OVERSEAS AID

HL Deb 29 May 1968 vol 292 cc1172-216

5.52 p.m.

LORD BARNBY rose to call attention to the amount and methods of allocation of Overseas Aid; and to move for Papers. The noble Lord said: My Lords, no one will deny that anything which contributes to the expansion of world trade is an assistance to civilisation, and this question of aid has been raised with me in many quarters. I found that there was concern as to its character and volume, and therefore I was prompted to raise the matter in your Lordships' House. In a way it is hardly a partisan question, because the provision of aid has been going on since the termination of the Second World War and both political Parties have been participants in its distribution. I raise the matter now because it represents a substantial drain on our balance of payments. When a country is in the position of having to borrow short heavily overseas it is questionable whether it is wise to lend short as generously overseas. It is that, mainly, which has prompted me to raise this matter.

I will quickly dispose of any suggestion that the cutting of aid shows a lack of compassion, because such is not my intention at all. It may be alleged that the volume of aid involved is small in relation to our gross national product. I raised the matter after having asked a second Question, because I believe in private enterprise, and that so far as possible we should reduce the amount distributed by the Government. I should quickly add that when I say "private enterprise" I mean by banking operations, if necessary providing incentives to those involved, and also that we should make full use of the existing mechanism to allow the Export Credit Guarantee Department to supplement private activity. I prefer that trade should adjust the differences, and in that way we quickly remove any charge of a threat to world peace through an insufficiency of generosity. In other words, it is a question of trade, not aid.

Basically, of course, the difference in the character of aid is the difference between aid which is tied and aid which is not tied. More than half is tied aid and in that way contributes to the exports of a country. There is bilateral, multilateral, technical and volunteer aid. Here I should interject that I believe a fundamental fallacy has existed since the war that because Marshall Aid was so successful in Europe, the same principle could be applied equally well in other continents where we have distributed our generosity. But of course in Europe you had an old civilisation, a highly developed industrial organisation, and a great wealth of skilled artisans. This practice which succeeded so well in Europe is not necessarily applicable to Africa, for instance, and I feel it is a fallacy to suggest that richer nations should help poorer nations or otherwise a struggle will develop between the haves and have-nots.

My Lords, I should like to pay a tribute to the Department of Overseas Aid for the generous amount of literature which has been put out. It is well compiled and has been skilfully presented, and it is most helpfully informative. It contains a number of figures, but I will confine myself to quoting a minimum number of them because I wish so far as possible to deal with the principles which caused me to initiate this debate. I hope to be brief so that others who may take part in the debate can make a more effective contribution. I am convinced there has been a great misuse of funds, and basically that is a discouragement to self-help. There have been great prestige undertakings instead of practical expenditure; money has been squandered and pocketed in petty dictatorships which have then proceeded to betray constitutional Government. All these things can poison the relationship between the giver and the receiver. I believe it is craven to suggest that unless generous aid is given, Communism will spread more rapidly; that this is a kind of "Dane-geld" handed out so that we may suppress the oncoming and threatened wave of Communistic influence, and that by giving away this money we shall counter Communism and help democracy.

I wish to turn for a moment to the situation not only in Africa but in Asia and elsewhere. I refer to terrorism, the activities of trained infiltrators who cross from one country into another, armed with Communist arms and trained by instructors who have learned their nefarious trade in Russia, China or Cuba. They seek to destroy the peace of these countries and call themselves "freedom fighters", a contemptible indication of something they certainly are not.

I believe that there is a mood of disenchantment and a need to achieve greater discipline. What a curious thing it is that we are contemporaneously trying to assist the integration of Europe and yet we have been the greatest contributor to fragmentation in Africa. Africa is the continent which has received the greatest amount of aid. Decolonisation was followed by quick developments. These emergent countries catapulted into sovereignty. They sought instant civilisation, which prompted them to have aspirations above those they were really entitled to. Both political Parties in this country have been induced to give generously of this aid. Look at what has been given to Ghana, Nigeria, Tanzania, Kenya. I see that since the war Kenya has received £128 million and Nigeria some £78 million. What sort of security or balance has it brought to those countries? Some of those countries—for instance, Ghana—have received aid from China, which brought with it Chinese representatives to pursue their propaganda there.

There have been many instances of improper aid: a university in Abyssinia, where there is an insufficient foundation of primary education; a deep-water port where there is no effective railway system to carry merchandise to the port, and the Owen Falls instance. They make me feel strongly that there is a need to review the aid that is given. In Africa the situation is basically a cultural one. The need is to develop these communities from a subsistence economy to a cash crop, and to do that more ought to have been done to develop co-operative organisations, which in turn could have received the support of civilian finance. Incidentally, as I have mentioned so many emergent countries which have received aid, I should say that Rhodesia, which has had no assistance, has the highest degree of education, after the Republic of South Africa, and is an example of self-help. There is no point in raising educational standards in any emergent country unless the economy is contemporaneously raised to the point at which it can absorb the products of higher education.

There is the question of the unwisdom of continuing aid to countries that have broken off diplomatic relations with us or to countries which have applied nationalisation. It has been claimed that aid cannot be broken off in midstream. What about the example of our own aircraft carrier, which is to be broken up? It was to last for several years but it was decided suddenly that we should not continue it. I cannot introduce this subject without mentioning that over 20,000 Britons are distributed throughout the areas where aid is given, giving technical assistance. On the other hand, there are 73,000 foreign students in this country, many of whom come here as a result of aid given to their countries. And there is a volunteer movement which absorbs some 1,700 Britons. This is most meritorious.

Then there is the question of interest-free loans. I understand that in 1966 the majority of loans made were interest-free. It may be that that is the right solution, but I should much prefer to see an outright gift than a loan, which will only further poison the feelings of the receiver towards the giver. I want to throw out one suggestion. Surely we should be wiser, if aid is to be continued to Africa, to insist that that aid should be regional and so use the Government's money to bring concentration and integration in order to mitigate some of the fragmentation which exists. I realise that there are other organisations, like the Asian Development Bank, based on a South American mould, and the International Development Association, which is a World Bank affiliate. They are organised in a way which I might claim complies with what I suggest.

There are many other areas to which aid goes—the Caribbean, Asia, Aden and Cyprus—to which doubtless other speakers will refer. So far as I can gather from the figures put out, since the war £1,600 million of the taxpayers' money has been given away in this manner. I wonder why we should give so much? I regret that there has been this continuous lecherous importuning from these recipients, whose behaviour has often been culpable. There has been a much too generous bestowal of the golden handshake. Why has it been necessary for us, as administrators, to renounce our civilising mission and the burdens of world leadership with indecent haste? We have nothing to be ashamed of. We have brought a civilising influence to vast areas of primitive savagery and by our sacrifices and by deploying our knowledge and accumulated experience have set those areas on the road to progress. I prefer to see civilian agencies, which have such a wealth of value and experience, take up the civilian burden. I beg to move for Papers.

6.10 p.m.

LORD WALSTON

My Lords, I am grateful to the noble Lord, Lord Barnby, for having given us an opportunity to discuss this extremely important subject, and also for giving us the opportunity, to which I know we are all looking forward, of listening to a maiden speech from my noble friend Lord Trevelyan. With some of the things that the noble Lord has just said I find myself in agreement, but with some of his sentiments I find myself in profound disagreement. For instance, when he speaks of aid giving encouragement to certain countries for aspirations above those that they are entitled to, I cannot really believe that he means what he said. Surely we must all admire everybody who has aspirations of reaching to the stars. We are all entitled to have the highest possible aspirations. It should be our privilege, where we can, to help those people to their aspirations, and not to tell them that they have no right to have such aspirations. The people we should despise are those who have no aspirations at all but who are smugly content to sit on the ground where they happen to be at the moment.

But when the noble Lord comes to speak of co-operative agriculture, regional aid and matters of that sort, then I find myself in complete agreement with him. I am certain that we must encourage—and encouragement, as the noble Lord said, has been given and is being given—aid for development and progress on a regional rather than on a more narrowly national basis; and the Asian Development Bank, the African Development Bank, and a similar organisation in Latin America, are all organisations which we should, and do, quite properly support. Another fundamental point where I am in disagreement with the noble Lord is on the amount of aid. In the old days there was such a thing as tithes. It was considered right that those who were relatively well off should contribute one-tenth of their income to objects other than their own personal pleasure, advancement or wellbeing. Whether it was given to the church, which used it for good purposes (one hopes), or whether it was given in other more personal ways, that was, in the noble Lord's youth and in my youth considered to be the right thing for people of wealth to do.

We are in international terms a country of wealth. Just as in the earlier days there were individuals of wealth, so there are individual nations of wealth among the poor peoples. Surely our object should be to reach a stage where we are able to give a tithe—one-tenth of our national wealth—to help poorer countries, just as in the old days it was the object of all good citizens to give one-tenth of their personal wealth. That, I believe, should be our object. At the moment we are not anywhere near to achieving it. I am not suggesting that in realistic political terms we can do so at the present time. We are aiming at one per cent.; that is an interim measure. It is something which is of some help, and something for which I think the donor countries, including ourselves, deserve a modified amount of praise and credit.

One of the great advances made in the second half of this 20th century is that the rich countries of the world collectively have come to realise their responsibilities to the poorer countries. This great international movement of collectively contributing to the betterment of other countries not so well off has gained ground, and has now become an integral part of international policy. That is something in which we can take pride. But we must not take so much pride as to sit back and say: "Now we have done our job. We are approaching one per cent. Let us do no more." We must still go back to the old-fashioned belief in the duty of the rich man in the rich country to divest himself of a tithe of his wealth in order to help those less well off.

Let me turn now to the other point of the noble Lord's Motion. He first of all calls attention to the amount of aid and then to the methods of allocation. This is a more valuable and more realistic subject to discuss. It is a subject where decisions can be taken and actions can follow on those decisions. One can divide the methods of allocating in various ways. First of all, one should decide on one's criteria for aid: what is it that one wishes to achieve? 'Then, when one has made those decisions, it is somewhat easier to decide which countries are to be helped. I suggest that the obvious and first criterion of aid must be that of need. It must go to the countries where the need is greatest, where there is the greatest poverty and hardship. Unfortunately, there is so much poverty and hardship throughout large areas of the world that there are vastly more people and countries who measure up to that criterion than can possibly be satisfied by any amount of foreseeable aid in realistic terms. So we must sub-divide the criterion of need into others in order to help us to make our decision.

The second criterion that I suggest, therefore, is that of use: that aid should, so far as possible, go of course to those whose need is greatest, but at the same time go to those who are going to make the best use of it, who themselves have what is required to improve their own standard of living by the aid that we are able to give them, and, having raised their own standard, will themselves become a focus of a giving and a focus of improved methods—technological methods, economic methods and educational methods—in their own surrounding countries.

The third criterion, I suggest (here I may find rather less agreement), is friendship. If one has to select those to whom one is going to give aid, and whose heeds in all other respects are equally compelling, I do not think there is anything wrong in giving preference to those who are our friends, who believe in the same values as we do and who are, in general terms, on the same side as we are, rather than to those who have fundamentally different attitudes and who are opposed to what we stand for and to the type of world that we wish to see. So I would sum up the criteria by saying, first of all, need; secondly, ability to use; and thirdly, their friendship towards this country and what we stand for.

Now let me come to the forms of aid: how should the aid, whatever the amount may be that we are going to give, be given? Here, again, I would divide it into three sub-headings. First of all, there is the need for infrastructure: for the roads, the means of communication, schools, hospitals and all the things that we think so much about. Here, again, I am in agreement with the noble Lord. I believe that the aid for the buying of infrastructure should not be lent, even by interest free loans, but should be given: because it is economically impossible for countries, developing or developed, to pay back the amount of money that is necessary these days for infrastructure.

Do a quick and rough calculation for yourselves, my Lords. Work out the capital cost to-day of our own roads system; of our educational system, including the primary schools, the secondary schools, the comprehensive schools, universities and all the rest of them; of our hospitals and clinics and all those things, not to mention our airports and our harbours. Then depreciate them over fifty years, or whatever you think is the correct period; charge interest at to-day's commercial rates, or at the cheap rates that are often charged on international loans. You will find the figure comes to a stupendous one, in the neighbourhood of £12 to £15 per head of the population of the United Kingdom to-day. It is utterly unrealistic to think that a developing country in Africa or South-East Asia, or where you will, with an income per head in the neighbourhood of £19 or £20, can possibly hope to meet charges that amount to £12 or £15, or even half or a quarter of that. If we really want to help these countries, the aid for infrastructure must be given and not lent.

The second form of aid is technical assistance: the actual training of individuals to do jobs at all levels, from the relatively low levels of the builder, the carpenter, the ploughman, the stockman, the bank clerk, and the shop assistant, all the way up to the doctors, scientists and economists. Fortunately, the cost of technical assistance of this type, though high, is not outrageous. It is something which can be shared equally, or at least equitably, between the donor country and the recipient country. The noble Lord referred to students who were in this country. I am proud that they are here. I hope there will be an increasing number of them, because that is the great way to improve the standard of the developing countries. And at the same time we can send, and do send, people out there to help them in their universities and at all levels—V.S.O., trained people, graduates and non-graduates.

Thirdly, there is the aid required for genuine economic ventures, whether they be steel mills, fertiliser plants, tractor assembly plants, or what-have-you. Those are commercial ventures; they are justified only if they are going to pay a commercial return; and for them, theoretically, there is no need for aid whatsoever. There should be a return there sufficient to encourage private capital to go in. But of course it does not go in. Therefore we must figure out means of helping the private capital, which needs and wants to earn a return, to go into these new fields. It is not so difficult as it sounds, because we have the example of the Commonwealth Development Corporation, which was set up, as your Lordships well know, first in the Colonies and then throughout the Commonwealth to do just this: to use, in the first instance, money provided by the Government to set up industries in partnership with local Governments, in partnership with local capital, in partnership with United Kingdom capital. And it has had a magnificent success.

Something on those lines is required, not simply for the Commonwealth but for the whole world, preferably on an international basis, not solely done by Her Majesty's Government, though I should like to see them take a lead in this. It should be done internationally, with the underwriting of the World Bank taking the initial risk and then, by degrees, hiving off the industry to local capital, to foreign capital, to private enterprise in general. In that way the capital would be recovered, and a revolving fund created. That, I believe, is the right way to deal with this third category of profitable enterprises which need some incentive to get them going.

My third suggestion, which I will put to your Lordships briefly, is this. We should have an all-embracing review of overseas expenditure. Our objectives overseas are all interrelated. Whether the expenditure is for defence, whether it is on the Foreign Office Vote, whether it is for trade promotion or for overseas development, our first objective, I suggest to your Lordships, is the maintenance of peace—or perhaps I should say, less complacently, the establishment of peace—throughout the world. Secondly, standards of living, especially in the poorer parts of the world, should rise. Thirdly, those values which we in the Western World consider to be important should have a chance of being understood and followed, and of being adopted more widely. Fourthly—and I do not think we need be ashamed of this—we should, while all this is happening, do our best to encourage our own national economic interests, not only for the wellbeing of our own people, but to enable us to have more economic strength with which to help other people.

Those are all things we are trying to do at the present time under our different Government Departments, and we are spending a very large amount of money on them. It would be a near-miracle if the proportions of that expenditure, as between defence, trade promotion and all the other things, happened in fact to be exactly the right mixture. I personally am convinced that at present it is very far from being the right mixture. I believe that we should have this comprehensive review of all expenditure, not with each Government Department fighting selfishly for its own Vote—the Ministry of Defence struggling to keep an overseas base, a certain number of frigates or whatever it may be; the Foreign Office fighting to keep its diplomatic representation at a certain level in a certain country; the Board of Trade fighting for trade missions here and there, and the Ministry of Overseas Development fighting for its own activities—but so that the relative values of (shall I say?) a frigate in the South China Seas, a feeder road in Thailand and a chemical factory in India, can be determined. The money should be allocated according to that reappraisal, and not according to the more or less foreordained departmental Votes in which we now find ourselves confined.

My Lords, I have tried to cover a lot of ground, probably too much, in a short time. However, this is a vast subject, and it is one that goes very much wider than simply removing the threat of poverty from so many people in the world. But, although it goes wider than that, that must always remain our primary objective in the whole of our international policy. I believe, my Lords, that the Ministry of Overseas Development, in its modest way has made great progress during its three, or now nearly four, years of life; and I believe that it will go on, as the years pass by making still greater progress in this great fight.

6.28 p.m.

THE EARL or BESSBOROUGH

My Lords, even if I, too, cannot go along altogether with my noble friend Lord Barnby in some of his arguments, I am grateful to him for having raised this matter in your Lordships' House. I think I should admit quite frankly that I am considerably closer to the remarks of the noble Lord, Lord Walston—at any rate his earlier remarks. I agree with him about the criteria. As to some of the comparisons he made at the end of his speech, I think it would be wry difficult to work out the kind of system which he envisages. But I am grateful to Lord Barnby, for it seems to me that overseas aid is one of the most important things, if not the most important, that the developed countries are doing in the world to-day.

As my right honourable friend said in another place, it is one of the main problems which the human race simply must solve if we are to redress this imbalance between the richer and the poorer nations. This can be done, it seems to me, only by the means hat we follow at the present time, that is to say, by greater private investment in the developing countries, as well as by loans and grants, technical assistance and contributions to the multilateral agencies. Much capital can of course be raised in the developing countries themselves; but not enough. Even with the present annual inflow of, I think, something of the order of 6 billion dollars of aid, the gap is still growing. We must maintain, and in my view, if possible, increase, the flow of resources to these countries. I agree with the noble Lord, Lord Walston. in that I doubt whether there is anything more important than that the "haves" should do everything within their means to see that the "have nots" become "haves" too. Only thus, in my view, can we achieve a stable and reasonably contented planet.

That, I judge, is one of the main reasons why most of us on these Benches#—if perhaps not my noble friend Lord Barnby and a few others like him#—warmly support the continuation of overseas aid, and indeed regretted its levelling off in 1966, in spite of the promises of increases made by the Labour Government before they came to power and in their subsequent White Paper, which we discussed at the time of the Overeas Aid Bill, two years ago. We all understood why overseas aid could not be increased. It was because the present Government's economic policies had brought them to the point where we simply could not afford to go on increasing our aid at the same rate. But there is certain aid on which we cannot cut down, even if a country does make rude noises at us, or, as others have said, "kicks us in the teeth". Having promised such aid it would be folly, for example, to cut down on the building of a new dam simply because of some—perhaps temporary—political disagreement. This is not to say that political stability should not be a factor in determining priorities for future aid—I repeat, future aid.

But the moral considerations which I mentioned at the beginning are not the only ones at stake, and I hope to show in these brief remarks that the moral issue and our own self-interest are at one in leading us to the conclusion that we should continue to help the developing countries in this way. Britain depends more on overseas trade than any other country. It is in our interests to see that these developing countries do not "go broke". To some extent trade follows aid—and I shall give a few figures later. It is important, too, that these countries should achieve political stability.

To take private investment first, I discovered a striking fact when I was working on this speech; namely, that the average return on private investment (I do not know whether the noble Lord opposite knows this; it is a figure given by the Board of Trade) in the developing countries was marginally higher, at 8.8 per cent., than in the developed countries, where in 1967 it was only 8.1 per cent. If we take our present gross aid of £205 million—again I am quoting 1967—it should have been some £225 million had it not been for the restraints which the Government felt obliged to impose. But of this £205 million we obtained £130 million worth of exports, plus an unspecified proportion of exports arising from untied aid from other countries, and although I cannot get an exact figure on this I think it must have been substantial. I do not know whether the noble Lord can give us a figure when he replies.

If, to those £130 million-plus, we add about £60 million which we have received in amortisation and interest on our loans, I would judge that we probably gain quite as much as we give. In regard to our contributions to the International Development Association, I think we get back some 30s. in every £1. Therefore, as I see it, aid does not represent any considerable drain on our balance of payments. That is why I believe that from every point of view, moral and economic, we should continue our efforts, and, if possible, increase them. There is much to be said for giving a high proportion of this aid in the form of loans, where appropriate, rather than in the form of grants—although I realise that in some cases a grant is more suitable—and we should provide certain of this aid through multilateral organisations in which there is no taint of so-called neo-colonialism. I realise, of course, that the administrative costs of such international organisations are higher, and that in some ways we can keep better control over our money, and use it more effectively, through bilateral arrangements.

However, the extent to which we should control our aid seams to be the real dilemma. If we apply excessive controls they may well be self-defeating. But above all I think that a policy of isolationism would be disastrous, both economically and politically. How disastrous it was in the United States of America we all know. The world is getting smaller and smaller, and it is quite impracticable nowadays, with our great need to export, to think solely in terms of wealth at home. If we cut down our aid and our private investment, which totals about 1–14 per cent. of our national income, other countries would no doubt do so, too—even the United States—and this would surely result in disaster.

I am sometimes worried about how our aid is used. Sometimes, I believe, the food does not reach the most needy consumers, but I am glad to see that even in India the predicted famine has not been nearly so severe as might have been expected. Indeed, I am not certain whether there has really been a serious famine at all. I was interested to learn from a recent Press hand-out by the Ministry of Overseas Development, which I think received no publicity at the time, that world hunger will probably not be the problem in the 1970s. I gather that this was the main conclusion of the Cambridge Conference on Overseas Development in April of this year, and that even in over-populated Southern Asia the small farmers are on the verge of a technological break-through in producing crops for their own country as well as for export.

With improved varieties of wheat, rice and maize, together with the latest fertilisers and pesticides and easier credit, I believe that the tide may be beginning to turn and that in the 1970s there may well be a problem of prospective agricultural surpluses instead of shortages. No doubt much can still go wrong, but the situation may not be as black as it has been painted. I shall be glad if the noble Lord can say something about this, for the conclusions of the Cambridge Conference certainly came as a surprise to those of us who have been greatly disturbed by the threat of world hunger as a result of the population explosion.

I am sure that distribution remains a key issue, and also the problem of using technically trained men in the right way. In some of my journeys, which have been extensive, I have noticed that when trained men return to their own overseas countries they do not necessarily do the job for which they were trained over here but may gravitate into some administrative job where their technical qualifications are wasted. I found this in various places in Southern Asia. In my opinion, so far as technical assistance is concerned, high-grade economic advice and advice on business management might be worth millions of pounds.

In India, for example, I have noticed that in their electronic industry, while there is no shortage either of labour, on the one hand, or of top scientists and engineers, on the other, there is a dearth of good people at managerial level, and also of foremen on the factory floor. It these deficiencies could be removed, I see no reason why, in those parts of India where the climate is dry, the country should not build up as effective an electronic industry as, say, Japan. This leads me to a conclusion which is entirely my own and which I have not seen put forward. It is that we should help these countries to set up business schools, as we are doing in this country, and schools of industrial management, so that this middle echelon of foremen and others could be strengthened.

Another problem is taxation, which has been dealt with in several reports on the subject. In these countries there is often a fiscal disincentive to invest in industry, and these disincentives should be removed as far as possible. The Stikker Report for UNCTAD dealt with this matter in a very interesting way, and I hope that the Governments concerned will study that Report carefully.

I will not thresh over all the points that were made in the admirable debate which was held in another place on May 7. Neither will I go into the overriding problems of the terms of trade—problems to which, I recognise, no solutions have so far been found. But there is one further point which I think has not recently been stressed and which I should like to make, and it concerns educational assistance, not only in what is described as intermediate technology, which we discussed in this House on two occasions in 1966, but also in the more basic kind of educational assistance provided by the Centre for Educational Television Overseas.

I have said before, but some years ago, that I consider the work of this organisation to be of great value. I believe that their "do-it-yourself" kits, kits which are provided by this Centre, are proving most useful in a number of Asian and African countries. I will not go into the details of them. It involves the provision of a script, models, stills and filmstrips, which can be put together as is thought best in the country concerned. The script can be translated into, say, Swahili, and adapted to suit the particular needs on the spot. I certainly believe that there is a great future in these visual aids. This organization—I call it CETO for short—has recently completed the task of establishing educational television in Singapore, and this is considered by members of the Asian Broadcasting Union to be the most successful educational television service in the developing world.

I gather that the organisation is also at present engaged in helping the Hong Kong Government in the establishment of what will be the largest educational television service outside Europe. Other CETO officers are at present engaged in schools in Ghana on the production of science programmes, and even outside the British Commonwealth, English language programmes are being developed in Ethiopia. These are a few recent examples of the admirable work which is being done by this organisation and which I am glad to learn receives every consideration from the Ministry of Overseas Development and Quite substantial grants. I hope I can obtain an assurance from the noble Lord that this aid will not be cut.

It seems to become more and more evident that the speed of development in terms of educational technology in the developed countries is so great that unless the developing countries begin now to master some of these new techniques the credibility gap between the two societies will grow so wide that it may be unbridgeable. We are living in one world in which political and economic progress or failure cannot be confined within national frontiers. We are all in this together, and not to recognise this overwhelming fact would be to court disaster.

I would end by saying, as others have, how much we look forward to the speech by my noble friend Lord Trevelyan, who must have unrivalled knowledge of these problems, and personally I am grateful to him in more than one way in several parts of the world. I am grateful, too, to the noble Lord, Lord Barnby, for having raised these matters. I hope he will agree, for the reasons I gave earlier, that those of us on both sides of the House who advocate a continuance of aid are not being wildly extravagant.

6.47 p.m.

LORD TREVELYAN

My Lords, I request your Lordships' indulgence. This is a subject which should be of the greatest importance to anyone who looks beyond his own back door. I shall confine myself to presenting the problems in a general way from the point of view of one who has been for many years a representative of this country abroad, though recently generally in countries to which we did not give any aid. Overseas aid, as I see it, is a branch of foreign policy, and aid policy must therefore be based on our interests and must balance those interests when they conflict. Of course, we can only have a foreign policy which we can afford, and it must be the overriding consideration that the amount of our foreign expenditure, including aid, is limited to a figure which will not significantly increase our difficulties in balancing our payments or weaken our economy. I was very interested to hear the suggestion of the noble Lord, Lord Walston, of having a review of our general foreign expenditure taken altogether, which suggestion is on the right lines, if I may say so.

Subject to this, what then are our interests in this field? It is obviously a British interest that the developing countries should, individually and regionally, develop their economies as rapidly as possible, and that we should be seen to be taking our fair share of the burden on the developed countries and, so far as is in our power, to be carrying out our obligations arising from the past. Our aid should have regard to our political interests. In the long term, I hope that the developed countries will aim to take politics out of aid and distribute it on a multilateral basis. This was always the hope and ideal of Hammarskjold when I was working with him. But this will not happen so long as the ideological struggle persists, and most international organisations are not in a position to administer the whole burden efficiently.

It is, of course, a proper concern of the Government that our aid should benefit our exports. Overseas aid is not and never will be pure philanthropy. It is an arm of British policy, and it should serve British interests in the widest sense, including, of course, real benefit to the developing country's economy. As to the methods of distribution, I suggest that the distribution of aid should be more diversified. I believe that only about 16 per cent. goes to non-Commonwealth countries, and I fear that allocation is to some extent distorted by existing commitments or old habits. Above all, we should not, I suggest, commit our funds for too long. We must not lose flexibility in the light of changing political and economic conditions, and we must be in a position to meet new situations at any time. We must be able to direct our aid to the places where it will be most effective, whether inside or outside the Commonwealth. Our financial techniques also should be as flexible as possible. The modern techniques for providing concessional rates of interest should, I suggest, be applied more generally. We should apply the sophisticated methods of mixed credit and aid as others do (the French credit mixte), and I believe we are now beginning to do so.

Technical assistance is a valuable form of aid, but it is completely ineffective unless the country receiving it has the will and the basic administration to make use of it. It can be like putting a very expensive super-structure on a leaky bottom. I remember a distinguished American agriculturalist remarking to me that many countries had been surveyed to death, and I have no doubt that the shelves of Government departments in a number of countries are full of files containing wise advice and admirable schemes which have never been and will never be put into force. At one time, this was not fully recognised, but I feel sure it is recognised now, and I hope that technical assistance is given to those who can use it effectively.

One can overdo the bilateral commercial approach. There is a limit beyond which it is not advisable to push tied loans, since you run the risk of pay- ing for exports which would be made anyway on payment. It has been calculated, or perhaps guessed, that about two-thirds of British direct aid now comes back to the British exporter. The noble Earl, Lord Bessborough, has told us that our subscriptions to those admirable institutions, the International Bank, and the International Development Association, are balanced to the extent of one and a half times by the business obtained by British industry from their projects put out to international tender. However that may be, in our present fin uncial circumstances it would be foolish in our aid policy to be less concerned with our commercial interests than our competitors are with theirs.

One can also overdo the pc Utica] approach. The grant of aid in the hope of achieving a direct political result is rarely successful for more than a brief period, as many countries have found. A Soviet Ambassador in a developing country asked my advice on the line of approach that he should adopt in that country. Whatever his motive in doing so, I answered him sincerely that it was better not to push to hard, and that in the long run the Soviet Government would get the most benefit if their aid was genuinely directed towards improving the country's economy. That applies to us all. Our advice to the developing countries should be that they should take aid wherever they can get it, provided it does not carry hidden political conditions. The burden should be shared by everyone who can afford it. Though we should be foolish to try to attach political strings to aid, we must at least ensure that our aid makes political sense in the circumstances of the country where it is to be applied, and that it is generally in accord with our political interests

From sentimental reasons we car overdo our obligations arising from the past. But in one case, where the sentiment is on the other side, I fear we may not be meeting them. I trust your Lordships will forgive me if, without wishing to enter into any controversy on this occasion, I touch upon the present position of the Republic of South Yemen. Whatever the circumstances in which the country became independent, whatever our feelings about those who fought us in the past, I believe that in spite of our financial stringency we have some obligation to the many people who were under our Government or protection, arising from the fact that we were paying the greater part of the expenses of the Administration and have left the country unviable. We cannot support South Yemen permanently. Our aid must be gradually tapered off, and that country must find other sources of revenue within a reasonable time. We must also carefully watch political developments, of which now I am not well informed. But, given all that, if we cut off aid almost completely at one blow we risk creating the chaos which we only just avoided before independence with unfortunate results to the continuing British and other foreign interests in Aden, and to our former Colonial subjects who took no part in the fight against us, and to the profit of the extremists. I trust that this question will receive continuing consideration, and I can only hope that in the event my fears will not be justified.

It is an old question whether we should have a separate Ministry of Overseas Development, which has added point in these days when the necessity for economy in Government spending is paramount and the total amount of our aid must be severely restricted. To mention this matter is not to question in any way the devotion and efficiency with which the Ministry carries out its task. I shall doubtless be accused of undue partiality for my own old Department if I suggest that there would be some advantages if the new Overseas Department, whatever it is to be called, should in due course include those administering overseas aid. I think that this is much in line with the line of thought developed by the noble Lord, Lord Walston. But this is not a question for immediate decision. It will be some time before the combined Overseas Department can digest its greater responsibilities and it will not wish further to strain its digestion by taking on more at the present.

I believe it is agreed by all Parties that this is a subject of importance in which public opinion should be increasingly involved, if only because we have a responsibility to share in the world effort to overcome the problems of world hunger and poverty in this century if we want to avoid disaster in the next.

6.56 p.m.

THE LORD BISHOP OF MANCHESTER

My Lords, I should like at the outset to congratulate Lord Trevelyan on a most notable maiden speech, both realistic and informed with an experience which but few of us have. I am sorry that he has had such a sparsely filled House, but I hope that he may make many further contributions to the debates here. With much of what Lord Walston and the Earl of Bessborough said I would entirely agree. As for the opener of the debate, so far as I could understand his remarks I for the most part disagreed with them. In fact. I found it most difficult to understand how such sentiments could have been expressed in the House to-day.

Bishop Gore once defined a Christian as "one who can read statistics with compassion". Certainly it is necessary in this subject to be able to read statistics if one wishes to get to grips with it. But I find myself much more likely to reach confusion than compassion when one considers the enermous amount of statistics connected with this subject of overseas aid. The one point that I want to emphasise clearly is how deeply concerned are all the Christian Churches in this matter. After all, the Christian Churches were first in the field. The educational systems of Africa and India, such as they are, owe much, more than they can guess, to early Christian effort. Christians are not slackening in their work. Each year the Christian Churches in this country spend millions on servicing educational, medical and agricultural projects overseas, and on proclaiming the Faith by which men can live, for although it may not be relevant to this particular debate. "Man does not live by bread alone".

Last year the Christian Churches in this country raised, over and beyond their contributions to missionary societies, through Christian Aid £1½million for overseas relief. That was quite apart from the work of OXFAM and many other voluntary agencies which have been assisted. Of that £1½ I million, £60,000 was spent on the volunteers for Voluntary Service Overseas. There were 233 volunteers, of whom 113 were graduates who had their expenses largely underwritten. I said that the British Churches were deeply concerned in this subject. It was as a result of that concern that the British Council of Churches published in 1966 a Report entitled World Poverty and British Responsibility. It is an admirable document, now into its second edition. It has as a supplement to it the Papal Encyclical Populorum Progessio. Since the publication of that document the Christian Churches in this country have been engaged on a continuing campaign to drive home to their members the responsibility of this country in relation to overseas aid.

The next action which was taken by the British Council of Churches was to submit proposals, drawn to some extent from the Report which I have mentioned, to the United Nations Conference on Trade and Development. These proposals, which were first submitted to the Prime Minister, were very sympathetically received by him, and he assured us that so far as he was concerned, and his Government, aid would not be turned off and on like a tap but that every effort would be made to keep overseas aid at its present figure, which is, I believe, £205 million for 1968–69 and also in 1969–70. I should like here to pay tribute to the wisdom and far-sightedness of the Government in agreeing to the continuance of that figure, though I know and realise that the pressures upon them to cut it must have been very considerable, As regards the amount of aid, I would suggest that the size of the total international aid effort should be determined by how much the developing countries can effectively absorb rather than by the donor countries' deciding how much they will wish to give. The President of the World Bank said recently that the receiving countries could effectively absorb 50 to 60 per cent. more in the way of aid than they were at present receiving. This would mean that Britain would have to contribute, instead of £205 million per annum, £350 million. I hope that in future, as we emerge from our own economic difficulties, we may set that as our target.

As regards the method of aid—that is to say, grants or loans—I think that in many cases grants should be made, otherwise too heavy a burden is placed upon countries in the repayment of the interest. But at the same time it should he recognised that some countries will wish to repay a small-interest loan, and they should, if necessary, be allowed to do so. I understand that our aid is running at about 50 per cent. in loans and 50 per cent. in gifts, and that, of the loans, 90 per cent. are at present interest-free. So it seems to me that we are moving there in the right direction.

The second question is whether loans and grants should be multilateral or bilateral. I think it is increasingly recognised by those who are most experienced in this subject that we should try to make them multilateral, rather than bilateral. At the present time, of the total aid given, only 10 per cent., I think, is multilateral, and one would hope that it might be Government policy gradually to increase that sum. Thirdly, there is the question of what type of aid should be given, whether it should be tied or not tied. In 1965, which is one of the last years for which I have the figures, 43 per cent. of all aid was tied. Here again I think that experience proves that increasingly aid should not be tied. It leads to complications which are unfortunate, both politically and in other ways.

As the point has been made, I would say that I know that aid is sometimes misused, although no concrete illustrations of the misuse of aid have been given us to-day. I am quite sure that if overseas aid is not to be discredited in the public view the greatest care will need to be taken to see that that aid is used most economically, and that it goes to the right people at the right time. The President of the World Bank recently suggested that there should be a conference of richer countries to take stock of their experience in providing aid; and the Prime Minister has already expressed sympathy with such a project. It could be of immense value if donors and recipients were at such a conference and pooled their experience. My hope is that Her Majesty's Government will encourage actively the promotion of such a conference. I would only add that I entirely agree with what the noble Lord, Lord Trevelyan, said about the urgency of the task. There is an old Jewish saying, "The hour is late, the time is short, the master of the house is urgent"; and this is a matter where that is certainly true. And so, despite our own difficulties in this country, I hope that we shall continue to press on with what has been done. Of what has been done already I think we may well be proud, although I hope that we shall not prove complacent.

7.7 p.m.

VISCOUNT SAMUEL

My Lords, I am glad that it falls to me to be the first to express from these Benches our congratulations to the noble Lord, Lord Trevelyan, who speaks with immense experience and who has spent a whole lifetime in the public service, largely overseas. On a personal note may I say that it was a distant relative of his, Charles Trevelyan, who was the best man at my father's wedding, which takes us back over seventy years ago.

I agree with the noble Lord, Lord Barnby, on some of the points he raised. I quite agree that we must go over all expenditure with a fine comb, especially overseas expenditure which affects the balance of payments—diplomatic expenditure; defence expenditure; expenditure in connection with the export trade; propaganda expenditure; and aid. I also agree with him that as far as possible one should encourage trade, not aid. I agree, of course, that aid should not be sacrosanct, that one must eliminate waste and prevent breakdowns and the embarking on schemes which eventually prove to be abortive. Luckily, they are comparatively few. I also agree that if cuts must be made, they should be made. It is a painful process to decide whether to cut this or that, and it is a matter of judgment which one must leave to others. But what one must aim at is that the cuts should do the least damage to the United Kingdom and to other countries, especially to their economies, their social structure, their security, and their ties with Britain.

In Britain, of course, every cut is followed by great outcries and by political pressure, often justified. The trouble with foreign aid is that the recipients are a long way away and they do not make their objections felt at Westminster. Take India, for example, with which the noble Lord, Lord Trevelyan, was so closely connected; the cry of India's hungry millions is hardly heard in this Chamber. Britain has done a lot for India and for other Commonwealth countries, and I quite agree with Lord Trevelyan that we should consider many outside the Commonwealth.

I do not think that Britain has been particularly generous. If you look at the table of the flow of financial resources as a percentage of national income, if you take both official and private flow, the United Kingdom is only the fifth. The first is France; the second the Netherlands; the third Belgium; the fourth Italy; and then Britain in only fifth place.

If you take only the official flow, again Britain is fifth. France is first; the second, of all countries, is Portugal; the third is Australia; the fourth Belgium; and only then comes Britain. The British share is only 0.61 per cent. on the old scale, which is still much below the 1 per cent. standard that was aimed at. It should have been increased this year in view of the overwhelming needs of the poorer Commonwealth countries, who see the rich countries getting richer and the gap in the standards of living widening, but aid has been frozen for the next two years, which is a big disappointment. However, it should go some way to satisfy the noble Lord, Lord Barnby. It is not just a matter of the ladling out of gifts, it is not a penny to the blind crossing-sweeper; actually aid from Britain works out at 1½d. in the pound). Much is given in the form of commercial loans, and much is repaid.

One might well follow up Lord Barnby's Motion by asking: why should aid not be given more largely through commercial channels? There are two answers. The first is that some countries just cannot afford the interest rates and therefore loans are either interest-free or made at reduced or deferred interest. I do not support the noble Lord, Lord Barnby, when he suggests that it is better to give these loans as gifts. I think there is just that little extra bit of difference between an interest-paying loan and an interest-free loan which enables a big project such as a dam to be got under way.

The second reason why it is difficult to rely entirely on commercial loans is that some countries are not good risks and the commercial world has no faith in them. I would cite the case of Palestine and Israel as a successful developing country. Like the noble Lord, Lord Gridley, who is to follow me in this debate, I was in the British Colonial Service. I spent fifty years in Palestine and Israel, 28 of them in the British Colonial Service. I suppose that I should declare an interest since my pension is paid by the Ministry of Overseas Development, but perhaps I am being over-particular. I went out to that country in 1917 as a young Artillery officer. I found that it was run down after 400 years of Turkish rule. There was practically nothing in the country. There were few roads, no ports and, above all, no electricity. My original intention was to be an electrical engineer, but, in the absence of electricity, I became a Colonial civil servant.

In those 28 years of British mandatory rule development was very slow, largely because of the point which was raised by the noble Lord, Lord Barnby, namely, that there was no commercial capital available. Nobody had any faith in the future of Palestine. In those days there was no aid. British policy, even in countries in which there was mandatory rule, was that they should be self-sufficient. During the whole of the 28 years only one loan was raised on the market, and that was for only £4½ million sterling, part of which was used to buy out the railways which were built by the War Office in the Sinai Desert in the First World War. With that loan the Haifa harbour was also built.

Palestine in those days was a wholly agricultural country and was unable to diversify. This was not only through lack of capital but also because the mandatory Government was not prepared to give protective tariffs to new processing industries. For example, I remember attempts to establish a textile industry which never got under way because of objections from the British textile industry to competition from Palestine. So there is a certain weight on British conscience in this matter. I see that the noble Lord, Lord Barnby, is shaking his head, but I am only giving the facts.

LORD BARNBY

My Lords, the noble Lord is quite right.

VISCOUNT SAMUEL

Then, my Lords, the noble Lord is shaking his head the right way. Because there is so much on the British conscience we should give aid a little more willingly than otherwise. After the independence of Israel in 1948, progress was much faster largely because of massive international aid. First of all, there was multilateral aid through the United Nations, including a British contribution; there were Congressional grants from the United States Government; reparations from Germany; and there was also a good deal of Jewish money, in the form both of gifts and of State bonds. Thanks to this aid, Israel is now on its feet. All the receiving and distributing agencies in Israel which were set up by the United States have been dismantled. Israel is now at the giving end of things.

The standard of living in Israel has risen by about 50 per cent., but it is still very low. For example, for every 20s. earned in the United States the equivalent in Britain is 10s. In Israel it used to be 5s.; and it has now gone up to 7s. 6d. But this is luxury compared to the position in India, where the level is still 9d. That is a terrible figure in relation to 470 million people. Israel has a population of 2½ million, and the problem there is much easier, and demands on capital are much less. The recent economic conference in Jerusalem did exactly what the noble Lord, Lord Barnby, suggested, since it was directed at encouraging private investment and relying less on State aid. Israel, of course, is not the only country which has blossomed under aid. Other countries have got off the ground, although at a lower level. Last year I visited Mexico, which seemed to be developing very happily, although the level there was only 2s. 10d. on the scale which I menioned earlier.

Some people may say that the developing countries themselves are largely to blame because of their improvidence and because of the population explosion which largely undoes the results of aid. India's Five-Year Plans have met with great difficulty. Although the cake has been enlarged, the number of mouths which have to feed from the cake have. multiplied very rapidly. By the time the High Dam at Aswan, in Egypt, is finished and the land has been brought under irrigation, the extra food which will be produced will long since have been literally swallowed up by the increase in population. The question of population growth is very complex. There is a great deal to be said for large families in agricultural countries, such as Egypt, where many sons are needed on the farms and teat is perhaps the origin of polygamy.

The difficulty arises because in recent years there has been a double change. First of all, there has been urbanisation, which has meant that sons are no longer a blessing but a curse; and secondly, as a result of the impact of the West, the three great killers—war, famine, and disease—have been largely eliminated. The death rate has gone down but the birth rate remains high, and that margin which was always necessary to balance life and death has become the population explosion. The poorer countries realise this, and are themselves doing a great deal to reduce the population explosion, the most successful being Japan. But other countries are very suspicious of Western aid. They suspect that it is a plot by white countries to reduce the population of the red, black, brown and yellow countries and to maintain the lead which the white countries have. Britain helps to finance population studies overseas, but the initiative must always come from the countries themselves and must not be suggested from outside.

There is not only this question of loans and gifts; there is also the question of training in the United Kingdom and British technical aid overseas. I personally have been concerned with both. I have taught Africans in Israel, and I went to Kenya as an adviser, just before independence, on the speed-up of the Africanisation of the Kenya Civil Service, chiefly through their admirable training school at Lower Kabete. We have found in Israel that bringing Africans to Western countries, even to a country in the Middle East, is not easy. If they come alone they are homesick, and if they come with their wives it is found that because the wives know no English it is very difficult to keep them occupied. A student of mine came with his wife, but she could not speak any known language and spent her time knitting for her children whom she had left behind. By the end of her husband's six months of studying radio she had produced what she called pairs of dresses. I think that during that period she produced something like 50 which she took back for her daughters of varying ages, but all the dresses were the same size.

There has recently been published a comparison—in fact, I published it myself in an annual which I produce—of the results in two comparable countries, Israel and Jordan, of training in the United States. Those were United Nations analyses of results of sending students abroad, and I thought it would be interesting to compare them. Of course, the wastage is rather high. Quite a number of students who go abroad are "playboys" and do not study. A number study, but they do not grasp what they are supposed to be studying. Some grasp it but never return home. Others return home but cannot apply what they have learned, because the scale in America, or even in this country, is so vast compared to the small scale in their own home countries. Some can apply it, but are not allowed to do so by their rather elderly superiors who are very jealous of these young men when they come back after being trained abroad. There is, therefore, a heavy discount; but even so I think the effort is still worth while.

Personally, I think it is better to send technical advisers abroad. If you Lend one man to Africa for a class of 30, it is much cheaper than bringing 30 people to this country to be trained. But I would point out that students in Africa and Asia suffer from claustrophobia, and they must get abroad before they begin their training, otherwise it is impossible for them to visualise what the trainer is talking about. For example, a man may go out to Nairobi to discuss traffic control, but it is useless trying to teach African police officers traffic control if they have never seen London in the rush hour. It is also useless to try to teach a man how to do port control or airport control unless he has seen a busy port or airport at work and knows what it is all about. So there must be some combination of, as it were, a prospecting tour to the West and the actual training in the country where the students live.

The value of British experts abroad is enormous, and I think the noble Lord, Lord Barnby, must not underestimate it. One man can change a whole country. It is not a question of trade. As the noble Lord knows, some countries are dependent on single crops and the prices are very chancy—I would mention only two, sugar and copper—and such countries just cannot build up their economies through trade. They have to diversify, and if you are going to diversify through industry what you need are skilled artisans. But skilled artisans must be able to read, and if you want to teach them to read you need more primary schools. If you need more primary schools you need more teachers; and teachers need a teachers' seminary. If you get one British teacher going out to start a new seminary on the right lines, then 20 years later you will have all the skilled artisans who will be needed to diversify the economy and lead it to prosperity.

I should like here, my Lords, to pay tribute to all those men and women who are going out as technical advisers from this country, many of them with no security of tenure. I am glad to share with the noble Lord, Lord Barnby, admiration for this spirit, now somewhat old-fashioned, of the white man's burden, suffering isolation and heat. Incidentally, I always assumed that the British Empire was merely a lot of Englishmen trying to get warm: perhaps it is because there is now no more Empire for them to go to that we are having central heating in this country. Or perhaps it is the other way round, that central heating has set in the rot, and that, once Englishmen could keep warm in this country, there was no reason for them to go overseas.

At all events—and here I come to my last point, which was raised by the noble Earl, Lord Bessborough—one must not be put off by destruction and rampage and sudden fits of anger among the beneficiaries. Americans are always upset when their Embassies are burned down in countries to which they have given massive aid. But in many countries burning down the American Embassy is the sole form of out-door sport. I think that we are a little wiser in Britain: we have had more experience. We are rather like the old English nanny whose charges bite and scratch but who have to be fed. The charges will not admit it, but deep down there is a deep love for the nanny, and that is what many countries, including Israel, feel for Britain—their old nanny. That, I think, is what Britain needs in its present hour of trial—love from all those it has helped, is helping and will help in the future.

7.29 p.m.

LORD MILVERTON

My Lords, there seems to have been such a general unani- mity pervading this debate on the subject of overseas aid that it has relieved me of making other than the very shortest speech. I think I can guarantee not to take more than four minutes.

SEVERAL NOBLE LORDS

Hear, hear!

LORD MILVERTON

I thought at least that that part of my speech would receive universal approval. I should like, first of all, to offer the warmest congratulations to the noble Lord, Lord Trevelyan, who has succeeded so brilliantly in distilling the wisdom and experience of a lifetime into so extremely well-expressed a speech. We shall all look forward to hearing him delight us in this way as often as he is able to attend this House.

My Lords, as I have said, I bund myself in general agreement with most of the speakers in this debate. I am even in the unusual position of agreeing with nearly all that the noble Lord, Lord Walston, said. But there are one or two points that I should like to make, the first being to lay some emphasis on the locally-interlocked activities which must be associated with overseas aid, and which are in many cases its justification. Another point about which I should like to say a word is with regard to the population explosion and the low nutritional standards of underdeveloped countries. Even a local improvement in food production is not yet enough to deal with that difficult situation. This universal shortage of food means that the greatest emphasis must be laid on agriculture. This is not a case for charity: it is a case for helping the underdeveloped countries to help themselves. It is easy to talk about improving production, but at the back of it there must be a great deal of education and training in scientific agriculture, and so on; and, as we all know, the most conservative person in the world is the peasant farmer, in whatever country he may be. It takes time, but I believe the modern idea is what is called the industrialisation of agriculture, which means associating with the improvement in production everything in the country which they can produce in the way of fertilisers, transport and all the other technical things which could grow with it and make a sort of compact industry.

Looking back a few years one remembers the Colombo Plan. When that Plan was produced it had the same hopes that we attach to overseas aid to-day, but at the end of several years the report of that organisation, which did wonderful work, was that the net result of their activities in India had probably been to conserve a few million more people on the margin of subsistence. That means that we must look at all these things in terms of modern conditions, otherwise, there will be the same result. It is no good producing more food for people if all they are going to do is to breed themselves into a state of starvation. With all the help of modern medical science, which is keeping alive people who would otherwise perish, we must associate education in control of population growth and in a number of other things which have to go with life if we are to help them to get a better standard of life. Lack of food is only one facet of the whole problem of underdevelopment. I personally hope that the third world war will shortly be upon us—that is, the war on poverty. It is a war which the United States intends to lead, and I think we should take an honourable part in it and keep as much control as we can over our own contributions to overseas aid, because we have a knowledge and experience which probably no other country possesses.

My Lords, one has also to face the fact that in many of the underdeveloped countries one of the difficulties in getting results from one's aid is the lack of good leaders and the existence of corruption. All of that we have to take into account in giving our aid, and I think that, distasteful though it may seem, through our representatives there—it should be done tactfully and unofficially—we have to keep some sort of, I will not say control but influence over their budgets. There is a tendency which we have all noticed, I suppose, to go in for what are called prestige products in a country which is short of food. We have seen it in Africa. We must endeavour to sell the lesson to them that you cannot sensibly have those things until you have provided the ordinary means of a happy life to the man without much means.

The partnership to deal with this poverty should in my opinion be international as much as possible. Perhaps praise for the United Nations comes strangely from me, but if only more of their activities could be diverted from the pernicious political projects with which they sometimes associate themselves, I think it would be a benefit to all mankind. Incidentally, in many cases overseas aid might be accepted with less reluctance if it came from an international body of that kind. I am not pretending to preach to the present Government, because they must be in touch with the sort of things which do not get publicised; but in many ways it is possible to help countries without making a great fuss about it. There is one thing which I would perhaps slightly modify in what the noble Lord, Lord Walston, said, and that is the rather too blatant suggestion (if I may use that expression) that overseas aid pays us. Of course it pays us, but I prefer to think that the way in which it pays us is in the creation of good will. I would prefer that to competing with, say, Russia, who comes along and says, "We will give you this if you do that, that and that". I should never like to see our Government acting in that way, and I do not think they do.

We are indebted to the noble Lord who raised this subject for debate. I can only say that I am a strong supporter of overseas aid, and I know that the present Government are in favour of it, as were the previous Govenment, also. I should like to conclude with one remark which is not very important. I noticed recently that it was suggested that one of the African countries now in receipt of aid was going to emphasise its independence by refusing to pay any longer the pensions of officers who had served it. I know that the Government will be able to deal happily with that, but I think that the then Government—and it was a Conservative Government—lost a great opportunity when they began to give these countries their independence. It would have been a gracious act, and a foundation of our overseas aid activities, if the British Government (I was going to say had been statesmanlike enough, but perhaps that sounds rather arrogant) had thought of saying to each country as it became independent, "Our first gift to you is to take over from you all responsibility for the payment of the pensions of officers who have served you in the past and who are still alive to receive it". I think that might have done a great deal to create good will, and would have been a very valuable contribution. My Lords, I can only say that all extensions of good will which we are able to make will, I am sure, meet with the approval of anyone who has any knowledge of the subject.

7.40 p.m.

LORD RITCHIE-CALDER

My Lords, I am very glad that the noble Lord, Lord Barnby, has introduced this subject. For one thing, it has given us the opportunity to hear the authoritative maiden speech of my noble friend Lord Trevelyan. I am also glad for the perverse reason that it gives us all the opportunity to rebut the implicit criticism of overseas aid in the Motion of the noble Lord, Lord Barnby. The unanimity here has given me great satisfaction. There was practically nothing with which I would disagree, except the implication of the opener's speech. But there are certain aspects which I should like to emphasise, one of which is very important.

I believe, with all the reservations which have been applied about progress and means, that more and more should be diverted into multilateral aid. This is not merely a justification of internationalism. It is the practical way to do it. As has been demonstrated and as has been mentioned by the noble Earl, Lord Bessborough, and others, we do rather well out of multilateral aid. We take more in return out of technical assistance than we put into it. We take out more, as I pointed out last week, from UNICEF than we contribute to it. This is not a reflection; it is because Britain produces the kinds of things necessary in technical development. We earn a great deal through our 20,000 experts who are deployed through the multilateral agencies. This seems to me to be a perfectly justifiable and enlightened self-interest, with the enormous advantage that it does the job most effectively in the field. As Senator Fulbright once remarked to his compatriots, "I have never seen anywhere in the world scrawled on walls the slogan, 'World Bank go home! '."

It is true that by diversifying, through the activities of many nationalities, you avoid the opprobrium or odium which is liable to be built up if you insist upon sewing a national flag on the seat of your pants. As the noble Viscount, Lord Samuel, pointed out, you are likely to invite the obvious; and, as he said, the burning of Embassies, the burning of information centres follows. It is very important that we should realise that multilateral aid must be the eventual form which all aid must take. I justify the present Government, and past Governments, in the emphasis laid on what were Commonwealth territories. Aid to the Commonwealth, I feel, is a liability that we are justified in accepting; for these were areas in which we had a great deal of experience.

But I would repeat what my noble friend Lord Samuel pointed out: that a great deal of what we are trying to redress to-day—and I say this not by way of indictment but in historical perspective—throughout the world is due to the shortcomings of the colonial empires, and not only our own. As the noble Viscount pointed out, we expected our Colonies to be self-sufficient. In the failure of the Colonies to develop, we saw the microcosm of the world to-day. We cannot expect countries or peoples to lift themselves up by their bootstraps when they have not even boots.

It seems to me that the greatest opportunity, and indeed the positive possibilities, of the immediate future lie in the reinforcement of those things which start countries on the upward escalator, instead of on the downward escalator on which they find themselves to-day. By that I mean that prosperity will not be achieved in these countries, there is no hope for these countries in industrial development, until we inject into their economies the things that we have called in the past "social services". I have said it before in your Lordships' House, and I repeat it to-night. If there is to be industrial prosperity in those countries, the emphasis must be on better education, on better health and on better nutrition, so that there is the human infrastructure on which prosperity can be built. Behind and beyond that, you must move in with the sharing of knowledge and skills, which is much more important than the book-keeping in terms of money. What is important are the people to whom you are going to lend money, the people who are to be lent money and educated; not the money, the balance sheet. Money is the book-keeping item which ought to express and reflect these things. What is important is the development of the sharing of knowledge and skills, and the increasing emphasis that we must lay on the follow-through.

I would say to the noble Lord, Lord Barnby, that in fact I see no justification whatever for interest-bearing loans to those countries. It is feeding a tapeworm. I would remind your Lordships that in 1966, the year in which my right honourable friend Mrs. Barbara Castle changed the policy and insisted on non-interest-bearing loans, the total amount of aid from all the world to the developing countries was 9 billion dollars. Of that total, 5 billion dollars were to pay interest on the loans that had already been made. This is feeding the tapeworm, because to the receiving countries it means that if they do not take loans they die; and if they take interest-bearing loans they feed the tapeworm and still die.

7.47 p.m.

LORD GRIDLEY

My Lords, the hour is late. I know that we all wish to hear what the noble Lord, Lord Shepherd, has to say at the end of this interesting debate, and therefore I do not intend to detain the House for more than a very few minutes. I should first like to congratulate the noble Lord, Lord Trevelyan, on his very able speech. I am sorry that he is not in his place at the moment; but I hope that there will be many occasions in the future when we shall hear him. If there is one aspect of this subject which I think has not received sufficient consideration, it is this. What we have to do is to convince our own British people outside this Chamber, in the country and beyond Parliament, that it is necessary for this country to continue its overseas aid. That I think is the most important aspect of this subject.

My Lord, we are considering in this debate the question of overseas aid at a time when our institutions are under attack. Many of us will have seen an article in the centre pages of The Times to-day in which it would appear that some of our students are under a form of psycho-analysis at the present time. Our students are of considerable interest to all of us; but I can only hope that the fact that they occupy the centre pages of The Times will not make them attribute to themselves an importance which obvi- ously they do not deserve. It was said in the debate in another place that our students are the greatest supporters of our overseas aid but—entering, if I may, a slightly controversial field—I feel that they support our overseas aid for the wrong reasons.

I suggest that the reasons why they support overseas aid are not very difficult to discover. They have lived in the era of the past twenty years, the post-1945 era of the "wind of change", when it was fashionable to challenge our great institutions and to find a great deal wrong with everything we stand for. Some of our students—I would not say all—see aid as an atonement for the exploitation by this country of our former overseas territories. Students therefore think it right that we should foot the bill to the extent of £205 million in support of overseas aid. They probably think that we should pay a great deal more, and particularly that your Lordships should pay more.

They have been ably abetted in their wrong-headed conclusions about the reasons for overseas aid by the silence of those of us who know better; by our failure to say what overseas aid is about and the moral obligations behind it. Our voice is not heard in the babble of disillusionment in the market place because it is very difficult to get across our point of view. They do not see, read or hear about the greatness of this country's colonial era. It does not appear in our history books, nor do the professors talk about it. It does not appear in television programmes or in the newspapers. This is a fact of life of the past 25 years. The dreadful theme of "exploitation" has been taken up by the leaders of Black Power who have been in evidence in this country and it is echoed by the Colonial Committee of 24 in the United Nations. All this angers the more level-headed among our population, who argue that if this is the way that people who receive overseas aid behave, they see no reason to continue providing it.

My Lords, if we were to discontinue the payment of overseas aid it would be unutterably wrong. I have discussed this subject with the noble Baroness, Lady Gaitskell, and I know that she will confirm the views I have expressed about the Colonial Committee of 24 in the United Nations. The Committee hold the views which I have stated to your Lordships, and all this makes the situation extremely difficult when dealing with our own people. I do not speak from theory but from practical experience. Our Empire, now the Commonwealth, is one of the greatest inspirations that the world has seen. To put it in its proper context, we give aid not because we have ever exploited our friends to their disadvantage but because it is the logical follow-up of the Empire, the logical extension of our belief that we should help the people with whom we have been associated.

My last post was in Malaya, where I was Commissioner of Customs and Excise. I know for a fact that we ploughed back into the economy of that country every single dollar that we collected. It went to the revenues of the Federation. I saw the standard of living of the inhabitants go up year by year. We were dedicated to the welfare of the countries we served to the exclusion of everything else. We have continued to provide aid because it is morally right that we should do so. What we have to get across to the people in this country is the truth about our past, so that they may never be in doubt about the propriety of what we are doing. We have also to disabuse their minds of the false notions about why we give aid, and get rid of that word in the context of the canard of exploitation.

7.54 p.m.

BARONESS GAITSKELL

My Lords, I must apologise to the noble Lord, Lord Barnby, for having arrived in the Chamber so late in this debate, and I must also apologise to the House. I shall not keep your Lordships for more than two minutes. I should have taken part in this debate although my work at the United Nations concerns the human rights aspect. All the same, we have a debate on what is called the world social situation, where aid is discussed although not very fully. When, in the United Nations, we speak of aid, it is no good our speaking as if we were representatives of one of the poor nations. It becomes absolutely ludicrous to our Afro-Asian friends when we talk about being hard up. We have talked ourselves into such a state of penury about the balance of payments, and into such a state of self- pity that it has been left to the Daily Express to come to our aid, as it did yesterday, to tell us how many things are right in this country and how well off we are in know-how an I in wealth of all kinds.

When the words "British taxpayer" are mentioned they are such emotive words that we have to stop speaking as if we are so poor, and point out to the British taxpayer that it is not only a moral duty for him or her to aid the developing and the poor countries but it is also in our interests, because we are helping future customers who will receive our exports. I mentioned in another debate that it was the delegate from the Philippines in the Human Rights Committee who said—and I thoroughly endorse his words—that there has to be a complete revolution in our thinking about aid and how much we ought to give to poor countries. It is not only for us to do this; it is for all the affluent countries, the Western European countries and America. We still could give more and we should give more aid. Unless we have a revolution in our way of thinking about this subject there is, I think, little hope for the future of the world.

7.58 p.m.

LORD SHEPHERD

My Lords, I would join with all noble Loath in expressing thanks to the noble Lord, Lord Barnby, for having initiated this debate and giving us an opportunity once again to consider this very important matter. Having expressed my thanks, I am bound to say that I share the view held, I think, by all those who have spoken, that we listened to the noble Lord but we did not agree. We disagreed not so much with what he said, at least so far as I am concerned, as with the tone of his speech. I will seek to put the noble Lord out of his misery during the few remarks I intend to make. I say that my remarks will be few because, as was said by the noble Earl, Lord Bessborough, there was a very full debate in another place and the Mir inter responsible for these matters made a very careful, well-prepared and documented speech. I think, therefore, it may be left there, at least so far as Government policy is concerned.

The noble Earl, Lord Bessborough, spoke with regret about the fact that the figure we had hoped for in 1968–69 and 1969–70 would not be reached, and that we had had to keep it at £205 million. I share his regret, particularly as a Commonwealth Minister, but we must take account of the present economic circumstances. While I agree with my noble friend Lady Gaitskell that we are not a a poor country and that in fact we could provide more, we must bear in mind that it is not purely a question of cash; there is also the effect upon the general resources of the country. As we see it, we must refurbish and develop our resources so as to be able to play a greater part in world trade and in providing aid for the poorer countries. Having mentioned the figure of £205 million, I think it fair also to point out that in the next year or so there will be further contributions over and above that sum, that we shall be giving in economic assistance to Malaysia and Singapore as a result of the new defence arrangements. There is also the Food Aid Convention where we shall be providing some £6 million in a year. There is the increased contribution that we intend to make to the International Development Association. We are very conscious of the need for increased aid and I can assure the House that we will do all we can to see that money is made available as soon as our economy makes this possible.

But I think that I should say that it is a question not just of the money we have available; it is also the manner in which we use it and the efficiency with which it is used. Many of the misconceptions in the mind of the noble Lord, Lord Barnby, about the misuse of aid can be attributed to the efforts we made immediately after the war, when help to developing countries was an unknown task. We knew little about this subject and I agree with the noble Lord that large sums of money were wasted. Since then the work of the United Nations, of the World Bank and of the new Ministry under its own Minister has enabled us to make our contributions infinitely more efficient and certainly more effective than they were in the earlier days.

I believe, as I think most noble Lords feel, that we should move from bilateral aid into the multilateral field. If this can be achieved—and we are seeking to bring this about, though initially the movement must be slow, with the help of the World Bank and the various development banks in Asia and the Caribbean—we shall have an expertise and knowledge which will make the sums available more effective. However, we are still bound by a number of long-term agreements into which we have entered bilaterally and it is right that these should be continued. My noble friend Lord Walston spoke about using our aid particularly for our friends. I would not turn my back upon an enemy who was poor and starving.

LORD WALSTON

My Lords, if I may interrupt my noble friend, I said that if needs and everything else were equal we ought not to be ashamed of helping our friends in preference to those who are not our friends.

LORD SHEPHERD

My Lords, I have seen poverty throughout the world, in India, in Hong Kong and in the Caribbean, and I have never seen how I could equate one poverty with another. But what I want to stress is that 90 per cent. of our bilateral aid goes to our Commonwealth partners. I think that that is right. I know that the noble Lord, Lord Barnby, has in mind, because he has raised it in the past, countries like Tanzania. As he said to-day, we have temporary difficulties with Tanzania and it is true that we have not made further additional financial grants, but we have technical staff in the developments in that country and I am sure that it is right for this to continue so long as possible, rather than for us to stop it and have all we have done completely wasted. A country with whom we are not an enemy, but with whom we have a disagreement on one matter, we can well be friendly with in other ways. In all these things I would say that we should have patience.

I agree with the noble Lord, Lord Barnby, that it would be better to give help as gifts, but there are circumstances when one must be a little more cautious. Much of our aid is given at a low rate of interest, and in many cases interest is not payable for some considerable time in order to allow the projects for which the loans are made to become productive and so make money available for the payment of interest. I agree with my noble friends who would prefer to see aid given without any tie and without interest, but at the present moment we need to have some degree of good housekeeping, even though it may seem rather hard on some of the friends we are seeking to help.

I agree with the noble Lord, Lord Barnby, that trade is better than aid. But we must remember that the main difficulty of the countries we are seeking to help, which are mainly agricultural—I would instance Mauritius and Fiji and their difficulties with their sugar crop—is that they must have some form of industrialisation if they are to raise their standard of living. If we accept the view that trade is better than aid, we must see how we can arrive at diversification in production so that the impact of imports from the developing countries does not affect our own manufacturing capability, and so that the richer countries who are in a position to do so buy their share of the produce of the developing countries.

In regard to regional aid, I agree with what my noble friend Lord Walston said. I am sure that he is aware of the Ministry of Overseas Development's work in the Barbados, which has now been in operation for so long that it is no longer an experiment. There we have learned a great deal about how we can assist developing countries more effectively, and I would pay a great tribute to all our staff in Barbados. I am sure that this regional development is the right way to proceed.

Turning to the allegation of the misuse of funds, I would say to the noble Lord, Lord Barnby, and also to the noble Lord, Lord Milverton, that none of our aid is given for prestige purposes. The aid we give bilaterally to our friends, in the Commonwealth and outside, is for agreed projects—projects which have been put to us, which we have examined and approved. We also agree with the need for developing an infrastructure in these countries. Certainly co-operation is a good idea and we give all the help we can in this direction. The noble Lord, Lord Barnby, spoke of private enterprise. There is a significant outflow of private capital into the developing countries, amounting to some £120 million a year, and the noble Earl, Lord Bessborough, himself drew attention to the good return on these investments. The reason why it should be different from the return on investments in more developed areas may be that in the more developed areas there is greater competition, while in the developing areas there is a degree of protection.

The noble Viscount, Lord Samuel, in his interesting speech, said he felt that we were not doing all we could and had failed to reach our objective of giving in aid 1 per cent. of the gross national product. This 1 per cent. was not regarded as the figure for official aid: it was to be a combination of official aid and private investment. In fact the 1 per cent. target about which I have spoken was adopted by the 1964 UNCTAD Conference. The 1968 Conference set a new target, and to-day our present official aid and our private investment brings us to 0.9 per cent. So we are within 0.1 per cent. of our target, and we are one of the foremost countries. We hope that one day we shall be able to reach this target that has been set by UNCTAD.

My Lords, we have had many debates on population, and I think we have a unanimity of view on the matter. The noble Earl, Lord Bessborough, spoke about television education. We give great priority, as he knows, to education, and in particular to technical assistance. This represents a rising percentage of our total aid. The noble Earl asked for an assurance that this aid will not be cut. He will well understand that I cannot give him that assurance this evening—4 have not been able to make contact with the Department—but I will see that this is looked at, and perhaps I can communicate with him.

The noble Lord, Lord Walston, called for an organisation for combining official and private funds. I can tell him that my right honourable friend is most interested in this matter. I will certainly see that what the noble Lord has said is brought to my right honourable friend's attention, and perhaps we might discuss it on another occasion. On the question of training, this is, of course, most important. I think one tends to oven tress the problem of training individuals for one job, only to find that they go to another country to do a different job. I think this is often exaggerated, perhaps merely because it seems so absurd that a man should come some 8,000 miles for training only to return to do something else. Clearly, at the end of the day men are free, and we cannot direct them to a particular job. But certainly this is very much in our minds.

I think I have dealt with most of the points that have been raised. I am glad that there is a unanimity of view—and I think at the end of the day even the noble Lord, Lord Barnby, is willing to join us. In spite of the views he has expressed in your Lordships' House from time to time, the noble Lord has always been, in my view, a very charitable man. I believe he has travelled the world. I cannot believe that he has stayed only in the Hiltons and the great hotels of Africa, Asia and Australia. I am sure that at some time he has walked the streets of some of these countries and seen the poverty and hunger on young people's faces, and old people lost. I cannot believe that the noble Lord would feel that he could walk on the other side and turn his back. It may be that all we seek to do is not done as efficiently as he would like and as we should like: but I am sure it is right that we should go ahead—and I stress this—in partnership with many countries who give aid for the same reason as we wish to give aid that is, that we feel it to be morally right and that, in the end we can find peace only when there is contentment and happiness among all people.

THE EARL or BESSBOROUGH

My Lords, before the noble Lord sits down, I should like to ask him one question. With regard to the overall gross aid, he gave a figure of £205 million. Does he agree that we get £130 million back directly in exports (I quoted these figures, and I think they were quoted in another place), and that in addition we are getting another £60 million in interest and amortisation of loans, and also a certain amount back in exports from untied aid from other countries? I am rather confused about this. Why should we not increase our aid if we seem to be gaining as much as we are giving? I do not think that the noble Lord quite answered that point.

LORD SHEPHERD

My Lords, I deliberately avoided answering the point, because the noble Earl knows the problem of figures and statistics, and particularly of arguing them across the Floor of the Howe. First of all, we have to establish clearly on what our figures are based. Undoubtedly to-day we earn both by trade and by interest on the sums that we have given by direct aid, and certainly by way of investment. But I should find it difficult to put before the House how the balance lies to-day. With one figure I will agree: that on the sums that we invest and give in aid we earn about 30s. in the pound invested, which was the figure used by the noble Earl. This is a figure that is clear in my mind. However, I should not wish to go into the detailed figures, because it could only lead to a great deal of misunderstanding.

8.17 p.m.

LORD BARNBY

My Lords, I am deeply grateful for the many contributions that have been made this afternoon. It has been a most informative debate, marked by significant contributions from so many noble Lords with long service abroad and great experience. I personally have learned a great deal, and I am indeed grateful. With regard to myself, perhaps I may add this note. I should perhaps be penitent for having attracted a reproof for an appearance of absence of compassion with regard to what aid is desired. I would say, in extenuation, that it is my strong conservatism and the preference for individual commercial action that has motivated my emphasis on the need for scrutiny of aid. It is in that sense that I appreciate the references that have been made by many.

I should like to make comment on several of the outstanding contributions. I like the suggestion made by the noble Lord, Lord Walston, with regard to a review of our overseas expenditure and I am glad that the noble Lord, Lord Shepherd in his reply went over the many points raised in the debate. I would add that I particularly appreciated the contribution of the noble Viscount, Lord Samuel, and I take note of his request for understanding with regard to any actions taken in anger by emerging countries I should like to convey my appreciation to the noble Baroness, Lady Gaitskell, who brought her long experience of the United Nations to bear in this debate. My Lords, I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.