HL Deb 26 July 1963 vol 252 cc919-31

11.26 a.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(The Marquess of Lansdowne.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair]

Clause 1 [Extension of powers and renaming of Colonial Development Corporation]:

THE EARL OF LISTOWEL moved, in subsection (1)(a), to leave out ("as defined by that Act"). The noble Earl said: I beg to move the first Amendment that stands in my name on the Marshalled List. Perhaps your Lordships will allow me to speak to both Amendments, as they cover the same point. This purpose is quite simple: it is to give the Colonial Development Corporation power to operate in India, Pakistan and Ceylon. Under the Bill as it now stands, its new field of operation will be limited to those independent Commonwealth countries that have become independent since February, 1948.

May I remind your Lordships for a moment about the way in which this demand for an extension of the Corporation's field has arisen? As your Lordships will remember, the Corporation was set up by the Overseas Resources Development Act, 1948, which was intro duced by the Labour Government and passed in that year. The Corporation's field was limited by that Act to British Colonies and other dependencies. For this reason, and for this reason alone, at that time, India, Pakistan and Ceylon were excluded. They were already independent; therefore, they were outside the scope of the Act. Since 1948, the area covered by the new independent countries in the Commonwealth has been steadily growing while the area occupied by British dependencies has been equally steadily shrinking. Hence the Government's decision, which we have already welcomed, to widen the field of the Corporation to include the newly independent countries.

But the logic of this decision to allow the Corporation to operate in independent and developing or underdeveloped countries in the Commonwealth, as well as in the Colonies, is that all such countries should be included. If the Government wish, as they appear to do in this Bill, to exclude the Indian subcontinent they must surely offer your Lordships valid reasons for doing so. They must prove, I think, to the satisfaction of the House, that there is a good reason for treating these three Commonwealth countries quite differently from all the others. I have already studied with the greatest care the reasons given by the Under-Secretary of State in another place, but I must admit that I have found them completely unconvincing. I hope that the noble Marquess, Lord Lansdowne, when he comes to reply to these Amendments, may be able to find better reasons than those given by his colleague.

May I for a moment examine the reasons the Government have already given for excluding India, Pakistan and Ceylon? The first reason given by the Under-Secretary of State in another place was that since 1959—that is to say, for the last four years—the Corporation has had the power to act as managing agent and to perform advisory functions in independent Commonwealth countries. But the fact is that this power has never once been used in the last four years. I think that is correct; and if it is not I am sure the noble Marquess will put me right. If it is correct—and as the noble Marquess has not interrupted I think I may assume that it is—surely this shows that this is not a service the independent countries want the Corporation to render. What they want is something quite different. What they want is the Corporation's combination of capital and business experience. That is what the Corporation can offer them and what they desire to have.

Another reason given by the Under-Secretary in another place is that India and Pakistan already have their fair share of British aid and that any increase, however small, would make their share disproportionate to that of the other countries. Of course, it is quite right that they have a very substantial share of British aid, but is it really the case that they have more than their fair share? I believe that our total expenditure in aid in the last three years, almost all of it within the Commonwealth, has been running at about £150 million a year. We have been giving India, Pakistan and Ceylon about £30 million a year in aid during this period. If my mathematics is right, that means that about one-fifth of all our financial aid has been going to those three countries.

The population of those countries is about 550 million. The population of the developing countries in Africa, the Caribbean and the Far East is about 100 million. So on these figures it is plain that four-fifths of the total population of the poorer countries in the Commonwealth have been getting one-fifth of the aid, while one-fifth of the total population of these countries has been receiving four-fifths of our financial aid. So it cannot be doubted that the Indians, the Pakistanis and the Singhalese are getting less per head from us than the people living in the ex-British countries in Africa, the Caribbean and the Far East.

The third reason given by the Secretary of State was that, if the Corporation were allowed this power, it would divert a very large part of its resources to the Indian sub-continent at the expense of countries where it now operates, or will operate when its field has been widened. But the Corporation has already undertaken that if it is given this power it would use it very sparingly in the early stages. Indeed, it might not be used at all for a considerable time. Moreover—and this is an even more convincing answer to this argument—the Government could prevent the Corporation from doing this by instructions, by saying that it would be contrary to Government policies. The Corporation always consults the Government on matters of policy. That happened when I was at the Colonial Office, and I am quite sure that it still goes on now that Lord Lansdowne occupies the office I once had there. It is the right and duty of the Government to direct the Corporation in matters of policy. The Corporation in this respect is like any other public company. Those are the arguments that have been used against the inclusion of these three countries.

I should like, quite briefly, to put the arguments in favour of including them. First of all, there is a broad political argument which stems from what I would call sound Commonwealth doctrine, a doctrine that is common to all Governments and, indeed, to all Commonwealth countries—namely, that it is most undesirable to discriminate between different Commonwealth countries. We do not want inner and outer circles of Commonwealth relationships. This matter was discussed very carefully after the war when these new countries were coming into the Commonwealth, some of them republics and some of them countries remaining under the Crown. I think everyone agreed that it was most undesirable there should be any differentiation or discrimination between them, and that the advantages of being in the Commonwealth should be shared equally by all its members.

I am quite certain that the Government would not dream of including Pakistan and leaving out India. For perfectly sound political reasons, if one is included so is the other. Why should the Government think that this reasoning does not apply equally to the three countries in the Indian sub-continent? Is it not extremely likely that these three countries will feel a good deal of resentment, primarily against us, for discriminating against them, as we are doing in this Bill, in favour of the developing Commonwealth countries in other parts of the world? Secondly, there is a very plain straightforward economic argument. The Indian sub-continent is in greater need of economic aid than any other part of the Commonwealth. The standard of living in that part of the world is much lower than that in Africa or the Caribbean. On grounds of using our money to the best advantage, I do not think there can be a stronger case than that for putting it into these countries.

Finally, it is the wish of the Corporation. If the Corporation did not want the power, there would be no case for asking for it. But the Corporation does want the power. What it wants is to have the power to start projects in these countries, provided that it is invited by the Governments of these countries to do so. The Corporation made representations to this effect to the Government after the Bill had been introduced into another place. Of course, the Government did not then have much time to consider its representations. The Government have had a good deal more time since, and I very much hope that as a result of these representations they may have second thoughts. There have been many examples in recent measures of the Government's having the sound sense to change their mind after having time to consider representations made to them.

I should like to point out that this is only an enabling power for which we are asking. It does not oblige the Corporation to start new projects in India, Pakistan and Ceylon. It does not oblige the Corporation to lend a penny to any of the Governments of those countries. It is merely an enabling power widening the Corporation's freedom of choice. That is all I am asking for, and I hope that I shall have the support of other Members of this House in backing this Amendment. I beg to move.

Amendment moved— Page 1, line 9, leave out ("as defined by that Act").—(The Earl of Listowel.)


I should like to add only one point to the full list of reasons put forward by my noble friend as to why this Amendment should be accepted; that is, on the rather wider issue of the Commonwealth as a whole. On various occasions in the last weeks many of your Lordships have spoken of the need for strengthening the Commonwealth. Many of us see the Commonwealth Development Corporation as one of the weapons with which we can strengthen the links of the Commonwealth. It provides a very practical means of doing this. At the moment it moves into a large part of the Commonwealth, not only doing actual material good, but also encouraging the mixing together of peoples from different parts of the Commonwealth on a purely practical, commercial basis. That in itself is an admirable and important thing to do. It is therefore unfortunate that a very important section of the Commonwealth are denied the opportunity of having this assistance offered to them, and that the Commonwealth Development Corporation are thereby denied the opportunity of being able to help them. Furthermore, I personally—and I do not think I am alone in this view—look forward to the day when the C.D.C. will not emanate entirely from this country in giving out its help, its expertise, its technicians and its money to assist other members of the Commonwealth, but, rather, will be no more than the gathering ground of help which other members of the Commonwealth can give to each other.

If that is ever to come about, it is clearly going to be very much easier for it to be achieved if it is the whole of the Commonwealth that is within its sphere of influence. I know that my noble friend's Amendment does not at this stage go that far; it is merely extending it to those parts of the Commonwealth which were as Colonies part of the Empire up until 1945. But this is an important step towards this ultimate concept, as I see it, of the C.D.C., whereby the whole of the Commonwealth would be able to contribute—as I said on another occasion, probably not very often, and certainly not at this stage in the way of money; but even at this stage in the way of technically trained qualified people. I am quite sure that that development, which many of us would like to see happening rapidly, and believe would be of great help in making the Commonwealth something more dynamic and up to date than it is at present, would be very materially assisted if India, Pakistan and Ceylon were brought into the general scope of the C.D.C. I therefore share my noble friend's hopes that the Government will accept this Amendment.

11.42 a.m.


The noble Earl, Lord Listowel, who has put forward the case for the inclusion of India, Pakistan and Ceylon in the wider spheres which this Bill will give to the Commonwealth Development Corporation, outlined some of his views on Second Reading; indeed, at that time I gave him some of my answers. Necessarily, therefore, both his speech and my speech must be somewhat repetitive. Certainly, I do not myself argue with the points the noble Earl has made. I think they were perfectly sound and valid. He said that the managerial powers of the C.D.C. have been available to India, Pakistan and Ceylon since 1959, and in fact they have not been called upon. This is perfectly correct. The noble Earl went on to say, as is quite true, that, though our aid to the Indian sub-continent is very large indeed, a large proportion of our total development aid, the Indian subcontinent, with its population of 545 million, receives somewhat less per head than other emerging territories. With this I do not argue.

The noble Earl went on to say that it had been suggested by Government speakers—in fact, it was suggested by myself and by my honourable friend in another place—that if his Amendment were accepted the likelihood would be that money would be drawn off from the other parts of the developing world towards India. This argument the noble Earl countered by saying that Her Majesty's Government would, of course, be in a position to put on the brake., as it were, and to say, "No. These monies must not be drawn off in excessive quantities to the Indian sub-continent at the expense of the 100 million or so population in the other parts of the developing Commonwealth." This is at once, I think, an admission by the noble Earl that, if we were to redraw the line even further back than 1948—as the noble Earl will remember, I do not want to make a Party point, but the line was drawn by the Labour Party, although I do not think this is of any significance; the circumstances, I agree, were different—the demands would be there. And where there are demands—although Her Majesty's Government would, I agree, have the power to resist them—it would indeed be rather difficult. There would be pressure.

Here I must refer to the speech made by the late Mr. John Strachey in another place. Like the noble Earl, Mr. John Strachey advocated the inclusion of India, Pakistan and Ceylon, but he said, and I think this is important, that he did not envisage an increase in the existing ceiling, which is at present £170 million. I submit to your Lordships that if India, Pakistan and Ceylon were included in this measure, if we were to accept the noble Earl's Amendment, this ceiling within a very short period of time would almost certainly—as certainly as one can predict—have to be raised very substantially. I do not think that the noble Earl would be likely to argue with me on this point—indeed he might say, Well, why not?"

The noble Earl was, I thought, very fair, as he always is, when he referred to the opinion of the Vice-Chairman and Managing Director of the Corporation. It is a fact that both these gentlemen expressed to my honourable friend the opinion that they would welcome the inclusion of India, Pakistan and Ceylon. But, again, as the noble Earl so properly reminded your Lordships, this was something that they had not said to us in previous conversations. This was something which they divulged to us only quite recently, and since this matter was brought before the consideration of Parliament. So this was something that had not been formerly put to us, and their willingness—I do not think one would go so far as to say eagerness—was not drawn to our attention. I should also remind your Lordships, so as to have the story quite complete, that at the same time they said that, while they would welcome the inclusion of these three countries of the Indian sub-continent, they did not think that in the first instance, or for the first few years at any rate, they would be able to do very much.

There is a degree of force in the argument put forward by the noble Earl. But, with great respect to him, I do not think that there is any resentment in India, Pakistan or Ceylon on this point. I have heard nothing about this, and if the noble Earl has heard something I should be very glad if he would tell me. I have not had any indication at all that, if this Bill were to go through as drafted—as I hope it will—there would be any risk of resentment. Because we already have our existing channels of financing to India, Pakistan and Ceylon; indeed, as the noble Earl has been good enough to say, the volume of finance which has gone into these countries has been very considerable indeed.

I should perhaps remind your Lordships of the figures. It is sometimes dangerous to be playing with figures, for at one moment one is talking about population, and the next about money. I am now talking not about population but about money, in pounds sterling. Since 1958, our commitments for economic aid have amounted to more than £200 million, and this sum includes, of course, the £30 million which we recently promised to the Indian consortium. In addition, as noble Lords will know, there was the separate item of military aid. Our commitments to Pakistan since 1958, over the same period, have amounted to some £49 million. This includes the £8 million which we have committed to the Pakistan consortium. Our aid to India and Pakistan in recent years has been running at between one-fifth and one-quarter of our total development aid—a very considerable proportion. While it is perhaps not necessary to try to convince your Lordships on this point, surely this is evidence of the fact that there is no unwillingness, no reluctance, on the part of Her Majesty's Government to provide the maximum degree of aid possible to the Indian sub-continent.

I do not think your Lordships would be wise to support this Amendment; for Her Majesty's Government, having considered this situation, do not feel that it would be proper or expedient at the present juncture to raise the ceiling of £130 million; and, without doing so (though I have a degree of sympathy with this Amendment), it is a fact that there would not be sufficient money fully to carry out what the noble Earl wishes. We have our other channel of financing India and Pakistan; and, moreover, these managerial services of the Commonwealth Corporation are always available to India, though up to now she has not seen fit to call upon them.

There is a third point—perhaps a very important one. That is that the Commonwealth Corporation's particular skills and managerial ability seem to us to be particularly well-fitted to the rather simpler economies of the developing countries. I think that, by the inclusion of this massive sub-continent, the whole balance of the arrangements of the Corpor ation would be seriously upset. None the less, while asking your Lordships to reject this Amendment, I wish to make it perfectly clear that the exclusion of the Indian sub-continent from this Bill has nothing whatever to do with our willingness or unwillingness—our willingness I think we have proved—to do all we can in financial aid for the three countries concerned. I earnestly suggest that this Amendment should perhaps not be pressed, or, if it is pressed, that it should be rejected.


I hope that my noble friend will consider pressing this Amendment. The noble Marquess has clearly indicated his sympathy with the point that we are now dealing with—the transfer, the translation, of the old Colonial Development Corporation into the Commonwealth Development Corporation, and the fact that this Corporation should in most cases cover what we call the new Commonwealth. That being so, it seems to me wrong in principle that we should exclude three of the big Asian countries from the classification of the new Commonwealth. I quite take the point of the noble Marquess, that the capital of the Corporation would be insufficient to make any major investment in India, Pakistan or Ceylon; but in the past the Colonial Development Corporation has not undertaken the rather mammoth investments that other agencies have made, mainly in India and Pakistan. The Corporation's investments have perhaps been a good deal smaller because the territories in which they are operating did not call for such mammoth investment.

One of the great successes of the Colonial Development Corporation has been the expert advice and the managerial experience which have been made available to projects. It is true that that type of advice and experience is available through other agencies, but I know from my own experience that, particularly in Ceylon, there are a number of small projects which could be of great value to the economy, particularly on the question of restricting imports, saving the currency, which would not in themselves require a very considerable investment but would be greatly helped if the Commonwealth Development Corporation, with all the experience that it has built up over many years in its contacts with British industrialists, were able, as it has done in Malaya and in the West Indies, to bring British industry, British investment, into contact with local investment, so that there could be a partnership between the local investor, the local business, and investors in this country.

I think it is true to say that where the Colonial Development Corporation has been prepared to put in even a marginal sum by way of investment, this has given a sense of security to the British industrialist. I think that this is a factor which should be developed if we are to bring in new industries—not necessarily the very large industries, but some of the smaller industries—so that the Corporation can play its essential part of creating this sense of stability and giving assurance to British industry. I believe that the Commonwealth Development Corporation would have a part to play; not a major part in the sense of major investment, because obviously it would not be in a position to do that, but in some of the smaller industries it would be of considerable help.

The point which I think the Committee must appreciate is that while, if we pass this Amendment, it will make it possible for the Corporation to operate in India, Pakistan and Ceylon, the actual decision whether to operate, whether to invest, whether to go into partnership, will still depend upon the Board of the Corporation. It is, of course, aware of its long-term projects; of the investment chat will be available; and it will be for the Corporation to decide, on a commercial and, in some ways, political basis, whether or not an investment should be made. Looking back on the great success of the Colonial Development Corporation over the past few years, I think we can now put our trust in the board of the Corporation to make the right decisions, in the interests of the country and within the capability of the organisation, taking into account its already known commitments in other parts. I believe that if this Amendment were passed we should be giving the Corporation flexibility, and I am sure that it would be able to make use of these powers, to the advantage of these three Commonwealth countries.


I am most grateful to the noble Marquess, Lord Lansdowne, for his extremely careful and well-argued reply to my Amendment. I do not think the Committee could have had a fairer statement of the argument against the acceptance of these Amendments. But I must confess that I am not convinced, because the noble Marquess did not give any reasons that were not given by his colleague in another place. It seems to me that his strongest argument was that, if this new power is to be effective and if the Corporation were to go into the Indian subcontinent, the provision of £170 million in the Bill would have to be raised. I honestly do not think that is the case. I do not think that the Corporation would want to spend the money in the sub-continent in the next couple of years. I think that the first stage would be exploratory and consultative, and I have no doubt that the Corporation would be prepared to give the Government an undertaking, if necessary, that it would not spend funds, whether by way of investment or loan, during the period that has been referred to as the early stages.

And there is a further point. A colleague of the noble Marquess, in another place—I cannot remember which one, but no doubt the noble Marquess will remember—said that the Government contemplated increasing the total amount paid from about £150 million a year to £180 million or £200 million within the next five years. I think that is what he said; the noble Marquess will correct me if I am not accurate. But if this is the case, and if it is Government policy to increase the total amount of financial aid, then surely within a not very distant period of time it would be possible to raise the financial ceiling of the Colonial Development Corporation and allocate more funds to the Corporation from what we are spending on aid. I do not foresee that particular difficulty becoming an insuperable one.

From the Parliamentary point of view I am in a very difficult position because I do not know the views of the noble Lords on the Cross Benches, or those of the noble Lords and noble Lady opposite, on my Amendment. If I were to divide the Committee I should not like the Division to be on a Party basis, for this is not a Party Amendment; it is an Amendment on which your Lordships will decide on broad Commonwealth considerations. Furthermore, I should not like a Division resulting in rather few favourable votes, because it would look as though India, Pakistan and Ceylon were not popular in your Lordships' House. It is possible for noble Lords to help me.

I should like to make a suggestion to the noble Marquess. If he were willing to say he would postpone the remaining stages of the Bill until next week so that he could reconsider the matter between now and Report stage, then I

Alexander of Hillsborough, E. Lawson, L. Shepherd, L.
Burden, L.[Teller] Listowel, E. Sinha, L.
Champion, L.[Teller.] Peddie, L. Summerskill, B.
Clwyd, L. Samuel, V. Walston, L.
Crook, L. Shackleton, L. Wise, L.
Albemarle, E. Glentanar, L. Lothian, M.
Atholl, D. Goschen, V. [Teller.] Mancroft, L.
Auckland, L. Grantchester, L. Merrivale, L.
Brecon, L. Grenfell, L. Milverton, L.
Colville of Culross, V. Haddington, E. Molson, L.
Denham, L. [Teller.] Hanworth, V. Newton, L.
Derwent, L. Horsbrugh, B. Robertson of Oakridge, L.
Dilhorne, L. (L. Chancellor.) Iddesleigh, E. Saltoun, L.
Dudley, L. Jellicoe, E. Twining, L.
Ebbisham, L. Lansdowne, M. Ullswater, V.
Effingham, E. Long, V. Waleran, L.

Clause 1 agreed to.

Remaining clauses agreed to.

House resumed.

Bill reported without amendment; Report received.

Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 23), Bill read 3a, and passed.