§ 2.48 p.m.
§ LORD BARNBYMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether, with a view to assisting the balance of payments, they are now willing to review the policy hitherto followed in connection with granting subventions to overseas countries; and whether they will henceforth require evidence of self-help, and not hesitate to seek assurances as to how grants are to be used so as to make sure that such grants will truly assist the economies of recipient countries.]
§ THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR FOREIGN AFFAIRS (LORD WALSTON)My Lords, the Government's policies for overseas development, including the terms on which our aid, in the forms of both grants and loans, is extended to developing countries, were fully described by my right honourable friend the Minister of Overseas Development in the White Paper,Overseas Development: The Work of the New Ministry (Cmnd. 2786), presented to Parliament last August.
The Government recognise that, although a large part of our aid is tied to British goods and services, our balance-of-payments situation must be a constraint on the programme, and we are ensuring in every new aid negotiation that the burden on the balance of payments is made as light as possible. But the Government have no intention of reducing our overseas aid, since they believe it to be a most important contribution to the progress and stability of the poorer countries through the promotion of economic development.
The uses to which our bilateral aid, of which nearly one-half is in the form of grants, is to be put are invariably discussed in detail with the recipient country before disbursements begin, and the mobilisation by a recipient country of its own resources for development is one of the factors which we take into consideration in deciding on the amount and terms of our aid.
§ LORD BARNBYMy Lords, I thank the noble Lord for that reply. It is certainly in advance of the reply he recently gave me, which suggested that there had been as yet little departure from the archaic procedure of insufficient supervision of how these advances should be used. His reply now indicates that something is being done in that way. Is the noble Lord also aware that recently a Note has been presented by the World Bank to the United Nations stressing that assistance should be given only to countries where performance with respect to development policies gives assurance that the help extended will be used for the purpose intended, and that this, indeed, means a lessening of expenditure for national status symbols, such as economic projects of various kinds?
LORD WALTSONMy Lords, far be it from me to refer to the efforts made by the previous Administration in the sphere of aid as "archaic" but I would certainly agree with the noble Lord that considerable advances have been made since my right honourable friend took charge of the Ministry of Overseas Development. With regard to the second part of the noble Lord's supplementary question, I am aware of the World Bank's views, and the directives and activities of the Ministry of Overseas Development are closely in conformity with those views.
§ LORD BARNBYMy Lords, would the noble Lord also bear in mind that some distinction should be made between normal advances and interest-free advances, which seem to represent a degree of generosity by this country that is often abused?
§ LORD WALSTONMy Lords, there is differentiation between normal loans and interest-free loans. I would remind the noble Lord of something of which I am sure he is aware: that is, that the object of our aid is aid, and it has been shown by past performance that interest charges often vitiate the objectives of that action on our part. It is for that reason that we have decided that the giving of interest-free loans is the correct means of achieving our aims in certain specified and selected cases.