonial Development Corporation's job is not to support socially desirable but permanently uneconomic projects.

Of course, the Corporation must accept losses and I think it is right, provided there is some eventual prospect of economic independence for the particular project. For instance, there is mentioned in the Report—I gather from the Report that the matter is still under consideration—the question of communications in the British West Indies. I should be entirely in favour of the giving by the Corporation, if necessary, of some form of subsidy for a period of years in order to prime the pump, in order to stimulate the development of communications which are both necessary and which will in the long run be economically sound. What I should be against would be the giving by the Corporation of a subsidy for a period of years for some project which should rightly be done by one of the other Agencies I have enumerated.

If the Corporation fits into the picture, as I submit to your Lordships it does, of our Colonial development, so also do I look at the Corporation as part of the economic development of Britain and of our Colonial Empire. I regard the Corporation as an important instrument in our economic planning, for two reasons. First, it can be the means of saving dollars for Britain. If we go more and more for dollar savers, we shall go some way towards relieving this country of our present dangerous dependence upon American economy. At present a small recession in American economy will have a disproportionate effect on the imports that America will accept from this country. The Corporation's list includes tobacco and cotton. I ask Her Majesty's Government whether they will be so good as to consider giving a direction to the Corporation that, on economic grounds, they should give a preference, wherever possible, to dollar-saving enterprises.

The second point I should like to mention about the Corporation as an instrument of our economic planning is that, as the Secretary of State said in another place when speaking about Tanganyikan coal, it is no good producing goods unless there are markets able to absorb the products. It is no good building new industries in our Colonial Empire if we are unable to help those industries to find markets for what they are making. Hence, I think the Corporation's prospects are inevitably tied up with the question of reserved and preserved markets in this country for Empire goods and, contra-wise, the preserved and reserved markets for British goods in Empire markets. So long as we are tied—I do not want to argue it in detail, but I must bring this out—to the General Agreement on Tariffs and Trade in its present form, the Colonial Development Corporation can assist the production of some article in some Colony, but we are unable in this country to give that article any preference over a corresponding article produced in Japan or a corresponding article produced in Germany.

There is going to be a session of G.A.A.T. at Geneva in September. I believe that the Secretary of State for the Colonies and his Under-Secretary ought to be assassins of G.A.A.T. if they are going to serve rightly the interests of the Colonial Development Corporation. You cannot divorce the future of the Corporation from the hamstrung position from which Britain is suffering under the present provisions of G.A.A.T. So long as they exist, for just so long we cannot guarantee preferential markets for the production which we have stimulated. Those are all the remarks I wish to make to your Lordships this afternoon and, having made one criticism and two suggestions, I would only say that I hope next year's Report will show us that the cleaning-up process has been accomplished and that the Corporation is embarking upon the road to that success which it is the wish of noble Lords on all sides of the House that it should eventually achieve.

5.29 p.m.

THE EARL OF LISTOWEL

My Lords, I should like to associate myself with what the noble Lord, Lord Balfour, said about the gratitude we all share to the noble Lord, Lord Winster, for giving us another opportunity of discussing the Annual Report of the Colonial Development Corporation. We discussed the Annual Report last year, and I hope we may soon be in a position in which such a discussion will become an annual event. I think it is particularly fortunate this year because, when this matter was dealt with in another place last week, it was associated with a discussion on the Colombo Plan. Quite naturally, the other place gave the lion's share of their attention to the Colombo Plan, and the Report of the Colonial Development Corporation did not receive very detailed consideration. Before I go any further, I should like to say that we on this side regret the absence, owing to ill-health, of the noble Lord, Lord Ogmore. He had special responsibility for the Corporation when he was at the Colonial Office and he therefore speaks with special authority on that subject.

I feel, looking at the Report as a whole, that the Corporation can claim a very creditable record in regard to its work in the past year and considering that it has been asked to make bricks with very little straw. I feel—and I hope this view is shared by other noble Lords who have studied the Report—that the Board and its servants, both in London and overseas, have done the utmost that can be expected of them in extremely difficult circumstances. It is greatly to their credit that they have not been discouraged and have not attempted to relax their efforts, but have continued to do their best to dispose of an extremely awkward inheritance and to undertake fresh constructive work.

The noble Lord, Lord Winster, touched on the question of whether or not the Chairman of the Corporation should take outside work. I think this is a matter which has caught the attention of the public, and it is a matter which ought to be frankly discussed. I agree with him that fundamentally it is a matter of conscience for the Chairman. I would be absurd to try to frame any general rule for the Chairman's action in this regard. One cannot say that in no circumstances should the Chairman of the Colonial Development Corporation accept any outside work. After all, it depends entirely on the particular circumstances, and the only person who can interpret those cir- cumstances is the Chairman himself, in the light of his conscience. I am quite certain that any Chairman of the Colonial Development Corporation would always leave time and mental energy for two things—first, to think out high policy in Whitehall, and secondly (and I am not sure whether this may not be equally important), to visit the Corporation's projects in our Territories overseas. I know from my own experience what an immense difference it makes to the morale of the people who are working for the Colonial Development Corporation if they receive a visit from the Chairman, and this can be translated into terms of added production.

My Lords, having said that, I hope that I shall be allowed to make one or two criticisms. These criticisms I make in the spirit of the candid friend. After all, a friend is always more serviceable to us when he is criticising than when he is praising us, because we all know our virtues but we are occasionally inclined to overlook our shortcomings. I should like to start by a rather slight criticism of the form of the Report. I use the word "form" in quite a different sense from the noble Lord, Lord Balfour, and I will try to explain the difference in a moment. Of course, this Report is intended for people who are possibly as ignorant of the affairs of the Corporation as I am myself—for Members of Parliament, for the uninstructed layman and for the general public. What I think the ordinary person wants to know is, whether the Corporation is making progress from year to year, and for this purpose to compare one year with another. It would therefore be helpful, I think, if, in essentials, the form of the Report varied as little as possible in each Annual Report. I do not mean the style of the Report—we all prefer literature to White Papers; and if a Government publication happens to have a literary style, it is all the better for that. I find that White Papers are apt to he extremely dull, and part of their dullness is due to the fact that they are very diffuse. If one can criticise the style of the Report, it is that it is elliptical. The fact that it has not a style like an ordinary White Paper seems to be something in its favour. I have said that because I wanted to show that I do not agree with Lord Balfour's criticism of the form of the Report.

Let me give one example of what I mean by my criticism. The 1951 Report, the last Report but one, states that ten new undertakings were started during the year, of which some were investigations. But it does not say in the Report which were the undertakings that were not investigations. Nor does it say how many were investigations, or what type of thing was done which was an undertaking but not an investment. These other projects were probably mostly loans, but we do not know that from reading the Report. It is impossible, therefore, from reading this Report, to know whether, in fact, the Corporation started any new development work in 1951. Yet that is the sort of question that any ordinary person would ask. On the other hand, in the latest Report, which we are discussing to-day, it is clearly stated that nine new projects were started. I feel that the word "project" is perhaps better than "undertaking." I noticed that the noble Lord, Lord Winster, used it, and I hope that that will be one of the respects in which the Reports may become standardised in form. The Report states that of the nine new projects started during the year, five were investigations and the rest were loans. That is extremely important. It is quite plain from that information that no new development work was begun in the course of the year 1952. I hope that this improvement in the form of the Report, as compared with the preceding year's Report, may be standardised, so that we can have this very vital information every year from now on.

Now, my Lords, let me say quite frankly what was my main conclusion from reading the Report. In a sense, it is a depressing conclusion, but not really depressing because it reflects on the work of the Corporation. As I have said, I think the Corporation has done its best in difficult circumstances. But what I think emerges from the Report is that the Corporation is unable, not through its own fault, to do the work for which it was set up by Parliament in the Overseas Development Act. It was intended in the Act, and certainly intended in the minds of those who adopted the policy of which the Act was an expression, that the Corporation should operate in the field of marginal profitability. Private enterprise was to continue to handle profitable and highly profitable development. Of course, if private enterprise had undertaken to develop this marginal field, there would have been no reason to set up the Colonial Development Corporation. The reason for the setting up of the Corporation was that this important field of development in the Colonies had been neglected by private enterprise.

Then there is a third field, besides the marginal field and the profitable field; namely, the field of unprofitable development—the social services, public utilities, roads, railways, harbours and so on. These were to be financed by the Colonial Governments out of public funds. The C.D.C. was not to go into this field. This was just as different from the specific task of the C.D.C. as was ordinary profit development, which it was intended should be left to private enterprise. Therefore, the specific task of the Corporation was to develop the productive resources of the Colonies in the narrow field between the highly profitable and the wholly unremunerative. I think we all recognise that the largest potential increase in production in the Colonies lies in this field. What has happened in practice is that the Corporation is now competing with private enterprise in the field of commercial profits. That was not intended, but that is what is happening.

I wonder whether the Corporation would be able today to look at any scheme with a profit margin of less than 12 per cent. I should like to ask the noble Earl, Lord Munster—because all the Corporation's schemes have now to be sanctioned by the Secretary of State—whether his Ministerial colleague and he himself would sanction a profit margin of less than this figure. It depends, of course, a little on the character of the risk, but, broadly speaking, I imagine that the line has to be drawn somewhere; and I should be very much surprised if it were drawn at less than 12 per cent. Looking at the pages of the Report it is clear that the least profitable schemes have already been abandoned. Eight undertakings were wound up in 1952 and five the year before, so the field of operation into which the Corporation has been obliged to go is quite clear. The result is that it is able to do very little new development work. For about two years the Corporation has been unable to start a single large-scale development scheme. That fact emerges from the last two Annual Reports of the Corporation.

Look at the last Annual Report. They show that, of the nine new projects, live were investigations and four were loans to private companies. Investigations are not development schemes; they are preliminary work on which development schemes may later be based. Similarly, loans are just a means of helping to finance private companies already operating in the Colony. This is a development which, although good in its way, is deflecting the Corporation from the purpose for which it was founded. I was glad to know that the Secretary of State for the Colonies has said that the function of the Corporation is not to lend money but to carry out development. One of the consequences of inhibiting development work by considerations of profit, forcing the Corporation into fields of high profitability, is that the Corporation is becoming increasingly a money-lending agency. That is inevitable. Like the banks, it puts money into the soundest schemes, and those responsible are glad to get a loan at a reasonable rate of interest.

I do not blame any Government (this is not a Party criticism) and least of all the Corporation itself, for this failure to develop the marginal resources of the Colonial Territories, which was the purpose for which the Corporation was set up. But I suggest that the time has now come, after the Corporation has been in operation for about five years, for a review by Her Majesty's Government—I am not talking about a review by the Corporation or an inquiry—of financial policy in relation to Colonial Development, and also of the terms of Overseas Development Act. I think it will be found that a more generous financial policy is essential if this development work is to go forward. I think it will also be found that the changes which are needed are so far-reaching that they will entail an amendment of the Overseas Development Act. That Act was passed by the Labour Government, and I am not in the least ashamed to say we all learn in the light of experience, and that if we were to find that the Corporation was unable to do its work because the provisions of the Act had not given it the instrument it required for its task, then I am quite certain we should be ready to support any proposal that might be made for the amendment of the Act. All I am saying at the moment is that the time has come, not for an inquiry into the administration of the Corporation—that would embarrass the Corporation and hold up its work—but for a review to be undertaken, at a high Ministerial level, of broad financial policy and of the terms of the original Act.

May I now make two remarks about financial policy. I hope the Government will consider immediately two ways in which the burden of the Corporation may be lightened. The first suggestion I have to make has already been made by the noble Lord, Lord Winster, and I should like cordially to endorse what he said on this subject. The fact is the Corporation has to repay in forty years all the capital lost on unsuccessful projects. This liability naturally increases from year to year, as projects have to be written off as failures or as unremunerative, and it restricts more and more the number of new schemes that can be undertaken. The noble Lord, Lord Winster, has pointed out that the Treasury has waived its claim for interest on this capital loss. The Corporation regards its obligation to repay capital as a very heavy burden, and in one of its recommendations it says: The Corporation hopes that those capital sums can be written off, as would seem logical and equitable. I hope that that point will be dealt with, and dealt with quickly, because it is difficult to see how the Corporation can get forward into the field of economic development work until this financial millstone is removed.

Another suggestion in the Report which I think would be highly useful to the Corporation is that it might be permitted to undertake schemes which are not likely to be profitable, but which are of great social importance. An example given is agricultural settlements. We all know that the most vital need for improving the standard of living in the Colonies is an improvement in the standard and technique of local agriculture—thegrowing of rice and the cultivation of vegetables and so on, which is done by the ordinary inhabitants of the Colonies. Agricultural settlement schemes which are given as an example of what can be done in a local setting will obviously not be profitable, but they have an immense social value. I think it would be very right and proper if the Colonial Development Corporation were authorised to undertake that sort of scheme. I was glad to see a recommendation in the Report that, to an extent approved, it should be able to finance projects that are of great value but unlikely to be profitable: that such investments should be separately recorded in the accounts and the results judged on other than a profit basis. It may be objected that unremunerative development, such as the provision of social services, housing, schools, and so on, should be financed by public authorities out of local funds, or from the Colonial Development and Welfare Fund. That is the general rule and practice, and in most cases it works quite satisfactorily; but there are certain cases where the costs of these services must be shared between the Corporation and the Colonial Governments. And in those cases where Colonial Governments are unable to contribute towards these schemes, highly useful development is quite frequently prevented. The prospect of the cost of this development makes it impossible for the Corporation to do the work.

Just a word, in conclusion, about one other matter where I think the Government could help the Corporation to do even more useful work—that is, in the field of scientific research. There is, I am sure, a need for more co-operation and better co-ordination between Colonial Governments and local projects of the Corporation in the sphere of practical research—I am not talking about pure or theoretical research; I do not mean laboratory work, but field work of one kind or another: soil surveys, crop demonstrations, and so on. The snag about this is that it is completely unremunerative. I know of cases in which the Corporation has had to give up promising projects because it has been unable to afford the cost of this preliminary research work. If Colonial Governments had been able to assist with a little money from the Colonial Development and Welfare allocation this work could have been done. I understand that what happens now (I imagine that the procedure is the same as it was when I was at the Colonial Office) is that the Colonial Government approve a research scheme and submit it to the Colonial Office for approval. If the scheme is approved, it gets a grant from the Colonial Development and Welfare Fund.

Here, I have a suggestion to make, which I think would be an improvement it the procedure and would bring in the Corporation. In those Territories where the Colonial Development Corporation has one or more development projects, why should not local representatives be consulted and brought in by Colonial Governments at the stage of drafting their research schemes? They might help to determine the character of the schemes, which are often apt to be a little too theoretical, and if a joint scheme emerged from the discussions they might also be able to agree about sharing the cost of the scheme when it was put into operation. This would have the advantage of preventing research being too much in the air, as it sometimes is now, and of ensuring that it is directed to the economic development of the resources of the particular Territory in which work is being done. My Lords, I am afraid that I have been critical rather than laudatory in what I have said. My reason is that I am a staunch friend of the Colonial Development Corporation, and I hope that the criticisms I have ventured to make have been such as may be of assistance to it in its work.

5.52 p.m.

LORD RENNELL

My Lords, the points which have been referred to by the noble Earl, Lord Listowel, are points I should very much like to take up before going on to the main subject of the Report. In the first place, may 1 say that when he spoke about the form of the Report, using the word in the sense which he used it, I find myself in very considerable agreement with him. I think the actual presentation of the affairs of the Corporation in this Report could be improved by segregating the financial schedules, which are necessary and must be published, into a separate document, and having a report of the activities of the Corporation rather in the form of a chairman's extended speech on the affairs of an ordinary commercial corporation. It is not sufficient just to give a number of notes upon what has happened to each particular project, without putting in also the information which the noble Lord, Lord Reith, certainly has about the sort of development that has been going on, the effects that economic changes in the world have had on the value of a scheme, and comments on the policy which is being pursued in adopting or turning down new schemes. I think that that would eliminate a good deal of detail in the descriptions of the projects, which is, perhaps, not entirely necessary, and would give a much better overall picture of what the Corporation was doing or trying to do.

It would also obviate—though I think we are all in favour of brevity—some of the unduly brief references to projects or affairs in certain of those places—references which, I think, leave a good deal to be desired. I will give only one instance. On page 55 in Section 73 (which deals with West African fisheries) we are told that: in February, 1953, one trawler sank in Lagos Harbour. How did it sink? Did someone pull out the bung? Did someone run into it? Did it turn over? I think there is a slight over-economy of description at that point and in several other places. The fact is that we want to know more—and in saying that, I think I am probably expressing the views of all noble Lords in the House. We want to know in what direction the Colonial Corporation is going. What is it trying to do? If you read the Report very carefully you will see that there are certain indications, and they have come into debates in your Lordships' House and into debates in another place in previous years.

I should like now to touch upon something which is clearly in line with what Lord Listowel has just been speaking about. On page 5, under the heading "Association," we find this: The Secretary of State endorsed Corporation policy in his public reference to association with private enterprise and local knowledge combined where possible with financial participation—governmental or other; indeed made such association a normal requirement for capital sanction. We have had a good deal of discussion on that subject in this House. I think that on more than one occasion I myself have advocated the bringing together of the Corporation and local interest or local government as a method of ensuring that those projects should not be fathered by the Corporation, as they have been in the past, because persons in this country or elsewhere have shown themselves totally unwilling to participate themselves or to put up any money. I regard that association as absolutely essential. Reading on a little further we find—and perhaps it is not altogether surprising—that there has been reluctance to invest scarce funds in the kind of risks which Corporation normally undertakes. This, it says, is understood. The Report also goes on to damn Colonial Governments with, I think, lather faint praise. It says: Colonial governments are substantial financial partners in some projects; in general they have been helpful. That seems to point very clearly to one thing: the Corporation has encountered great difficulties in pursuing this policy of association with people in either management or development who might be expected to know more about a particular project than the Corporation could ever get to know. There are one or two outstanding examples where this association has been successful.

It is clear that if the Corporation has encountered these difficulties in getting this association even from Colonial interests for developments in their own countries, there is some good reason for it. To my mind that good reason is clearly that many of the projects on which the Corporation has embarked—and no doubt some of those which are being put up to it at the present time—are such as a wise, foreseeing and sensible person would not invest money in. That brings us to the point which has been raised already by the noble Lord, Lord Winster, and the noble Earl, Lord Listowel. What is, in fact, the purpose of the Corporation? I do not share what appeared rather to be Lord Listowel's view, that the Corporation should indulge in projects that, on the whole, are more likely to lose money than to make it.

THE EARL OF LISTOWEL

My Lords, may I make clear what I meant? I am afraid I did not make it clear when I spoke before, and naturally, the noble Lord could have misunderstood what I said. I said that I thought the Corporation could operate in the field of marginal profitability, say between zero and 6 per cent., with variations on both sides. I meant profitability.

LORD RENNELL

To that I would say that if any Corporation will operate by preference on low margins of profitability, say zero to 6 per cent., it is inevitable that that Corporation will over a period of years lose money, go on losing money and never make any. "Marginal" is a word which has acquired a new meaning in the English language. That is especially true in regard to farming. In farming, when applied to land it means land which you would not farm if you could get anything better. Marginal projects of this sort seem to me to fall into very much the same category. They are projects which no sensible person would invest in if he could help it, and the suggestion seems to be that he ought to be pushed into it by a Corporation like this. I personally am doubtful whether that is the right way to develop any country.

I think this policy needs restatement more clearly than it has been stated in another place, either this year or in previous years, by Secretaries of State for the Colonies, because it is not consistent to say that, where possible, the Corporation shall obtain partners in the form of Governments or private enterprise, and, when they report that they cannot do that, to say at the same time that they ought to go ahead on projects which other people will not follow them into, which means that they have to go into projects on which they make losses. It is only right to say that if we have this policy (I do not say it is right and I disagree with it myself), we have used this £100 million for investment in the Colonies and do not expect to see it again. That is what is meant by "invested continuously only in marginal products." In past years—I am not speaking of present policy and present direction—the Corporation had some seventy examples of precisely that policy of going into projects which other people would not touch with the end of a bargepole.

In spite of two years' clearing up by Lord Reith, we find figures which I frankly consider very disquieting. I do not share the more optimistic, the more sanguine, views of the noble Lords, Lord Winster, and Lord Listowel. On looking at the financial statements at the begin- ning of this White Paper, I find that the accumulated loss is about £80 million, which is getting on for about half more than the loss last year. In other words, the rate of loss is piling up by geometrical progression. If it is the policy to spend £100 million and see no return, judging by the balance sheets of these companies that policy is being actively and satisfactorily pursued; but I do not believe that policy is the right one. I am inclined to doubt some of the figures, and from what I can see by reading between the lines I think that next year will not show any substantial improvement in the appalling rate of loss. As the noble Lord, Lord Winster, pointed out himself, on £40 million-odd invested an accumulated loss of £8 million has already taken place. I would add that nearly half of that, some £3,500,000, is loss on this last year's operations.

If noble Lords would turn to the balance sheet on pages 10 and 12, they will see an item of investments of £5,500,000 represented by shares in associated companies, debentures and secured loans. I should like the noble Earl, Lord Munster, in his reply, to tell us, if he can, whether those investments have been written down and, if so, by how much, because on looking through the comments on the balance sheet, I see that the provisions—otherwise reserves—which are made, and which are more particularly referred to on page 4, refer, in the main, to losses already incurred—in other words, losses written off. About half way down page 4, your Lordships will see that the board write that a reassessment has been made, and £3,965,000 has been provided under three headings—namely, so much for abandoned projects, so much for continuing projects (specific) and so much for continuing projects (general). The appended note says: first two are money losses; third the best possible estimate of possible losses on doubtful projects. As I read it, that means that there is a current reserve of £1,375,000 carried against the assets of the company which include (on page 11) £5,500,000 of investments. From the experience of the Corporation in past years, it seems to me that this reserve is very small compared even with the item of investments, and I should deduce from that, without being unduly pessimistic, that next year's loss will probably be of the same order as that shown in the present balance sheet.

We are not considering a Corporation which takes the good with the bad, he profit with the loss, and will eventually pay back any of the £100 million which has been provided. We must face the fact that £100 million has been granted by Parliament in this country for projects on which the money is going to be lost. It is going to be expended in the same way as the annual provision made under the Colonial Development and Welfare Act, under which grants are made to meet deficits and the money is written off. Do not let us "kid" ourselves into thinking that this is an undertaking which is going either to repay the capital or the interest or to produce a profit, if it is to be conducted in this way. I do not think this is the right way to do it, and I do not agree with the gist of what the noble Earl, Lord Listowel, said.

As I have said before, I believe strongly that the functions of the Colonial Development Corporation ought to be to provide funds for other people to use, to associate with Governments and enterprises and provide money on loan, and not to go into management itself. The whole curse of the activities of the past years has been precisely that the Corporation has tried to go into management. It has embarked on seventy-five or eighty projects, dotted about all over the world, in all sorts of different fields which no Corporation and no board and no chairman of any board, with all respect to the noble Lord, Lord Reith, can possibly be expected to undertake. The alternative is to use the Corporation as the machinery for finding money. It should divorce itself from management as far as possible and leave the management either in the hands of local governments or of the commercial enterprises desirous of being associated with it.

The fact of the matter is that I do not think there is a clear policy even yet in the minds of the Corporation, of the Colonial Governments or of certain noble Lords in this House. I base that remark on a consideration of the projects enumerated on page 1. May I take investigation projects first? These seem to me to fall into two distinct categories, and the distinction is not made clear here. An investigation project may be for the purpose of embarking on that project either oneself or on behalf of a third party. We have examples of both here. We have very good examples in the Tanganyika iron investigation and the earlier investigation in the Tanganyika coalfields. I do not think that it is contemplated—at least, I have never heard it suggested—that if either of these two projects proves to be commercially feasible the Corporation should embark on the development of either iron or coal in Tanganyika. Indeed, so far as the coal project is concerned, it was made clear last year, if not the year before, that the investigation into the coalfields was being carried out on behalf of the Tanganyika Government. I held the view then, and I still hold it, that it is not the function of the Corporation to undertake exploratory work and investigations, more particularly in a field where there are people better qualified and who are engaged is doing it for the Government all over the world at the present time. There is no point in the Colonial Development Corporation's putting up money to bore holes to see whether there is coal there, and then handing over a report to the Government of Tanganyika, receiving the payment of expenses, plus a small fee.

The other types of investigation—namely, those which might lead to a project being developed by the Corporation itself—fall into a different category. But we have no guidance in the Report about which sort of investigation is which. It is because that is not there that I claim there is a certain confusion of thought in people's minds as to what the Corporation is really trying to do. To recapitulate, I do not think that the Corporation ought to go into projects which everybody else has condemned and for which nobody is going to put up any money. I do not think the Corporation should go in and do exploratory mining and development work in order to hand the enterprise over for somebody else to develop after payment of a small fee. Finally, I do not think the Corporation ought to embark on mining ventures. I believe there is plenty of risk capital of this sort in the world to go and do any mining which looks at all profitable anywhere in the world. It is not for the Development Corporation to embark on that with funds provided by the taxpayer.

The real objection at the back of people's minds when the Corporation started—and it is still prevalent here to-day—was to the idea that this was a method of providing what the noble Lord, Lord Shepherd, referred to a few days ago as adequate, cheap, risk capital. Risk capital ought never to be cheap. By the nature of things it must not be cheap, but must be capital that can earn a sufficient remuneration to write off the losses incurred on other enterprises of the same sort. It is idle to suggest that there can be any form of solvency, either local or national, in an enterprise that will put up money at cheap rates for enterprises that the ordinary commercial institution will not look at.

I feel that there should be—and I join entirely with the noble Lord, Lord Winster, on this—an inquiry into the activities of the Development Corporation. I want to be careful in what I say here. I do not mean an inquiry into the conduct of the Corporation to-day, or into the conduct of the Corporation in past years, but I feel that there should be an inquiry to try to clear up in people's minds what it is that the Government really expect the Colonial Development Corporation to do, in the light of what it is doing and in the light of possible developments in the future. Then let there come out, perhaps (as I should hope) that the emphasis should be on the development of communications in special cases where Governments are unable to foster it; the development of agriculture by the provision of irrigation or water, as was done by the Sudan Cotton Plantation Syndicate and the Sudan Government jointly; and the provision of certain necessary, what I might call quasi public utility institutions, such as the hotel at Belise. I have no objection to that. I think it is necessary to have the hotel as part of the development of Belise—it is what I might call a quasi public utility development. It must be clear that those are projects on which a small rate of return ought to be expected; and they could be, and I think, perhaps, ought to be, guaranteed by local authorities and by local enterprises. That return will be the remuneration of the capital of the Colonial Development Corporation—the money which they have borrowed from the Treasury. Then let us by all means start with a clean sheet, having written off as irrecoverable the losses which have been incurred, and not keep them as a purely fictitious, evaporated asset hung round the neck of the unfortunate Lord Reith.

6.16 p.m.

LORD MILVERTON

My Lords, if I may take up the debate where the noble Lord, Lord Rennell, has left it, on the subject of an inquiry, not into the executive activities of the Corporation, as he has said, but into the aims and objects of it, I suggest that there is nothing very fruitful in that proposal, because who would be better qualified to offer an opinion on that subject than the present board of the Corporation itself? They have considerable experience of the difficulties they have encountered under their present terms of reference; and they have given clear indications of where their difficulties have arisen owing to those terms. If they are not qualified to offer the best opinion, I really cannot visualise any body better qualified likely to be appointed. If it were to be a high-level political inquiry, one could immediately foresee that there would never be any agreement, because many noble Lords on the other side of the House obviously have fundamentally different views on what should be the aims and objects of such a Corporation. It would merely succeed in plunging the affairs once more into the political arena, which would be deplorable.

At first sight, on reading the wording of this Motion, one might almost have thought that it was confined—as it asks a definite question—to speculation as to the views which the Government have formed on this Report. I should never have the temerity to attempt so precarious a task as the diagnosis of the Government's mind. But in the circumstances, and encouraged by the apparently quite irrelevant speeches of all noble Lords who have spoken in this debate, perhaps I may be allowed to add one more irrelevancy in putting forward the views I have formulated on this Report. However, before doing so, lest I should forget, I should like to mention one or two points to which noble Lords have referred and on which I profoundly disagree with them.

To begin with, the noble Lord, Lord Winster, drew the analogy of the wonderfully successful Cameroons Development Corporation and cited it as an example to the Colonial Development Corporation. I suggest that there is no analogy whatever between the two organisations. I happen to have been responsible for the foundation of the Cameroons Development Corporation, so perhaps I can speak with a certain amount of authority. Where is the analogy? The Cameroons Development Corporation were handled over ex-enemy assets, planted by the Germans—banana plantations, rubber, oil palm, and so forth—and the job they had to do was a totally different one, their chief initial difficulty being the obtaining of working capital. They had to face none of the difficulties of deciding whether it was suitable to grow bananas, or whatever it might be: they were already there, and had been proved successful. There is, if I may say so to the noble Lord, no real analogy whatever in the problems which face this Corporation.

As it has been mentioned, I should like, in passing, to refer to what I regard as the deplorable references made to the fact that Professor Lewis left the Corporation on the expiration of his term of appointment. As an ex-member of the Corporation myself, I cannot for the life of me think why, when a member's turn of appointment expires, it should be made a subject of invidious questions as to the reason for it. No such questions were asked in the case of half a dozen other members in similar circumstances. They were content, and so was everybody else: and I consider it deplorable to select this one instance—for what purpose I do not pretend to know.

Another matter on which I profoundly disagree with the noble Lord, Lord Balfour, is his criticism of the style of this Report. To me it is extremely refreshing for once to get away from the diffuse "Whitehall-ese" in which such Reports are normally written. Again, I think it would be deplorable to stand by this craving for uniformity which now seems to attack all sides of this House, and try to stamp out any symptom of individuality which we may find in such Reports. It is also refreshing that the Report has been written by the Chairman himself and has not been left to the staff in his office.

LORD BALFOUR OF INCHRYE

All the more deplorable.

LORD MILVERTON

I have some remarks to make on that, but they will come in the course of giving my views about the emphasis which has been laid on the profit motive. I think that generalities about whether profit motives are good or bad are quite irrelevant. The fact is that the Corporation is working under certain terms of reference. They may be good or they may be bad, but it is no use flinging at the head of the Corporation beautiful thoughts about how it ought to work, if those thoughts involve breaking some of the terms under which the Corporation has been authorised to work.

I suggest that a proper appreciation of this Report needs a reference to its background of the past. In the early days, five or six years ago, we all talked a great deal of any nonsense about Colonial development. We all talked nobly and generously about the great field of endeavour that lay waiting for exploitation. Everything we willed then seemed destined to be ours. To-day, we are sadder and, I hope, wiser men. That vast field of endeavour waiting for exploitation is just a mirage. Experience has taught us that it is much narrower and smaller than ever one would have dreamed from the way in which we all spoke. We have learned in an expensive school, and the history of the Overseas Food Corporation, as well as that of some of the worst disasters of the Colonial Development Corporation, has shown the danger of assuming that money can do anything. Economic and sociological facts, climatic possibilities, communications, markets and businesslike management, political stability, and a score of other factors have to be studied and co-ordinated into a picture which shows whether any given scheme is a reasonable risk or not.

Now to come to the Corporation's Report for 1952, which is the subject of our debate. I regard this as the lineal descendant of the two Reports which preceded it, and. as I see it, the present Chairman took over an organisation which was hopelessly top-heavy, in which the Chairman was also chief executive. Control of a wide range of activities, agricultural, mineral, commercial and social, including also forestry, fishing and public works, scattered over the whole wide world, was heavily centralised in London. I do not want to stray into any detail, because it would take far too long. I am merely trying to sketch in a bold way the overall picture. As I read it, the Report before us reveals the steady development of what I may call a two-pronged policy, internal and external. May I take the internal aspect first? If I may say so with respect, many noble Lords who comment on this and suggest what should be done, do not seem to have analysed what is the actual present policy of the board, and much of the advice being tendered to the board is what they are already struggling, in the midst of a prevailing ignorance, to do. The Chairman and his board have been steadily cutting down inflated headquarters staff and have been decentralising authority.

Your Lordships will remember that the basic principles of the Tennessee Valley Authority, and the principle which contributed most to its great success, was just this—the devolution of executive authority to the lowest possible levels, while retaining on top a broad overall control of policy. The present Board is paying something more than mere lip service to the idea of partnership with Colonial Governments, with statutory bodies and with private enterprise, and, at the same time, is building an efficient executive machine which can function without submerging the Chairman and his board in a mass of detail and, incidentally, without the Chairman's ceaseless personal attention. It is surely an entirely wrong conception, though a popular one in certain quarters, that the Chairman must have his hand on every lever and, as it were, be on duty for twenty-four hours a day.

After all, indispensability in this sense is not efficiency. If I may draw an analogy from my own experience, even in the confines of one Colony a Governor who concentrated all control in his own hands would be a disaster—and often has been in our Colonial history while one who organised the machine of government so as to give the utmost possible authority to others, not only obtained better results and wider popular understanding and support but also left himself free to travel, to think and to acquire those outside contacts which are so necessary to efficiency in any walk of life. Criticisms of the permission given to the present Chairman to undertake other work, in addition to his Chairmanship, are, I suggest, based on nothing more than a complete misapprehension and misunderstanding of the proper functions of the chairman of an organisation in which it is not desirable that he should also be the chief executive. I do not think it is a matter of conscience or anything of the sort; I think it is a matter of administrative practice—and may I add that it is a matter of very common administrative practice.

May I now give a brief sketch of the external aspects of the board's policy as I understand it to be from a perusal of this Report and its predecessors. It seems to me to have four points. First, disengagement from ventures with no commercial prospects—for instance, the abandonment of the British Honduras fruit scheme and the West African Fisheries; also the handing over to the Government of certain schemes as development schemes, for instance, the Gambia Rice Farm. Then, secondly, a reasonable investment in loans, under guarantee, to give a steady net income towards covering overheads, investigations and abortive pilot schemes. Thirdly, in regard to existing projects, the board aims at finding commercial associates for management and also for financial participation. Fourthly, in regard to new projects the board seems to me to be aiming at virtual restriction to those offering the possibility of association with private enterprise partners and/or with Government or statutory bodies like the development boards.

It is clear that in working with local development boards or Governments, the Corporation can provide certain marked advantages—finance, access to London contacts, private enterprise, experience and knowledge. Moreover (and this is quite an important factor, too), it can be a mediating force, on the one hand allaying suspicion of business exploitation, and, on the other, reassuring commercial interests and safeguarding them from bureaucratic gaucherie. One gathers that the Corporation's object in such partnership is not majority control but to achieve a balance. For instance, a participation of Corporation 40 per cent., commercial enterprise 40 per cent., and Colonial Government or statutory body 20 per cent., would ensure both due consideration of Colonial development needs and also unimpeded employment of proper technical procedures. The board seems to have a natural preference for association with local development boards wherever they exist, as in Uganda.

Lastly, one cannot but sympathise with the board's desire to be allowed to write off the burden of "dead" capital, and also to be allowed to segregate, and have special accounting for, projects that are developmentally valuable but unlikely to he profitable. As our experience has grown, one has been tempted by some of the initial disasters to say that the Corporation should be restricted, either to the provision of finance or to operation through established local development hoards and such bodies; but probably, none the less, it would be better to try to maintain, within approved policy limits, the maximum flexibility of operation. In passing, I would say that there is a case to be made, in my opinion, for the Corporation operating in that no-man's-land which lies between the profitable private enterprise and the Colonial Development and Welfare sphere. There are schemes which could be of great development value, which would not necessarily end in a loss but which would certainly not produce the profit which would be necessary under a strict interpretation of the terms of reference of the Corporation.

My Lords, I have tried to give the picture as I see it. Personally, I am entirely in agreement with the policy of the board as exemplified in this Report. The gloriously amateur days of three or four years ago have gone for ever. The glad, confident morning of its birth has faded into the light of common day. As the Secretary of State for the Colonies has indicated, it is rendering no service, either to this country or to the Colonies, to initiate and run at a loss schemes which never had in them the ingredients of success. There is no intrinsic merit in commercial failures or in managerial inadequacy; and the Colonial Development Corporation would surely be failing in its duty if it regarded sterile expenditure of the overtaxed British taxpayer's money as a meritorious performance. I hope that the noble Earl, when he comes to reply, will he able to say that Her Majesty's Government endorse the policy of the Corporation, as exemplified in this Report, and also its requests for certain relaxations of its terms of reference, and that, in fact, they will give their blessing to the Report as it stands.

6.36 p.m.

THE EARL OF MUNSTER

My Lords, I feel the whole House will agree that we have had a very interesting and illuminating discussion this afternoon on the whole field of the Colonial Development Corporation. I feel sure, at the same time, that the House will have been glad to notice that the noble Lord, Lord Winster, who moved this Motion to-day, seems fully to have recovered his vocal chords. I fear that in replying to this debate I shall have to weary the House for some time in answering the many important questions which have been raised. I apologise for so doing, more especially as the House has heard sufficient of me in the course of this week; but if I now inflict a long speech upon the House, there is ample opportunity during the long Recess for noble Lords to recuperate.

The House will recall that in May of last year we had an important debate on this Corporation; and in replying for Her Majesty's Government I made a somewhat lengthy statement on our policy towards this body. Whilst I have no desire to repeat that statement, I would remind the House of the policy which I then announced would be followed in the future. I do so briefly for this reason: that it has much bearing on what we have been discussing this afternoon. Subject to this the primary duty and principal purpose of the Corporation was to remain unchanged. Her Majesty's Government have never felt that it is their responsibility to supervise the detailed carrying out of each individual scheme undertaken by the Corporation, or at the same time to usurp its function of judging the commercial soundness of any scheme. However, as I said then and as I repeat to-day with equal emphasis, as so much of the taxpayer's money must inevitably be involved in every single one of these schemes, we feel that we must have a say in the choice of schemes and the final decision whether any particular one should he pursued or not.

Of course, it is the duty of the Government to facilitate in every possible way the work which the Corporation is undertaking; and my right honourable friend is of the same opinion that the two major conditions which he laid down last year must still be fulfilled before he can sanction any new project. The first of these was that he would require enough information to enable him to judge whether a prima facie case had been made out; and secondly, as I think was mentioned by the noble Lord, Lord Rennell, that someone else besides the Corporation should normally share in the risk, whether it was a local or United Kingdom private enterprise or a Colonial Government. Indeed, the Corporation has itself been working on that basis for some time, and mention is made of the fact in paragraph 4 of the Annual Report. Now I should like to say a word about the Annual Report for 1952 with which noble Lords are fully acquainted, and which we have been discussing to-day. Complaint has been made that the Report is too brief; but that has nothing whatever to do with my right honourable friend the Secretary of State. The only responsibility that he has in any way for the Report is to lay it before Parliament and carry out a particular section of the Act.

The House will have observed that nine schemes have been started and eight have been abandoned during last year, that there are now fifty-seven projects operating and a further number, which figure I cannot give, are still in the investigation stage. Unhappily, as the noble Lord, Lord Winster, remarked, the Corporation are still showing substantial losses even though it was hoped that the year 1951 constituted the peak of the loss. The greater part of that loss which has been sustained, however, can, I think, be attributed to projects which were begun in the earlier days of the Corporation. It is quite true that the number of new schemes started last year has not been large, but the Corporation has during the past eighteen months concerned itself with overhauling its organisation and steadily weeding out those bad schemes. In fact, during this pause in time, the Corporation has been taking stock of its position and endeavouring to put its house in order. At the same time, it is in the Corporation's own interest, and that of the Colonies as well, to keep all speculative projects down to a minimum and to proceed with any new schemes with caution.

I should like now to say a word about the functions of the Colonial Development Corporation and the Colonial Development and Welfare Fund. Mention was made of it to-day in the speech made by my noble friend, Lord Milverton. I do so because I am not certain that the distinction between these two is always fully understood. There is at times much confusion of thought, and it might therefore be useful if I recall the different purposes of the Corporation and the funds provided for the working of Colonial Development and Welfare. The Corporation is, of course, only one of the agencies of Colonial Development. It was set up to deal with commercial type projects which I need not go into now, but which are in fact all enumerated in the first section of the 1948 Act. On the other hand, the Colonial Development and Welfare Fund can provide funds to assist Colonial development in drawing up long-term plans precisely because they are, as I think was pointed out by the noble Earl, Lord Listowel, commercially unremunerative and are usually regarded as a Government responsibility.

The noble Lord, Lord Winster, and the noble Lord, Lord Milverton, both mentioned the fact that suggestions had been heard that the Colonial Development Corporation should be wound up and liquidated. Frankly, I admit that this is the first time that I have heard this rumour, and indeed it is without foundation. Although both noble Lords were not in favour of the idea of liquidating the Corporation, the noble Lord, Lord Winster, nevertheless suggested that a Committee should be set up to inquire into or to review all the workings of the Corporation. I could not support that proposition. In the first place, if it was intended to close down the Corporation, the responsibility for that action must rest on Her Majesty's Government alone, who always have obtained, and always can obtain, from the Corporation all the information which it is necessary for them to have in order to reach a major decision of that character. In my judgment, there is no necessity for a committee of inquiry into the workings of the Corporation.

My right honourable friend, as the House will remember, has agreed with the Corporation upon certain conditions which it must fulfil, and he himself as Colonial Secretary is responsible to Parliament for the broad general principles of policy which the Corporation follow. If this was a departmental committee it could, I venture to think, add nothing at all to what is already known; and if it was an outside committee I venture to think it could find out nothing further; and there I would agree with my noble friend the Lord Milverton. There s a close relationship between the Colonial Office and the Corporation, and it is working to mutual satisfaction. But any committee which was set up to inquire into the functions of the Corporation could do no more than report that it was fulfilling the obligations which are written down quite clearly in the first section of the Act.

I pass front that to deal with another point which was made by the noble Lord, Lord Winster—namely, the regrets which he felt that there were no directors with Colonial experience on the board of directors. In point of fact since the Corporation came into being there have been on the board five individuals with a considerable knowledge of Colonial territories; and, of course, Sir John Hall is still a member of the board. The noble Lord, Lord Winster, attributed some, but not all, of the Corporation's misfortunes to the fact that there has been no expert in tropical agriculture as a member of the board since, I think I am correct in saying, the death of the late Sir Frank Stockdale. It is quite true that to-day there is no member of the board with the necessary agricultural qualifications. But it could be argued—I do not want to rouse the noble Lord now—that the appropriate place for the expert is on the staff and not in fact upon the board.

The House will be interested to know that the Corporation has recently set up a panel of scientific advisers, almost all of them experts in various branches of agriculture and science, for the special purpose of advising the Corporation upon how it can most effectively use scientific knowledge and experience in application to agricultural projects overseas. I understand from the noble Lord the Chairman of the Corporation that the Corporation consults this panel on the planning and inauguration of new agricultural projects, on problems which arise from existing projects and on the selection of personnel for investigations and for experimental work on projects. My right honourable friend the Secretary of State has told the noble Lord the Chairman of the Corporation that he regards this as an excellent innovation and I think it does meet in substance, though perhaps by a somewhat different method, the point which the noble Lord, Lord Winster, has raised.

The noble Lord, Lord Winster, also asked me about and drew attention to Section 7 of the 1948 Act, which gives power to the Corporation to set up local committees in any of the territories in which it is likely to function or operate. The section states that the committee will have the duty of keeping the Corporation informed as to the circumstances and requirements of the inhabitants. Since that Act was passed, regional commissioners have come into being, and it is their duty and responsibility to keep the Corporation fully informed of what is occurring in their particular territories. Naturally, I take it (and I am sure that I am correct) that the regional controllers are in almost continuous touch with the local Governments in their regions, and they are fully acquainted with the views which those Governments would express. If the regional commissioners had not been appointed, there might have been considerable merit in having these particular committees functioning. I should mention, in passing, that the section in the Act, in effect, leaves the establishment and the composition of these committees entirely at the discretion of the Corporation. So, if they have not been appointed the Corporation is not in any way breaking any section in an Act of Parliament.

My Lords, I should now like to answer some other detailed questions which were put to me during the course of this debate. As regards the resignation of Professor Lewis, I regret, with my noble friend Lord Milverton behind me, that this matter is constantly coming up as if there were something sinister or shady behind it. Professor Lewis was neither dismissed nor did he resign; he accepted appointment for two years, and at the end of two years his appointment expired. That is all I can say on that point. I am aware of no question which caused him to be dismissed or to resign.

I should like now to deal with further important points which came up during this discussion, but I would say in the first place that every one of the schemes which the noble Lord, Lord Winster, referred to, and which have now been abandoned, were in fact founded and started in the days of the late Government. How right Lord Listowel was when he said in the course of his remarks that we all know our virtues, but that we are apt to overlook our shortcomings! The noble Lord, Lord Winster will forgive me if I do not go into all the questions he raised. In point of fact, the aeroplane in British Honduras was purchased for the main purpose of spraying from the air. Colonial Development Corporation employees are, of course, permitted, and I should imagine encouraged, to become members of registered trade unions where they exist. But as the noble Lord, Lord Winster, knows full well, there are not many registered trade unions functioning in the Colonial territories on the basis that we understand. As regards labour welfare, the Corporation is subject, of course to the local labour laws, and the Corporation co-operates, as it must do, with the local labour departments.

Finally, there is the question of machinery being imported into this country from one project in a Colonial territory, to be sent out again into another. There the position is slightly complicated, but I think I can cover it in these terms: that if the machinery is of British origin no Customs fees or dues are paid. On the other hand, if the machinery has been manufactured in America, and has been supplied to a project direct from the manufacturers in the States, then the Corporation deposits with the Customs a sum based upon the value of the machinery when it is brought into the United Kingdom from the Colony, and that deposit is refunded when the machinery is exported to a fresh field of operations.

Many noble Lords asked me questions concerning the writing off of capital losses on those projects which have now been abandoned. I told the House last year that we were prepared to relieve the Corporation of liability from interest in respect of capital advances which could properly be regarded as dead. Since then a further undertaking has been given to the Corporation that Her Majesty's Government intend to introduce legislation to permit the writing off of capital losses on schemes which can properly be deemed to have been abandoned. We hope that this legislation will be introduced early next Session.

Then, my Lords, there was the question raised—I think by the noble Earl, Lord Listowel and by the noble Lord, Lord Winster—about the noble Lord who is Chairman of the Corporation. I feel that I cannot do better than to read to the House the reply which was given in another place by my right honourable friend on the question of Lord Reith and outside directorships. He said this(OFFICIAL REPORT, Commons, Vol. 516, Col. 209): Now that Lord Reith has nearly completed his reorganisation of the Corporation both at headquarters and in the regions, I saw value in a suggestion which he made some time ago, that the Chairman, as in many large commercial organisations, should concentrate upon major questions of policy, leaving the day-to-day administration to be carried out by the strengthened executive. I therefore felt able to agree that the post of Chairman need no longer exclude the acceptance of two or three private directorships. I welcome this move, since it will keep the Chairman in closer touch with the business world outside the Corporation. The reorganisation of the executive will be completed in the autumn and thereafter Lord Reith's salary as Chairman will be £3,500 per annum instead of £5,000. He has assured me that he will still regard the Corporation as having the first claim upon his time and energy. In reply to a supplementary question, my right honourable friend said that Lord Reith would continue to give the whole of his time to the affairs of the Colonial Development Corporation, subject to attending one or two board meetings of those companies a month. The House will see at once that, although my noble friend is taking on additional directorships, he is at the same time having a very substantial reduction in his salary.

Perhaps I may turn now to a criticism which has been made to-day, I think I am correct in saying, by the noble Earl opposite, that the Corporation has not been fulfilling the duties which have been laid upon it by the Act, but on the contrary has invaded the field which should be covered by private enterprise. I can only call to my aid the Act of Parliament which charges the Corporation with the duty of securing the investigation, formulation and carrying out of projects for developing resources of Colonial territories with a view to the expansion of production of foodstuffs and raw materials or for other agricultural, industrial or trade development therein. Surely the development of rubber in Malaya, or sugar in the West Indies, or copper in Northern Rhodesia, is a development of the resources of those territories, and indeed an expansion of the production of their foodstuffs and raw materials. It has been carried out by private enterprise, but is, nevertheless, part of the functions of the Corporation under the Act.

My Lords, it seems to me that the difference between private enterprise and the work of the Corporation is not so much in the field of their activities as in the instrument used for developing that field. I am supported in this view by the observations which were made by a former Minister of Food, Mr. Strachey, who, when moving the Second Reading of this particular Bill in another place, admitted the part played by private enterprise in the past—and, indeed, particularly mentioned Malayan tin and rubber, and Rhodesian copper. He then went on to say (OFFICIAL REPORT, Commons, Vol. 443, Col. 2016)—and this is what I would ask the noble Earl to bear in mind: This old type of development….has become decreasingly desirable and even decreasingly possible in the case….of many areas. The whole tenor of world Influence to-day in the areas themselves, and generally, is making it less and less possible to rely exclusively on that form of development. The right honourable gentleman went on: I am not saying, of course, for one moment that there is no place in the future for private enterprise and profit-seeking in Colonial development. On the contrary, the organisations, the instruments, which the House is being asked to set up this afternoon, will undoubtedly use private firms in many cases in every kind of partnership and contractual relation with themselves. I do not, of course, support the views of the right honourable gentleman about the obsolescence of private enterprise, but the important point is that the late Government thought of this as an alternative instrument to private enterprise in developing exactly that field of development which had previously been the exclusive preserve of private enterprise. I really cannot understand why the Corporation can be said to be neglecting its duties. It seems tome, on the contrary, that it is doing precisely what it was originally set up to do; and it is doing it precisely in the way in which the noble Lord's own Party contemplated it should—namely, in partnership with private firms. In view of the criticism that has fallen from noble Lords opposite to-day, I am inclined to ask whether the theory which they support is that good schemes should always be for the field of private enterprise and that bad schemes should always be for the field of the Colonial Development Corporation. That certainly is not what the Corporation was founded to do.

There is one other matter to which I must refer—and I apologise for taking so long. Mention was made this afternoon of the Corporation's need to be able to spend money on investigations and experiments which were not likely to be of a remunerative nature. I would refer at this stage to the importance of pilot schemes. These two points are often linked together, although in fact they raise a very different set of considerations. I suppose that "pilot scheme" has become a fashionable term, and there is a tendency to think that any, and every, project must be preceded by a pilot scheme. You could not, however, carry out a pilot scheme to see whether it was practicable to dam a river and install a hydro-electric plant. Where pilot schemes are appropriate we should entirely support the view that they should be carried out.

I wonder what really is meant by some noble Lords who use the term "pilot scheme," or other words to convey the same thing. Many people seem to think that it is an investigation which may, or might, throw up some useful result. But, of course, it is really nothing of the sort. It is a carefully controlled small-scale experiment, designed entirely to establish whether any particular scheme which looks good and workable on paper will work out in practice. For example, you may have a scheme which looks well and would certainly be an economic proposition but which depends on the ability to grow a certain kind of crop in a certain area on a certain basis of cost. It is wise to do it on the smallest scale, provided, of course, that it is big enough to establish evidence. The only way to be certain, naturally, is to try it out. But a general experiment into the agricultural or industrial potential of any area without any particular scheme in mind is obviously not a pilot scheme. Such expenditure may be very necessary, but it does not seem to me to fall within the scope of the Corporation. I should regard this as falling far more within the ordinary responsibility of the Colonial Government, to be financed from their own resources or from allocations which may be made to them under the Colonial Development and Welfare Act.

I do not deny that there may be cases where the finance of the Corporation and the finance of the local Government may be, and probably are, complementary to one another, and in that connection my right honourable friend, shortly after his appointment, circulated Colonial Governments, and suggested that they should consider the possibility of making a special effort to finance investigations which held the prospect of substantial long-term benefit. He asked all Colonial Governments to consider very closely, in consultation with the Corporation and local representatives, the possibilities of financing investigations which the Corporation itself was unable to undertake without assistance. That, I suggest, is the more appropriate way of using the taxpayers' money than the suggestion which I think was made by the noble Lord, Lord Winster, and indeed was certainly hinted at in the Report of the Corporation itself—namely, that it should have funds set aside for investigations which would be accounted for outside the normal accounts of the Corporation which, as the noble Lord knows, is required to "break even," taking one year with another.

A number of other questions were addressed to me, but I hope that I have dealt with the principal ones, except, perhaps, one which was asked by the noble Lord, Lord Rennell, who quoted investigation costs, and asked whether they had been written off. I understand that the answer is in the affirmative and that they have been. If I have not answered all the detailed points, I trust that the House will forgive me, for I have kept noble Lords much too long, though the matter is of some importance. We are all directing our thoughts in the same direction, and we hope the day may not be far distant when the Corporation will find a better fortune than that which seems to confront it at present.

7.7 p.m.

LORD WINSTER

My Lords, I would make only a few brief remarks at the present hour. I was very struck by what was said by the noble Earl, Lord Listowel, about the possibility of a review of financial policy, and indeed of the very terms of the Act, becoming necessary if things do not go as we all hope. That was what I had in mind when I was speaking on the subject of an inquiry, and I am entirely at one with him: if there is an inquiry it should be along those lines. I am also in agreement with what he said about practical scientific research, and it seemed to me that, in Lord Munster's remarks about panels of experts which the Corporation ought now to set up, there was some measure of acceptance of the view put forward by one noble Lord today.

There are two brief comments that I should like to make about Lord Milverton's remarks. I notice, from sad personal experience, that he usually knows better than anyone else, but he does not always listen to what other people say. I drew no analogy between the work of the Corporation and the work of the Cameroons Corporation. I was drawing a comparison between private and public enterprise, and I said that if State enterprise has its failures, it also has its successes; and against the failure of the groundnuts, I quoted the great success of the Cameroons Corporation. I was drawing no analogy between the work of the two Corporations. As regards the subject of an inquiry, and what the noble Lord, Lord Milverton, said about the board of the Corporation being the best people to conduct the inquiry, I think that would be a very strange principle to introduce into our legal system. But, in any case, the board, being bound by the Act, cannot express their own opinion. They are really the servants of the Secretary of State, so I should think that they would be most inappropriate people to conduct—in fact they would not be capable of conducting—an inquiry into their own conduct.

I would not dream of attempting to reply in detail to everything which the noble Earl, Lord Munster, has said in reply to my Motion. I should like, however, to express the very great pleasure with which I listened to what he had to say about the writing off of the losses of the Corporation. I think that is a great step forward. If this debate has served no other purpose, I think that in eliciting that piece of information from the noble Earl it has been well justified. In conclusion, I feel it is my duty to thank the noble Earl most sincerely for what, I think, is one of the fullest and most informative replies I have ever listened to from a Minister in this House. He gave us a wealth of information and endeavoured to reply in detail to the most important of the questions put to him. I should like also to thank noble Lords who have taken part in the debate for their assistance in making it, as I feel the House will agree, a useful one. If the noble Lord, Lord Reith, has had to listen perhaps to criticisms and admonitions this afternoon, I think he will be repaid by also having listened to expressions from every part of the House of determination to support the work of the Corporation and to do everything possible to bring it into a safe haven. And now it only remains for me to beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.