HL Deb 16 June 1969 vol 302 cc882-900

4.31 p.m.

BARONESS LLEWELYN-DAVIES OF HASTOE

My Lords, I beg to move that this Bill be now read a second time. It has two main purposes. The first is financial, and it is to increase the Commonwealth Development Corporation's borrowing powers so that it can continue to assist economic development in large numbers of developing countries. The second purpose is to remove the present limitations on the countries in which the Corporation can operate. It will then be able, with the prior approval of my right honourable friend the Minister for Overseas Development, to invest in countries whether they are in the Commonwealth or not.

Noble Lords will know that the Commonwealth Development Corporation is one of Britain's success stories; and very welcome it is in these days. The late Sir Andrew Cohen, whom many noble Lords will remember and who was I think one of our great men, told the 1968 Estimates Committee on Overseas Aid that the C.D.C. is as efficient a form of aid as exists in this country or in the world—a view which I know the World Bank also holds. The Estimates Committee reported: This is high praise indeed, but your Committee believe it to be well founded. The C.D.C. works as a commercial organisation. It is non-profit-making, but it is expected to pay its way, taking it year by year. In other words, it combines the best of several different worlds. It is idealistic in that it can take a very long view of the development needs of a country, which a commercial organisation could not do. On the other hand, it is run by businessmen on strictly commercial lines, so that its projects have to be not only imaginative and forward looking, but also soundly conceived, thoroughly appraised and efficiently managed. Where the C.D.C. operates it has a multiplier effect because it attracts other investors. It is associated with territorial and European Governments, with the World Bank and the International Finance Corporation, leading banks, commercial firms and companies from all over the Commonwealth and from outside.

But, just as important, my Lords, in its particular projects it operates with local people, local businessmen, local entrepreneurs; and it brings with it managerial talent and therefore plays a serious and important role in training local people to take increased responsibilities at managerial as well as other levels. May I give the House just one example, out of thousands, of one of the C.D.C.'s projects? There is in Kenya a tea-growing project, financed in collaboration with the International Development Association, which involves 30,000 peasant farmers and will soon involve 60,000. It is a tremendous and growing success.

I thought it proper to set the stage, as it were, against which the House could consider the provisions of the Bill. They are simple and straightforward and were not amended in another place, either in Committee stage or on Third Reading. Clause 1 is, as I said, the financial clause. The C.D.C. is at present empowered to borrow so that it has at any time not more than £150 million outstanding. That means that the £150 million limit will be reached when its total borrowings, less its repayments of capital, reach £150 million. Clause 1 of the Bill seeks to increase the £150 million to £225 million; and I should like to stress that this is sufficient for a further five to seven years. Clause 1 also makes provision for the limit to be further raised when necessary to £260 million; and that will be sufficient for a total of about 10 years.

Within the current overall limit of £150 million the C.D.C. has power to borrow from the Government so as to have not more than £130 million outstanding; and this limit will probably be reached early next year. The Bill also seeks to raise this limit to £205 million and to make provision for it to be further raised to £240 million when necessary. I think that this is clear and I hope that noble Lords will be able to approve the provisions.

Clause 2 deals with the extension of the Corporation's area of operations. At the moment it can invest in British dependent territories and any Commonwealth country which has gained its independence since 1948. This Bill will widen these powers particularly to countries, for example, like Sudan or Ethiopia, which are close to countries in which the C.D.C. is already operating and which offer the same kind of conditions, where the Corporation's regional officers can use their local expertise. But I want to stress that this does not mean that the Corporation will cease to be Commonwealth-orientated, or that a large proportion of its resources will be devoted to foreign countries. On the contrary, the Corporation remains the Commonwealth Development Corporation. But Britain rightly wishes to play a part in the world-wide effort being made to assist the developing countries, and it does this through the C.D.C. as well as in many other ways.

Where unavoidable poverty and ignorance exist it is in the best interests of the whole world to pool our knowledge and our resources towards rooting out those causes of unrest and ill-health. Neither we nor other Western countries are playing our full part in giving to developing countries all the assistance that we might. Nevertheless, it is a necessary part of our international obligations, and it is at the same time a form of enlightened self-interest. We believe that the C.D.C. should be able to invest in countries outside the Commonwealth, subject always to my right honourable friend's prior approval.

An important new factor that we should recognise is that donor countries no longer think in terms of giving only to their former colonies. I might add that countries receiving aid are very keen to notice and to diversify the sources from which the aid comes. We very much welcome the aid given to Commonwealth countries by, for example, the United States, Western Germany and others, and it seems right for the United Kingdom to operate more widely. May I give the House an example from my own personal experience of the sort of detailed aid which is becoming rapidly more commonplace? When I was Director of the African Educational Trust I received very generous donations of £70,000, £40,000 and £20,000 from Scandinavian countries, particularly Sweden. This was to give technical and university education to African students from Commonwealth and ex-Commonwealth countries in the United Kingdom. The students then returned to their own countries where they used their skills and knowledge to reconstruct and to develop the countries' economies. It was splendidly generous of the Scandinavian countries to give us those donations, and this is the climate in which international aid is now being given. So, my Lords, it seems right to widen the C.D.C.'s horizons when other forms of British aid are going to foreign countries as well as to Commonwealth countries.

I am sure the House would not like me to introduce this Bill without congratulating the noble Lord, Lord Howick of Glendale, on the great progress that the C.D.C. has made under his splendid leadership and, if I may say so, all those associated with the C.D.C.—its chairman, its Board, its able general manager, Sir William Rendell, and all his staff, at home and overseas. They deserve our praise for building up what is a unique and highly efficient agent of development. Equally, no mention should be made of this subject without paying a tribute to the noble Lord, Lord Reith, and to Sir Nutcombe Hume, who played their magnificient parts in earlier days.

This Bill does not provide for extra sources of development. As my right honourable friend the Minister for Overseas Development pointed out in another place, money lent by the Government to the C.D.C. must come out of the total sums provided for in the aid programme each year. It is a modest, but important and wholly productive Bill, and I hope that it will receive the approval of the whole House. I beg to move the Second Reading of this Bill.

Moved, That the Bill be now read 2a.—(Baroness Llewelyn-Davies of Hastoe.)

4.41 p.m.

THE EARL OF BESSBOROUGH

My Lords, we are grateful to the noble Baroness for having explained the purposes of this Bill so clearly, and at the outset I should like to say how much we appreciate the work which she herself did for the Africa Education Trust, on which I think she should be congratulated. I venture to say that this is a good Bill. We do not often say that from this side of the House, but we give this Bill our full support. I am glad, too, that since the debates in another place the Commonwealth Development Corporation's Annual Report and Accounts has now come out. I am sorry that there has been some delay, and of course certain criticisms were made in another place that it has taken so long to print. Indeed, I think the full Report is still not out.

I know that all of us on this side of the House would like to join with the noble Baroness in paying a tribute to the noble Lord, Lord Howick. I am sorry that he is not here to-day to hear our tributes to him and to the members of the Board and staff of the Corporation, which has done twenty years of remarkable work and, in my view, a very good job in many parts of the world. I agreed with the Estimates Committee when they concluded last year that this great public Corporation had fully justified the trust placed in it.

We must all greatly regret the death of the late Sir Andrew Cohen. Certainly his death is a serious loss to the work of overseas development. I am sure that what he said about the Corporation, which the noble Baroness quoted—about providing more efficient aid to developing countries than any other country in the world—is absolutely true. The Corporation is performing an immensely important role in helping these developing countries to help themselves. I believe the Corporation goes about its work in a businesslike manner, spreading its investments over a wide range of products, such as transportation, housing, finance, capital for the development of agriculture, ranching, mining and basic manufacturing.

In regard to the provisions of the Bill, it seems to me that the extension of the borrowing powers of the Corporation is eminently sensible and the provision should be adequate for the next five to seven years. I notice that it is always open to the Corporation to ask for more capital if it can justify the need, and I would stress what seems to me to be absolutely true (and I would emphasise it for those who have some doubts), that this type of development aid not only has no adverse effect on our balance of payments but in fact has the very reverse effect.

However, there is one point on which I should be grateful for some comments by the noble Baroness. I have given her notice of this. I refer to the criticism of the Overseas Development Institute regarding the C.D.C.'s financing in relation to the ceiling of aid expenditure. I gather that advances to the Corporation count as part of the aid ceiling but that repayments to the Treasury are not deducted. This is quite a complicated accounting point, but it seems to me that the effect of the present procedure appears to exaggerate Britain's aid expenditure and that this effect will be increased as the C.D.C.'s operations expand, as recommended by the Estimates Committee and approved by the Minister. I think this may be justifiable criticism. It does not make much sense to count a grant for an overseas Government to buy, say, buses in this country as aid and yet to exclude the investment which a private company may make in building a factory overseas in partnership with local interests. I hope that the noble Baroness will be able to say something about that point.

The C.D.C. certainly operates successful ventures, and there is no doubt that it is stimulating a demand for British exports. It seems generally agreed that the most pressing need in most developing countries now is investment in a large number of smaller enterprises. I do not think the noble Baroness mentioned this point. This is the way to broaden the base of a country's economy, to stimulate real growth and to get wider participation in it by the people of the developing countries. I am sure that is the right approach.

With regard to the second provision in the Bill, the extension of the Corporation's operations to the whole of the Commonwealth and also to foreign countries, this was much debated both on Second Reading and in Standing Committee "D" in another place. I was glad to see that the Minister said the Corporation would be cautious in not venturing into too many new territories. If we pass this Bill the Corporation will be able to operate in any part of the Commonwealth, and in this way I believe that the spirit of Parliament's intention must continue to be that it operates in countries which are in an early stage of their economic development and where this is also in line with an essential British interest.

I agree that there are certain cases in which regional development seems to be desirable, and these might well include not only territories within the Commonwealth but also those which were formerly part of it, like the Sudan and the Cameroons. There seems, too, to be a good case for operating in a country such as Ethiopia, because of its proximity to Kenya, Uganda and even Tanzania, where the Corporation has been well established. In regard to a country like Tanzania, which has shown, to put it mildly, some hostility towards us, I am glad to note that in countries which have broken off relations with us or have become our declared enemies, loans have been frozen, even if some technical aid and training has still to go on.

There is also the question of whether the C.D.C. should go into India and Pakistan. That is a big question, and I should be glad if, before we finish our debate, the noble Baroness would say something about it. I hope she will agree that this must be a matter of commercial judgment. I agree with the Government that there seems to be no need to change the name of the Corporation, although perhaps it might now more appropriately be called the Overseas Development Corporation. But the present organisation certainly has an aura of success around it which is good. However, there might be some difficulty if it were to operate under its present name in certain countries. I do not want to exaggerate the danger, but it has been suggested that perhaps a formula could be found whereby the Corporation must operate in other countries, maybe through an appropriately named subsidiary. I do not know whether the noble Baroness will have anything to say on that point.

Finally, I think we have a considerable job to do in selling the whole concept of such aid to those in this country who may criticise it on the grounds that our own home needs are so considerable that we cannot afford it. Of course, it is said that the economic situation in this country is not at present exactly encouraging. But I am glad that in another place the Parliamentary Secretary agreed that it was essential to get the need for such aid across to those critics. I am glad that the Minister has said that there is no question of reversing our policy in respect of multilateral aid, and that the proportion of our aid programme which is dispersed through multilateral agencies has increased over the last five years from 8 per cent. to 15 per cent. I think we should welcome this increase.

I also give the Bill a warm welcome and express the hope that with the increased funds now made available the Corporation will be able to continue the good work of helping developing countries, not only in the Commonwealth but also a few outside it, although I would not wish members of the Commonwealth to suffer from the extension of aid to other countries; and I do not think the Government want this either. Therefore, in general I certainly commend the Bill to your Lordships.

4.52 p.m.

LORD WALSTON

My Lords, may I apologise in advance, in case I have to leave this debate before it comes to an end, but I have a long-standing and important engagement at which I have to represent your Lordships against another place in some non-Parliamentary activities for which I must not be too late. I hope I shall be able to remain to the end, not solely out of courtesy but out of interest also.

In company with the noble Earl, Lord Bessborough, and I am sure in company with all your Lordships, I welcome this Bill warmly. It sets out to do two things, both of which are admirable. In the first place, it increases the amount of money which the Commonwealth Development Corporation will have at its disposal, and there can be nothing but praise for that. I certainly would share, or echo, the point the noble Earl made about some of the accounting procedures, which have always seemed to me not only less than generous to the Corporation but less than reasonable in enabling it to carry out its good work. But I will not pursue that point further.

The part I should like to dwell on for a short time is Clause 2 of the Bill, which seems to me not only extremely important and valuable in itself but something which opens up a wide and exciting vista of the future along lines which are entirely commendable. I have for a long time felt that overseas aid, or the aid—shall we say?—to developing countries, should in our own minds and to a large extent in our own actions be divided into three sections. First of all, there is the aid which is needed for what has now come to be called the infrastructure, the aid which is essential for any developing country if it is to reach something approaching the levels of those countries already developed, but which will not give dividends in the accepted sense of the word, the results of which cannot be expressed in a balance sheet and distribution to the shareholders. I refer to such things as transport, communications, schools and hospitals.

For that type of aid, which is very necessary indeed, there can be no question, if we are honest, of our accepting or acquiring or exacting any form of return. Possibly eventually, in the long distant future, we might hope to get paid back the original capital; but to think of this in terms of an investment, a loan on which the borrowing country—already lamentably poor, which is the reason we are giving the money—has to pay 5 per cent., 6½ per cent., or even 2½ per cent., interest, to my mind not only does not make sense but defeats the very purpose of the operation. Therefore, that type of aid, I believe, should be given as a free gift, by ourselves if we can afford it, by other rich countries, and above all internationally if it can be managed. I will not dwell on that matter because that is not the subject of the Bill.

The second form of aid is that of technical assistance, not requiring any large amounts of money, not even vast amounts of manpower, but a certain number of highly selected people, men and women of different skills. There is no need to elaborate the importance of that. Again it is not the subject of this Bill. We then come to the third form of assistance, and that is to provide both capital and technical expertise for operations which eventually will become profit-making and the objective of which is to earn a profit, whether it is for building a fertiliser factory, or, as the noble Baroness gave as one example, making a tea plantation in Kenya, or setting up and operating hotels to meet the needs of tourism, or any other form of commercial enterprise—all things which will add to the wellbeing of the country in which they are carried out, things which are in essence commercial undertakings and which should be started only if they have prospects of paying what business investors would call a fair return on capital, a dividend, if not during the immediate years at any rate in the foreseeable and not too distant future.

The obstacles which are holding up that type of investment in many developing countries are, in the first place, lack of know-how, lack of financiers who know how to raise the money, lack of the technical people who know about, for example, building and running an hotel. A second obstacle is a general ignorance of how to start a business on this scale in a country which has never known such a thing. And there is the fear of the outside investors—and it is largely from the outside investor that capital for this type of thing must in the first place come—of investing in a new, unknown country with, at any rate to their minds, political instability. There is the uncertainty among these investors as to what the future will hold for them, the uncertainty about the people they have to deal with, the local population, both in labour and in management. All these things hold them back; and if they are not unduly held back and are eventually persuaded to go into the venture, they will do so only if the return on capital is more rapid and more substantial than it would be if they were investing in a safer and better known part of the world. That, of course, is exactly the opposite to what we want. Those of us who are interested in the development of under-developed countries do not want them to have to pay a higher dividend and thereby increase their costs in competition with the already developed parts of the world, simply to meet the higher risk and uncertainty and to attract the normal private investor.

That is where the C.D.C. has played an enormously important role, first in the Colonies, then, by the wisdom of the then Government, by extension to the Commonwealth, and now by the wisdom of the present Government by extension to other under-developed countries. The Corporation effects, as it were, broadly a marriage between outside finance and internal finance and local knowledge. It brings them together, in the first place, by providing its own capital. By degrees, it withdraws, eventually leaving those industries and operations entirely to private enterprise, from both outside and inside. That is the right line on which these things should be managed.

Where I disagree with the noble Earl is when he expressed the hope that the Government—I think, probably rightly, the Minister will have to give his approval for this form of investment in foreign countries—would be, cautious. Caution has a variety of interpretations. We do not want the Government to be rash. I should never expect the Commonwealth Development Corporation to be rash in its investment, in any case. I sincerely hope that the Minister will encourage development of this type and will not be a dead hand holding the Corporation back but a hand pushing it forward increasingly to extend the scope, so that it departs from the limits of the old Empire and the present Commonwealth into the much wider boundaries of the developing world as a whole. It is not only because I believe it to be good in general that this should be done; it is not wholly because I believe it to be good economically for this country, but it is also, as the noble Baroness and the noble Earl have said, because future efforts in these areas, whether they be in Africa, in South-East Asia, in Latin America or in any other part of the world, must be more and more directed towards regional development and not be limited by the existing narrow national boundaries.

It is perfectly understandable that all countries, and particularly the newly emerged countries, should have a great national pride. We should encourage them to have that. But what we cannot encourage them to do, and what the world and they cannot afford, is that there should be economic balkanisation where each small area has its own small development scheme, its steel plant, its overseas airline and so on. These things must be done regionally, and the regional aspect of development must not be based on the fortuitous acquisition of an empire in the nineteenth century but on to-day's regional economic needs. For those reasons I gladly welcome this Bill, and I hope that it is only the beginning of a much wider movement towards the provision of capital for this type of enterprise on a regional basis. That can only do good to all those we wish to do good to.

5.3 p.m.

LORD RITCHIE-CALDER

My Lords, I want to follow the noble Baroness and the two noble Lords in welcoming this Bill and commending it to everyone, including the outside public whom Lord Bessborough wants us to educate. I agree with him that that education is most necessary. The misunderstandings about this which is called aid are prodigious. I sometimes wonder whether we ought not to get rid of the word altogether. I believe that it has now become a completely misleading term in one sense of the word, because, as my noble friend Lord Walston has pointed out, this has not only become global, regional and national, but finally must be a complete two-way passage in which we are depending for our future on recovering not in tangible returns, not by way of dividends, loan repayments and so on, but in fuller accomplishments.

It is difficult to get this over. It is profoundly difficult to get it over, in view of the fact that we find the Governor of the Bank of England, Sir Leslie O'Brien, saying, within the last month, that the great change for the worse has been the huge increase in Government expenditure abroad, mainly on aid to less-developed countries and for defence. I must say that if my bank manager could not distinguish between spending on defence and the total of long-term investment which is called "aid", then I would not trust him with my overdraft. This is manifestly a complete and absolute misunderstanding of what we are trying to achieve, and in fact what we are achieving in the wider world of development.

As the noble Lord, Lord Walston, has pointed out, what we are talking about to-day is a neat, tidy, reassuring balance sheet which demonstrates what one can do under strict and enlightened business management, and the results that can be achieved. This is extremely encouraging, and I hope, as does Lord Walston, that the small Bill we are discussing to-day, and indeed the small amount we are talking about to-day, will eventually become something much bigger: in fact overseas resources development on a significant scale such as we have not yet achieved.

The problem is first, how we are in fact to produce this two-way passage, the sense that what we are giving now will eventually bring back rich rewards, but, more importantly, that if we do not do it there will not be anything there: we shall not have the resources to maintain our own standard of life; we shall not be able to maintain ourselves as an industrial nation. One of the things we always forget when we talk about developing countries as though they were our pensioners, our orphans or something like that—when people treat this as putting a penny in the blind man's tin—is what in fact it means in terms of the future. The Paley Report to President Eisenhower made it quite clear that before 1975 that great self-sufficient country the United States (as at school we were always told it was, from the crust of which you could extract anything for ever), will be dependent on the countries we call "underdeveloped" for over 50 per cent. of her industrial resources; that is to say, the raw materials of the American standard of living. This seems to me to be the only way of looking at this problem, in the terms of the kind of things which, for some benighted reason, people will not understand.

I am absolutely sure that my motivations are entirely set towards seeing that people in the world are better taken care of; but a pre-condition of that is the development of natural resources and, above all, the investment in human resources, making it possible for people to fulfil their hopes and expectations and the hopes and expectations which we must have if we are quite selfishly to maintain our own standard of life. I find it appalling that one can go around, as we still do, and as the noble Earl, Lord Bessborough, has stressed, finding people who do not comprehend that this is not only putting a penny in the blind man's tin. While we can demonstrate clearly with C.D.C.—a tidy business management—we must also be able to see that the total investment, the continuing investment, the great expanded investment that we must have abroad is in fact going to pay off, not in terms that anyone without our human sympathy can understand, but in terms of the ultimate and better interests of this country.

I remember that last year, when my right honourable friend the Minister for Overseas Development was announcing the increased contribution in respect of UNICEF from £400,000 a year to £500,000, everybody cheered. My right honourable friend, quite properly, as an honest man, said in effect, "Do not cheer too much, it is not as big as that; because what we are in fact doing by increasing the amount to £500,000 is to bring into this country from UNICEF over £1 million of trade a year". By apparently giving alms we are being big-hearted, but we are also doing a good bit of business, thank you very much.

The point I want to make is this. While we are gratified to see clearly in C.D.C. what we can do with a tidy, or what the noble Lord, Lord Strathclyde, would have called an "easy-oasy", operation, do not let us ever lose sight of the fact that what we are doing in a much wider and bigger way—and we must do it on a much wider and a much bigger way—will produce benefits of which we shall be beneficiaries.

5.10 p.m.

LORD BALFOUR OF INCHRYE

My Lords, I do not in any way oppose this Bill, and I support fully all that has been said of the admirable work of C.D.C. I would not dare to comment upon the interesting review of the need for world overseas aid which the noble Lord, Lord Ritchie-Calder, has just given to your Lordships, but this Bill is important constitutionally and from a Parliamentary point of view I think is questionable in one aspect. For the first time ever, moneys which finally arc provided by the taxpayer for the C.D.C. can be spent anywhere and everywhere in the world, subject not to prior Parliamentary approval, but only to the Minister, at his discretion, giving approval to the C.D.C.

Three times in her speech the noble Baroness made the positive assertion that the Minister would have to approve. If the noble Baroness reads the Bill, she will see that it says, "The Minister may give directions…" In fact, it is entirely at the discretion of the Minister whether or not he requires the Corporation to obtain his approval, and I think that perhaps the noble Baroness, when she replies, should clarify that particular position because there is a contradiction between what the noble Baroness told your Lordships and what appears in the Explanatory Memorandum of the Bill.

At present the activities of the C.D.C. are limited to the areas defined in the third paragraph of the Explanatory Memorandum. As the Memorandum says: The new extension will enable its resources to be deployed more quickly. To me that is Civil Service jargon for saying that more money can be spent more quickly, and anywhere in the world. I do not object to that; but there is nothing in the Bill that says Parliament should have knowledge if the Minister approves the policy of the C.D.C.'s extending beyond its particular areas as at present defined. There is nothing to say that the Minister has to agree if the C.D.C. proposes, let us say, to build hostels in northern China, or to install central heating in Alaska. I grant that no Minister would agree to such proposals, and I am quite sure that no good, well-run C.D.C. would ever propose such a thing; but in these days we sometimes doubt the sanity, and we often doubt the wisdom, of those in authority, whoever they may be.

I hope that at a later stage the Government will agree to one of two courses. The first is that they should themselves introduce an Amendment to Clause 2 requiring the positive approval of the Minister to the extension to new territories beyond those at present authorised, and that he should inform Parliament of his approval of such extension. Alternatively, if the Government will not look favourably on that (I am a very trusting person. to all Governments) I should be satisfied if I could receive an assurance that in practice the Minister will do two things: first, always call for approval if there is going to be an extension beyond the existing limits; and, secondly, undertake to inform Parliament when he has given that approval. I repeat, I do not oppose the Bill, but in the interests of the supremacy of the Legislature over the Executive I ask that my suggestions be considered.

5.15 p.m.

BARONESS LLEWELYN-DAVIES OF HASTOE

My Lords, we have had an extremely interesting debate, and I have been very gratified at the welcome which the Bill has had from all parts of the House. I think that this kind of debate brings out the best of your Lordships' House, which has shown a great deal of understanding of the operations of the C.D.C. If I may take the points of the noble Earl, Lord Bessborough, first, I very much regret the delay in the printing of the Bill, but, as your Lordships know, that was due to circumstances beyond our actual control. We do indeed intend the C.D.C. aid to apply to countries in the early stages of development, as the noble Earl said. Turning to the question of India and Pakistan, I would say that it is true that the Estimates Committee recommended an extension to those countries; but, of course, that is a vast area, the sums of money in which we deal are very small, and as the noble Earl said, it would have to be a matter for commercial judgment. I think that for the present, or even the foreseeable future, there is little likelihood of the C.D.C. ranging as far as that.

As to keeping the name of the Commonwealth Development Corporation, think everybody would be loath to change the name. It carries with it a great deal of good will, it is known everywhere, and it is appropriate that we should keep it. Nevertheless, it is possible that, if it should be necessary, we could set up another organisation subsidiary to it, with a different kind of name, if that seemed appropriate. There is nothing in the Bill which would prevent my right honourable friend from doing that.

I should like to thank the noble Earl for his welcome to the Bill, and turn to the rather difficult accounting question which my noble friend Lord Walston also raised. It is really a question of the way we give our accounts to the Development Assistance Committee. The advances to the Corporation are counted gross against the aid programme; the same is true of all other aid lending. That is because the Budget of this country has to provide gross for both the advances to C.D.C. and other loans. But as my right honourable friend the Minister for Overseas Development made clear, he intends to make available both net and gross figures, because both are significant in their own particular way. The figures we claim as aid internationally are net of capital repayments, but not net of interest. I hope that explanation has managed to clear up some of the complications.

I am sorry that my noble friend Lord Walston has had to go, because I read in The Times that to-day is his birthday, and I think your Lordships would have liked me to give him your best wishes. I will just answer one interesting point he made, and that was about the different types of aid; what was hard and what was soft. I think it is right that we should understand that C.D.C. aid is not as hard as commercial aid, but it is not as soft as the other kind of aid which the Ministry of Overseas Development gives. It is in between. Although non-profit-making, it does have to pay, year taken beside another year. That is the difference I will bring my right honourable friend's attention to the noble Lord's recommendations about not being too cautious.

One or two noble Lords, while welcoming the extension of the areas of operation, made reference to Cameroon. This is a particularly good example, because Cameroon was a United Kingdom trusteeship territory. When it got its independence, part of that country joined the French Cameroon and therefore became for us a foreign country, although it was eminently suitable for the type of aid which C.D.C. gives, and indeed already had a certain amount of investment in it. Under the terms of this Bill we shall be able to raise the investment. So that is a particularly good illustration.

My noble friend Lord Ritchie-Calder made one of his characteristically global, practical, and compassionate speeches, and I was particularly glad that he referred to the remarks by the Governor of the Bank of England. Those remarks were in fact very ably dealt with, in a letter to The Times of May 27, by the Director of the Overseas Development Institute. I think it is very important that noble Lords realise that many benefits flow to this country as a result of the aid programme, particularly—and this is important—in the shape of increased exports, as indeed the noble Earl mentioned. Much of the aid programme money, of course, does not leave this country, because it is in the form of British goods, and much of it returns in a relatively short period. Unlike my noble friend Lord Ritchie-Calder, my bank manager does not allow me to have an overdraft, but if I had one I should rather agree with the view expressed by the noble Lord. I should say that it is the opinion of my right honourable friend that if there were no aid programme at all the United Kingdom's balance of trade would suffer losses through changes in other donors' aid, and through the inability of some developing, countries to pay debt service or to allow repatriation of capital and dividend. So I think it is a good thing that that point should have been raised in our debate to-day.

The noble Lord, Lord Balfour of Inchrye, raised some rather complicated points, and I think it might be better, if he wishes to raise them at Committee stage, if I dealt with them more fully then. I think we could give him the assurance for which he asked. I cannot of course commit myself in advance in regard to Amendments, but the points he raised were important and, for myself, I do not feel any anxiety about our being able to reassure him. If he will leave the matter like that for the moment, I shall be grateful.

May I repeat how very glad I am that the Bill has had such a welcome from all parts of the House? My noble friend Lord Blackett, who, I think, has not yet made his maiden speech in your Lordships' House, gave a very remarkable lecture, the Gandhi Memorial Lecture in Nairobi early last year. He pointed out that in a developing country capital is always in short supply and that the rate of growth in the economy of the country depends on how much capital is available and how well it is used. He went on to say something profoundly interesting and, I think, relevant. He said: It might be argued that main drainage, water supply and good housing may have done more for the health of people living to-day than all the wonderful achievements of modern curative medicine". My Lords, it is precisely those things with which the C.D.C. is concerned, and where its activities lie. Electricity in Dominica, fertilisers in Trinidad, land development in Malaya, development finance in Kenya, sugar production in Tanzania, water and electricity in Malawi—the list is endless: and noble Lords know it. For that reason I am very glad that they have given such welcome to the Bill to-day.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

House adjourned at twenty-four minutes past five o'clock.