HL Deb 16 July 1963 vol 252 cc151-77

4.45 p.m.

Order of the Day for the Second Reading read.


My Lords, this is a short Bill compared with some of those which have occupied your Lordships' House lately, and I hope it will command general support. The Bill has two principal clauses, the first of which is to amend the Overseas Resources Development Act, 1959, so as to widen the present sphere of operation of the Colonial Development Corporation; and the second is to make a further provision for funds under the Colonial Development and Welfare Act. The first clause has become necessary due to the steady process of constitutional advance, which has transformed what was in 1948 a large colonial empire, when the Colonial Development Corporation was set up, into an expanding Commonwealth of independent nations.

Under the Overseas Resources Development Act, 1948, by which the Colonial Development Corporation was constituted, the operation of the Corporation was concerned with the development of the resources of colonial territories. I know that it is felt that the activities of the Corporation ought to have been extended to cover independent Commonwealth countries a long time before this, indeed, as far back as 1957 when Ghana became independent. Noble Lords will remember that this matter was debated at that time, and it was thought logical that forms of assistance designed and intended only for Colonies, should cease to be available to them when they became independent. In the light of the number and difference in circumstances of the territories which have become independent since then, the arguments advanced in 1957 have, I think, acquired much greater force: and that is the reason for this Bill.

In the meanwhile we have been supplying very substantial assistance to independent Commonwealth countries by other means. My right honourable friend announced, almost exactly a year ago, that is was the intention to restore to the Corporation its powers to operate in territories in which it had been able to operate when it was originally set up, but for a number of reasons the preparation of this Bill has, I am afraid, been delayed. Although I am sorry it has not been possible to introduce it earlier, I am glad to be able to commend it now to your Lordships.

In doing so I should like to pay my tribute to the successful operations of the Corporation over recent years. If it were judged only by its operating surplus, which I suppose we might call a gross profit, it would be seen from its annual report that the Corporation is going from strength to strength. Your Lordships will have seen from its recent reports that it is becoming more self-sufficient financially. Last year it was able to provide from its own resources about one half of the money which it had invested. It has brought a number of projects to fruition, and has been able successfully to dispose of a number of them to interests which will carry on what the Corporation founded. This is proof of the successful work of my noble friend Lord Howick of Glendale and of his colleagues, as well as of the staffs of the Corporation both at headquarters here and overseas. Noble Lords will have seen the recognition which the Corporation paid in its annual report to the work of Lord Reith, who did so much to establish the foundations upon which it has built its present successes.

As regards the detail of the first clause, Clause 1(1)(a) provides that any territory which was within the Corporation's field of operations in 1948 shall again come within its sphere, so that the Corporation will be able to start new projects there. At the moment, once a territory becomes independent all the Corporation can do is to carry on any projects which it has begun before independence, or it may provide managerial or advisory functions if asked by the Government of the country to do so. Up to the present time, the managerial and advisory services have. I understand, not been asked for.

Clause 1(1)(b) would bring the New Hebrides into the scope of the Corporation. As your Lordships will know, the New Hebrides is an Anglo-French Condominium in the Pacific. It was formerly excluded because it did not come within the definiton of "colonial territory" in the 1948 Act, as it was not within the field of Colonial Development and Welfare assistance. Since 1955, however, the islands have been able to receive Colonial Development and Welfare help, and it is now intended to make it possible for the Corporation also to operate there. Clause 1(2) will change the name of the Corporation to the Commonwealth Development Corporation. Clause 1(3) enables my right honourable friend to give directions to the Corporation requiring it to obtain his approval when he so specifies before it performs functions in any independent country. This is so that the Secretary of State may ensure that the Government of the independent country concerned concurs in the intention of the Corporation to seek out and develop projects in its country. I think your Lordships will agree that this is a proper provision, as the countries in which it is now intended to enable the Corporation to operate are independent.

Clause 1, subsection (4), is to make a consequential change, arising out of the change of name of the Corporation, in the House of Commons Disqualification Act. Subsection (5) is simply a tidying up provision resulting from the liberty which the Corporation will now have to operate in Southern Rhodesia for the benefit of the inhabitants of that territory alone, instead of for the benefit of the Federation as a whole, which is what it can do at the present time.

Clause 2 of the Bill amends the Colonial Development and Welfare Act, 1959. This Act, which was a consolidating one, provides for two types of assistance to Colonial territories. The first takes the form of funds, which are usually given as grants, for schemes for promoting the development and welfare of the Colonies. This is the system which was first established in 1940. The provision of these funds has been dealt with on a cumulative basis from April 1, 1946, each succeeding Act having simply extended the period in which the funds were to be spent and increased the aggregate amount. The second type of assistance is Exchequer loans, which are made available for the purposes of development programmes of colonial Governments. These loans were introduced in 1959, when the colonial Governments were experiencing difficulty in gaining access to the market. They have proved of invaluable use, and I think undoubtedly will have a continuing part to play.

Under Clause 2(2) of the Bill, the period in which funds may be spent on Colonial Development and Welfare schemes, and in which Exchequer loans may be approved, will be extended from March 31, 1964, to March 31, 1966. The effective period, therefore, is nearly three years, there being nearly a year's overlap with the existing Act, which ends on March 31, 1964. This overlap enables funds to be allocated to colonial Governments before they have spent their existing allocations. As your Lordships know, many colonial territories rely almost entirely upon assistance provided under the Colonial Development and Welfare Acts for their development expenditure, and for others it is the most important single source of finance. Knowing in advance what assistance they are going to get from this source enables colonial Governments to frame realistic development plans. Previously the period of assistance of Colonial Development and Welfare Acts has been live years. We have chosen a period of only three years this time, not because we think that the need for assistance is coming to an end but because of the difficulty of assessing requirements for longer periods ahead.

Clause 2(2)(a) increases the aggregate amount of funds available for Development and Welfare schemes from £315 million to £340 million. Since about £431, million of the existing provision was unspent at March 31, 1963, a total of about £68½ million is available for expenditure in the three years up to March 31, 1966. Exchequer loans, like the Development and Welfare monies, are also to be dealt with on a cumulative basis. Thus, Clause 2(2)(c) increases the total of loans that may be approved from £100 million to £105 million. At March 31, 1963, £36 million remained unissued from the orginal provision, so that the additional provision made by the Bill will raise the further issues which can be made to £41 million. The aid made available by this Bill covers, of course, a much smaller number of territories than in 1959. Since then, Cyprus, Jamaica. Nigeria, Sierra Leone, Somaliland, Tanganyika, Trinidad and Uganda have all become independent. North Borneo, Sarawak and Singapore are to enter the Malaysian Federation on August 31, and Kenya is due to become independent on December 12.

When a territory becomes independent, it ceases to qualify for assistance under the Colonial Development and Welfare Acts. There are however, of course, other means by which we can and do give assistance to these territories. The range of activities covered by the Bill has also become narrower. Research activities benefiting the Colonies and technical assistance to them have been taken outside its scope. These are now financed, as your Lordships know, by the Department of Technical Co-operation, whose functions in these fields extend beyond the colonial territories. The change does not mean, of course, that any less importance is attached to these activities.

After taking account of all these factors, the scale of assistance provided by the Bill does, in fact, show an increase of about 28 per cent. compared with the provision made in 1959, and a large proportion of it is in the form of free grants. This Bill provides for commercial projects to be undertaken by the Commonwealth Development Corporation in both dependent and independent countries, and it gives assistance for social and economic development in the dependent territories also. My Lords, I beg to move that this Bill be read a second time.

Moved, That the Bill be now read 2a.—(The Marquess of Lansdowne.)

4.58 p.m.


My Lords, I am sure that your Lordships will welcome a Bill that does what many of us have been asking the Government to do for a very long time; and we are all grateful to the noble Marquess for introducing it in such a clear and skilful manner. It was, as the noble Marquess pointed out, almost exactly a year ago, in July of 1962, when the Secretary of State told Parliament that he would allow the Colonial Development Corporation to operate in independent Commonwealth countries, and that he would introduce a Bill. We had been urging the Government to do this for quite a number of years—indeed, whenever the Annual Report of the Corporation was debated in your Lordships' House. The noble Lord, Lord Ogmore, will remember that very well; and in those days, when he had not his present official post on the board of the Corporation, he played a very efficient and useful part in these annual debates.

The noble Marquess referred to a criticism which I think he correctly anticipated. It is that this decision should have been taken as far back as 1957, when Ghana became our first African Colony to reach independence. This failure to act earlier is bound up with what I believe to be one of the cardinal defects of the Government's Commonwealth and colonial policy: the withdrawal of the United Kingdom's financial support as soon as a Colony becomes independent. It is due to the fact that the Government's policy in relation to the new developing countries in Africa and elsewhere had been, until not very long ago, the same in principle as its policy in relation to the old Commonwealth countries which became independent before the war. The basic assumption was that when a Colony becomes politically independent it also becomes economically viable. We all know that this is not the case, and we only regret that the Government did not act up to the basic facts of experience a good deal earlier.

It has taken the Government five years to accept this basic British economic responsibility. I wonder how many opportunities for development in these countries have been missed by the delay in widening the field of the Corporation—opportunities for the Corporation, as well as for the countries concerned. Clearly, the Corporation would have benefited if it could have been taken up usefully and profitably in the Colonies after they had achieved independence. The decision, as we have heard, was taken in July; but we have had to wait a whole year for the Bill. The noble Marquess is apologetic for the delay, but I do not blame him: no one but the Government know what caused the delay, though I believe that some of us can give a pretty accurate guess.

I believe the difficulty is that the Secretary of State for Commonwealth Relations is a Minister who has far too much to do. A Minister who has as much to do as the Secretary of State for Commonwealth Relations is inevitably obliged to neglect the less urgent matters in both the Departments of which he is master, the Commonwealth Relations Office and the Colonial Office; and of course, the less urgent matters for which he is responsible include the economic side of the Colonial Office. I do not blame him at all. I do not think one can expect anything else of a Minister who is doing the work of two full-time Cabinet Ministers. Most of us believe—and we have expressed this opinion on former occasions—that when the time comes the Colonial Office and the Commonwealth Relations Office should be one Department under one Minister. The time has obviously not yet come; indeed, they are still separate Departments. The great mistake of the Government, of which this very belated Bill is an example, has been to place them too soon under a single Minister.

Look at the activities of the unfortunate Secretary of State for Commonwealth Relations in the last couple of weeks: a date for independence for Kenya (which we were debating yesterday); the setting up of the Malaysian Federation; constitutional talks with British Honduras and Malta; and a crisis in British Guiana. The unfortunate Secretary of State is arriving home to-day from a strenuous tour of British Guiana, judging from the evening newspapers, and he goes straight into constitutional talks of the utmost importance with representatives of Malta. Of course the Government should have waited to make this change—one Minister in charge of these Departments—until more Colonies had hived-off into independence. In this way the Secretary of State for the Colonies would have been relieved of the sort of work he has done up to now. But it seems unreasonable to expect any man to undertake all this work at the same time.

The effect of this is that he is trying to deal with the most urgent political problems and issues as they come along at the moment. Everything of secondary importance must be shelved, including something that I regard as of great importance: the routine visits of the Secretary of State for the Commonwealth to the Commonwealth countries. I believe that the noble Earl the present Foreign Secretary, when he was at the Commonwealth Relations Office, visited all the independent Commonwealth countries. This I thought was a good thing. I met him in Africa when he visited that continent, and I know how much good he did by that visit. I am sure that no Commonwealth Secretary can do his job unless he has first-hand experience of all the Commonwealth countries and of the leading personalities in those countries. It is quite impossible for Mr. Sandys to go around and visit the Commonwealth while he has these burning political issues to deal with at home.

The result of this situation is drift and delay in the two Departments for which he is responsible; and they both suffer. I have no doubt, for example, that if the Colonial Office had had its own Secretary of State to fight for this Bill it would have been in the legislative programme for the early part of this Session. It would have been introduced last autumn. If agreement had not been reached between the Colonial Office and the Treasury about money allocation for colonial welfare, another Bill could have been introduced to deal with this matter as soon as the agreement had been reached. But I cannot see any reason why, if the Commonwealth Secretary had been able to direct his attention to the Bill (which he promised last July and which is really uncontroversial) it should not have been introduced much earlier.

My second complaint, not of the Bill itself, but of the method of dealing with it, is that the policy behind the Bill fails to implement what I regard as the most important recommendation of the Sinclair Report on the financial structure of the Corporation. Your Lordships will remember that the Sinclair Report wanted the bulk of the Corporation's capital to be an equity stock, like the bulk of the capital of any private company. The Report took the view that the Corpora tion would be enormously handicapped if all its funds were tied up in fixed interest-bearing stock. But that is still the position. It has not been altered by the present Bill. I cannot see the point of the Government's asking experts to advise them about the financial structure of the Corporation if their most important piece of advice is ignored. It is like asking a doctor to take your temperature and then refusing to take the medicines to bring the temperature down.

The argument against adopting the recommendation of the Sinclair Report is that there would be a risk of subsidy if the rate of interest earned by investments of the Corporation was less than the rate of interest at which the Government borrow. But this financial loss would be more than offset, in the long run, by the rapid economic development of the countries concerned. All these countries need a good deal more risk capital if they are to become economically viable. The Corporation should be allowed to be one of the institutions to provide this risk capital. I have no doubt at all that the relatively small amount of the Corporation's new investment last year—between £4 and £5 million—was due to the fact that it cannot take the risk of putting money into marginal development projects.

My third and final criticism of the policy behind the Bill is that it limits the operation of the Corporation to part only of the Commonwealth—namely, that part which has become independent since 1948. There might have been something to be said for excluding India, which already gets the lion's share of British aid, but there is no case for excluding Pakistan and Ceylon, which are really, economically and financially, in the same position as any one of the Commonwealth African countries that will be helped under this Bill. Why do the Government not allow the Corporation to cover the whole Commonwealth, or at least all the developing countries of the Commonwealth? Not all the Commonwealth countries, of course, need this sort of help: some do not want it, and the Corporation is not the instrument for providing them with capital investment. The Bill is only permissive: it does not oblige the Corporation to go anywhere. But why not give the Corporation an opportunity of going into, say, Pakistan and Ceylon, if it so wishes? I regard this matter as being of such importance that, if I receive any support from other noble Lords, I shall come back to the point during the Committee stage of the Bill.

Just a word, if I may (and this is my last argument on the Bill), about ministerial responsibility for the Corporation. The Corporation, of course, is still under the Colonial Office, although the responsible minister is the Secretary of State for Commonwealth Relations. The Colonial Office is a political department dealing with the political relationships between this country and the Commonwealth countries and was never intended to handle economic development. Therefore, it is quite natural that these economic matters are regarded as of secondary importance, and that the economic side of the Colonial Office—which includes, of course, the Corporation and the expenditure of the Colonial Development and Welfare funds—is handed over by the Secretary of State to a ministerial subordinate in his Department. I am delighted that he hands it over to the noble Marquess in this House. These matters could not be dealt with more competently than they have been by the noble Marquess, but I still wish that we had with us a Secretary of State, preferably in the shape of the noble Marquess, rather than a Minister of State.

Surely the time has come for the Government to take a new look at overseas development. It is becoming increasingly important as a function of Government; and, as the noble Marquess himself pointed out in his concluding sentences, responsibility for economic development overseas is divided between a number of Ministers and several different Government departments. Should overseas development not be regarded by the Government, like an expanding home economy, as one of our major national interests? It is a field in which our national interests in increasing world trade and the humanitarian desire of the British people to help their fellow men exactly coincide. I have heard Ministers express some fears on this aspect. The Government wonder why they have failed to capture the loyalty of youth. I suggest that, if they really want to touch the idealism of the young, they should appeal for support for an overseas development programme.

No people in the world have stronger humanitarian feelings than the British. Look at the success of the Freedom from Hunger campaign, in which the noble Earl, Lord De La Warr, took a leading part. I believe that the sponsors have raised far more money than they expected. Look at the success of the United Nations appeal for refugees. We raised more money in World Refugee Year than any other country in relation to our resources. There is no doubt that the Government could have public support, if they were to make overseas development one of their major policies. Nothing would underline the importance of this more effectively than the appointment of a Minister for Overseas Development. And I think that "development" is a better word than "aid", which suggests charity.

Such a Minister should have a seat in the Cabinet. He would be responsible for the whole of our overseas aid, in money and technical skill. This would not be creating a new department. I know that anyone who has had ministerial responsibility is very chary of creating new Government departments. Nor would it necessarily add to the number of Cabinet Ministers. Again, nobody would wish to do that unless there was a strong reason. The Department of Technical Co-operation, which is already responsible for technical aid, could be expanded and made responsible for capital as well as technical assistance overseas. A Cabinet Minister without a Department—for example, the Lord Privy Seal, who presumably has less to do, now that he is no longer trying to get us into Europe—could be put in charge of such an expanded department and made responsible for all non-military Government expenditure in developing countries. This, after all, is the system already adopted to-day in the principal donor countries. In the United States, capital and technical aid are under the same agency in the State Department and the Secretary of State is responsible for dealing with overseas aid and with providing both technicians and money. In France, there is a Minister for Cooperation, who deals with almost all financial and technical aid given by the French Government overseas.

A new Minister for Overseas Development would, I think, have four main jobs. None of these is a job for which any one Minister is responsible at the moment. First, in the Cabinet, like the heads of other spending Departments, he would fight for his share of Government expenditure. Secondly, he would be the salesman of British aid—to Parliament, the public and the Press. Thirdly (and this is where we come to matters dealt with in this Bill), he would decide priorities in relation to the limited amount of capital and technical aid available, and would co-ordinate both money and technical skill. I need not go into the haphazard way these matters are decided at the moment, by a tug-of-war between different Departments, such as no doubt took place on this Bill, when officials of the Treasury and officials of the Colonial Office dealt with this matter during the past year. Nor need I go into the waste of technical skill, when experts are sent overseas by the British Government without the equipment they need for their work. I know very well that this happens.

Fourthly, and finally, this Minister would be the mouthpiece of the Government in receiving representatives of the recipient countries and of international aid-giving bodies. There is no single Minister now to welcome a Minister from a developing country when he arrives in London, or a representative of one of the United Nations aid-giving agencies. Someone might have to go from the Foreign Office or the Colonial Office, or someone from the Treasury or the Board of Trade. My Lords, I am certain that our reputation in the outside world would be enormously enhanced if we had a single Minister of the highest standing dedicated to aid in all its forms. That is why I should like to see the Commonwealth Development Corporation receiving the highest ministerial priority, which it would get if a Minister of that standing were responsible for it.

We hope that your Lordships will support this Bill, but we also hope that some of the matters which I have mentioned in the course of my remarks will be regarded by your Lordships as matters that might well be taken up at Committee stage.

5.18 p.m.


My Lords, although this Bill is in some aspects a formality, it is very necessary to enable a valuable machine to work more efficiently in British overseas Commonwealth interests than it has been able to do hitherto. The limited resources and financial stringency under which the Commonwealth Development Corporation has been operating have obviously reduced considerably the great possibilities of which it is capable. These possibilities and potentialities, given adequate funds to implement them, are of particular importance at this juncture, when the whole image of the British Commonwealth is rapidly changing from the conception of an Imperial Colonial Empire to a new and constructive consortium of emergent and largely self-governing communities with whom we now seek to work as a partner and a brother, rather than as a manager and a master.

Our aims are joint aims towards communal advance, and it is at this stage of change that there must emerge many situations where, on the one hand, the line of advance can confidently be left to the resources of the territory concerned, but where, on the other, unforeseen opportunities arise which can be exploited only by substantial help from the Commonwealth Development Corporation. It is because these opportunities must not be allowed to slip away (with results which may not only be negative, but may even engender political as well as economic difficulties) that the Commonwealth Development Corporation must be given more power and more elbow room to exploit new schemes and new ideas.

The sum involved in this Bill is admittedly not small, and one cannot expect, as the noble Earl said, that the Treasury will treat the proposed increases in this Bill as in any way trivial. But the cause is a good one and should repay handsomely the expenditure which this Bill will make possible. By enlarging the scope of potential of the Corporation in financial terms, it is to be hoped that Her Majesty's Government will also enlarge the ambit in which the Corporation may work. It is unsatisfactory that in regard to such places as Pakistan, Ceylon, and possibly India, too, the Corporation should be confined to a mere agency status. And it is unsatisfactory that it has not been possible for the Corporation to integrate some of its valuable activities with other international organisations, such as the International Bank and many other individual bodies whose activities lie parallel to those of the Corporation. In supporting the Bill, I would ask Her Majesty's Government not to lose sight of those aspects, which are not merely financial, and to back up the Corporation in every way in this very wide field of vast potentialities.

5.23 p.m.


My Lords, we have awaited this Bill for a long time, and, in fact, for so long that I have forgotten the remarks which I had intended to make had it been brought in when it should have been, some years ago. Admittedly, the questions involved have been somewhat complicated, and this has caused delay; but, even if it is belated, it is none the less welcome. There are only a few points I wish to make. In the past, the C.D.C. has experienced some bouts of growing pains, and it is good to know that it is now so firmly and successfully established. Its history can be divided into three phases. In the first phase over-enthusiasm led to projects which were not always wisely selected, and an attempt was made for the Corporation to manage these schemes itself. For these reasons, there were a number of failures, and losses amounting to about £12 million were made.

The second phase covered the period when the Chairman of the Corporation was the noble Lord, Lord Reith. Some drastic changes in policy were made: the top-heavy headquarters staff was streamlined, and emphasis was placed on the desirability of going into partnership with private enterprise, who could supply the management and "know-how". The third phase has covered the period during which my noble friend Lord Howick of Glendale has been the Chairman, and has been notably successful. The lessons of past experience have been learnt, and the rationalisation of policy and organisation has enabled the Corporation to operate profitably. The operating surplus has increased from £1,869,000 in 1959 to £4,361,000 in 1962. This is a notable achievement, and all who have contributed to it deserve to be congratulated.

The Governments of the countries in which the C.D.C. now operates have gained confidence in the Corporation and turn to it for participation in many projects they are anxious to launch. I am particularly glad to note that the C.D.C. is participating as an equal partner with the Tanganyika Government and the Government of the Federal Republic of Germany in establishing the Tanganyika Development and Finance Company Limited. I understand that a similar arrangement is being negotiated with the Kenya Government. I should like to see this sort of arrangement entered into elsewhere.

In some areas—East Africa is a notable example—the doubts about political stability have led to a lack of interest being taken by private enterprise in investment possibilities. These countries, particularly those that have gained independence, are very anxious to attract private capital for industrial and economic development. A finance and development company sponsored by a local Government, and in which one or more other Governments are participating, can offer private enterprise partnership with a measure of security which should give confidence. I believe that this sort of activity can go a long way to speed up economic development in these newly independent countries. In previous debates in your Lordships' House on the activities of the C.D.C. I have expressed the hope that everything will be done to encourage local private investment in projects in which the Corporation has an interest. There are difficulties, especially as the number of people who are in a position to buy shares is at present small. But the advantage of local participation is great, and steps should be taken to make it possible.

Finally, my Lords, may I make a plea for increased investment by the C.D.C. in the "Little Seven" in the West Indies? These small islands are anxious to gain independence and, if possible, to federate; but the development of their economic resources is slender, and this makes the prospect of independence hazardous. If some industrial enterprise could be established in these islands, with the considerable Caribbean market in view, it would go a long way to strengthen their economy.

5.26 p.m.


My Lords, I, too, should like to add a few words of welcome to this Bill. It is a change in the activities of the C.D.C. which many of us on this side of the House, also, have urged for many years. I remember doing so when I was still at the Colonial Office some seven years ago. It has always seemed to me to be completely illogical that the emerging Commonwealth countries should be excluded. The noble Earl, Lord Listowel, said that this decision should have been taken in 1957. In my view, it should have been taken in 1948, when the Bill was originally introduced, so as to cover at that time India and Pakistan. The criticism that I wish to make of this Bill—and I think it is a serious criticism—is that it excludes Commonwealth countries which were independent before 1948. It seems to me that that introduces a completely unreal distinction between the Commonwealth countries which I personally could not accept. The late Mr. John Strachey, who was an old friend of many of us from schooldays, and whose untimely death we deeply regret, made an eloquent speech on this subject in another place the other day in which he set forth the arguments in favour of including India, Pakistan and Ceylon.

I really wonder why they were excluded! India was perhaps excluded, as the noble Earl said, because it was too big. But surely that does not apply to Pakistan and Ceylon. I suppose it may be argued that India and Pakistan were never technically Colonies. But that, again, does not apply to Ceylon, which came under the Colonial Office until its independence. Another argument might be that if you include India, Pakistan and Ceylon, then you must include the older Commonwealth countries, such as Canada, Australia and New Zealand. I do not think that this is a serious argument. This Bill is purely permissive. It need not be extended to any Commonwealth country unless it is the view of the Government and of the C.D.C. itself that this aid should be extended. I should like to see it made to apply to all Commonwealth countries so that there should be no distinction between them.

In the back of my mind, I rather wish that it could be turned into a two-way traffic, so that the C.D.C. itself should become a Commonwealth operation to which the more wealthy Commonwealth countries could contribute to help the others. This is something that I should have always liked to see, and if it could be extended (not under this Bill, of course, but in some way), in that sense I think it would be a good thing. I understand that the Chairman of the Colonial Development Corporation, my noble friend Lord Howick of Glendale, is himself quite willing to take on India, Pakistan and Ceylon. I hope that the Government will reconsider this point and perhaps introduce an Amendment to cover it on the Committee stage.

5.30 p.m.


My Lords, most of your Lordships who have spoken so far in this debate have confined your remarks to the Colonial Development Corporation, and I do not wish to repeat what has been said by other speakers, other than to say that I agree, I think, with everything that they have said. In particular, I was happy to hear the noble Lord, Lord Colyton, say appreciative words about our friend John Strachey, not only for his remarks about India and Pakistan, but also for the rôle he played in earlier days, some not altogether successful, but all of vision and imagination in this concept of developing the different parts of the Commonwealth. I should also like, with my personal interest in the West Indies, to support the plea of the noble Lord, Lord Twining, for additional attention to be paid to the "Little Seven" in the West Indies, a group of islands which undoubtedly can make good use of any assistance which may come their way, but where the rules imposed upon the Commonwealth Development Corporation, as it will now be called, concerning risk taking make it more difficult for it to give help in those areas where help is so much needed.

The only other point I would make concerning the C.D.C.—and I am sorry we have not the opportunity to-day to go in more detail into their operations, which are so admirable—is one of minor criticism or, at least, of warning, to them. In their Annual Report they give an interesting set of figures, among many others, concerning the proportion of their money which is invested in continuing projects. It is divided into three headings: that of basic development, primary production and processing, and commerce and industry. They rightly devote more than 50 per cent. of their resources to the first of these three—that is, to basic development—but it is a little disturbing to note that there has been in the past twelve months, comparing 1961 with 1962, a drop in the proportion of their funds devoted to basic development of just over 1 per cent., from 54.8 to 52.7 per cent., with a virtually similar rise in the proportion devoted to commerce and industry from 10.8 to 11.8 per cent. That is not a very big shift of emphasis, but I think that if it went any further it would be a rather disturbing one, because commerce and industry, important though it is to developing countries, is something which can rather more safely—and I put it no higher than that—be left to private industry and other forms of investment, whereas basic development and primary production and processing are something for which it is much harder to raise capital. Therefore, I hope that the C.D.C. will give increasingly sympathetic attention to those basic and primary projects, and turn their backs perhaps a little more, in spite of the attractive returns and the greater security they may get from such things, on these projects which they describe as "commerce and industry".

Now I should like to deal just a little more than has been done already with the other sections of this Bill: those concerning the Colonial Welfare and Development Fund. The noble Marquess explained to us the good and important work which had been done by this Fund, and told us of the arrangements which were being made for its future continuation. Those, I think, are good. It has done valuable work in the past, and there is a great deal needed for it to do in the future. It is interesting to see how its activities have increased since 1946, when it first started its operations. In that year it disposed of something like £3½ million—getting off to a rather small start—rising to just over £5 million in the next year. In 1949–50 it had a large jump in the amount of money that it disposed of. That rose to about £13 million, and rose steadily from there until 1959–60, when it went to over £25½ million; in 1960–61 it increased to £26 million, and in 1961–62 it was about the same. That is a good indication of the important work which it is doing, and the great need there is for it.

As the noble Marquess has said, the number of Colonies which now rank for grant from the C.D. & W. funds is contracting. Therefore, I would not, much as I should like to, make a plea for an even larger amount to be given to those who remain, because if one holds the balance properly between the various applicants for money from this country, the increased amount which this Bill envisages for the small number of remaining Colonies is satisfactory. But what is not so satisfactory is the fact that there are a large number of Colonies (as we have seen with the Colonial Development Corporation) who benefited from the C.D.C. but who were, as they attained independence, and will be until this Bill becomes an Act, debarred from benefiting from these C.D.C. funds. So there will be an equal number of Colonies which have benefited, as these figures I have quoted show, from the C.D. & W. funds which will be cut off from them on attaining independence, just at the time when their need for those funds is greater than in the past.

Certainly, as the noble Marquess said, there are other means of helping these newly independent countries. It is true that there are other means. We make grants from this country for special purposes to such newly independent former Colonies. They can go to the World Bank and raise funds there. But I believe it would be of the greatest assistance to them—and we were talking only yesterday of one Colony, Kenya, shortly to become independent, to take that as an example—if, during the initial years of independence, the type of support which had been coming from the Colonial Development and Welfare fund could be made available to the newly independent countries. I should like to see exactly the same change which we have asked for for several years now, and which has now been given us—of changing the "C" of C.D.C. from "Colonial" to "Commonwealth", similarly changing the "C" in C.D. & W. from "Colonial" to "Commonwealth".

Noble Lords who have spoken have welcomed this Bill so far as it goes. The noble Lord, Lord Colyton, said how much better it would have been if this had been done in 1948. I ask the Government not to wait until an irresistible pressure for this change builds up, but to give their urgent consideration to it at the present time. I should also urge them to give very close consideration to the suggestion put forward by my noble friend Lord Listowel for bringing together the whole of our aid to developing countries in whatever form it may be. I am quite sure that it is right both on the grounds of administrative convenience and on the grounds of impact upon the public here and upon the world at large. If the very considerable, though still increasing, amount of aid that we do give were all under one Department I believe that the world at large would realise that we are not so backward in this as some countries sometimes think; though I hope the noble Marquess will not take this as indicating that we, at any rate on this side of the House, feel that there is not a great deal more that we should do in this context.

After all, this form of assistance embraces a great many activities and functions. What is needed in these countries is, first of all, the purely basic requirements. Before a country can start to embark upon economic expansion it must have its roads, bridges, water supplies and power; and those are things—certainly roads and bridges—which cannot ever be regarded as in themselves bringing in a profit. They only contribute to future profits made, more usually, by private undertakings. Water and power may be profit-making but never to the extent which would encourage investment in normal circumstances in such countries. So, first of all, what is needed is capital—considerable capital, long-term capital and permanent capital—for these basic requirements.

We then need capital for the more direct economic development of the country; for clearing land, drainage, irrigation; for possible clearing of suitable sites for the erecting of factories, and even for putting up workshops for repairing the new machinery which is essential for modern cultivation; for docks and harbours, and needs of that kind. That is the second need. Third—though it does not come third in chronological order—is the need for very considerable and long-term investment in education; for investment in the lowest level of primary schools in the small villages scattered miles from anywhere throughout these developing countries and, in this case, under-developed country; for investment in buildings for the teachers and for the training of teachers, without whom, however good the schools, they will be valueless; and for investment in colleges of technology of one kind or another, engineering and agricultural, in universities and research stations. All these things are needed. They are done to a certain extent by the Government at the present time, but very largely by different and disconnected Government Departments and organisations. On top of all that, personnel are needed to do all this, to help with this development.

There I would come back to another of the points which the noble Lord, Lord Colyton, made concerning the Commonwealth aspect of this whole question of aid. We are the major giver of aid, but we are not the sole givers and, as time goes on, while I hope we shall give greater aid, there will be other members of the Commonwealth who will equally be in a position to give aid from their own resources. And although to give aid of a material and a financial kind may be very hard for many of them because they are short of finance for their own development, aid in personnel is not in some cases, even at the present time, so difficult. There are technicians, scientists, university professors and research workers in many parts of the Commonwealth who, while needed at home—and we need all our own here—are needed even more in the less developed areas of the Commonwealth itself. That is where I envisage that a Department, as outlined by my noble friend, could play perhaps its largest part, not only by acting as a dispenser of help to other members of the Commonwealth but by encouraging them to help each other and, where they are asked to do so, by co-ordinating inter-Commonwealth aid: for instance, between Canada and the West Indies, where there are traditional links and where they have much in common; between Australia and Malaysia; between India and Africa; and in reverse in all these cases.

So, while welcoming this Bill and accepting it as a step in the right direction, I hope the Government will not feel that they have now done their job and can concentrate on their own other important matters to the exclusion of this great subject of help to all members of the Commonwealth, but will still very actively pursue the suggestions which have been put to them, in particular the suggestion for one central Government Department with a Cabinet Minister, not only to co-ordinate but actually to initiate and encourage all forms of aid of the kind about which we have spoken.

5.46 p.m.


My Lords, I am very grateful to all noble Lords who have spoken and the more so that they have welcomed this Bill, although of course, as one would expect, with certain qualifications. The principal one was, I think, the complaint that this Bill has been brought in too late. This is a matter of opinion, but, as I tried to make clear in my opening remarks, circumstances have, as I think we shall all agree, changed since 1947, and the arguments for extending the scope of the Corporation are far stronger now than they were at that time. None the less, I do concede that there are strong arguments in favour of having brought this measure about earlier.

I should like particularly to deal for a moment with some of the observations made by, I believe, the noble Earl, Lord Listowel, and the noble Lords, Lord Walston and Lord Colyton, about extend-in the sphere of activity of the Corporation to countries which were independent before 1948. Here I entirely agree with the noble Lord, Lord Colyton. Clearly, one could not exclude India and include Pakistan and Ceylon. It would have to be a question of all three of these countries being included, or none. I think probaly we all agree on that. I did point out that, within the scope of the Corporation, there is power for these countries to call upon the managerial and advisory functions of the Corporation, and this, of course, India, Pakistan and Ceylon are perfectly entitled to do, but, so far as I am aware, they have as yet not done so.

Although the noble Lord, Lord Colyton, said that this Bill is to a certain extent permissive and it might be possible to include Pakistan, India and Ceylon within its scope, at the same time one would have to reflect that this might disturb the balance of the activities of the Corporation. Certain noble Lords referred to the speech of the late Mr. John Strachey, whose death I also lament, who said that he did not himself think that India would be suitable to be included. This, I think, was a view shared by the noble Earl. Mr. Strachey also went on to say that he did not advocate an increase in the ceiling of the fund of the Corporation, but I should think it is possible that if India, Pakistan and Ceylon were included it might be necessary to increase the ceiling if other countries were not to get less than perhaps we should wish them to have. I think that, in considering whether the "pre-1948" independent countries should be included, this is something perhaps we should bear in mind.

I was very interested to hear what the noble Earl, Lord Listowel, said on the question of equity capital, and he referred, of course, to the very exhaustive Committee of Inquiry under the chairmanship of the noble Lord, Lord Sinclair of Cleeve. The Report of this Committee was considered, as the noble Earl knows, very carefully, and the conclusion reached by the Government at that time was that the arrangements which the noble Earl suggested were not really suitable. I think it is possible that the information available to the Committee at that time was of a nature which was perhaps less encouraging than the information which they might have had now, so possibly they might have come to a different conclusion—I do not know—if the situation of the Corporation when the Committee was sitting had been what it is to-day. But I think it would probably be unwise at this stage to make a further alteration of the structure of the Corporation, although certainly I myself will bear in mind what the noble Lord has said, and, of course, I will draw the attention of my right honourable friend to it.

Both the noble Earl, Lord Listowel, and the noble Lord, Lord Walston, have advanced an idea which I think is not new to many of us and one about which I have myself often thought, the idea of a central department and a Minister who would be entirely responsible for dealing with overseas development. We have talked about the type of inter-departmental war which, of course, does happen; and the noble Earl, with his great experience, knows how it happens. But this is part of our democratic system. It is one of the checks and balances which prevent anybody from getting an undue share. So I think one would have to be very careful before centralising all this in one person. None the less, I am with the noble Earl and the noble Lord, Lord Walston, in thinking that this is an interesting idea which one should perhaps consider further. At the same time, I would voice this word of caution on the danger of having too much power centred in one Department. This is something that one would want to watch very carefully.

I think that basically your Lordships blessed this Bill. The noble Lord, Lord Walston, regretted it did not go further—in fact, he asked for more. He wanted what we have provided for the Colonial Development Corporation to be extended also to the Commonwealth Development Acts. As the noble Lord is well aware, I am sure, where there are Colonial Development and Welfare schemes in train, they are carried on into the period of independence so that they can be completed. This is something we should think about very carefully. I would remind your Lordships that the aid which would have been available under the Colonial Development and Welfare Acts, does not get cut off on the schemes already in train, when a country becomes independent. But I think perhaps one would think very hard before going the full length the noble Lord asked for.

I was interested in the speech of the noble Lord, Lord Rea. I rather wondered, when he was speaking, whether he fully appreciated the extent to which the Corporation does, in fact, co-operate with other partners. The noble Lord, Lord Ogmore, who is a distinguished member of the Corporation, would be perhaps better fitted than I am to explain this to the noble Lord. If he would be good enough to look at page 10, paragraph 62, of the current Report, he will see that it states clearly the terms on which the Corporation invests, and it can operate with any partner. It grows pines and make card paper pulp in Swaziland with Courtaulds, for instance. I think that ample provision is made for a very wide degree of co-operation by the Corporation with other partners.

The noble Lord, Lord Twining, may be interested to know that we are now on the point of approving the C.D.C. investment in the Kenya Development Finance Company. Mention was also made of assistance badly needed by the "Little Seven". I can assure your Lordships that the Corporation already has numerous projects in that part of the world, and is always ready to look for more. I do not think it is necessary to remind the Corporation about the needs that are there.

That, I think, covers all the points that have been raised by noble Lords. There is a further point concerning the C.D.C. on which I should like to make something of a correction to what the noble Lord, Lord Walston, said. I think that the percentage figures which he gave for C.D.C. investments in "basic development" might lead to a wrong conclusion, if not taken in their proper context. The noble Lord (I think I am right) referred to the drop to 53.7 per cent. If the noble Lord will look back, he will see that the figures, in fact, were as follows: 1959, 47 per cent.; 1960, 51.4 per cent.; 1961, 54.8 per cent; and then, indeed, as the noble Lord said, 1962, 53.7 per cent. The reason for this—and I expect the noble Lord may have forgotten it for the moment—is that in the year 1961 very large investment is included for the Kariba Dam; and this, of course, somewhat set the picture out of balance. I just wanted to draw the noble Lord's attention to that point in case he got a wrong impression.

I should like to thank all noble Lords who have taken part in this debate, and assure them that all the constructive observations they have made will be noted both by myself and by my right honourable friend. I should perhaps say, when referring to the activities of the Commonwealth and Colonial Secretary, that sometimes I think some of his subordinates also feel that they are overworked. I feel I should point out to the noble Earl, Lord Listowel, that, despite the tremendous responsibility he has, the Commonwealth and Colonial Secretary has, none the less, managed to visit a very impressive list of countries. Since he became Secretary of State he has visited Ghana, Rhodesia, India, Pakistan, Malaya, Nigeria, Sierra Leone, New Zealand, Australia, Canada, Tanganyika and Cyprus; and within the last twelve months he has been to India and Pakistan twice; to Jamaica, Uganda, Tanganyika and Trinidad. So I do not think we could describe him as a stay-at-home Secretary of State. I thought I should remind your Lordships of that. I do not wish to detain your Lordships any longer.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

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