Clause 4. — (Minor and Consequential Amendments.)

Colonial Development and Welfare Bill – in the House of Commons at 12:00 am on 25th March 1959.

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Photo of Mr James Callaghan Mr James Callaghan Member, Labour Party National Executive Committee 12:00 am, 25th March 1959

I beg to move, in page 4, line 40, to leave out "in force" and to insert "made".

Photo of Mr John Arbuthnot Mr John Arbuthnot , Dover

It will, perhaps, be for the convenience of the Committee if we discuss with this Amendment the next one on the Notice Paper to line 40, leave out from "section" to "shall" in line 41 and the next six Amendments to this Clause on page 1529 of the Notice Paper.

Photo of Mr James Callaghan Mr James Callaghan Member, Labour Party National Executive Committee

Yes, Mr. Arbuthnot, I think that that would be for the benefit of the Committee, at this time of night, as well as of yourself.

The purpose of the Government's proposal is that a scheme in a Colonial Territory shall cease to have effect at the moment the territory becomes independent, subject to certain minor amendments that payments which were due under the scheme, and incurred before the territory became independent, shall still be met. This seems to us to be unsatisfactory and it also seems to reflect a change of policy. In the 1950 Act the Labour Government removed this stipulation. I ask the Under-Secretary of State for Commonwealth Relations to tell us why he proposes to put it back again.

The 1950 Act repealed a Section in the previous Act confining benefits to territories not possessing responsible self-government, thereby removing a limitation which, it was said, might prevent in the future the giving of help to certain territories which had received assistance in the past. So that the territories should not be excluded from assistance because they possessed responsible government, the Secretary of State for the Colonies now decides whether any particular dependency should be regarded as eligible for colonial development and welfare assistance.

The position, then, is as follows. In 1940, the Colonial Secretary had no discretion in this matter. He was told that as soon as a territory became independent, it had to be excluded from the benefits. In 1950, the then Labour Government took power to give the Colonial Secretary this discretion, which has re- mained until this evening, when the present Government wish, apparently, to return to the original 1940 position and remove any discretion from the right hon. Gentleman.

This seems strange. I would ask the Under-Secretary of State for Commonwealth Relations on the basis of what experience over the last nine years he justifies this alteration which seems to act in an arbitrary and unfair manner. Think what the position will be. In some territories there may be a school being built out of colonial development and welfare funds. As I read the Bill, not all of the money in respect of the school will be paid out. It will give the Colonial Secretary the power to pay out money only in respect of the part that has been built. In other words, we shall not leave the newly emergent territories in debt.

On the other hand, the Bill takes away the Minister's power to make a payment for the half of the school not completed. If the school is to cost £10,000 we can pay the first £5,000 for the part of the school that is built and not pay the other £5,000. I think that interpretation is right, but it seems a rather miserly way in which to part from our Colonial Territories. The Minister's discretion should be retained.

Anyone in the Committee can think of half a dozen projects, such as for agricultural research, productivity and fishery, and all of us who have been round the Colonies have seen such projects in process of completion or being started. Are we to part with the Colonies saying, "We have half done the job. You have now your independence and we shall pay for everything up to independence. It is a matter for discretion whether we pay for anything afterwards." That is an attitude of which we should not be too proud.

I suppose that the Under-Secretary of State will say, "We can bear that cost on the Commonwealth Vote." By the hon. Gentleman's nod of the head I see that I have anticipated his line of defence. I think that has been done in the case of Malaya. There was a transfer in the case of Ghana, which was treated rather less generously than Malaya was treated. Why should we do it in this cumbersome way? Why not leave the sanction in the Bill to continue with the necessary payment until the task to which we set our hands is completed? That would seem to be the simpler way. I should like to go further in the Amendment and to say that schemes which had been agreed under the Colonial Development and Welfare Acts but which have not been embarked upon should be completed. That would seem to be an act of reasonable generosity. Our Amendment would make it possible for the Government to do that and I would like to see the idea earned out in that way.

When plans have been laid and territories have embarked upon this proposition, they have got the plans set out and they ought to be able to carry them through. I do not suppose I would ever get the Government to go as far as that, but I shall not regard it as satisfactory if the Under-Secretary of State tells me that we can bear this later, if we want to do it, on the Commonwealth Relations Department Vote. This is the place where the idea originated and the place where the money was voted. This is the scheme which is proper to the occasion and the Government should think about it again.

The Government should not go back on the principle which was established in 1950. If we put our hands to a job we should finish it off and not stop half way through because the territory in question becomes independent. Let us part from our territories saying, "We have embarked upon these jobs and we shall finish them before we leave, although you have now become fully independent." I hope that at this late hour the Under-Secretary of State may be disposed to be generous.

Photo of Mr Arthur Blenkinsop Mr Arthur Blenkinsop , Newcastle upon Tyne East

I hope that the Under-Secretary of State will be able to say something to us on this subject. I noticed that his right hon. Friend the Secretary of State for the Colonies himself raised the matter in his Second Reading Speech, and said that we had to find other ways and means of giving help when a territory became independent. We want to know clearly what those ways are. It is of very real concern to all of us in the Committee that at the very moment when the needs are greatest, as we all know, there should be any doubt at all about the financial situation.

10.30 p.m.

We all have our own pictures of the problem. I think of the Federation of the West Indies which we hope will develop into an independent territory within the Commonwealth at a not very distant date. It would be appalling if there were to be any doubt about the continuation of assistance by schemes which have been developed under colonial development and welfare funds which have undoubtedly made very valuable contributions.

There are clear examples of the sort which my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) has mentioned of schemes in the West Indies—for example, road development schemes in an island like Dominica. Are we to say that because a certain section of the road has been completed we cannot give advance guarantees about the other sections which require to be completed? This is the sort of thing upon which the whole opening-up and development of the territory depends. It is not good enough to say, "We will think of that when we reach that situation." We cannot plan on that basis. We have got to have some foreknowledge, some guarantee in advance about the continuity of work of this sort. Therefore, it is vital that we should have some clear understanding.

Similarly one has heard heart-felt pleas from those who are responsible for development work in a territory like British Honduras. Not long ago there were developments there which were most urgent—the whole question of the development and building of the main city in Belize and the problem of attempting to restore some of the forests in that territory which were so scandalously cut down some years ago. Is there to be a break in this kind of valuable work upon which people depend?

Taking the case of British Honduras, it may be—we do not know—that that territory at some time in the future will wish to associate itself with the Federation of the West Indies. We cannot tell at the moment. Obviously the view of the inhabitants in that territory would be affected by the attitude that we adopt to the question of continuity of financial support. By that I do not mean that we should envisage indefinite support in the future, but such support as would ensure that they themselves in that territory can look forward to co-operating with us in building their own economy. It is that kind of approach about which we are so desperately concerned.

Then there are medical developments, such as hospital and other services which have in part been provided and are envisaged under colonial development and welfare funds, which make nonsense unless there is some guarantee of continuity. It will have been a waste to provide what we have already provided unless there is some reasonable understanding that this work is to continue. Therefore, we need to have something more than an expression of general good will. We want to know how, in fact, this kind of support and co-operation is to be continued.

Photo of Mr Cuthbert Alport Mr Cuthbert Alport , Colchester

I can assure the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) that the subsection would not affect the West Indies. Indeed, the change to which the hon. Member for Cardiff, South-East (Mr. Callaghan) referred was made in order to overcome the difficulty of definition, because it was held that the previous definition excluded from the operation of the Act territories like Malta, which had internal self-government. It was not the intention to extend the Act to independent Commonwealth countries which had moved from a dependent to an independent status.

I hope that I shall be able to give the assurance for which I have been asked, and which concerns hon. Members on both sides of the Committee, that there is no issue of principle at stake. All we are discussing is a difference of opinion about ways and means of providing the continuity to which hon. Members have referred.

The subsection with which the Amendment is concerned makes it possible for payments to be made after independence in respect of expenditure incurred in connection with C.D. and W. schemes before independence. We have always made it a principle—and with such experience as I have, I am sure that it is the right principle—that at the moment when independence is granted everything possible should be done to give full significance to the change taking place.

We have felt that where a scheme is partially completed at the point when independence is achieved, the method of providing the finance for ensuring the continuation of that scheme should not be in accordance with provisions of the colonial development and welfare scheme, which is applicable not to the period of independence but to the previous dependent status.

We had an interesting debate on the last Amendment and we had a most interesting contribution from the hon. Member for Farnworth (Mr. Thornton). Hon. Members will agree that that was an outstanding feature of the debate and has made the day we have spent here worth while in itself.

Hon. Members will appreciate that whatever we may feel about the rights and wrongs of an industrial problem in a dependent territory, and whatever action we here may decide to take in connection with it, or with a social problem, it would be greatly resented by an independent country, particularly in its first flush of independence, if it were felt that the financial provision being made by the United Kingdom, whether by loan or grant, was made under conditions which, as set out in the Bill, were applicable to a dependency. That would appear to be an interference with full independent status and independent policies towards social matters and labour problems of an independent Commonwealth country.

There is another point. Hon. Members will realise, I am sure, that there is strict accountability by the Colonial Government concerned to the Treasury here, through the Secretary of State for the Colonies, for the expenditure of moneys put out under C.D. and W. schemes.

In our view this strict accountability is not appropriate to the financial relationship between the United Kingdom and the newly independent Commonwealth country either after its independence has been of some standing or, perhaps more particularly, when it is extremely new. In those circumstances we have felt—and I am sure that this is right—that we should find other means of providing the continuity, for we accept in general principle that it is most desirable that continuity should be provided, in commitments which have been undertaken under C.D. and W.

The hon. Member for Cardiff, South-East raised this point on Second Reading. He asked my right hon. Friend this question: As to that subsection I wonder if the Colonial Secretary can tell us whether commitments entered into by those Governments before they attained their independence will be fulfilled by the Government? Or will they be cut off, too? The hon. Member was referring to Colonial Governments emerging from dependent status. My right hon. Friend the Colonial Secretary replied, No. They are certainly continued."—[OFFICIAL REPORT, 2nd March, 1959; Vol. 600, c. 62.] I therefore hope that, although the hon. Member was slightly critical of the Commonwealth Services Vote, he will realise that it provides the means whereby, as in the case of Malaya, the continuity which he seeks can be given to the schemes which were embarked on during a period of dependency and which must be carried to completion when the country has independent status.

Photo of Mr James Callaghan Mr James Callaghan Member, Labour Party National Executive Committee

The hon. Member has used two words, and I do not know whether in his mind there is any technical difference between them. On one occasion he said that commitments would be fulfilled and on another occasion he said that schemes would be fulfilled. I understand that commitments may be schemes which have not yet been embarked on. Is that the difference, and does he mean "commitments" in its fullest sense?

Photo of Mr Cuthbert Alport Mr Cuthbert Alport , Colchester

I mean commitments. There are three stages in the financing of colonial development and welfare. There is expenditure, when money is spent and the buildings are raised. There is the commitment, when the scheme is approved, an individual allocation of money has been made and it becomes a firm commitment. There is the previous phase, which is the general allocation. I used the word "commitments", and the hon. Member used that word in his question, to which I referred him.

In the case of Malaya, through the Commonwealth Services Vote, in addition to a grant of £308,000 to the University of Malaya we made a grant of about £4 million for general development purposes in which we caught up all the outstanding commitments which had preceded the grant of independence to Malaya. In the case of Ghana, which was in a somewhat different position, we made a grant of £350,000 to the Kumasi College of Technology, which provides a great monument in Ghana to the work of colonial development and welfare.

There are therefore alternative means of meeting the point which hon. Members opposite have raised and of providing continuity after independence has been achieved. I submit to the Committee that these means are much better attuned to the psychology of independent Commonwealth countries, particularly in the immediately post-independence period. They give greater freedom to these countries in the expenditure of the fund and, a point which I regard as most important, they do not give the impression that we are trying by means of economic aid I o exercise a veiled influence over and to interfere in a secretive way in their independent policies.

That is the particular argument and I hope hon. Members opposite will take it this way—that we are just as determined to ensure that the work which has started in these independent territories under colonial development and welfare schemes is not wasted but carried through to the fruitful end which was originally intended.

10.45 p.m.

One other argument I put to the hon. Member in the hope that he will feel he need not press this group of Amendments, is that if he is going to include a number of schemes and sources of expenditure in this Bill which can be met outside the Bill, all that will happen will be that the amount of money available for Colonial Territories in the strict sense will be by so much reduced. I have shown that there are other means of meeting the points he had in mind. I agree with something he said earlier, that the needs of some Colonial Territories are very great indeed. I do not believe it right to try to squeeze the independent territories into this Bill but that the money which will be allocated as a result of the Bill should be available for the dependent territories and available to assist this Parliament and this country in carrying out the very special responsibility we owe them.

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn

I am sorry to detain the Committee, but I still am not clear on this point and I am referring at this stage not to the wider proposal in our series of Amendments, but to the very narrow point of the stage at which aid given to a Colonial Territory that becomes independent is cut off.

In his speech, the Under-Secretary used a phrase which, I think, is significant and which contradicts an earlier impression he gave. He said that under this Clause commitments would be met after independence and—I think I am quoting his words—in respect of expenditure actually incurred. That is taking the word "commitment" in a very narrow sense. That is, I fear, the sense in which the Government mean it; indeed, I think that that is the sense in which the words in the Measure must be interpreted.

As the Under-Secretary pointed out, on Second Reading, in reply to my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) on this point about commitments, the Colonial Secretary said of the commitments: They are certainly continued but he went on to say: The way in which we are approaching that was explained in some detail at the time of the Ghana Bill."—[OFFICIAL REPORT. 2nd March, 1959; Vol. 601, c. 62.] The payments made after independence under Section 3 (2) of the Ghana Independence Act were very much payments which were adjustments on audit. They were very marginal adjustments and not a settlement of the payments of outstanding allocations which had not yet been taken up. I think that that is the difference between us even on this narrower point to which I am now referring.

If we are to get continuity there must be, as it were, a twilight period between colonial status and independent status. There must be an overlap period in which plans made while the Colonial Territory was still drawing this kind of aid are coming to final fruition. Our point, very strongly, is that unless we allow in the Bill for the completion, after independence, of schemes that have been planned and for which allocations have been made, there will be a sudden break that will be financially inconvenient to the territory. Worse still, all those countries approaching the point of independence will be operating their planning schemes in uncertainty.

The Under-Secretary said, "You need not worry. After all, we treated Malaya quite generously." Indeed, one of the points made by my hon. Friend was that Malaya was treated better than Ghana, but as Ghana has been quoted by the Under-Secretary we have to presume that it will be the model for the future. When independence came, Ghana had outstanding allocations made under the 1945 Act—she had not had any allocations under the 1955 Act. The shadow of independence was already over her, and that may be one of the reasons that no further allocations were made.

At the time of the Ghana Independence Bill it was thought that the outstanding allocations might amount to as much as £350,000 but, in fact, when the time came, the amount was about £100,000. The Under-Secretary has said, "It was all right. We at once stepped in with some other form of provision. Provision was made in the Commonwealth Services Vote for the completion of the Kumasi College of Technology." It is true that the allocation was made from the Commonwealth Services Vote but, of course, even if Ghana had not become independent the money for the completion of the college would have come from the colonial development and welfare central fund for colleges and not from the territorial allocation for Ghana.

It is because there is this kind of dubiety that we on this side are genuinely unhappy about the Clause. I am not, at this late hour, making merely a debating point—I am far too tired for that—but I want the Government very carefully to consider the present words in the Clause … without prejudice to the making of payments in pursuance of the scheme after that time in respect of any period falling before that time,… The reference is not to any scheme, plan or other allocation, but to "period." That can only mean what the Clause in the Ghana Independence Bill meant—absolutely minute marginal adjustments on audit that might fall to be dealt with—

Photo of Mr Cuthbert Alport Mr Cuthbert Alport , Colchester

Perhaps, on this technical point, I can help both the hon. Lady and the Committee. The Clause gives the Government power under C.D. and W. to reimburse moneys expended prior to independence, but which become due after it. The reason for this provision is that a Colonial Territory expends money on a scheme and then claims it back from the Colonial Office and the United Kingdom Treasury when it is in a position to do so—presumably, when the receipts and accounts are available. That is done roughly four times a year—quarterly.

The result is that during a period of, I suppose, up to a year, or even longer, there may be further moneys being claimed from the United Kingdom in respect of expenditure that has previously taken place under C.D. and W. The hon. Lady is quite right to call this a narrow point. The Clause seeks to make it possible for these moneys to be paid out in respect of previous expenditure for which the accounts and demands come in afterwards.

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn

I am grateful to the hon. Member, because he has confirmed that I rightly interpreted his use of the word "commitment." As it stands at present it is only where expenditure has actually been incurred that the payments will be made. In other words, the colonial Government must have paid the money out. This is a very narrow interpretation of the word, and not the one that we were operating on. We say that it does not give sufficient margin of continuity, because it means that we will have a two-tier situation.

On the one hand, the territory will have a scheme on which expenditure has been incurred, in respect of which claims lie against us under the Commonwealth Development and Welfare Acts—and those claims will be met, otherwise we would be seriously letting down the territory in respect of expenditure which it had incurred in good faith—and, parallel with that, other schemes will have been planned for a considerable time ahead, which are only just coming to fruition.

What happens, apparently, is that at the moment of independence any claims under the Acts in respect of those schemes, however far advanced they may be, will fall, unless expenditure has been incurred. We say that that does not provide the necessary sort of continuity. We say that we must have this overlap between colonial and independent status, in which the colonial Government should be covered under the scheme to give it proper confidence to plan ahead.

Photo of Mr William Wells Mr William Wells , Walsall North

Is the Under-Secretary's argument that no territory incurs expenditure until the allocation has been made? If so, I can understand his argument, but if not, I do not understand it at all.

Photo of Mr Cuthbert Alport Mr Cuthbert Alport , Colchester

I hoped I had made it clear that the subsection deals with expenditure. Later in my remarks I turned to the question of commitments. The hon. Lady has said that unless we accept the Amendment the financial support from the United Kingdom for the commitments which may be partly carried out will fall, the commitment will cease to exist, and the financial support will disappear. She implies that a newly independent territory will become completely responsible for the further financing of any such projects. But I have been arguing that that is not what happens. It is not what happened in the case of Ghana, and certainly not what happened in Malaya.

What happened was that a more appropriate means of providing the finance was substituted for the finance available from colonial development and welfare funds—more appropriate for an independent as opposed to a dependent country. I was suggesting that the more appropriate method was through the Commonwealth Services Vote rather than under these funds, and under this Bill, because the Bill provides certain requirements which could be regarded by an independent Government as an interference in its policies, and has certain requirements for Treasury control and responsibility to the Secretary of State which are inappropriate to the financial relationships between Her Majesty's Government in the United Kingdom and Her Majesty's Government in Ghana, or the Government of Malaya.

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn

Under what legislation is that obligation laid upon us? Is it merely an ex gratia payment?

Photo of Mr Cuthbert Alport Mr Cuthbert Alport , Colchester

This is part of the financial arrangements which have been made in the case of previously dependent territories.

The hon. Member for Cardiff, South-East (Mr. Callaghan) asked my right hon. Friend to answer a question, and I drew the attention of the Committee to my right hon. Friend's answer. Indeed, in the case of Nigeria—I can give this assurance—any unexpended balance of moneys committed in schemes remaining at the time of the independence of, say, Nigeria next year will be catered for when it comes to deciding the financial arrangements which are appropriate to the new independent State of Nigeria.

I hope that hon. Members will agree that we should ensure that when we make these financial arrangements for an independent Commonwealth country, the relationships which they represent between the United Kingdom and the new country should be appropriate to independence and should not merely be, so to speak, the left-over from the colonial days.

Amendment negatived.

Clause ordered to stand part of the Bill.