HL Deb 29 April 1963 vol 249 cc2-4
LORD BARNBY

My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government with regard to the announced total of £153 million of aid and subventions to overseas countries, what proportion of this was "tied aid" and what is the considered United Kingdom labour content included therein.]

THE EARL OF DUNDEE

My Lords, of the expenditure of £153 million on overseas aid in 1962, about £40 million was tied under the Export Guarantees Acts to the purchase of goods in the United Kingdom. It is not possible to estimate the labour content of these goods.

LORD STONHAM

My Lords, in view of the rather small percentage, somewhere about 25 per cent., which was tied in that way, can the noble Earl say whether the full effect of Government policy in this respect has been felt; and whether we may expect in the current and future years a much higher proportion of overseas aid to be tied in this way to the benefit of British industry?

THE EARL OF DUNDEE

Yes, I think that the tendency is to put more emphasis on this. Of course, a great deal of our aid is in internal expenditure in countries, which naturally cannot be tied to export of goods.

LORD OGMORE

My Lords, is it not highly undesirable in many cases to tie aid? Is it not a fact that, if aid is tied up, the receiving countries, the underdeveloped countries, often have to pay far more for the goods than they otherwise would have done? Is it also not a fact that the British Government are about the only Government in the world which do not tie their aid and have received great praise from the underdeveloped countries for that fact?

LORD STONHAM

They have also had much unemployment. Is it not the case that we are now beginning to do merely what other countries have been doing for a long time, and have in the past been suffering from not doing it?

THE EARL OF DUNDEE

My Lords, if I may try to do my best to please both noble Lords, I think it might be to our advantage if nobody tied their aid at all. But since many other people do, I think it is inevitable that in some cases we should do the same.

LORD BARNBY

My Lords, I suppose the noble Earl would not be in a position to make any comment on the relationship of the interests charged on tied loans and loans which are not tied.

THE EARL OF DUNDEE

No, my Lords, I do not think I would.

LORD OGMORE

Would it not be much better for the Government to try to persuade other countries not to tie their aid, rather than to tie our own? Is it not a fact that it is the rich countries who tie their aid, and the poor countries who have to suffer for it?

LORD MOLSON

My Lords, is it not obvious that we can do a great deal more to aid underdeveloped countries if we give tied aid than if the aid given can be spent in any foreign market?

THE EARL OF DUNDEE

My Lords, I think it is right that we should in some cases try to ensure that aid which we give to underdeveloped countries is not spent on buying industrial goods from our competitors.

LORD SHEPHERD

My Lords, would the noble Earl make this point quite clear—because the word "tied" has a different meaning overseas? Many people talk of "tied aid" in the sense that there are political consequences arising from it. Would the noble Earl say that there is no question that we attach political ends to the aid that we give to the underdeveloped countries?

THE EARL OF DUNDEE

This question is getting rather like the distinction between a tied cottage and a tied house, which are quite different things. I think the noble Lord is right in saying that we do not attach political strings to this aid; but I should like notice of any more subtle definition he has in mind.

LORD SALTER

My Lords, would not the noble Earl agree that the absence of tying, in the sense in which Lord Ogmore referred to it, is one of the longest and perhaps more creditable traditions of British policy?

THE EARL OF DUNDEE

My Lords, I think I would. I have already said that if everybody would agree not to tie their aid, it might be to the general advantage.

LORD BARNBY

My Lords, in view of the danger of interpreting these comments as suggesting that it would be unwise to tie loans, would the noble Earl not agree that it would be undesirable for this country to compete with the United States, who are prepared to give up to 40 years free of interest on a tied loan? We cannot afford to do it.

THE EARL OF DUNDEE

My Lords, that may be so.