§ LORD BARNBYMy Lords, I beg to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government why preferential treatment should not have been given to British civil 302 engineering contractors tendering for contracts such as the Kariba Hydro-Electric Scheme in Rhodesia, which could not have been undertaken without some of the money provided having emanated in the first instance from the British taxpayer.]
§ THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK)My Lords, the contracts for the Kariba Hydro-Electric Scheme were put out to international tender by the Federal Power Board. This development could have been carried out only through the participation of the International Bank of Reconstruction and Development, who subscribed £28 million out of the total of £80 million. The Bank's normal practice is to insist that contracts for which they provide part of the finance must go to international tender. From this general policy we do in practice gain a great many, dollars from different parts of the world. Moreover, it is not normally the policy of Her Majesty's Government to insist on tied loans, because it gives a had example to other countries, and on the whole we stand to gain most by encouraging the general practice of open international tender. It is clearly to our advantage in the long run that the great advantages of the Kariba Dam should be available to Rhodesia at the earliest time and at the lowest cost.
In this particular case, while the Italian contractors have gained one major contract, substantial sub-contracting will take place in this country which, together with the £5 million contract for turbines, generators and transformers, is the most valuable part of the contract from the point of view of our home economy. We may regret the specific result of this contract. but open international tender is a practice from which we believe we have far more to gain than to lose.
§ LORD BARNBYMy Lords, I thank the noble Earl for the fullness of that reply. In view of the concern widely held about this matter, and since his reply is based on the assumption that lower-paid salaries and wages of contractors of other countries operating in British territory will enable them to obtain low-price contracts, I would ask him whether there could not be some review of the policy which he has outlined for projects for which only a part of the sum is being 303 provided by the International Bank. May I also ask him whether it is correct that, out of the £28 million subscribed by the International Bank towards the total of £80 million which he quoted as being available for this contract, £10 million is provided by British sources; so that the amount is £18 million on £80 million—I repeat, £18 million on £80 million—and the tender is won by a foreign contractor because of the lower-paid salaries of the personnel employed in the execution of the contract in British territory?
§ THE EARL OF SELKIRKMy Lords, I think the noble Lord is correct in saying that, of the £80 million, £28 million was supplied by the I.B.R.D., and of that, of course, £10 million was sterling releases.
§ LORD BARNBYI thank the noble Earl.
§ THE EARL OF SELKIRKI would simply say this to the noble Lord. We are living in a competitive world, and if we think we can live in a closed economy, I am sure we shall find, in the long run, that it will not work. In the long run, it behoves us to see that our efficiency makes up, as it can do over a wide field, for the better standards in wages and conditions of labour which exist in this country.
§ VISCOUNT STANSGATEWill the noble Earl make it widely known that the Government have abandoned the principle of Imperial Preference?
§ THE EARL OF SELKIRKI think that is outside the Question I have been asked to-day.