HL Deb 01 July 1965 vol 267 cc1018-31

3.25 p.m.

Order of the Day for the Second Reading read.


My Lords, I beg to move that this Bill be now read a second time. This is a short but most important Bill, which extends and develops the provisions of the Colonial Development and Welfare Acts, 1959 and 1963, and the Overseas Service Act, 1961. It is concerned with two great aspects of overseas aid—namely, capital development and technical assistance; or, in other words, money and men. Clause 1 deals with the money; Clause 2 deal with the men. Clause 1 is confined to the remaining dependent territories; Clause 2 makes it possible to offer technical assistance in any part of the world. Clause 1 is limited in time, and Clause 2 is unlimited.

Clause 1 deals with the capital aid to our remaining dependent territories, and your Lordships will be familiar with the method that has been adopted in the series of Colonial Development and Welfare Acts, in which provision has been made for spending cumulative sums of money or of advancing dates. This Bill raises the ceilings on the money which may be spent on Colonial development and welfare, and advances the date by which the money may be spent for a further four years. Since its provisions overlap with the existing Act of 1963, the Bill makes provision for five years in all: that is, from April 1 last until March 31, 1970.

A good deal of the money provided under the previous Acts remains unspent. This is partly, indeed largely, because the territories for which it was provided became independent, and money for their development could no longer be provided under these Acts. Including this balance, which is carried forward, the total amount available in the new period will be £95 million in grants and £40 million in loans. This is money for dependent territories only. These figures compare with the totals available under the previous Acts of £68½ million for grants and £32 million for loans. But both these periods were of a duration of three years only. The new figures of £95 million for grants and £40 million for loans are spread over five years. This is a comparison of an annual average of about £33½ million available under the old Act and £274 million available under this Bill.

In the meantime, however, the population of the dependent territories has fallen from 18¾ million to 5½ million as territories have become independent. In fact, during the period Kenya, Zambia, Malawi, Zanzibar, Malta, Gambia, Singapore, Borneo and Sarawak have all become independent, and the result of the arithmetic is that the money per head for development rises from £2 a year to £5 a year. It is only fair, of course, to add that these remaining territories for which this money is required are small territories, where difficulties of development may be even greater than in the larger territories which have already gained their independence.

Your Lordships will notice that in Clause 1(2), for grants, and Clause 1(4), for loans, ceilings have been provided for expenditure in the first three years. This is to assist in controlling the rate of outflow of the money. Admittedly, expenditure in recent years has been so far below these ceilings that perhaps they do not appear to have a great deal of significance. We have, however, continued what was done in the previous Act by the previous Administration, and we think it useful to have some sort of governor for the rate of outflow of this money, even though we do not expect anything like it to be reached.

Now a word about grants and loans. The money provided for Colonial development is in most cases a mixture of grants and loans. Under the previous Act the ratio of grants to loans was slightly more than 2:1. We have increased this proportion a little, so that 70 per cent. of the aid available in this Bill will be by grants. In other words, the new ratio is 7:3 instead of 2:1.

Grants are manifestly more important than loans, not only numerically but inasmuch as they do not put a further burden on the developing territory. This is particularly the case in regard to the remaining developing territories. The grants must be for specific projects. Most of these territories also receive budgetary aid. They have their budgets made up with assistance from us, so the servicing of any loans may fall back on us. Therefore, in a way it is better that they should get their help by grant. Assuming a territory receives a 7:3 mixture of grants and loans and has to pay the full rate of interest on the loan, the mixture of grant and loan would have the result that the overall cost of development finance would be reduced to something like one-third of the nominal lending rate.

The rate of interest on loans provided under this clause would normally be the rate at which the Government itself could borrow for a similar period, plus a small service charge. At the moment this total charge is running at about 6¾ per cent. for 25-years money, although this is not the real cost to the territories of their overall development finance. However, my right honourable friend the Minister for Overseas Development announced on June 21 that it was her intention to make interest-free loans to developing countries in appropriate cases. The criteria relate to the poverty of the territory and its development capacity. These apply to each country in question, and the Colonies will be eligible for loans which we may agree to make in the future on the same criteria as will be applied to other developing countries.

For the sake of completeness, I will say a word or two about interest rate on loans paid by the Colonial Development Corporation, although it is not strictly in order under this Bill. As the Minister has already announced on June 21, there will be a concession on certain projects which the Corporation undertakes. Instead of interest being deferred and, as a result, accumulating during a fructification period, the Corporation will be relieved of interest during that period, so there will be a considerable gain to the developing country's finance at a very difficult time. This will make a significant difference to the cost of the Corporation's money for such schemes, and will enable it to develop fresh schemes in those countries where its capabilities are already well known. The concession will apply mainly to the agricultural schemes which cannot be expected to produce a return in their early years.

The grant money available under the Bill is provided only for individual schemes within Colonial Development plans. So far as loans are concerned, money is available towards the cost of development plans generally. Under the main Act, such plans have to be approved by the Colonial Secretary, because of his overall responsibility for administration of the Colonies, and he consults fully with my right honourable friend the Minister for Overseas Development. We therefore make this money available only towards the execution of plans which have first been approved. All the advisory services of the Ministry of Overseas Development are available to be brought to bear on the development problems of these territories, and we are, of course, in close touch with their administrations. So we should be able to secure that this money is spent as effectively as possible. We appreciate that some administrative procedures have become rather cumbersome, and we hope to have them tidied up before the Colonial territories actually start to spend money under this Bill.

The Minister moved the Second Reading of the Bill in another place on February 24 with the intention, as she stated, that allocations should be available to the territories much earlier in the planning period than the similar allocations had been in 1963 under the previous Government. However, the Committee stage of the Bill in another place was more protracted than had been the case on previous similar Bills, so it again looks unlikely that the Act can receive the Royal Assent much sooner than did the previous one. It is a little sad because it means that there is that much less time for the territories to work out their plans. One must not complain about this meticulous Committee examination, but it is a pity that a Bill, introduced on February 24 in another place, should reach us only on July 1. I hope, however, that our Committee stage need not be too protracted.

I now come to Clause 2, which seeks to do two main things. It repeals and replaces the Overseas Service Act, 1961, a very valuable Act which is the authority for the present Overseas Service Aid Scheme. It extends that scheme to people who are performing public or social services in overseas territories outside the Civil Services of Governments. The exist ing scheme was announced in a White Paper, Cmnd. 1193, which was published in August, 1960. The main problem at that time was to help the remaining dependent territories to attain independence with public services that would be equal to the strains which would follow from independence. The British Government had already promised that the members of Her Majesty's Oversea Civil Service, who were filling many of the senior posts in these territories, should be permitted to retire with compensation when the British Government could no longer protect their terms of service. The White Paper recognised that the need for skilled people in the dependent territories would not stop at the point of independence, but would continue for some years as these countries developed their economies and their public services.

The Overseas Service Aid Scheme therefore offered to the Governments of the territories then dependent financial help from the British Government towards the salaries, education allowances, passage costs and, where appropriate, compensation of British expatriate officers serving in the Civil Services of those countries. Forty-one agreements have been signed under this Scheme and at its peak over 15,000 officers were designated. Because of resignations under the compensation schemes, this number has now dropped, but over 10,000 officers are still in post under the Scheme in both independent and the remaining dependent countries. Of these about 5,000 are members of H.M. Oversea Civil Service, and the rest are designated contract officers. All these men are in the service of overseas Governments and receive the payments due to them from those Governments, who in turn are reimbursed at an agreed level by the British Government.

During the lifetime of the Scheme the requirements of overseas Governments have been steadily changing. Most designated officers serve independent Commonwealth Governments, and these Governments no longer need expatriate officers for a lifetime of service. Virtually all appointments are therefore now made on a short-term contract basis which is renewable by agreement between the employing Government and the individual officer. The emphasis of this vast Scheme of technical assistance has therefore come to be placed on maintaining through a large number of short-term contracts a considerable body of officers in the field to help overseas Governments to attain independence and to develop that independence as effectively as possible. Independence has not reduced the need for this help, and although about 1,800 appointments were made under the Scheme last year by the Ministry of Overseas Development and the Crown Agents, the vacancies outstanding at the end of the year exceeded the appointments made. We can therefore be confident that this considerable Scheme, which is our major vehicle for technical assistance and which is costing the British Government between £15 and £16 millions a year, has proved, and is proving, of great benefit in supporting the Civil Services and Governments of many overseas countries. However, one aspect of the scheme has assumed increasing importance since it was introduced. Over the past five years, salaries and the general standard of living have increased more rapidly in this country than in the great majority of the under-developed countries where these officers serve. Without the help in improving salaries provided by this scheme it would always have been difficult for these relatively poor countries to pay the full cost of employing men from overseas. But the increasing prosperity here has widened the gap between our living standards and theirs and so made the scheme much more essential, both to encourage serving officers to stay and to make new recruitment possible.

While some independent countries have established their own recruitment machinery here, many are content to continue to rely on the services of the Ministry and the Crown Agents, with their longstanding contacts with the authorities and professional bodies here, from whom most of our overseas recruits are drawn. The scheme is now to be extended outside the Civil Services of overseas Governments to a great variety of bodies and institutions overseas performing public and social services in their countries. The bodies covered by this extension are generally described in subsection (5). This subsection was the subject of a great deal of debate in Committee in another place, and the first version of it aimed at setting out in detail the kinds of employment in which people might be supported. However, it was partly redrawn to describe in more general terms the bodies which now come within it.

The concept behind this extension is that many services are of equal value to a developing community, whether they are undertaken by the Civil Services or by somebody else. Thus in many countries schools are run partly by the Government, partly by institutions set up by, or supported by, the Government and, perhaps, partly by charitable or other non-public bodies. It is the same with railways: in one country the railways may be run by the Government and in another by a public utility. But there is clearly no special logic or value in the distinction drawn by the existing scheme between a railway engineer employed by the Government and one employed by a public corporation, or between a teacher employed by the Government and one employed by an independent technical institute. At present we can support only those people who are in Government service. Under the extension we shall be able to bring in the railway engineer and the teacher who are not in Government service, the local authority employee, the co-operative society officer, the highly skilled employee of a research institute, people in the Health Services of those countries, and the university professor or lecturer. We are sure that this will prove a sensible and helpful extension of the present scheme, and we already know that it will be welcomed by many Governments and authorities overseas.

With one major exception, we have not yet decided the bodies to whom this help will be offered. We have begun a process of consultation, so as to make out a list of a large number of bodies who might be eligible for it. and then to assign some order of priority in the offers of help that we can make. It will be seen from the Explanatory Memorandum to the Bill that we anticipate that the cost of this extension will rise in due course to a maximum of about £1½ million a year, a figure which assumes an average payment of about £1,000 per designated officer. In opening the Second Reading of the Bill in another place, the Minister did, however, say that she proposed to use this extension of the scheme to discharge the undertaking given by the British Government to the Commonwealth Education Conference at Ottawa last year, to offer help in respect of British expatriate staff in overseas universities. As funds become available, the scheme will be offered to other bodies potentially eligible for it, and from our initial soundings it looks as though there will be no shortage of claimants for this aid.

Because this extension of the scheme is not concerned with the Civil Services of Governments, or with members of Her Majesty's Oversea Civil Service, no question arises of compensation payment under it; nor will any pension be paid. The benefits will consist of inducement or overseas allowance, given in addition to local salaries, paid by the employers, education allowances and a contribution towards passage costs. While it is possible under Clause 2 to offer the benefits of the scheme to bodies performing public or social services in any country in the world, it is likely that the bulk of the help provided will be within the Commonwealth. This is partly because our limited resources will make it necessary for us to administer the scheme on a system of priorities, and partly because technical assistance is one aspect of our general aid programme, and we assess the need for it as part of our general aid programme for a particular country.

We know that this extension of the aid scheme made by the present Bill will be welcome in many countries. While there was argument in another place about the Bill's drafting, there was a general welcome from all sides of the House for its provisions. We hope that it will prove equally acceptable in your Lordships' House, and will be given a speedy passage to the Statute Book. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Taylor.)

3.47 p.m.


My Lords, I should like to thank the noble Lord, Lord Taylor, for the very clear way in which he has presented this Bill to your Lordships this afternoon. In common, I think, with all noble Lords on this side of the House, I most certainly give this Bill a wholehearted welcome. As the noble Lord, Lord Taylor, has told us, it is one in a long series of similar Bills, and I like to remember that the first one of the series was introduced in 1940, when we committed this great act of faith and courage in what has been described by one of our greatest men as "our finest hour".

As the noble Lord, Lord Taylor, has told us, it is true that the amount of money which is being made available is a little less, but the number of people with whom we are dealing is very much less: approximately 13½ million fewer will be covered by this Bill than were covered by the Act of 1963. I, for one am very pleased that Her Majesty's Government have not reduced accordingly the amount of money to be made available; and, as the noble Lord has explained, it will be £5 per head of population available as opposed to £2 per head of population available under the Act of 1963.

As the noble Lord, Lord Taylor, has said, however, the needs of the remaining 30 territories for whom we are directly responsible are very great, and I feel that everything that we can afford should be made available to these territories. Perhaps it is a little invidious to mention particular territories by name—and one might be tempted to name only territories of which one has personal experience. But I should just like to put on record my own view—and I should make it clear that I am speaking only for myself. I hope that the Minister, when considering the allocation of aid, will pay particular attention to the needs of the Seychelles, to the needs of Mauritius, to the needs of what we used to call the High Commission territories—Basutoland, Bechuanaland and Swaziland—and to those two lonely territories, St. Helena and Tristan da Cunha. I also hope that, if the difficulties with which Gibraltar is having to contend continue, special consideration will be given to her needs, as well as generous consideration to the needs of the West Indian Islands, which we sincerely hope may before long achieve federation.

I should like to remind the noble Lord, Lord Taylor, of something to which I drew his attention on the occasion of the Gambia Independence Bill. I suggested to the noble Lord that, in considering aid for The Gambia, it might be wise to consider aid which would be of use also to Senegal. I suggested that these two countries had similar interests, and that, in considering aid, that would perhaps be a proper way to look at the problem; and the noble Lord was good enough to say he would bear this in mind. I hope he has not forgotten what he said then. Also, I particularly welcome the fact that this is a five-year Bill and not a three-year Bill. In 1963 I for one bitterly regretted that we were not able to get a five-year Bill, and I should like to congratulate the right honourable lady upon her success with the Treasury in this respect.

The noble Lord, Lord Taylor, referred to the alteration in the emphasis between loans and grants and said—I am sure that this is right—that 70 per cent. of the £135 million will now be payable by way of grant and only 30 per cent. by way of loan. I think I should perhaps remind your Lordships that the right honourable lady, now the Minister of Overseas Development, said in 1959 that she considered that the rate of interest of 5 per cent. on Exchequer loans was too high. Of course, in these countries we are now considering the servicing of these loans makes them extremely unattractive. I was glad to see that the Minister went on to say that loans would be considered only as a last resort.

Now, however, we have this added news that there is the intention (if I have understood the noble Lord aright) of giving Exchequer-free loans. I do not know how they are going to be administered. I think it is going to be extremely difficult for the Minister responsible to decide where these loans should go. I should rather like to know from the noble Lord—perhaps he could tell me when I sit down—whether the ordinary 6¾ per cent. rate will be charged on other loans. Perhaps the noble Lord would be good enough to tell me if that is still to persist in certain cases, because we still have £45 million, I think it is, in loans. I would be interested to know what proportion of this money is going to be for interest-free loans and what proportion of it is going to be for interest-bearing loans. Perhaps the noble Lord could tell us about this later on. I was grateful to the noble Lord for his explanation of the new arrangements that have been gone into by the C.D.C. I think this is very good news and most satisfactory, and of course it will be particularly helpful in regard to agricultural schemes which are slow to produce returns.

I should now like to say a word about Clause 2—that is, the extension of the OSAS scheme. I think this is an admirable and very necessary alteration to the existing law. I speak from a certain degree of personal experience, and I welcome this wholeheartedly. I am a little disappointed that the Minister was not able to make an absolutely overall offer of this aid. So far as I understand it, she is going to have to get Treasury approval. She is going to select and is going to say that so-and-so is a high priority, and then she has to try to weaken the resistance of the Treasury. I wish her luck, and I only hope that the Treasury will feel able to allow the right honourable lady to administer this alteration in the law as widely as she can.

The noble Lord has made it perfectly clear that there is no question under this extension of the scheme of there being any pensions or compensations. I think I am right in saying that no pensions are added by this extension of the scheme; nor are there any compensations for loss of employment. Here is a point that I should like the noble Lord to consider—and here again I speak from direct personal experience of many conversations with designated officers. This is a problem with which many of them are faced. When they come home what is going to happen to them? I do hope that we are not just going to encourage these admirable people to give their services abroad and then, when they come back to this country, just forget about them.

I know that in the medical world, and, I believe, in the teaching profession up to a certain extent, something has been done to arrange for the promotion of people who fall out of the main stream, as it were, through their overseas service. In my opinion, they are all the better for their service overseas, and they are probably far more useful because of it. They should not be penalised when they come back to this country by losing the chances of promotion that they would have had had they remained here. I should like to hear from the noble Lord, Lord Taylor, whether he is able to give us any encouraging information on this score, and whether we have in fact been able to make any progress here. It does seem to me to be a matter of great importance, and I hope that something has been devised.

There is another point I should like to raise on Clause 2, by which the Minister proposes to give this aid under the OSAS scheme directly or indirectly. As noble Lords who are interested in this subject will know, previously this aid had been given only indirectly. This was very, carefully thought out, because we considered it might be an embarrassment to overseas territories if this money were not to go into their Exchequer for them to pay out, and for those who received it to appear not to be entirely their servants. I understand that further consideration has been given to this problem, and that it has been thought to be rather embarrassing for there to be shown in their accounts quite large figures of monies coming from the United Kingdom. Apparently the Minister now proposes in certain cases to give this aid directly to the officers concerned. I am a little dubious about this and question whether this alteration will in fact achieve the desired result. I merely wish to utter a word of warning on this point.

I am very pleased indeed, as I said earlier, that the scope of OSAS has been widened to include people outside the ordinary central Government services, but there is a point that is not clear to me, and perhaps when he comes to reply the noble Lord, Lord Taylor, can enlighten me on it. Is it the intention of Her Majesty's Government to pay direct to organisations or institutions without the money being channelled through the Exchequer of the Government of the territory concerned? In other words, will there be a direct dealing between the Department and other organisations? I should very much like to have the Minister's information on this point, also.

I do not wish to weary your Lordships for a long time, but there are one or two general points to which I should like to allude. I hope that special attention will be paid to the teaching of English. I know that we are sending more English teachers overseas than we did, but the number still seems to me to be pitifully small. I think it was 200 in 1964, and I am told that it may reach the figure of 300 this year. This really does not seem to me to be enough. I would have thought that, with greater effort, it would be possible to increase this figure. There are many people of good will in this country who would be only too pleased to give their services in this direction, and, fortunately, it does not require very high qualifications.

It is not necessary to have a university degree to be able to qualify for the elementary teaching of English. I should have thought that there might be many young men and women who were unfortunately unable to get into a university, not having reached that academic standard, but who would be only too pleased to go overseas and teach English during the years they would otherwise have spent at the university. I hope that the Minister will give serious consideration to this suggestion. I should like also to ask the Minister to pay particular attention to avoiding the risk of over-emphasis on urban development and industrial development. I think there is already a tendency in this direction. I do not believe that too much attention can be given to agricultural development; I think this is vital, and I hope that the Minister will watch and see that sufficient attention is paid to this.

Like the noble Lord, Lord Taylor, I regret that the Bill has come to us so late; but the reasons for this are the long debates which took place on it in another place. I remember that in 1963 we had the same trouble: the allocations were made late in the year and this was of great inconvenience to the territories concerned. In these long discussions in another place there was the question of the creation of a career corps of overseas specialists. I hope that this thought will be examined closely. We in this country have many families with long traditions of overseas service. For generations these families have given of their best to territories overseas. One thinks, of course, of the great Indian Civil Service, a wonderful body, about which we all feel very proud; one thinks of the sons and daughters of the officers of our present Colonial Service or, as we now call it, Overseas Civil Service, a Service with which I, for one, was very proud to be associated as Minister.

We have this tremendous experience and this great good will in abundance in the British people. I only hope that in the years to come we shall have the wisdom, wit and generosity to make full use of these qualities which are to hand. I am convinced that the British people will continue to want to go overseas and to serve abroad. In the future, they will not be going as Governors, as High Commissioners or as District Commissioners; they will go (as they used to go in the old days before the creation of our Empire) as missionaries, teachers, nurses and doctors. We must give them encouragement and help. Here is something which we can continue to do.

This is not a Party matter at all. I am sure that we on this side welcome this Bill because it is a means of pursuing this particular type of aid to those countries which are less fortunate than ourselves. The noble Lord, Lord Taylor, told us that Overseas Service Aid Scheme (Clause 2) is universal in its application: it is not limited to the Commonwealth. But I hope that help—I do not want to use the word "charity"—will begin at home and in the Commonwealth. Surely this must come first. I do not wish to detain your Lordships any longer. I welcome this Bill; I think it a very important piece of legislation and one of the most important things that will happen for our overseas territories until the next Bill comes in five years' time.