§ 4.2 p.m.
§ Debate resumed.
§ LORD TWINING
My Lords, in resuming the debate, may I first say that when I saw this Motion on the Order Paper I thought that your Lordships were being asked to do some crystal-gazing, because until the Order Paper I received this morning was issued it was the 1960 Report that we were going to debate and not the 1959 one. So I consulted my crystal and saw that this unwritten Report would be signed by my noble friend Lord Howick; who would continue to deplore the fact that 543 the Sinclair Committee's recommendations had not been brought into effect; that it was still regretted that there were insufficient funds available, and they could not be used for those countries which had received their independence—a growing number by then, my Lords. But this morning we were brought back to earth.
And may I say that I feel that this is an occasion on which we should pay a tribute to Sir Nutcombe Hume, whose last Annual Report it is. He has been associated with the Corporation for a long time, and until last year, when he became chairman, had been Deputy Chairman since 1953. In that period, when Lord Reith was Chairman and the Corporation was brought to its present satisfactory state, Sir Nutcombe was the Deputy Chairman. I have seen him in the field and I have seen him in the office and I know what a lot of wise guidance he has given to the Corporation. I am sure that this will be continued by the noble Lord, Lord Howick, whose experience and knowledge are very considerable.
There are two questions which I think may well be asked about the activities of the Corporation. The first is: has the Corporation fulfilled the purpose for which it was set up? The second, in simple language, is: what of the future? I have seen the work of the Corporation in several territories and I was not surprised that some of the earlier projects were unsuccessful. But to-day it has 88 projects in 27 countries, representing an investment of £100 million and a further £15 million committed, and I think your Lordships will regard that as a great achievement. It has really made a great contribution to these countries and has been much welcomed by the leaders there. That, I think, provides an answer to my first question.
It is true that one still hears criticism of the Corporation, particularly from those who are connected with the City and private enterprise. I think that a great deal of this is unjustified and due to a lack of understanding of the manner in which the Corporation must work, and perhaps a little irritation and impatience at the controls which are necessary in dealing with the investment of public money. But I would add my own small 544 criticism. It is that there seems to be a reluctance to obtain local financial participation. In East Africa, for instance, where there are eighteen projects—and some of them are excellent—there are only one or two in which the Africans have been invited to participate. I believe that it is possible to bring the Africans into some form of partnership and that it is very important to do so. There are no projects there, so far as I know, where there has been an opportunity for what I call omni-racial participation.
The second question really revolves around how much money is going to be available and in how many countries the Corporation can continue to invest money. I find it difficult to believe that the sum still available—£15 million of Exchequer money and an additional £20 million which can be borrowed with Treasury approval—will be adequate, even for those countries which are likely to remain dependent and, therefore, to qualify for investment of the Corporation's funds. Since the Corporation was set up, the value of money has diminished and, though the sums sound very large, they in fact will go a very little way in so large an area. It is, therefore, of great importance that local Governments should be consulted on priorities and that projects should not be selected haphazardly on a "good idea" basis.
On the question whether countries should qualify for investment in new projects once they have obtained independence, I would say that this seems to command two points of view. The Government's attitude, as I gather from reading the Hansard of the debate in another place, is that it is not proper constitutionally for a sovereign country to obtain financial investment of this sort which is subject to the approval or veto of the Secretary of State for the Colonies. This is a perfectly logical argument; but we, as a nation, are not noted for being logical in our practices, and we demonstrate this here by allowing the Corporation to continue to operate existing schemes in independent countries, and even to invest additional capital in these projects, although the Secretary of State is still the authority in the matter and the reports and accounts of these enterprises must be laid before Parliament.
545 I think it would be wise not to shut the door to these newly independent countries, but to allow them, if they so wish, to take advantage of the money at the disposal of the Corporation and the experience and know-how which has somewhat painfully been built up. These newly independent countries will need more money than ever before, and while there are some where nationalistic feelings may prevent them from turning to this sort of assistance, there are others whose susceptibilities are not likely to stand in the way. I hope, therefore, that it will be possible for those independent territories which wish to continue having assistance from the Corporation to be permitted to do so, although this may mean the provision of additional funds to be put at the disposal of the Corporation.
Finally, my Lords, I must say that I regret that a decision has not been reached on the recommendations of the Sinclair Report. Informed opinion seems to favour the eminently sensible conclusions reached by this distinguished Committee. This is another example, perhaps, that the mills of Church House grind slowly; and your Lordships have not been given an opportunity on this occasion to see whether they grind exceeding well. Should a decision be made, I hope that your Lordships' House will be given an opportunity to debate it.
§ 4.9 p.m.
§ LORD GRANTCHESTER
My Lords, there is one aspect of the subject to which reference has not been made and which I believe may be one of the difficulties in the way of the expansion of the work of this Corporation, quite apart from the limitations imposed by the size of the surplus of our balance of payments. I suggest, my Lords, that the constitution of this Corporation was misconceived when it was drawn. It was the result of a marriage of incompatible ideas, and it is therefore not surprising that many should find its offspring somewhat barren.
I found the realistic Report of the noble Lord, Lord Sinclair of Cleeve, one of the most depressing Papers I have read recently. It brings out the irritation and frustration that the procedure of the Corporation involves, without any evidence of adequate compensations. Tremendous efforts have been made, by 546 those who have given service to the Corporation, to perform some useful tasks, but the frustration inherent in the constitution and system of control can only gradually wear down the initiative and enterprise which is necessary to generate momentum in an organisation such as the Corporation has established. Surely the time has come when so much should be recognised. Then the way would be open to remodel the constitution. We can accept the fact that the Government are committed to providing £130 million on loan to the Corporation. The way will also be open to rearrange the terms of this loan in a businesslike way, with a long term for repayment. Being already committed, the realities of the situation must be faced.
My Lords, normally I do not believe that lasting benefit derives either from hidden subsidies or from the establishment of enterprises unlikely to become economic and profitable rapidly. But this is an established organisation, and if Parliament still feels that the Corporation can make a special contribution to colonial development then there is a case for making the terms of the loan already authorised generous rather than strictly commercial. It would then be possible for the Corporation to go to the public for additional money, raised by the issue of a participating prior stock. And, as the noble Lord, Lord Twining, has mentioned, it is very desirable to attract local money, and very important that this should be an increasing factor in financing the work of the Corporation. This would give small investors an opportunity of taking part voluntarily in overseas development under British auspices, which seems to me to be preferable to a system under which the Government raise more forced loans by taxation, which in my opinion is an abuse of the power to tax.
It is of the utmost importance to secure good arid experienced management. When it has been obtained, the right thing is to trust the management of the Corporation. Decisions on its operations, within the limits of the finance authorised, should be left to the Corporation, as the Committee of Enquiry very rightly suggests—"to the commercial judgment of the Corporation" are the words used by the Committee of Enquiry. My Lords, the Corporation has been fortunate in having a 547 Chairman who has shown great ability in building up to success many and varied enterprises, and I am sure we are all sorry that his term of office should be coming to an end.
I hope that the Government will decide that the time has come not only to amend the financial structure of the Corporation, as the Committee of Enquiry suggest (because that was all they could suggest under their terms of reference), but to amend also the constitution under which the Corporation operates. If they do that, I believe that the Corporation, by reason of the experience they have gained, can not only perform a useful task in colonial territories, but also, if so invited, give advice within the resources they have available in territories which have moved to independence.
§ 4.16 p.m.
§ LORD HASTINGS
My Lords, once again we are indebted to the noble Viscount the Leader of the Opposition for bringing this Motion before your Lordships' House, as he did last year. I owe him an apology for not being in my place when he made his speech, but I am afraid that it was quite unavoidable. As he knows, I should have been here if I could. On the other hand, if his speech was anything like the one he made last year, I do not think there will be very much between us.
I want to deal first with the first part of the Motion—that is, with the Annual Report of the Colonial Development Corporation. First of all, I want to draw attention to the paragraph on production, on page 9, where it is set out that, as a result of direct projects and subsidiaries undertaken and controlled by the Colonial Development Corporation, there has been, in the territories in which the Corporation operates, a total production of £18 million. In addition, as a result of that production, there has been a great stimulation of other developments by private industry; and I think that when we come to consider the balance between direct projects and subsidiaries, on the one hand, and finance house business, on the other, that paragraph on production is most important and should be always borne in mind.
Very recently, in the debate in another place, the suggestion was made by the 548 Secretary of State that perhaps more finance house business should be indulged in in the future. Now your Lordships will remember that it was only two years ago, and in the immediately preceding years, that the Corporation was being very much criticised for indulging in finance house business at all Now it is suggested that it should do more. I put it to your Lordships that it is not very easy for the management if they are going to be first told to do one thing and then another. I really rather question whether they should be given instructions of this sort at all, as they are supposed to be responsible for a commercial undertaking on a commercial footing. It is quite obvious, of course, that the more finance house business they do the easier it is to make a profit, and I only hope that it is not perhaps a Treasury idea that they should do more of this finance house business in order to enable them to pay the interest which is outstanding. Already, this finance house business, in numbers of projects, is equal to about 50 per cent. of the projects undertaken. But, if your Lordships will look at the balance sheet, on page 17, you will see on the assets side a total of £67 million, and that, after taking off the £8 million for complete losses which the Corporation wishes to have written off, £39 million of the remaining £59 million in assets is already attributable to finance house business and £20 million to direct projects and subsidiaries. So that there is already a proportion of two to one in favour of finance house business. And I should have thought that that was sufficient.
Coming back to direct projects, one must bear in mind the direct impact of these projects on the population in the territories concerned. Most of them are agricultural. Though I know that loans to Governments for housing, hydroelectric power and other schemes are very good and raise the general standard of living, these things affect the rural areas the very last, and it is important that direct projects should continue in rural areas. The improvement of agriculture is the key to the solution not only of the economic problem but also of the political problem in these countries.
It is moist interesting to see that the Colonial Development Corporation are tending to branch out into a number of smallholder schemes. There is one for 549 rice development in British Guiana, one for wattle in Southern Tanganyika, one for tea in Kenya and one for tobacco in Nyasaland—all more or less in the embryonic stage. Surely those are the sort of projects to be promoted by the Corporation, which can improve the standard of living of the population of rural areas, set them on their feet and then teach their neighbours around them.
This brings me to the tobacco project at Kasungu which I criticised so much last year. The difficulty about making criticisms of a detailed nature is that we are a year behindhand. When I made my criticisms, I spoke of a £45,000 loss at last July, but in fact the position was as set out in the Report now, showing a loss of £13,000. By the time I criticised what was going on, the management had been out there and taken action, reorganised the project and got back to where they were before. The season ends approximately in July and the new season, at any rate as regards seed beds, starts in July and August. It does not run parallel with the Report. That is the difficulty. I have been out to that project since and given it a thorough examination over a whole day, and spent the night there. The reorganisation has been complete. There is a new, first-class, experienced young manager, with a complete team of two section managers and mechanic, all from one of the biggest tobacco farms in Southern Rhodesia, and they are running the project on a thoroughly sound basis. The problem is to get the money back, because the Treasury has cut them off with the proverbial shilling. They have enough to continue for one year and now for a second year. But this is a great anxiety for the people engaged on the project. I mention this because I am anxious that this project should go ahead. I think that it has got over its bad time and that it has really first-class management.
Attached to the nucleus estate are smallholders—at first six, and now twelve, Africans. Last year they made an average income of £109. This is very high indeed for an African in that part of the world, where the average is something like £15 a year. The scheme is intended to provide 60 smallholdings, and until it does, the overheads cannot be covered. At present it is being subsidised by the 550 Nyasaland Government to the tune of £9,000 a year, because they are so keen on it. If this kind of project can be encouraged and spread, I believe that the Colonial Development. Corporation will really be carrying out the purpose for which it was set up. This is the sort of project, difficult in the first stages, which should be persevered with and encouraged, not only by the management but also by the attitude adopted in the Treasury.
Turning to the second part of the Motion, I would say that it seems to have two aspects—the Sinclair Report and the question of operations in independent territories. May I deal with the latter aspect first? I do not want to cover the ground so ably covered by the noble Earl, Lord Swinton. I would merely add to what he said about the Colonial Development Corporation's staff. It is true that they are allowed to continue to operate in West Africa and in Malaya, but, in point of fact, as they cannot expand their operations those operations are bound gradually to contract, if only by the Corporation's following their own policy, which has now been confirmed by the Secretary of State in another place—that they should divest themselves of successful projects by selling them to private enterprise and use the money in a sort of revolving fund. It will result in cutting down staffs. The important point is that the Corporation cannot recruit any more staff, apart from the staff's own fears for their future. It is very much like the situation in the Oversea Civil Service which we talked about two weeks ago. It is important that these people should not be wasted and should be able to give the benefit of their experience and knowledge to the territories concerned. But they can do that only by being allowed to expand in the independent countries of the Commonwealth in the way the noble Earl has said.
I do not want to go into the Sinclair Report in detail. Its contents are well known to your Lordships. We were just able to mention the Report in our debate a year ago. I put down a Question on March 1, and in reply to a supplementary question by the noble Lord, Lord Silkin, Lord Perth said that he hoped to have decisions on the Report in a matter of a few weeks. That was nearly 551 five months ago, and it transpired in a debate in another place that the Secretary of State had not even had a meeting with the Corporation. I know that there are difficulties—exchanges with the Treasury—but twelve months is really too long. Possibly the noble Earl, Lord Perth, will tell us that since the criticisms made in another place there has been a meeting with the Corporation, but certainly there cannot be any result. As Parliament is going into the Long Recess at the end of next week, I think it is only right that we should be given an undertaking that we can have a decision on this which we shall be able to discuss when we resume in the autumn.
Perhaps it is significant that in another place all the Conservative speakers, and in your Lordships' House the noble Earl, Lord Swinton, and myself, have been pressing the Government the whole time on the general set-up of the Colonial Development Corporation. There was actually a Division in the other place, and the Conservative speakers—and they are the ones who matter, because they know about this subject—did not vote for the Government. Perhaps that is more significant than the numbers of those who did. It might even be that if there were a Division in this House the noble Earl and I should find ourselves abstaining in like manner. I hope that the Government will pay some attention to the seriousness of the situation.
There is one last plea that I would make. Perhaps I have been a little hard on the Government and on the Treasury, and it may be that we are all in a certain measure to blame, because time and time again on all sides of the House, here and in another place, we ask the Treasury for more money. Of course they have their job to decide on priorities. I only suggest to people on all sides that we should decide our own priorities in our own minds and recognise that the Commonwealth and Colonies, and not perhaps the National Health Service, is the top priority. I have nothing against the National Health Service, but I see that there was an increase of some £45 million in one year, representing half the total so far invested or spent by the Colonial Development Corporation in over ten years. Have we got our sense of priorities right? After 552 all, how much more can we afford to give our own people? There is no National Health Service in these colonial territories; there is not even a decent medical service, even if you can pay for it, in many of them. Therefore I suggest that if we can sink our Party differences in some of these respects and make it quite clear to the Government and to our own Party leaders that we want the money to go, in the first place, to Commonwealth development and to colonial development, then perhaps the Government's and the Treasury's hands will be strengthened.
§ 4.32 p.m.
§ THE EARL OF LUCAN
My Lords, I think I should say, first of all, that we should like it to go on record from this House that we do appreciate the magnificent job done by the staff of the Colonial Development Corporation, from the top to the bottom, and that we wish them well. The purpose of this debate is, we hope, to help those members of the staff in their work and to help them to do the jobs, in which we feel present conditions are hampering them.
Now I should like to refer to the Sinclair Report, which is one of the sections of the Motion in the name of my noble Leader. In that famous paragraph 43 of their Report they come out quite unequivocally on the subject. A year or two ago Her Majesty's Government chose an exceptionally distinguished trio of men to go into this question and to advise them, and here we have the flat statement, that they have come to the conclusion thatit is not possible for the Corporation to continue to carry out the purposes for which it was set up…unless there is a change either in its financial structure or in the nature of its activities.One could not have anything straighter than that. The Government have sometimes been rather choosey in what recommendations they accept from their Commissions and Committees, but here is something so straight, and coming from such an authoritative quarter, that I do not see how they can fail Ito meet it. Time has gone by since the Committee reported, and we feel that the Government should now be able to tell us what they have decided to do.
The debate in another place was most enlightening. The Colonial Secretary 553 dealt, quite frankly up to a point, with the criticisms made. On the question of the financial structure, one of his first points was that the Corporation should make its capital revolve, by which, he explained, he meant that they should sell those undertakings which were going concerns and devote the money to something fresh. Let us just look at that proposal. What would it mean? That would mean, surely, that wherever there was an undertaking which was bringing a substantial return on the capital invested the Corporation should sell it. As the Corporation's job is to assist in those marginal aspects of development where here is a good deal of risk, and since, in the nature of things, there must always be a substantial proportion of their undertakings that do not pay, or at any rate do not pay for some time, it means that they are going to be asked to sacrifice a profitable investment and re-invest in something that may not be profitable. That cannot be a sound commercial way of doing things.
The Secretary of State said that they should borrow from private sources the £20 million which they are authorised to borrow. But, as other speakers have pointed out, they cannot offer an attractive investment to the private investor while they have this financial burden and problems unresolved. The proposals made by the Sinclair Committee have been supported by many noble Lords with much more experience than have, and it seems to me that the Government should tell us, to-day if possible, what they have decided to do.
Then we come to this old question of investment in independent territories. There is something rather depressing about coming back to this subject, because it has been brought up so often. It is like going through a sort of ritual: we put the arguments to the Government, and the Government make their stereotyped reply. They have never, to my mind, convincingly demolished the arguments in favour of more participation in independent countries. We have had most powerful support from the noble Earl, Lord Swinton, who is quite convinced on the subject, and equally powerful support from the noble Lord, Lord Hastings, with recent experience of some of the investments, and from the noble Lord, Lord Beveridge. Why the 554 grant of political independence should suddenly change the character of a country has never been explained. If the country was in need of assistance for development before independence, how can it suddenly cease to be in need afterwards?
The Secretary of State said that he did not think the conditions under which investment from the United Kingdom could be made were consistent with full independence of these emerging countries. Assistance to the under-developed countries of the world is now being given on an enormous scale. Every sort of international authority is giving money in exactly those ways; and it is being given by varying methods. Some have tighter control than others, no doubt, but what under-developed country has ever said that its independence is inconsistent with the receipt of financial and other help in its development? Do not let us forget that the basic furniture of civilisation and society is lacking in many of these countries. Roads, water supplies, schools, houses, and all the rest, have to be provided. Some can be provided by Colonial Development and Welfare funds, but there is a great deal more that needs grants, and almost every noble Lord who has spoken this afternoon has maintained that the Colonial Development Corporation should be allowed to continue to help in these countries.
The noble Earl the Leader of the House intervened when my noble Leader was speaking, but I did not think his intervention really cleared up the question. We all know that the C.D.C. is empowered, with the permission of Whitehall, to increase its investment in any existing project of Ian independent country, and we know also that it is allowed to supply the management and the know-how without the finance. But surely it is difficult to imagine circumstances in which some other organisation would be asked to finance a project and the C.D.C. to provide the staff. It does not seem a realistic way of doing things at all. I think what worries so many noble Lords—many have mentioned it this afternoon—is the effect on the future of the personnel of the Corporation to see it condemned in this way to a gradually narrowing scope. The Corporation has built up an extremely successful staff in many parts of the world. Their prestige has been growing. I think there is a 555 very high quality of entrants into the service. That will stop if the future is either uncertain or is plainly going to be severely contracted. If the Corporation cannot offer a good career, and a good prospect of a career, with a pyramid of promotion, it will not attract the best entrants into the service.
My Lords, that is not the least of the reasons why we think the Government should come to a decision at once. On the general question, finance and development in the Commonwealth, noble Lords will have seen that the Chairman of the C.D.C., Sir Nutcombe Hume, mentioned in a speech not long ago that there was a possibility that some link between the Commonwealth Development Finance Corporation and the C.D.C. would be very profitable. We know that he has also been in touch with the international organisations—the World Bank, the International Development Association and others.
There has also been a suggestion that the establishment of a Commonwealth Bank—something on the lines of the World Bank—would be one solution to the problems of Commonwealth development finance. The C.D.C. might then be converted to one of the Bank's main agencies. Its internal organisation could remain as it is, but the general policy and the provision of finance and general decisions regarding priorities would be taken out of the hands of the Colonial Office and vested in the directors of this Bank. The Colombo Plan could also be linked with it, and the funds contributed by various Commonwealth countries to the Colombo Plan could be brought into the scope of such a bank. I should like to know what Her Majesty's Government think about this proposal. In any case, what we hope to hear from them is a firm decision that they accept the terms of the Sinclair Report.
§ 4.47 p.m.
§ THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF PERTH)
My Lords, as various other noble Lords have said, we are indebted to the noble Viscount, Lord Alexander of Hillsborough, for once again bringing up the subject of the Colonial Development Corporation's Annual Report and the Sinclair Report. I think the noble Lord, Lord Twining, when he looked 556 into the crystal ball, may have been right in two respects, but I am satisfied that I can tell him that in one respect he is wrong—that next year he will not find in the Report that the Sinclair Committee's Report is still under consideration.
It seems to me that the debate to-day has really been divided into three parts. One has been the Report itself; the second, which arises from the Report and which is of immense importance, has been the scope of the Corporation's activities and the question of Commonwealth aid generally; and the third has been the question of the Sinclair Report, about which I shall be able to say something but not give any final decisions. The Report itself, as several noble Lords have said, is clearer than ever and better than ever. I think it is both right and proper that we should at this moment pay tribute, as the Report does, and as they say in the Report, to the splendid work of the noble Lord, Lord Reith, in the years 1951 to 1959. After all, it is quite true that things are now being done well, but I think the main foundation may properly be attributed to those years.
The other thing about which I am particularly happy in the Report this year, because it has been something about which in past years there has been a good deal of discussion and blame on the Government which I, for one, would say was not justified, is the question of the relationship between the Corporation and the Government. Here I am glad to see in the Report that there is satisfaction expressed at the relationship, both with the Commonwealth Relations Office and with the Colonial Office.
Coming to the results of the Report, I agree with the noble Viscount, Lord Alexander of Hillsborough, and others that it is good. Indeed, we are approaching a time when what was the first requirement of the Corporation, namely, that taking one year with another it should break even, is very nearly being reached. I say "very nearly" because these things are always very difficult to follow. Technically, you could say that that position has already been reached to-day when you see the profit figure as it is given. But it is misleading, because the profit figure includes a capital amount of £300,000. On the other hand, 557 that is offset by some £400,000 which they have not taken into their profits but which their subsidiaries have earned. If you ignore the interest due on the fructification period which has not been paid (if you look at the appropriate column you will find it listed as £1,400,000) you can see that the profit is as shown, £1,300,000;but if you take it into account, as you must do, as it has got to be paid sooner or later, subject to what may come out of the Sinclair Report the result is £100,000 short of breaking even one year with another. That, I think, is a very satisfactory result.
One wonders how it has been achieved. Has it been that they have had a windfall here or there—one or two good results? I am glad to say, No; it is a very general improvement in the great number of different enterprises they have undertaken. That, I think, is a particularly satisfactory situation. I had better be a little careful when saying how well things are going; otherwise somebody may say, "If that is so, if everything is so rosy, perhaps the idea of reorganisation is not necessary at all". I do not think that that is the case, and accept what the Corporation say in paragraph 3, sub-paragraph (11): that they cannot bear the load of both interest and capital repayment that is at present laid upon them. We have seen what that has meant in the past: capital losses, some £8 or £9 million; then this deferred interest of somewhere between £10 and £12 million. So that if you try to estimate on a strict accounting basis what has been the cost to the C.D.C. to date, either in actual losses or interest which has not been paid but which the Government have, nevertheless, had to pay to the people they borrow from, you do get a figure of £20 million; and I think it is important to bear in mind that, good as results appear this year, to date the Corporation has cost the Government £20 million. I am hopeful that in the next decade they may catch up, but I think we should be wrong if we looked at the Corporation as the answer to all development. I should not wish you to think, because I say that, that I in any way decry the very great things the Corporation has done, and in particular (I think the point was made by the noble Lord, Lord Hastings) how often they stimulate local production and encourage local people in a way that is of the greatest value.
558 At this moment it might be appropriate for me to turn to the question of the scope of the Corporation and the areas in which it works. We have found, as I say, that the Colonial Development Corporation itself appears unhappy about this. We have heard the noble Viscount, Lord Alexander of Hillsborough, and, more importantly, if I may say so, the noble Earl, Lord Swinton—I say more importantly because he says it represents a change of mind so far as he is concerned we have heard the noble Lord, Lord Beveridge and, I think, other noble Lords, expressing great worry on this point. I have listened to their speeches with great care, and it seemed to me that the worry falls under two heads. One is damage to the Colonial Development Corporation itself, and the other is damage to the Commonwealth, since the independent countries cannot get the benefit of money from the Corporation for new projects.
Let me take, first of all, the question of damage to the Colonial Development Corporation itself, and in particular to its staff. I have tried very hard to follow the argument about damage to its staff. I find that not only have various noble Lords pleaded this but that also in the Report there is this sentence:It should not constantly be threatened with a contraction in its scope".It is true that as things stand to-day its scope is contracted, in the sense that once a country has become independent it cannot put money into new projects there. But it does continue with existing projects. Do you suppose that if any ordinary commercial company is told, when it has gone into some business or other and it is going pretty well—which I think is the case with many Colonial Development Corporation businesses in these independent countries—that because completely new business cannot be started up the outlook for the managment is very serious; that in fact they really do not know where they are and it is most worrying for them? I frankly do not understand that. It seems to me that if you have a good business you can go on with it; you do not have to worry; you are the management and your purpose is making that business good. The Corporation is in a position to do this. I cannot follow the anxiety to the management that various noble Lords have talked about in those countries where they are doing good business already.
§ THE EARL OF SWINTON
My Lords, may I put this to the noble Earl? It is part of the policy, and I think very sound policy, that as the businesses develop well and become profitable, the Corporation should hive them off. If they hive them off, unless they can go into new business, there is no work for the staff.
§ THE EARL OF PERTH
I take the point of the noble Earl. But, surely, if they hive them off, if they have got, which presumably is the case, a business which is their own business, something they own themselves at the moment, the staff in that business would go on with it. You would not at that moment say to all the management: "I am sorry. We have sold the business. Out you go". The people who bought it would want to continue with the staff.
§ THE EARL OF LUCAN
My Lords, may I interrupt the noble Earl? Has he not overlooked the fact that the policy of the Corporation is to train up and bring in residents of local countries?
§ THE EARL OF PERTH
Yes, but, of course, everybody does that who is working in any country; it is a perfectly normal thing to do. You bring in local management and take them into a growing business These are not going to be static businesses. The hope is that they will develop like any other business abroad. There is a second point in this connection: we are not saying that the management has to stop in that particular business. If one of the Governments, or some other enterprise—the World Bank, for instance, with whom we read the Corporation is in touch—wishes to use the services of the management on something else, they are certainly at liberty to do so. I do not believe that such a case has arisen as yet. I do not know quite why that is, if the Corporation's management is unique and superlative; it may be that although it is very good there are other managements also very good.
I would also add one other point on this question. We are particularly anxious that when a country becomes independent there should be enough business in that country to ensure that you get what I might call decent management, or that it is worth while for the Corporation to have decent management there. May I give an example of what we have in mind? The Corporation, for 560 one reason or another, was rather slow at helping Nigeria. Very little indeed was done until the prospect, or the certainty, of independence arose last year. Then the Corporation—and I am not blaming them; I think it is most natural—made a particular drive to catch up. The result is that over the last year we have approved projects in Nigeria of some millions of pounds—much more than ever before. We did that quite deliberately, although Nigeria was near to reaching independence. We said, "It is important that you should have good management ready, and a worthwhile amount of money for it to spend". mention that fact to bring out a point which I think is most important in connection with the anxiety of the staff in various cases, and to try to show that I do not really believe that this—
§ LORD LATHAM
Would the noble Lord forgive me, but is not the example which he has so kindly cited complete proof of what the noble Viscount, Lord Alexander of Hillsborough, has said? Why did you hurry to intervene and invest the money before independence arrived?
§ THE EARL OF PERTH
That was the decision of the Colonial Development Corporation, not mine. All I said was that we were not going to stand in the way of it when they asked to do it suddenly and quickly. Rather did we encourage them to do it, with the thought that it would ensure them a good stake in the country for good management.
§ LORD LATHAM
If I may say so, the noble Earl used the word "we"—"we hurried the investment of money in Nigeria".
§ THE EARL OF PERTH
Very well; I stand corrected, and will say that the Colonial Development Corporation hurried. I am most ready to make that change, but I shall probably use the word "we" because I look upon the Colonial Development Corporation as something for which we have—as indeed is the case—not only a direct responsibility but a real interest, and we should do all we can to help.
VISCOUNT ALEXANDER OF HILLS-BOROUGH
Is my noble friend still not right in his intervention that by proceeding, as with regard to certain loans 561 in the West Indies, in this particular instance you have to hurry to do it before it is too late and the countries become independent?
§ THE EARL OF PERTH
I think the reason is, as I tried to point out, without casting any strictures on anybody, that Nigeria had been curiously neglected in the past.
Now let us come to a question which is of great importance and about which the noble Earl, Lord Swinton, rightly expressed concern—namely, the anxiety about help to the Commonwealth and, more particularly, to the countries which have just become independent in recent years. First, I think it is important that we should have a sense of proportion as to what the Colonial Development Corporation may represent in relation to other help. I think it was the noble Lord, Lord Hastings, and certainly other noble Lords, who expressed great anxiety about the capital available to the Corporation for its general use. I will come back to that in a moment. The total money made available under successive Colonial Development and Welfare Acts amounts to £315 million, and the Exchequer loans available to Colonial territories is another £100 million. I mention those figures to give a proportion in relation to the Corporation's investment in the Colonies.
Then we come to the increasingly important question of the Commonwealth countries which are now independent. There, we ("we" in this case being Her Majesty's Government) decided that the right policy to follow was Government-to-Government help. We thought about this a great deal, and we decided that in such cases the right course to follow if those countries wanted additional help for their development, was to provide it direct. One of the thoughts behind that was that the Government of the country concerned probably knew best what were the right priorities for its development. It may be a wrong assumption. But, remember, they are independent countries. They have their five-year development plans, or whatever they may be, and presumably they know in what order they want to develop their countries. It was with that much in mind that the Commonwealth Assistance Loans were invented. These Commonwealth Assistance Loans 562 are becoming a more important feature of help from this country. For example, figures over the last three years show that, whereas two years ago in Commonwealth Assistance Loans we provided £7 million, last year we provided £26 million, and this year the estimate is one of £40 million.
Again I would make the point about proportions. The Colonial Development Corporation last year (I think it was its record year) committed altogether £13 million. Of course one would like to make available more than the £40 million in Commonwealth Assistance Loans which we are making available this year. But noble Lords know the problem that we are up against. It is the problem of overlending and not weakening our exchange position. That is something we have to keep in mind. But let us not forget that there is a vast amount of money which will come—and nothing must he done to stop it—from private enterprise. That almost always proves to be at least an equal, if not a greater, source of help to these territories. That is most important.
Then, as regards these newly independent countries, we have further help from outside sources in the world. I think it is human nature, and certainly a natural tendency, that when a country becomes independent, other countries become ready and anxious to help it, both from a trade point of view and from a political point of view. One has seen that happening in the case of Ghana. There, American money has gone in, apart from private enterprise sources. Then, of course, one gets money coming from the World Bank, and from the International Finance Corporation, which is an associate or affiliate of the World Bank. There is also the newly formed International Development Association, to which only this year the United Kingdom have subscribed capital of £47 million. We are, in fact, doing a great deal for these newly independent countries, either directly or indirectly, and if for some reason or another any of them says: "In connection with that Commonwealth Assistance Loan which you have made available to us we have a problem of management in this or that particular. Can we use the Colonial Development Corporation?", of course the answer is, "Certainly, if you so wish." In practice, what they may 563 be more apt to do is to take some private group working in the country, or having great experience and highly specialised knowledge of it—for instance, the great Steel Works of India—and they get a steel consortium to help them train the people. I think that is a normal and natural course.
Then, apart from the money side, the noble Viscount, Lord Alexander of Hillsborough made great play about Israel and the help she was giving in one way or another with her technicians. I think that is splendid. But so are we.
VISCOUNT ALEXANDER OF HILLS-BOROUGH
I did not use the argument in that sense at all. I introduced it to show the steps that Russia was taking to prevent even what assistance Israel could give. I was not praising the amount of assistance that Israel could give. She is a small country. What I was trying to show was that the way to do it was to give all the help possible, otherwise they will have to turn to other countries like Russia.
§ THE EARL OF PERTH
I am glad of the explanation, if I misunderstood what the noble Viscount said. I quite agree that it is an important thing to do all one can to help. I wanted to make the point that we are doing a great deal, quite apart from the money side. Look what we are doing in the way of technical assistance. My noble Leader said that as soon as a country becomes independent we make a special arrangement with her to provide all the technical assistance she may ask for on a reasonable basis. And I do not have to repeat to your Lordships what you all know so well—the immense effort we are making in relation to education; and, after all, technical aid and education is every bit as important as the money side. But I remain firmly of the opinion that the main thrust, purpose and attention of the Colonial Development Corporation must and should be with the Colonial territories. I have tried to show your Lordships that that does not mean that the staff have to worry. Undoubtedly there is a great deal more for them to do. It certainly does not mean that the independent Commonwealth countries are neglected; far from it.
564 Having said all that, when so many of your Lordships speak as you have spoken, we will certainly study the debate with great care. Perhaps one of the values of the fact that I have been unable to comment on the Report of the Sinclair Committee, or to answer it, is that I shall be able to show my colleagues the very important things which have been said by noble Lords to-day; and we shall have the advantage now of being able to take them into account; so perhaps some good comes out of the delay.
§ THE EARL OF SWINTON
My Lords, may I ask the noble Earl a question? He has been very helpful in not closing the door. I gather it was said in another place that there were constitutional objections to allowing the Colonial Development Corporation to function in the self-governing territories. That is a point I never really appreciated, even when I was supporting its exclusion. I supported its exclusion because I thought those territories should be self-supporting, but I cannot see the faintest constitutional objection. What is the difference, constitutionally, between giving £300 million loans from Colonial Development and Welfare Funds for which the right honourable gentleman the Colonial Secretary is responsible to Parliament, and for which he has to get a Bill or an annual Vote through Parliament, and allowing a Government Finance Corporation to do a bit of work in those territories? Constitutionally, I cannot see the faintest objection there. There may be other objections, and I should be glad if the noble Earl could clear up that point. He has not advanced it, so I gather that he does not differ from it.
§ THE EARL OF PERTH
My Lords, I do not think I should be drawn into constitutional argument, although I believe that there is a constitutional point here.
§ LORD BEVERIDGE
My Lords, I wonder if I could ask for an explanation of the doubt the Government have over saying "Yes" to what has been urged upon them to-day? The noble Earl the Leader has spoken as if it were a matter of unassailable fact that for the independent nations we must act Government to Government; but I have always understood that our Government, even in this country, had advisers. Is it not a 565 question of whether it is necessary for those advisers to be somebody quite independent of the people who are dealing with the non-independent countries? Is that-not sufficiently the same problem? What is the reason for insisting that our advisers, for the independent people should be quite independent of the advisers for the non-independent people? I will not ask the noble Earl to answer that question now, but perhaps he will think it over.
§ THE EARL OF PERTH
My Lords, I will certainly think it over again, but I have endeavoured—though clearly I have failed, so far as the noble Lord, Lord Beveridge, is concerned—to explain why we believe that the machinery is adequate and that the right course is that which we are following—namely, that Government gives to Government, and that it is the independent Government which decides the priorities in relation Ito the aid it asks for and the projects to which it shall be devoted. If the Government should then wish for additional advice it is open to it to get it from whatever source it chooses, including the Colonial Development Corporation.
§ LORD BEVERIDGE
My Lords, would it be impertinent for me to suggest that, as National Insurance has undoubtedly benefited this country by being put under one advisory authority, a similar step might be of some advantage on this similar problem of helping economic development in other countries connected with us, wherever they are, to bring them a little nearer together?
§ THE EARL OF PERTH
My Lords, I am not sure that I follow the noble Lord After all, I am talking of five-year development plans—very large affairs—which the Colonial Development Corporation, quire frankly, have never suggested that they should enter into.
§ THE EARL OF LUCAN
My Lords, surely the noble Earl is confusing Colonial Development and Welfare Assistance with investment by the Colonial Development Corporation. He speaks of five-year plans, but surely these have nothing to do with investments that might be thought desirable by the Colonial Development Corporation.
§ THE EARL OF PERTH
My Lords, that is exactly my point. Whether it is a development plan drawn up by an independent Government or a plan drawn up by a dependent Government, in neither case is the Colonial Development Corporation called in. It is the Government of the country concerned which decides its plan and works accordingly, whether helped by C.D. and W. money or anything else.
If I might finish with the point raised by my noble friend Lord Swinton, I would not wish him to think from what I have said that the door is open for a change, for I do not believe that it is. I said that I should be- glad to look and see whether there were any gaps in what we believe to be adequate machinery for the purposes of helping independent countries. Having dealt with that matter at some length, because I think that it is in a sense perhaps the most important point which has arisen, and one which I believe is also open to great misunderstanding and certainly to difference of opinion, I should like now to come back again to the general view as it is set out in the Corporation's Report. I will not go into it at very great length but there are one or two points that I should like to make.
The question of local association has already been made by the noble Lord, Lord Hastings. In paragraph 5 of the General Report which is headed "Commercial and Local Association" the point is clearly made that wherever possible the Corporation does work in with local governments, local statutory bodies and local smallholders, or tries actually to bring them into a project, as in the case of tea. They set up their own tea plantation and factory and had a number of smallholders in. They were encouraged by being shown how tea could be grown and processed in their own factory. I know that some private enterprise companies are doing the same thing. It is right that this aspect is being given special attention by the Corporation, for we feel that here they can do something which is not quite commercial, bearing in mind their purpose as laid down in the original Charter.
I am a little surprised that the noble Lord, Lord Twining, should say that there was not enough association with 567 local interests. On that account, having read the policy expressed in the Report, I can only believe that the local interests, for one reason or another, are shy of joining in. But I believe that recent experience has shown that such things are now going better. Again, on this question of partnership there is the interesting new example of the association of the International Bank with the International Finance Corporation, a Dutch corporation and the Colonial Development Corporation all working together in Tanganyika on a sugar scheme, though this is too recent to be mentioned in the Report.
I am quite clear that the more the Corporation can join in with others, the better. That shows that they can make full use of their management and their skill; and it shows, also, that their capital can be made to go further. If your Lordships will look at paragraph 7 of the Report you will see that that refers to various training schemes which are being undertaken. It says that a country sometimes needs skilled, experienced management even more than loans, and shows how they are doing all they can for partnership with the local people; and that is right. They are doing that by training them on the spot, training them overseas, and even giving them scholarships. I am sure that that is a lesson which all private enterprise is learning, and nothing could be more important to the receiving country.
I shall not go into any detail on the Report and the results of any one of the various subsidiaries that are listed, but I think it was my noble friend, Lord Hastings, who raised a very important point—namely, that they have this year, out of direct projects which they run, produced £18 million worth of primary production which has been sold, and that has given great encouragement. One sees the pattern of the sort of thing they are very apt to do in such things as housing schemes. To us, housing schemes, perhaps, seem a normal and a natural thing. We all know about building societies and it is no problem here at all. But in almost all colonial territories there is no such machinery, and one of the things the Corporation has done—and it has a special skill and knowledge now which is of inestimable 568 Value—is to start up housing schemes, whether in Malaya and Borneo or in Africa or in the Caribbean.
Then we see to-day one or two very big businesses with which they are dealing. There is in Swaziland the Usutu Pulp Company. They have the timber and they have joined up with Courtaulds in a great project; they have a great pulp mill and it has transformed that country. Then there is the Borneo-Abaca scheme, which is a fine scheme that started at the beginning of the Corporation's activities when they were under the chairmanship of Lord Trefgarne. That is showing very good results and having a great influence on the country itself.
Now, I think, if I may, I will turn to the Sinclair Report.
§ THE EARL OF PERTH
I think that the noble Viscount, a little with his tongue in his cheek, made various personal points in relation to this—that one, as a banker, should be able to decide after a year, and so forth. Of course, if a year has gone by it is a distressing thing, and I, for one, regret that we cannot in this debate say in detail what is the outcome of consideration of the Sinclair Report. We have now started (and this happened not because this debate was taking place to-day but in the normal course of preparation) our discussions with the C.D.C. itself.
§ THE EARL OF PERTH
Earlier this week. The noble Viscount laughs, but I can assure him that not only was the preparation of this matter difficult; it was necessary to take great care in getting it right. We might have moved too quickly, but it is very important that we find the right answer. As I say, it is very helpful to have had the speeches of noble Lords to-day, because we shall be able to take those also into account. But I can say this—I think it was the noble Lord, Lord Beveridge, who expressed anxiety about how we are going to treat the Sinclair Report—that not only are we going to treat it with sympathy but, of course, when it comes from such wise and experienced hands it is going to bear very great weight. As 569 a matter of fact, I do not expect that we shall follow it exactly. Here is a Report which is really worked out on the assumption that the Corporation is perhaps a private commercial body, whereas, in fact, it is a Government-financed body and there is the problem of accountability to Parliament. I think it was in the Sinclair Report itself that that difficulty was recognised, and I am sure that noble Lords will understand that it is one of the things which has made it most difficult to decide on exactly what is right. But we are very near the end of that. As I say, we have started our talking with the Corporation and we shall, as soon as we can, be issuing a White Paper setting out our decisions. I should hope—but I cannot be certain—that that will be out during the Recess; and that will give us an opportunity, if it is so wished, to debate it in the autumn or in the winter.
Perhaps I can give one or two hints now of our thinking—it has been mentioned also in another place—on what I call the use of the funds. As was rightly pointed out, until recently we were a little anxious at the amount of investment that was going into finance-house business. This is a term which has become a term of art. It may mean loans either to statutory bodies or to private enterprise companies. Over the last several years the situation has altered; the climate of confidence has considerably changed in many of the colonial territories, and the sequel has been that it is more difficult, very often, for statutory bodies to borrow in the City of London. So we also are inclined to change our mind on the policy to be followed, and I do not think that that is something of which we should be ashamed. And I do not think it is something which the Corporation finds difficult, because it has been a gradual change; it is a change which they know well, and it does not rule out a continuing investment in equity. Rather does it show that, whereas at one time we felt that they were going a bit too far in finance-house business, now, perhaps, we do not mind if they do so. It is not going to be difficult for anybody in the Corporation to work on that basis.
But certainly there will be a continuing equity interest, and we like that very much when it involves partnership. As 570 I think the noble Lord, Lord Grant-chester, said, it is important that, wherever we go, we should trust the commercial judgment of the Corporation. I would say, quite firmly, that that is our policy. Occasionally, there may be an odd reason of policy or some point which causes us difficulty, but in general we think we can work on that principle as it was laid down in the Sinclair Report, and I am sure that that is right.
§ LORD HASTINGS
My Lords, may I intervene for a moment? It is my concern that the Corporation should not be given direction by the Government to increase their finance-house business against their own better judgment; and it is my concern that that should not become so great a proportion of the total investment (I said it is already two-thirds) that there would be little left over for those direct projects which are one of the very important aspects of the Corporation's work.
§ THE EARL OF PERTH
My Lords, I remember very well what the noble Lord said, and it is certainly one of the points we can bear in mind when considering the final way our decisions go on the Sinclair Report.
§ LORD LATHAM
My Lords, does the noble Earl mean by his statement that henceforth the emphasis will be upon investment in prior charges and not in equity?
§ THE EARL OF PERTH
My Lords, I said that whereas until now there had been a feeling that it was going too far in the way of investments in finance business, owing to changed conditions I think the tre[...]d is probably the other way at present; and I tried to show why it seemed to us that that is a right direction for it in the circumstances to-day.
When we come to the future, the question arises—the point was made by various noble Lords—has the Corporation enough money? They have, as we know, a balance of £15 million which is still available from the Government, and they have the potential borrowing of £20 million from outside sources. Now it is quite true that, until we have got the capital reorganisation ready, or the "new look", or whatever you like to call it, it is a very difficult thing for the Corporation to borrow from private 571 sources; but certainly the will of Parliament was that it should be possible for the Corporation to borrow from outside sources, and we will see that that is carried out within reason. It seemed to us that the best method would be to deal with the requests that might come up on what I might call an ad hoc basis rather than to lay down a general direction about the ranking of all money borrowed from outside. It is much better to look at each project which may come along when there is an opportunity, and decide together what is the right method of handling it. I think that that is both a practical and a proper method to adopt.
§ THE EARL OF PERTH
That, of course, goes without saying; but I think we can leave that as an instance of commercial judgment for the Corporation itself.
VISCOUNT ALEXANDER OF HILLS-BOROUGH
Could I ask, with regard to getting money from private sources: are you going to enable this Government Corporation—and it is a Government Corporation—to borrow on at least just as favourable terms as the Government of the day have given to a private enterprise steel concern?
§ THE EARL OF PERTH
This is money which the Corporation will borrow from private sources, not from Government sources. Therefore, clearly, it will have to pay whatever the going rate is for borrowing from private sources. You would not expect anything else.
VISCOUNT ALEXANDER OF HILLS-BOROUGH
Then you are proposing to treat the Colonial Development Corporation on far less favourable terms than a private steel trust in this country.
§ THE EARL OF PERTH
Certainly not; on exactly the same terms. If you look at what has happened as regards the steel companies, they do borrow from outside sources, and they do borrow at the market rate. We are proposing exactly the same thing.
Now, we have the £15 million from the Government, and we have the £20 million from outside sources. Then, as 572 has already been explained, we are intending that there should be a revolving fund; and, clearly, that revolving fund is automatic in so far as loans are concerned. When you make a loan, your loan is gradually repaid, probably over its own life, so there will be money coming in on that revolving basis for new investment. Apart from that, one would have the possibility of selling year by year some of the equity investments, and of using that money for new investment. I think it was the noble Earl, Lord Lucan, who made the point, "That is all very well, but does that mean to say that you are going to get rid of the profitable things and then go into bad ones?" I have got two comments on that. I do not mind getting rid of profitable things if I get a good price for them. If I put £1 in and I can get £2 for it, that is fine; that is good business.
§ THE EARL OF PERTH
It may be relative, but it does show the value of profitability. Then, when the noble Earl says "Go into bad things" I say, "I hope not." I hope the Corporation will go into good things. It has had such experience, and very often its judgment has turned out right. So, in general, I think that that policy is the right one. As a matter of fact, the Corporation has already begun to do it. If your Lordships will look at the Report, you will find that they—
§ THE EARL OF LUCAN
I am sorry to interrupt, but the noble Earl says that he hopes the Corporation will go into profitable business. Has he forgotten that its job is to develop the country—that is, to conduct investigations, explorations, pilot schemes and the rest? Surely he is forgetting that that is part of the function of the Corporation.
§ THE EARL OF PERTH
Certainly not. I have not forgotten that at all. What I would remind the noble Earl is that the purpose of the Corporation, or its charge, is to break even one year upon another; and if you invest in a company and £1 becomes £2, or even £5, for all I know, and then you sell, you have got that amount more money to put into other ventures. As I have said, you will find on looking at the Report that 573 this is something which the Corporation has already been doing. It had an important investment in Chilanga Cement. In fact, I think it had almost the whole investment originally. Then it sold a considerable amount to local interests. That is the right policy. It has been doing the same thing, with a company called Bird & Company. I think that is splendid, and that provides the sort of revolving fund that one wants to see.
§ LORD LATHAM
Does the noble Earl agree that if this policy is pursued and is successful, then this corporation will cease to be a Development Corporation and will become an investment company?
§ THE EARL OF PERTH
No. My point is exactly the opposite. If all that happens is that it makes an investment and sticks to it, then it is an investment company, and that is wrong. If, on the other hand, it is a revolving company, then it is a developing one; and I think that, if the noble Lord will think of it, he will see that that is right.
§ THE EARL OF PERTH
I do not understand what that means, either. When I look at the different types of investment which the Corporation has been making, it has got, as far as I know, not a single property investment as such. We will leave it at that. Now I have said that I am hoping that, very shortly, we shall be having a White Paper which will give our final decisions on the Sinclair Report. I have regretted that we have not been able to tell your Lordships during this debate exactly what has been decided, but I can assure your Lordships that I am as anxious as any other noble Lord to get this thing finished.
Now it remains for me to thank those members of the Corporation who have contributed to the results we see to-day. Many people have to-day said, quite rightly, how much we owe to the present Chairman, Sir Nutcombe Hume. I am not at this time going to make any very detailed remarks on his tenure of office. He has still got a little while to go, and we shall not see the full results until the next Annual Report. I think that that would be the more appropriate time 574 to go into more detail. Then, one has to express thanks to the Board and staff, and to the management overseas—which, I agree with every other noble Lord, is a splendid management. I hope that some of the things that I have said today will remove any anxieties they may have, or any anxieties which might have been caused by what other noble Lords have said. My hope is that good relations between us will continue, and that next year, if we have a similar debate—and I for one always welcome such debates—we may find, not only that there is a new Corporation in the sense that the results of the Sinclair Committee will be known and acted upon, but also that the results will be even better than they are this year.
§ 5.38 p.m.
VISCOUNT ALEXANDER OF HILLS-BOROUGH
First of all, my Lords, I should like to hank all the noble Lords who have joined in this debate. Secondly, however, I would say, with regard to the speech of the noble Earl, Lord Perth, that I feel that he has had to plead "guilty" to the main charge this afternoon: that is to say, he has no real excuse whatever as to why the Sinclair Report has not been acted upon. I have never in my life heard a weaker defence. Here is a vastly important recommendation—that a Government Corporation, the Colonal Development Corporation, should have its capital structure reorganised. An expert Committee reports within three months; and then, for twelve months, you have no real, formal meeting or consultation with the Corporation itself—in fact, not until this week. That is an amazing situation to reveal.
§ THE EARL OF PERTH
If I may say say, I think that is just about the right word—no "formal" consultations. That is just night.
VISCOUNT ALEXANDER OF HILLS-BOROUGH
All we have is a formal failure at the end of twelve months—twelve months of having done nothing. That is a most extraordinary state of affairs. When I hear the arguments about the difference between what aid can be given to independent States and what aid can be given through the Colonial Development Corporation, I am not very much moved. After all, there is one thing to be said for the special 575 work the Government have undertaken through the Colonial Development Corporation. That is, that there are many things to be done in developing territories, whether they are independent or still of colonial status; things which these countries need but in which private capital, as a rule, will not invest, because of the doubt whether they will satisfy the investors' profit requirements. Therefore, I am not at all moved by the argument put to us this afternoon.
There is a great deal to be said for the view put forward by the noble Lord, Lord Beveridge: that the requirements of the independent territories within the Commonwealth could be better met by the use of one organisation. And the noble Earl, Lord Swinton, asked: what are the constitutional difficulties? In the changing circumstances of world trade and changing political circumstances, I do not see why the Government could not by now have altered the actual title of the organisation, if that was necessary, in order to retain both the advisory service and the management, and at the same time widen the scope of the aid given. It could be called the Commonwealth Development Corporation, because we already have Commonwealth Assistance Loans. But I can see no harm in offering the Commonwealth aid of the kind which is offered through the present Colonial Development Corporation. However, that question can come up for consideration at a later date.
In the meantime, I find the Government guilty of not having done their job on the Sinclair Committee Report, which is now twelve months old. I find them truly guilty. And we shall watch with great care what is the next step to be taken. The noble Earl smiled broadly at the end, as if quite content to have an annual debate. If he goes on mishandling the affairs of this Corporation from the Government side as he is doing now, I can promise him that he will have much more frequent trouble. I beg leave to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.