§ Mr. Braineasked the Secretary of State for the Colonies the position regarding the Colonial Development Corporation's housing loans to the Governments of Kenya and Southern Rhodesia, and works contracts schemes elsewhere.
§ Mr. Lennox-BoydI have been advised that the Colonial Development Corporation's loans to the Governments of Kenya and Southern Rhodesia for housing schemes, the Federal and Colonial Building Society in Malaya and certain West African works contracts areultra vires as not being within the scope of the Corporation's powers as defined by the Overseas Resources Development Act, 1948. Though the Corporation takes the view that the Act does permit it to undertake these and similar projects, I am satisfied that the matter must be put beyond all doubt. The Government have therefore decided to introduce legislation in the current Session to do this and to validate these schemes, and are considering a suitable amendment to redefine the powers of the Corporation.
2. Meanwhile, no further advances can be made under the Act from public funds in respect of these projects and the Corporation has been requested to suspend negotiations on any new similar projects.
3. Such steps as may be necessary will be taken to avoid the Governments concerned having to delay essential housing development pending the enactment of the legislation.
4. While I regret the situation that has arisen, I must make it clear that the Corporation has proceeded with these projects in all good faith that they were entirely within the Corporation's competence.