HL Deb 20 December 1965 vol 271 cc873-7

2.40 p.m.

LORD BARNBY

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

[The Question was as follows:

To ask Her Majesty's Government (a) with regard to the outstanding loans and advances of £7,327 million to Tanzania, of which £5,238,000 is reported as interest free, what arrangements exist to convert the latter into fixed-interest obligations, and (b) if services of all outstanding indebtedness were calculated at conventional interest rate, say 5 per cent., what relationship the resulting total would bear to the current income budget of Tanzania.]

THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR FOREIGN AFFAIRS (LORD WALSTON)

My Lords, no arrangements exist by which interest-free loans may be converted into interest-bearing loans. An interest charge of 5 per cent. on the total of interest-free loans issued to Tanzania would cost a little under 1 per cent. of Tanzania's recurrent expenditure in the financial year 1965–66.

LORD BARNBY

My Lords, with regard to the first part of the Answer, would the noble Lord not agree that it would seem that lenders must be circumspect in their behaviour towards those who borrow money from them? It would be appropriate that something should be done fairly soon to achieve a rapid conversion into interest-bearing loans. Also, would he be able to say, in regard to the point about which I have already given him notice, that since that Question was put down the situation of the borrower had changed? Could he give any indication to the lenders as to the position now of an independent Republic which had broken off relations with the United Kingdom with regard to other expenditure it might incur affecting loans from the United Kingdom?

LORD WALSTON

My Lords, with regard to the first part of the noble Lord's question, of course Her Majesty's Government, as all lenders are, or so I hope, are circumspect with regard to the conditions of the borrower. With regard to the second part of the noble Lord's question, I would first of all thank him for his courtesy in warning me in advance that he was going to raise this particular point. I would in the first place remind him that the object of our loans is to help developing countries and not specifically to influence their political attitudes or actions. But I would further say that this whole matter of loans to all countries in Africa at the present time is subject to very serious thought, and it is probable that my right honourable friend the Minister of Overseas Development will be making a statement, or at least coming to a conclusion, in the very near future.

LORD COLYTON

My Lords, are we not getting into a completely Gilbertian situation when we go on giving loans and aid to a country which has broken off diplomatic relations with us? Has not the time come to be a little more realistic and to take a leaf out of the Americans' book, so that when a country kicks you in the teeth you withdraw aid?

LORD WALSTON

My Lords, as I have already said, this matter is under review and no decision has been reached. But I would once more reiterate what I have already said, that the object of our loans is in order to help in the economic development of the countries to which we are lending money, and it is not a backstairs means of influencing their policies.

LORD BALFOUR OF INCHRYE

My Lords, arising out of that reply, can the Minister say whether or not all this loan money has yet been drawn?

LORD WALSTON

My Lords, it has not all been drawn yet.

LORD BARNBY

My Lords, while I thank the noble Lord for his reply, has he not observed that he did not answer the question, which was: what is the position of the lender to a borrower who has broken off relations with this country and therefore must be in a different condition? Perhaps I should put it in this way. The status of the borrower has changed since I put down the Question on the Order Paper: can he make some comment on that?

LORD WALSTON

My Lords, I am sorry that I did not answer the question sufficiently specifically for the noble Lord. For the first part of my answer, I can only repeat what I have already said—namely, that the whole matter is under review at the present time. But, at the risk of wearying your Lordships, I will repeat the second part of my answer, which is that the object of these loans is primarily to help in the economic development of the countries to which we lend the money, and the economic circumstances of those countries have not changed in any way whatsoever.

THE MARQUESS OF SALISBURY

My Lords, I should like to ask the noble Lord two questions. In the first place, he says that the money is for the benefit of the people, and not of the Government. But to whom is the money being lent? Is it not being lent to the Government, for them to spend as they think best? That seems to me to be the position. The second point is this. He said that the matter was under review. Will the Government make a Statement on this situation before the House rises? This is not a difficult question. It is a question whether we do lend the money, or partly lend it, or do not lend it. It is a perfectly simple question about which to come to a decision, and I think that before rising Parliament has a right to ask the Government to provide a reply.

LORD WALSTON

My Lords, as the noble Marquess says, it is a perfectly simple question. I cannot promise that a decision will be reached before the House rises. But if a decision is come to—and I believe that it will be—then undoubtedly the House will be informed. With regard to the first part of the noble Marquess's question, the money is being lent to the Government as they represent the country in question. But it is not for them to spend as they like. It is lent for specific objects which have been settled by discussion and approval between the Ministry of Overseas Development and the Government of Tanzania, and to the best of my knowledge there has been no change whatsoever in those objects or in the method by which they are to be achieved.

LORD BALFOUR OF INCHRYE

My Lords, would the Minister take note that there is a considerable body of opinion in this House—and, I believe, outside—who would greatly regret the taxpayers of this country continuing to find funds for countries that have broken off diplomatic relations with this country?

LORD CARRINGTON

My Lords, will the noble Lord. Lord Walston, realise that there is a great deal of interest on this side of the House. We are adjourning for, I think, over a month, and will he please represent to his right honourable friend the Foreign Secretary that we should like a Statement before the House rises, so that your Lordships can see what decisions the Government have come to?

LORD WALSTON

My Lords, I will certainly do that. I will also take note, as the noble Lord has asked me to do, if not of the "considerable body of opinion" in the country—because that is still unproved—at least of the considerable interest taken in the country, and of the considerable body of opinion on certain Benches opposite, with regard to this question.

THE MARQUESS OF ABERDEEN AND TEMAIR

My Lords, may I ask whether the rather astonishing figure of £7,000 million, referred to in the Question, is correct?

LORD WALSTON

My Lords, I think it should be £7.327 million—with a point and not a comma. May I at the same time call your Lordships' attention to an error for which I am responsible in my reply in a Written Answer to a Written Question of the noble Lord, Lord Barnby, on December 6, which has been corrected in the OFFICIAL REPORT? The error occurred in Schedule B of the Written Answer [col. 99]. It read: Tanzania (Tanganyika and Zambia)". It should, of course, read: Tanzania (Tanganyika and Zanzibar).

LORD BARNBY

My Lords, I would thank the noble Lord for that reply. I was puzzled by the Answer and thought there must be something wrong. If I may revert to the present Question, without any political angle at all, I would ask, since this country is the lender and the borrowers having broken off diplomatic relations with us, is the noble Lord in a position to give an assurance that there will be no more advances in this direction until the situation has been cleared up?

LORD WALSTON

My Lords, there will be no more advances until the decision has been taken as to whether or not there shall be more advances.