I beg to move,
That this House congratulates the members and staff of the Colonial Development Corporation on their Report and Accounts for 1959; regrets that they are unable to expend their successful activities in ex-Colonial Territories which became independent; and calls upon Her Majesty's Government to introduce the necessary legislation to remove this artificial restriction.
The Motion is in three parts. The Government accept the first part. They, with us, are ready to join in congratulating the members and staff of the Colonial Development Corporation on its Report and Accounts. I think that the members and the staff of the Corporation should be encouraged to know that the House as a whole believes that the job which they did in 1959 as well as in earlier years was an excellent job. It is a success story, judged by any principle which anyone on either side cares to enunciate. The Corporation's financial record shows that its net revenue from trading and investment has increased in the period from 1955 to 1959 from £625,000 surplus to £2,273,000 surplus.
I hope not, but it is restricted.
The Government agree that this is a very successful record of activity. The balance of profit as shown by the Corporation's accounts has risen from £409,000 to £1,334,000. Here is an organisation, financed with public money, with a great deal of skill which is operated on a commercial basis and is making a great success of those operations. Clearly, all of us feel that it is doing a good job.
The Corporation is suffering from two difficulties. The first is that its activities will slow down because the capital which it requires for its operations is getting shorter. The second difficulty, or perhaps the second half of the first difficulty, is that the losses which it incurred in its early and rather troublesome years of operation are still hanging like a millstone round its neck. Sir Nutcombe Hume, the most distinguished chairman of this organisation, said in a public speech the other day that it was born with a lot of money and no experience. I think that the taxpayer certainly has paid for its acquisition of experience during the first few years. But, because the Government persisted, the Corporation eventually became a successful enterprise, and under Lord Reith, who made a tremendous difference, and, during the last two years, under the leadership of Sir Nutcombe Hume, it has pursued a most successful path.
What are we to do with the heavy losses which are hanging around the Corporation's neck? It is under an obligation to pay interest on its borrowed capital. It is also under an obligation to repay its borrowed capital, the early part of which has been lost. In addition, it is under an obligation to break even every year. These losses were of such a character that Lord Reith and his colleagues became convinced that they could not be borne; they were insupportable.
Accordingly, in April, 1959, the Government set up a committee to investigate what should be done. That committee, under the chairmanship of Lord Sinclair, with a very distinguished accountant among its members, reported in three months. It reported on a scheme of capital reorganisation which would have put this body on a sound financial basis and would have enabled it to pursue the successful activities that it has been following for some years without this crippling load of debt hanging round its neck. It is a financial reorganisation not unknown in a great many other companies which have had an evil period. The textile industry had a great many such operations with which it had to contend in the 'thirties.
The Government received the Report in July, 1959, within three months of setting up the committee. The first question that I want to ask the Colonial Secretary is: why has he done nothing about it? The Government have had the Report for a whole year. If the committee could consider the matter and make a report within three months, surely it is not asking too much of the Colonial Secretary, in view of all the resources at the disposal of his Department, to reach a conclusion on it in twelve months. Why has he not done so? That is the first question.
The Corporation has said that it accepts the recommendations of the committee, whether they be burdensome or would relieve them of liability. There is nothing between the Government and the Corporation which need prevent the Government from taking action. I know that the Colonial Secretary has been very busy. He was new to the job after the General Election. He had many things on his plate, But there is no reason why he should have looked at this Report. He has other Ministers in his office. The Minister of State, Lord Perth, has been very concerned with this matter, if I read a recent lecture aright. He has very considerable financial acumen. He came from the City of London. Has not he been able to make up his mind in twelve months and make a recommendation to the Colonial Secretary?
Although I am in no mood to make, and do not wish to make, a party speech, it seem to me that the Colonial Office is convicted either of sloth or indifference in this matter.
I ask the Colonial Secretary now: may we have an undertaking that the Government will introduce legislation on this matter next Session so that the Colonial Development Corporation can be relieved of this difficulty which, as long as it hangs around its neck, will make it extremely difficult for its future operation? That is the first complaint.
The second is this. By this decision of the Government, as imported into a Statute and, therefore, if one likes to say so, by decision of the House of Commons, although not by my own personal consent nor that of my hon. Friends, the Corporation is, in the words of the second part of our Motion,
…unable to expand their successful activities in ex-Colonial Territories which become independent…
We have never been told convincingly why this should be so. We have raised it on many occasions. This is, as I see it, a House of Commons matter, because
this issue has not been raised solely by the Opposition. It has been raised by hon. Members opposite and by noble lords in another place who support the Government. It has been a combined attack by the Legislature upon the Executive and, so far, the Legislature has been easily worsted every time, but only in terms of votes and not logical arguments.
The Government had to call in nearly all the members of the Government to do this. I have made a list of the members of the Government who have tried to convince the House of Commons and the House of Lords why the Corporation should not have this right. We have had the Secretary of State for Commonwealth Relations, the Lord Chancellor, the Minister of State for Commonwealth Relations, the right hon. Member for Mid-Bedfordshire (Mr. Lennox-Boyd), the Minister of State for Foreign Affairs, the Economic Secretary to the Treasury, the Minister of State, Board of Trade, the Minister of State for the Colonies, and, last but by no means least, the Colonial Secretary himself.
Yes. Who would dream of putting in the Minister of Works?
All of them have been put up to tell us why the Colonial Development Corporation should not have this right. They have failed to satisfy the House. This issue has been raised on sixteen occasions in both Houses of Parliament. They have never convinced, if I may say so to the Colonial Secretary, who comes to this with a fresh mind, many of their own supporters and they have never convinced me.
I am trying to put this in a House of Commons manner and not particularly in a party manner. What is the present position? The Colonial Development Corporation is, at present, prevented from operating in Ghana and Malaya, and next year it will be prevented from operating in Sierra Leone and, when Nigeria becomes independent on 1st November, it will be prevented from operating there. To make doubly sure that the West Indies should labour under no misapprehension about the cost of independence, when the Colonial Secretary went there he made a speech in which he gave them a birthday present by saying, "When we launch you on the world, I want you to understand that in no circumstances can the Colonial Development Corporation operate here."
This reads rather poorly when we contrast it with the fine words of the Prime Minister's communiqué which was issued after the close of the Commonwealth Prime Ministers' Conference. They noted that the economic expansion which had taken place since their last meeting had been greater in the industrial countries of the Commonwealth than in the primary producing countries. They recognised the urgent need to maintain and, where possible, to increase the flow of economic assistance to the less-developed countries. They welcomed the decision to establish an international development association. They expressed concern about the division of Europe and they agreed that consideration should be given to the possibility of co-operative action among the members of the Commonwealth to assist the economic development of those countries in Africa which have recently attained, or are approaching, independence.
I ask the House: how do the Government match up that communiqué with their present policy on the Colonial Development Corporation? What reasons have been advanced? Ministers have told us that they rely upon private enterprise. This was the view of the right hon. Member for Mid-Bedfordshire. He stated coldly and nakedly that Government responsibility ended with independence. It was up to these territories to build up their credit in the City of London.
The present Colonial Secretary has told us that these arrangements can be made only on a Government-to-Government basis. The Secretary of State for Commonwealth Relations has told us that they rely on the Commonwealth Development Finance Corporation. He told us that nearly four years ago. Any hon. Member who has followed this matter knows that the Commonwealth Development Finance Corporation has singularly failed to live up to its expectations. I am not blaming it. I state it as a fact that it has made no noticeable impact at all in the Commonwealth by its operations. The Colonial Secretary cannot deny that.
Those are basically the arguments which have been used, except that the Minister of State treated us to the argument that the Corporation was intended for dependent territories. I can only reply, so what? There are lots of things which originally were intended for something, but which have grown out of their original intention and have been adapted to something else. It is no argument for the Minister of State to say that it was originally intended for something else. The question is whether there is a need for it at present.
The Government know, as I know, that the commodity in shortest supply in the under-developed territories is skill, enthusiasm and knowledge of management. Everywhere one looks throughout the dependent territories this is what is most needed. I challenge the Colonial Secretary to produce any other organisation in the world which has the skill, enthusiasm and teams of people based throughout the world capable of carrying out operations like this. Is there one anywhere on either side of the Iron Curtain? I do not know of one. The Corporation has divided its activities into six regions, with regional controllers in each of them. It has a wonderful team. All of us who have met these young men feel that many of them are imbued with a real sense of mission and purpose and that they are carrying out an enterprise and undertaking that the whole House rejoices in, welcomes and would like to see extended.
The Colonial Secretary comes to this matter afresh. I give him the doubtful privilege of believing that he had not thought about the matter until he had the papers placed in front of him just now. But, knowing his intelligence and his approach to these problems, I cannot believe that he will be satisfied with the stuffy nonsense which has been put to the House of Commons before on this issue.
Look at the attitude towards the Common Market. For good or for ill—I am not adjudicating on it now—this country is taking certain action in relation to the Common Market which may well prejudice Ghana, Nigeria, the Cameroons, and these other territories. We are not in the Common Market. We all know what proportion of Ghana's cocoa exports goes to the Common Market countries and how important the Common Market countries are to Ghana's exports. The export of bananas is extremely important to the economy of the Cameroons. Our actions in relation to the Common Market may well prejudice these emergent territories in their trade with the Common Market countries.
I am not asking for charity. I do not think that the House as a whole is asking for charity in this matter. What we are saying is, why cut off the nose of the Colonial Development Corporation at this time? Let the Corporation carry on. It is not excluded from the territories anywhere. The Corporation is able to go on managing those enterprises which exist in the territories. It is able to provide technical skill in respect of any new enterprise that the Government of a territory may decide to set up.
For some obscure reason, however, although the Corporation can do both those things, it is not allowed to put in any finance. The view of the Colonial Development Corporation is that it is not wholly useful merely to be able to put in skilled teams if it is not possible to have a financial stake. I ask the businessmen on the benches opposite, who know about these things, whether that sounds a reasonable argument. To me, it sounds reasonable. If one has a financial stake in something, one is much more likely to provide the skilled management that is necessary on a basis of responsibility.
Will private enterprise fill the gap? We have it on the words of Sir Nutcombe Hume that it will not. Sir Nutcombe Hume is not a pillar of the Socialist Party. He is a distinguished financier in the City of London who manages a very large trust. What is his conclusion? Speaking with his C.D.C. hat off, he said in a broadcast the other day:
…it is our job to take a risk which private capital is not nowadays prepared to take. That arises from two reasons—the projects in themselves may be more speculative than private enterprise at any time would have undertaken. But private enterprise capital…is shy…when it is a question of being deployed in remote areas",
because of the political risks. That is Sir Nutcombe Hume's view. Do the Government differ from it? If so, they are setting themselves up against some-
body with quite as much experience as any civil servant in the Treasury about these matters and whose considered view is as I have stated it.
The Government must do better than they have done before if they are to satisfy the House tonight on this issue. I want to put forward four short, swift recommendations. First, I ask the Government to take their thumbs out and reform the financial structure of the Corporation. There has been plenty of time to do it. It could be started straight away. Secondly, merge the Colonial Development Corporation and the Commonwealth Development Finance Corporation. There seems to be no reason for these two enterprises. I am repeating a view expressed by Sir Nutcombe Hume, which I accept. It seems to me to be sensible. One of these Corporations is large and experienced, the other is small and has not done anything that has made a noticeable impact.
Thirdly, change the title of the Colonial Development Corporation. I well understand that even in Colonial Territories which are still dependent, it is slightly irksome to have the title "Colonial Development". It sounds as if we still want to develop these places as our colonies. Fourthly, amend the Charter to enable the C.D.C., with its changed name, to operate wherever the investment opportunities arise and wherever the Corporation can itself undertake the work that was laid down for it in the original Statute. That seems to me to be a basis of common sense.
I cannot believe that there can be any difference in the House on this matter. I invite hon. Members opposite to consider our Motion. We are not censuring the Government—although I would like to have done so. Having congratulated the members and staff of the 'Colonial Development Corporation, our 'Motion
regrets that they are unable to expand their successful activities
and we call upon Her Majesty's Government
to introduce the necessary legislation to remove this artificial restriction.
No hon. Member opposite, if he votes for that, need fear that he is likely to bring down the Government. It is not a Motion of censure, nor is it a Motion
of confidence. After sixteen abortive efforts to convince the Government, however, it is time that the House of Commons asserted itself on an issue upon which there is considerable all-party agreement.
I beg to move, to leave out from "1959" to the end of the Question and to add instead thereof:
and looks forward to future successes by the Corporation in assisting the economic development of overseas dependent territories.
As the hon. Member for Cardiff, South-East (Mr. Callaghan) fairly said, the first part of the Opposition's Motion is common ground between us. I am delighted to add my congratulations to the members and to the staff of the Colonial Development Corporation, not simply on their Report and Accounts for 1959, but on all the work they have done. They have very distinguished membership indeed. In particular, one would like to pay tribute to Sir Nutcombe Hume far the work which he has done and to say how glad one is that he is now joined as deputy-chairman by Lord Howick, better known to us as Sir Evelyn Baring, who will bring to the Corporation an unequalled knowledge of some of these problems. My only reason for not spending more time on this aspect is that we have a very short debate. Probably quite a number of hon. Members will wish to speak and there is no point in emphasising the matters on which we are entirely at one. The first part of the Motion is acceptable to the whole House.
There are two points that concern the future of the Colonial Development Corporation, although the Opposition Motion concerns itself with the second. The first is whether the C.D.C. can operate at all with its present financial structure. It was to examine this that the Sinclair Committee was set up. The second point is the question of what should be the area over which the C.D.C. should operate.
I am glad that the hon. Member for Cardiff, South-East spent some time on the first of those questions, because, clearly, unless the first is satisfactory the second becomes almost academic. I gladly respond to the hon. Member's suggestion that before dealing with the point enshrined in the Motion I should say something about the Sinclair Report and the Government's attitude towards it. I am prepared to plead guilty, if necessary, to taking a considerable time about this matter, but it is of great importance. I have been giving very close study to the Sinclair Report and to the future of the Colonial Development Corporation.
As the House knows, the Corporation estimates that all but £15 million of its limit of £130 million is already committed. Therefore, on the basis of those figures, within the terms of the Act the Corporation would have access to a further £15 million of Exchequer money for new commitments and also, with my agreement and the consent of the Treasury, would be able to borrow up to £20 million from other sources. I wish to make it absolutely clear that the Government value very much the work of the C.D.C. and we wish to see it go on. The question, therefore, is how finance can best be provided to enable it to be continued.
In my view there are two lines which we should follow. First, we should encourage the C.D.C. to cause its capital to revolve. With its loan projects, obviously that will happen automatically. In the field of equity-type investment, however, I believe that when the C.D.C. has brought a project to a successful state of development it should, in appropriate cases, dispose of the scheme and so make it possible to free funds to finance new development.
Secondly, we must see what we can do to enable the Corporation to do something which it has never been able to do before, and that is to borrow from private sources the £20 million which the Act authorises it to borrow with my agreement and with Treasury consent. As the hon. Member said, we set up an extremely distinguished committee of Lord Sinclair of Cleeve, Sir Archibald Forbes and Sir Harold Howitt to examine this and allied matters. Her Majesty's Government accept, with the Sinclair Committee, that there will need to be some alteration to the capital structure of the C.D.C., although it does not follow from that that in all and precise detail I would wish to follow each and every recommendation of the Sinclair Committee.
We must also study very closely the ranking of these loans. I am sure that even when the capital structure is altered it will be necessary for Her Majesty's Government to consider on each occasion the kind of security which the C.D.C. can offer to potential private lenders. If these two lines of policy are followed, and we intend that they should be, it is my view that it will not be necessary to raise once more the limit of advances that come from the Exchequer.
There is only one other general point that I wish to make on the financial structure before I turn more closely to consideration of the Motion. It is on the kind of use to which the Corporation should put its remaining capital and any other funds which may accrue to it as its capital revolves. We know that some time ago there was a feeling in the House that the Corporation should concentrate to a large extent on direct development projects of its own and that it should be pretty strictly limited in the proportion of its funds that it devoted to what we can call finance house business. But I think that comes from a view and from a time when there were other sources from which Governments could borrow, and that it was for a different purpose that the C.D.C. had been established.
But now that it is much more difficult for colonial Governments to raise loans on the London market, I believe—and I would welcome the comments of the House on this matter—that finance house business is the field in which the Corporation can make the most valuable contribution. Frankly, it seems to me that this is a line of business, which, generally speaking, is more suitable for a Government-financed body than is the equity type business which the Corporation itself manages as well as finances.
In saying this I do not at all rule out future and further undertakings in equity business. Indeed, I wish to see them. There are projects in which the Corporation's participation can be helpful and it is appropriate that participation in whole or in part should take the form of equity share holding. But we know that it is in this type of business that a large proportion of the inevitable losses of the past have been incurred. It seems to me, therefore, that it would be wise, within the statutory limit of borrowings from the Exchequer which I have mentioned, that there should be a limit which should be invested in equity projects.
This, in broad terms, and in frank response to what the hon. Member for Cardiff, South-East has said, is how our minds work in these matters. We intend to publish a White Paper as soon as we can to show this in detail. It may be that we shall have a further opportunity to discuss the more directly financial aspects of the structure of the C.D.C. Naturally, of course, we wish to start discussions on these matters at once with the Corporation.
If the capital is revolving, it clearly depends on how swiftly it can revolve. As I understand that a great part of the capital is tied up in projects which will fructify very slowly, does this mean that, except for another £15 million, there will be very few fresh opportunities for investment in the Commonwealth? If that is so, the right hon. Gentleman is sounding the death knell of these schemes.
Indeed not. Apart from the £15 million uncommitted, there are the £20 million which the C.D.C. has never been able to touch. I hope that by re-examining the financial structure we shall enable the Corporation to use that. Furthermore, there are additional sums which become available as part of the capital revolves. It is my belief, which I wish to discuss in detail with the C.D.C., that that will fully meet the present and future position.
Some of the investments of the C.D.C. that could be sold are now in independent countries. Supposing that they were sold, would my right hon. Friend agree to the money being reinvested in that country or not?
No, I do not think that that could be done—and that comes in the second part of the Motion before us—with the exception that money can be invested even in independent countries to carry forward projects that have been already started.
The precise proposal made by the Opposition states in effect that the present restriction on the C.D.C. in independent Commonwealth countries is artificial and should be done away with. I have a great deal of sympathy with what lies behind the Motion. I do not regard this, as one so often is apt to do, as an issue in which all virtue is on one side. I do not regard it as an absolutely clear-cut, black and white, issue. I see considerable force in the argument of the hon. Member for Cardiff, South-East. The hon. Member knows me well enough to know that it is my conviction and nobody else's—and I have studied the matter carefully—when I say, however, that I believe that the arguments on the side opposite to his are the stronger.
I have come to this conclusion not because a formidable list of Ministers may have argued the case from this Despatch Box but simply as a matter of intellectual conviction from my own fairly considerable study of the matter. When a Commonwealth country becomes independant —and in this there has been a flood of instances to study recently, such as Cyprus, Nigeria, Sierra Leone and Somaliland—it does not mean that we stop being, interested in it or stop helping it. Far from needs diminishing on independence they often become more pressing, but the point is that the attainment of full sovereignty means that the method and the channels of United Kingdom assistance have to be changed if independence is to have its full meaning. The question is not whether but how and in what way it is best for us to help.
When a territory has achieved independence, with or without a struggle, to what do the minds of its leaders turn next? If they are wise, their minds turn to the development of their country, and often that development is very rapid indeed. But the programme of the development and the choice of priorities must be in the hands of the leaders of the newly independent country. No other system would be tolerated. It is not conceivable that priorities could be allocated either by the Secretary of State for the Colonies or by the C.D.C., and it would not be reasonable to allow outside bodies to decide how much, if any, money was to be invested in each project. It is a question from which pocket we offer the help given and in what way, and it is to that point that I am directing my argument.
I do not think that the right hon. Gentleman has met the argument at all. No one has suggested that the C.D.C. should decide priorities. The C.D.C. has a very simple veto. If it is asked to invest in something by a local Government with which it does not agree, it just does not invest. The choice is still with it to decide how the taxpayers' money is best to be invested.
Yes, of course, but then there are still priorities as between one project and another, and still the accounting system which the House rightly insists upon, and I simply do not believe, with respect, that that is compatible with ordinary independence. The hon. Member was arguing a very similar point, although exactly the other way round, in the debate which we had on the Commonwealth Prime Ministers' Conference on Monday, when the hon. Gentleman, commenting on the speech of my right hon. Friend the Minister of State, said this:
The psychology of independence was such that ex-colonial territories tended to be very touchy in their relationship with us if they detected the slightest hint of patronage or the feeling that the old colonial system was hanging over."—[OFFICIAL REPORT, 4th July, 1960; Vol. 626, c. 147.]
The hon. Member is a very adroit debater indeed, but he cannot attempt to say—and I am using his own words—that he was greatly influenced by that argument on Monday and deny from the same Dispatch Box on Thursday of the same week exactly the same argument. With great respect, that is exactly what he is doing. He said rather cheerfully that this is a matter which, in part, could be got over, as I understood his third point, by changing the name of the C.D.C. to some more general term. It could not. This rose, believe me, would not smell just as sweet if given any other name.
I am sorry to interrupt again, but this is the first coherent argument that we have had, and it is still not very good. What is the basic difference between the C.D.C. and the Commonwealth Development Finance Corporation as regards investments and the psychology of independence? They are both the same. Both have emerged from the same stable, in effect, and, as the chairman of the C.D.C. said to me quite recently, "I do not mind if you call it a Cats' Meat Development Corporation if that will meet people's susceptibilities."
I think it is more than a matter of title. I am glad that the hon. Gentleman thinks that my argument is coherent; I hope that he will find it convincing by the time that I have finished.
The Sinclair Report, in paragraphs 67 and 69, refers to the accounting procedure which there has to be inevitably, because of the expenditure of public money, and I have said that I do not believe that that would be acceptable to the independent countries.
Surely, there is a very simple answer to that argument? Is it not a fact that the C.D.C., or whatever it is called in future, can only operate in the independent territories at the invitation of those Governments? Therefore, the whole psychological point is settled by this. If the psychology of a newly independent territory is affronted by the offer of help, it will not ask for the help.
Indeed, that is a perfectly valid argument, but, with respect, it does not get over the main difficulty, which I shall come to in a short time, which is that, because resources are limited, if we are to do this we shall be taking it away from somewhere else, and this is the second main point of my argument upon which I wish to concentrate in a moment.
An important point which the hon. Gentleman mentioned is that the services provided by the C.D.C., the "know-how", should be available to independent territories, and I believe that it is here that the C.D.C. can and should make its contribution to the future of these territories. We do not need legislation for this because it is already provided. On the question of various sources of assistance, they are, as the House knows, set out in Command Paper 974, and the biggest single source is finance by way of Commonwealth assistance loans. There is also the Colombo Plan and the Commonwealth Development Finance Company, which the hon. Gentleman mentioned, and there are international sources, such as the International Bank and the United Nations agencies.
Again, if I may hark back for a moment to an echo of Monday's debate —and this directly deals with the point which the hon. Lady the Member for Blackburn (Mrs. Castle) has just mentioned—in considering the question of a
Colombo Plan for Africa, I said that this is the heart of the matter, and I went on:
If I may sum up our attitude towards it, it would be that we are very interested in the suggestion but that we hope that it will not be just one more organisation, because there are, perhaps, enough organizations for the distribution of capital. What is wanted is more capital to distribute."—[OFFICIAL REPORT, 4th July, 1960: Vol. 626. c. 162.]
With great respect, this is also the heart of this particular argument. Because we know perfectly well that our resources are limited, that the problems of the balance of payments have been and, so far as we can see, are going to be with us for some time, it follows that in this field—and this is a problem of Ministers and of the Government collectively as well—we must decide where our help is to go. I am sure that the House would agree that the main thrust here must be in the dependent territories. Nobody will argue against that, and I imagine that the Opposition will want to argue, as well, that our duty is to determine how these extra facilities should be given. I do not think that anybody will argue that the main thrust should not be in the dependent territories.
Indeed, in the Sinclair Report, in paragraph 7, it is stated that the territories of Malaya, Nigeria and Ghana, which are being or have been granted independence, would perhaps
—have offered more immediate scope for the Corporation's activities by reason of the stage of economic development which they had reached.
I do not doubt that. Of course, that is true, and it is even more true if we extend it to all the other independent Commonwealth countries like Australia, Canada and so on, where the opportunities for the C.D.C. would be greater still. Obviously, the more advanced economically a country is, the more likely it is that the operations of the C.D.C. can find fruitful and profitable outlets there. If the House once accepts the fact, and this, surely, one must do, that the amount of aid from whatever source it is given is limited in total, it follows that we must select priorities within our aims, and the object, surely, is to bring on the under-developed countries rather than to accelerate the rate of growth of those countries which already have fairly advanced economies. Although the territorial scope of the Corporation's
activities, as the Corporation itself points out and as the Sinclair Report also points out, is becoming and will continue to become narrower and narrower still, everybody knows that there is ample scope, and will be for many years, in the under-developed countries for the C.D.C., because the smaller and poorer territories are hungry for development, as, indeed, is the whole of the world.
Therefore, I argue, in effect, that it is right from all points of view that the help given to the independent countries should be on a Government-to-Government basis, with the additions which we have that the "know-how" is available on repayment, that schemes can be continued and that, indeed, additional money can be invested in these schemes. I believe that for many years ahead it is right that we should discharge our duty to the under-developed countries partly through this medium of the C.D.C., and, although, as I said to the hon. Member, I recognise that there is force in the case put forward by the Opposition, I believe that the way I suggest is the surest way of fulfilling our duty to the truly under-developed countries, and I do not think that we should be wise to alter the approach which has proved itself in the past.
As my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) reminded us, we have had many debates on this subject, and in every one which I can recall it has been a question of the back benches on both sides of the House against the Government Front Bench. I shall be very interested to know what the position will be today.
I recall only one of those debates, which demonstrated the situation very clearly. It took place on 30th November, 1956. No doubt as a result of the ganging-up of back benchers against the Government on that occasion, we had a few concessions in the subsequent legislation on Ghana. If we had not had that debate, we would not have had the slight extension allowing for continuation of projects and further investment in existing projects and the management arrangements. For what they were worth, those concessions were a result of that debate.
In that debate hon. Members on both sides of the House argued strongly that the Colonial Development Corporation was a good instrument and should be expanded and not contracted. The hon. Member for Blackpool, South (Sir R. Robinson), who is hardly a revolutionary, said that he would like to see an expansion in the work of C.D.C., and the hon. Member for Somerset, North (Mr. Leather) said that the Government should make C.D.C. their main instrument of policy. In discussing the matter, we all felt that there should be something more than just a change of name. I do not entirely disagree with the Colonial Secretary when he argues that merely to change the name from Colonial to Commonwealth Development Corporation would not suffice.
However, we made some imaginative and constructive suggestions, saying that if we believed in this type of organisation, there was much to be said for asking other Commonwealth countries to join it, not to multiply entities, but to use the instrument we had, an instrument of which we had experience and which had been used with success, and to develop it with the changing nature of the Commonwealth itself. It was said that, although the contributions of other Commonwealth countries in terms of men and money might be small, that in itself would be a fruitful advance in our Commonwealth organisation. That was the line which we hoped that the right hon. Gentleman would take today. However, the right hon. Gentleman has argued on a very narrow ground and I am sorry to feel that he has failed to see that there might have been a chance of a worth-while innovation had he been a little more forward-looking.
There were two steps in his main argument. One was on the financial side, based on the Sinclair Report. Frankly, he has taken us very little further on that. We still do not know in any detail whether he accepts or rejects the Sinclair Committee's proposals for financial reorganisation. We do not know what he proposes to do with the millstone, or albatross, whatever one calls it, of the abandoned schemes' money. We do not know whether he agrees with the A and B stock divisions and the different conditions attaching to them.
Above all, we do not know his attitude towards the future position of the C.D.C. when the seven-year period of waiver of interest comes to an end. As the Sinclair Report points out so clearly, although apparently in a fairly good position at the moment, from 1966 onwards the C.D.C. will be in a position of extreme difficulty. We are still in the dark about what the Government propose to do about the Report which they have had in their hands for the last twelve months.
On this matter all we have had from the right hon. Gentleman is two assertions. One was that it should not be necessary to raise the limit of advances now empowered, and the second was that he was in favour of a large proportion of finance house business. While not objecting to a proportion of finance house business which is a direct loan to Government or public corporations, most of my hon. Friends feel that there is a limit beyond which the C.D.C. should not be involved. At one time about 40 per cent, of its resources were in that type of investment, but there should be other sources in the world from which vast schemes like the Kariba Dam could be financed. About £15 million of the C.D.C.'s money is tied up in the Kariba Dam and similar projects.
In the C.D.C. we have an instrument which is very flexible and which can be more selective, and it should not necessarily be used for that type of investment beyond a certain point necessary for its own financial balance. I would be very sorry to feel that the Government's attitude was that it should be pushed to a proportion of 50 per cent. or 75 per cent. of such investment. I do not know what the right hon. Gentleman has in mind, but he obviously looks on such investment favourably. We must not carry that too far, because to get out of the equity type of investment too much would be a serious mistake.
I am not now disputing with the right hon. Gentleman on ideological grounds that the C.D.C. should or should not hold on to something which it has initiated and managed. In most cases it is wise for the C.D.C. to go into partnership with private enterprise, or the local government, or both. That is a very happy pattern. But it is quite clear that the object of the C.D.C. is to go into the kind of development where something more than ordinary financial considerations are at stake. In some cases, for instance, it could set a very good standard as an employer. I have in mind, for example, the work it is doing in North Borneo, where it is doing something thoroughly worth while and, incidentally, also profitable. I should be very sorry if that sort of thing were stopped and if the Government suggested that that kind of work was not to have first priority and was not regarded as an important sphere in which the C.D.C. had special advantages.
There are many matters of finance with which one would like to deal, but it might not be fruitful to do so now, beyond emphasising one other matter. As far back as 1952, the C.D.C. asked that special consideration should be given to a type of expenditure which it had found in its experience to be necessary but not commercially profitable. It asked—and the Sinclair Committee took this into consideration in its proposals—that it should have money available for two purposes.
One was for schemes in which some kind of special social provision was needed if the commercial scheme was to go on at all; in other words, where the local government was not able to provide money for housing, schools, and so on, for the workers needed on a plantation, for instance. It was thinking of the sort of case where the commercial enterprise could not go ahead at all in that place, although it was otherwise desirable, unless provision were made for social services. The Government may feel that that is not valid, but there are still territories where that consideration might be paramount.
The other object was investigation work and small experimental pilot schemes which could not be expected to be remunerative, but which were nevertheless desirable. I hope that in any financial arrangements both these needs will be taken into account.
The other great question is whether the C.D.C. should be allowed to operate in territories which have ceased to be dependent. I have mentioned already the Commonwealth aspect, which is very important. There are other considerations. What is the attitude of the members of the staff and their feeling about their prospects? There is no doubt that when, next October, the operations of the C.D.C. are cut down by 26 per cent. in area and 52 per cent. in population, this will have a constricting psychological effect on the staff.
It is not as though the Government are particularly generous in this matter when countries become independent. Nigeria does not become independent until 1st October, but for C.D.C. purposes Nigeria is already independent in the sense that the Corporation is not permitted to undertake any fresh work. The Government put the notional date as 1st January and, after some argument, changed it to April. The same thing happened with Ghana and Malaya. The Government fixed a notional date of independence some time before the constitutional date. One may say that a few months do not matter very much, but it is the ungenerous attitude and the rigidity of this which upsets one.
The Secretary of State may say that it does not really matter so much as the C.D.C. "know-how" is still available and it can be asked to send in staff as agents or managers. But, so far, not one single request has been made, I understand, for such services. The reason is, as my hon. Friend the Member for Cardiff, South-East said, that normally investment and management go together. A country like Pakistan, for instance, which is badly in need of development, wants capital and it knows that whoever puts up the capital is likely to want some say in the management.
Therefore, this idea that the Corporation can go in in a sort of disembodied state and do management but have no financial connection with the scheme, is unreal and cannot be used by the right hon. Gentleman as a valid argument. The real argument, I believe, is that the Government do not want to have any further financial commitment, that they do not want to have any further expansion of the C.D.C.
I take the right hon. Gentleman's point of a perhaps slightly quicker revolution of funds. It is a fair point, and it is true that if the financial rearrangement is satisfactory there may be no need for any increase in allocation, because there will be better opportunities for borrowing in the market. But those of us who have a conception of real Common- wealth development do not feel confident that we should not have an arrangement for continuing in some of these territories on a much freer basis than is available at present.
I shall not take up further time, because many other Members wish to speak. For the reasons I have given, and for others which could be adduced, many of us feel that the Government's attitude towards the C.D.C. ever since they came into office has been a negative one. They have hindered rather than helped. They have taken a narrow rather than a wide view of the possibilities of this organisation. They have consistently discouraged the skill, devotion and enthusiasm of the staff. We had hoped that the right hon. Gentleman, as a new Secretary of State, would have taken a more imaginative and more constructive approach in his speech.
This debate is to revolve round two points—the lack of decision by the Government on the Sinclair Report, and whether the Commonwealth Development Corporation should operate outside dependent territories. If the Opposition's Motion had been one of censure on the Government for their delay in dealing with the Sinclair Report, I would have been tempted to follow them into the Lobby. I shall come back to that point later.
As my right hon. Friend the Secretary of State said, the first part of the Motion applauds the staff of the Corporation, and as one who was at one time associated in a venture with the Corporation, I echo these words that have been said. I may add that the venture was profitable neither to the Corporation nor to myself. It was one of the millstones now hanging round the Corporation's neck. But I did at least learn to have great respect for the staff and for the organisation.
Many of us on these benches perhaps did, as the hon. Lady said, start with a slight prejudice against the Corporation, but have now learnt to admire it in the years that we have known it. The Corporation won its way through to public respect after a disastrous start. I would like to echo the words of appreciation that have been paid to Sir Nutcombe Hume for all that he has done and is doing for the Corporation, and also to Lord Reith for what he did.
My only complaint against Lord Reith is the appalling things that he did to the English language in his reports. I remember raising this once before in the House and complaining of the stark, staccato telegraphese in which he wrote. One could not read the reports, but had to chant them aloud to get sense out of them. If there is one thing to the credit of the present chairman it is that he has limbered up the English and the reports are almost readable. They are not exactly garrulous even now.
I come now to the question of whether the Corporation should operate outside dependent territories. I came to this with an open mind. The argument put forward by my right hon. Friend, which I accept, is a rather intellectual one and, if I approve of it for the time being, the day will come when we may have to change our ideas. For the time being, however, I think that the C.D.C. has quite enough to do in the existing dependent territories.
I came to this with an open mind, and yesterday I refreshed my memory by going back to the fountain source—the debate on the Overseas Resources Development Act in 1947, when the Corporation was set up. It is rather an interesting experience to read that debate now. It has an historical and almost archaeological flavour, because times have changed a great deal.
It is rather odd to read that the opening speech on the Second Reading was not, as one would assume, given by the Colonial Secretary, but by the Minister of Food. The Bill before the House was to set up not only the C.D.C., but also the Overseas Food Corporation. The Minister of Food, not unnaturally, devoted most of his speech to the Overseas Food Corporation, and the C.D.C., if anything, was rather an afterthought. He used this one sentence—and this is an argument which still applies very strongly. He was talking about the possibilities in Australia, and he added:
I need hardly say to the House that the one thing which would make the development of which I have spoken in Australia or Australian Territories quite impossible would be if the corporation was called the Colonial Development Corporation or was responsible to
the Colonial Office."—[OFFICIAL REPORT, 6th November, 1947; Vol. 443, c. 2025.]
We can change its name, but I do not think that any of us would want it to be responsible for the time being to anybody but the Colonial Office.
Because it has still an important job to do in the dependent territories. Until that task is finished I do not think that we should contemplate a change.
I think that the quotation that I have just given still applies, but for "Australia" we must read "Ghana". It is worth noting that in the first years of its operation the Corporation under the Labour Government did not operate in India or Pakistan, which were then becoming independent territories. Implicit in the whole of that debate was the principle that the Corporation should operate only in the dependent territories, but I believe that when the phase of bringing the dependent territories to economic viability is complete we may have to look at the situation again in terms of the Corporation's Charter.
I would emphasise that it has a great deal on its plate at present. As our other responsibilities dwindle we are left with more and more responsibility for these curious territories scattered all over the world. In most cases the full independence of the kind of territories of which I am thinking cannot be seriously envisaged for many years to come. It is to them that I want to see the Corporation's efforts increasingly directed, the aim being to make them viable, at least, if independence is out of reach for some time.
I was recently in the Caribbean, in company with the hon. Member for Dundee, East (Mr. G. M. Thomson). I was astonished at the progress that had been made in that area during the last five years, at the new confidence the people have, and at the immense economic changes which have occurred since 1955. When I first went to the West Indies, in 1953, I came back and talked to a very distinguished West Indian who was in London and is a very good friend of many of us. We both became a little gloomy, because he could not see how the West Indies would ever pull itself out of the slough of despondency in which it then was. I am astonished at what has happened in those few years. Even if the Federation is having a difficult time politically, progress in the economic sense has been very marked.
But after the Federation achieves its independence we shall still have some curious and anomalous residual responsibilities in the Caribbean area. I do not know how many hon. Members realise that after the Federation gains its independence, quite apart from the mainland territories of British Guiana and British Honduras this House will still be responsible for the Cayman Islands, the Turks and Cocos Islands and the British Virgin Islands, and how they will be administered from the Colonial Office I do not know. I visited two of those territories—British Honduras and the British Virgin Islands—this year, and they typify the kind of problems I have in mind. The British Virgin Islands, about which most people know very little except the old Parliamentary joke about their being a long way from the Isle of Man, are in a most astonishing position.
They form a small enclave in the middle of a United States dollar economy. We find American money in circulation there de facto. The currency is that of a foreign nation—so much so that I understand that the Queen's head on the stamps is about to be overprinted with United States values. Virtually the whole of the adult population works in the American Virgin Islands. Yet I feel that we must try to maintain a British interest in these islands, so that they can for a long time retain their British character and nationality. I am sorry to say that although there are possibilities there, and although American investment is coming to the islands, there is no C.D.C. investment there.
At the other extreme there is British Honduras, which is about the size of Wales. It is twice the size of Jamaica, and has a population of only 90,000. The land is absolutely crying out for settlement, in a world that is too full of refugees. Its people have at long last accepted the fact that they must build up their population to achieve any kind of a decent standard of living, and yet the land is still empty and crying out for pioneers to open up its riches. The C.D.C. has two small projects there—an admirably-run hotel and a flourishing citrus estate. But all the new development is being achieved with either American or Jamaican capital. Only a very small amount of British capital is going in at present.
I should like to see the C.D.C. taking the lead in opening up the country, if necessary on the lines of the old charter companies, such as the Royal Niger Company and the British South Africa Company, which did so much in Africa. That could be done in British Honduras This is the type of work for which the Corporation was invented, and for which its organisation is so suitable. For that reason alone I wish to see it continue in this work in the dependent territories and not go into the Commonwealth as well.
I now turn to the question of the Sinclair Report. Three men as distinguished as we could find anywhere in the business world—Lord Sinclair, Sir Archibald Forbes and Sir Harold Howitt—produced in three months a shrewd and sensible report with comprehensive proposals for the reform of the financial structure of the C.D.C. As all speakers so far have pointed out, it has taken the Government a year to make up their mind. I sympathise with the Corporation in every criticism that has been made in this respect.
The mild comment in the Report should have been far less restrained, because the Corporation must be relieved of the burden of its debts, for which neither the present direction nor the management is in any way responsible. Unless it can get rid of this burden, which is not a millstone or an albatross but rather a necklace round its neck, it will never be able to operate successfully. I accept the argument about it operating in the dependent territories for the time being, but we must keep an open mind about its future activities, and trust that we may have a far more definite statement about the reform of its financial structure.
I was interested to hear the hon. Member for Reigate (Sir John Vaughan-Morgan) say that if this Motion had been in the form of a censure Motion he might have supported it. That is a fascinating idea and I feel inclined to suggest to my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) that we might change the form of the Motion in order that the hon. Gentleman might support it.
If I thought that it would attract the support of the hon. Gentleman, I should be happy to move a manuscript Amendment. Perhaps he would give an undertaking to support it.
Like other hon. Members, I shall await the draft with pleasure and hope that the hon. Member will support it.
I wish to add my hearty congratulations to those already voiced to all those who work for the Colonial Development Corporation. They have a very difficult task. It is somewhat different from the task of a private enterprise organisation in the Colonies. After all, private enterprise has to be concerned with one thing—it is perfectly correct that it should—the profitability of the concern. The C.D.C. has also to consider profitability, but in addition it has to consider other things, especially the needs of those Colonies which are going through difficult times and in which private enterprise has found it unwise to invest. I refer in particular to the most obscure of the C.D.C. projects in Tristan da Cunha. I cannot imagine any private firm starting that development which, incidentally, has turned out to be profitable and successful. That is the kind of thing which the C.D.C. is eminently qualified to do, but I should not like to see its activities confined entirely to remote islands.
The Corporation has shown a wonderful example in the way it has dealt with the Lobatsi abattoir scheme and other undertakings started in the High Commission Territories. I understand that it has been able to set aside everything above, I think a 6 per cent. profit, to be returned to the smallholders who provide the cattle. That is a remarkable example which might well be followed by private firms. The whole of the Corporation's work in the High Commission Territories particularly the Usutu pulp works, has been a remarkable success. It has achieved something which was badly needed in the Territories and which private enterprise failed to provide in the past. I hope that its example will be followed by private enterprise.
The second task of the Corporation has been to set an example, again to private enterprise, in such matters as training schemes, especially in the Cameroons. This is referred to in its Report. It has set an example in other ways, such as having no colour bar. I know that the colour bar has been abolished in a large number of places but an example was set by the C.D.C.
I have one or two criticisms to make, and here I wish to refer in particular to the points made by the Colonial Secretary. The right hon. Gentleman said that we have to bring on the underdeveloped countries rather than those which are already developed, or words to that effect, and I agree. But let us consider these figures. In Rhodesia £20 million has been invested and in the Caribbean £13 million. I think I am right in saying that most of the latter was invested at a rather earlier period, and I should have thought that the rate of increase has diminished, whereas in Central Africa it is increasing rather than diminishing. We have been informed by the Government and by Sir Roy Welensky that there is plenty to attract capital in Central Africa and so I think it a pity that the C.D.C. should provide such a large proportion of its investment for Central Africa rather than the Caribbean. The Kariba loan for instance was a loan of £15 million. It is certainly important that that development, to which the hon. Member for Flint, East (Mrs. White) referred, should take place, but I think it might have been done by some other agency than the C.D.C.
That brings me to another of the points made by the Colonial Secretary. The first point was that, generally speaking, I gather, he would prefer the C.D.C. to became more and more of a finance house and less and less of an equity shareholder. I should take exactly the opposite view. I think it important that the C.D.C. should concern itself in the direct running of businesses of which it now has some experience. Certainly at first it did not have much to offer. Now it has a great deal more to offer in technical experience and financial experience which could be put to use instead of the C.D.C. simply lending money in great blocks, whether to Kariba or to Malayan electricity. If anyone wants to use it against my argument, I agree at once that the electricity loan was made during the time of the Labour Government, but there should not be too many of these large loans rather than equity shareholding.
I think, too, the C.D.C. should develop its profitable concerns. I am very disturbed by the suggestion of the Colonial Secretary that as soon as a concern becomes profitable it should be sold off and in that way new money should be provided for something else. It is discouraging to people running concerns to be told that if they are successful the concerns will be turned over to somebody else. They should be continued by the C.D.C. and the profits used if required for other enterprises. Obviously we need to have a great many new concerns in small outlying areas which cannot bring great profit. They can be balanced by the profitable concerns if they are kept on.
The speech of the Colonial Secretary was an exceedingly depressing one. It was depressing, not only to this House but—which is much more important—depressing for the people working on the C.D.C. to be told, as emerged from the speech, that they are a dying concern. I know the right hon. Gentleman did not use those words, but that was the impression he gave—that they were working for a dying concern whose prospects were getting less and less. The C.D.C. is only too clear about that in its own Report. It refers to Nigeria and says that it cannot proceed any further with certain schemes there because Nigeria is to be independent. Of Malaya it says that new schemes cannot be developed. Only the old schemes can be carried on.
Do the Government want to kill the Corporation? It looks as though they do, and they are going the best way about it. Instead of this kind of proposal, we need a bold, imaginative scheme. I should like the C.D.C. to be allowed to expand into other Commonwealth countries. I should like it to be given more capital. I should like to see in particular what my hon. Friend the Member for Flint, East referred to, some form of co-operation with other Commonwealth countries so that we might have a joint concern which would serve the whole Commonwealth.
That is a practical idea—far more practical than much of the talk that goes on at Prime Ministers' Conferences. It is a practical idea which would prove that we have something more we can give to the Commonwealth. Small countries could contribute a little and larger countries could contribute more. Together they could produce a big corporation which could do the kind of work which is now being done by the C.D.C. I hope that will be done, because we on this side of the House are proud of the Colonial Development Corporation. We are proud of its work, and we think it has performed a very fine task. We only hope that the Government are equally proud of it, but we fear that they are not.
When this matter was discussed in the House in January, 1958, I was a critic of the Colonial Development Corporation and particularly of its presentation of accounts. I said that the profit showed for 1956 was illusory, because no account had been taken of what I think is called the fructification interest. I said that if this interest had been taken into account during the whole period that the Corporation had been in operation and had been added to the special losses, the Corporation would have shown an accumulated loss of £16 million.
On perusing the accounts for 1959, I think that, on the surface, the criticism still remains, but it is muted, and perhaps it disappears altogether on considering two factors. The first is that over the last three years the Corporation has had a very successful record, and the second is that we have received the Sinclair Report on the Financial Structure of the Corporation. I do not want to go too far into the complicated matter of the Sinclair Report. I am probably not capable of doing so. But I do not regard with any enthusiasm the proposal to convert the special losses of the fructification interest, amounting to £17½ million, into a C stock which will be irredeemable and will not pay interest and which, indeed, will be dead stock. Frankly, I should prefer that we wrote off the losses of £17½ million, but I recognise the problem of the Sinclair Commission in this respect in that it could not do so under its terms of reference and within the Act under which the Corporation was established.
The accounts which we have before us are necessarily cryptic. It is not possible to obtain any real appreciation of the profitability of each project or venture, but it is clear that the Corporation has done immensely better in 1959 than in any other year, and I join with hon. Members in offering my congratulations to the staff and to the Board on the results which have been achieved.
Much has been said about broadening the basis of the Corporation. I held the view for some time that it would be wrong to broaden that basis to include independent Commonwealth countries. I subscribed to the view then expressed by other hon. Members that when a country becomes independent it must be deemed to have a viable economy, and that, in any case, there are enough Colonial Territories fully to engage the activities of the Colonial Development Corporation.
But things have changed very much in the last three years. We have seen the Colonial Empire, as it was once called, steadily shrinking. In conjunction with this, and as one of the reasons for it, we have seen the granting of independence to countries which are not economically viable. The criteria which used to be applied to the granting of independence to a Colony have had to be abandoned for various reasons. Pressures have been too great for us to maintain these criteria. We have, for example, Sierra Leone and, more particularly, Somaliland, which have achieved their independence in conditions which certainly do not hold out a prospect of a viable economy in the future without substantial aid from outside.
Another feature of the last three years, which has emerged since I last participated in a debate on this subject, is that there is now a universal acceptance of an obligation to help underdeveloped countries. That obligation is not confined to dependent territories, but also embraces independent territories, and for us it embraces, particularly, those independent territories which have recently emerged from colonial status. I think that that was clearly emphasised at the last Prime Ministers' Conference, as the hon. Member for Cardiff, South-East (Mr. Callaghan) said.
If we accept that obligation, embracing the under-developed countries in the independent Commonwealth, then surely it would be wise and logical to channel at least part of that aid through an organisation which, through twelve years of trial and error, has eventually emerged to a profitable basis of operation. That seems to me to be logical, although I enter a caveat and make some provisos. For example, I think that hon. Members would agree that it is essential that we should not permit a Commonwealth Development Corporation, as a new institution might be called, to invest anywhere it chooses within the independent Commonwealth.
My right hon. Friend said that there was a tendency for the Corporation to invest its money in the more highly developed countries of the Colonial Empire. If it had a free discretion, it might wish to invest its money in the highly developed countries of Canada and Australia. If there were a change in the basis of operations of the Corporation in order to embrace the Commonwealth, the operations could not be conducted at the sole unbridled discretion of the Corporation. There would have to be some direction from Her Majesty's Government.
I was very much impressed by what I saw during my visit to Sierra Leone two years ago. It is a country of 2¼ million inhabitants. It is in a very backward condition indeed in relation to other West African territories, such as Ghana and Nigeria. So far as I know, prior to independence the Corporation had never set foot inside that territory. Although it was obviously ripe for development and crying out for it, it was only when the question of independence for the territory arose that the Corporation sent representatives there. It has recently embarked on or participated in the building of a hotel in Freetown.
There is still great scope for the Corporation in the Colonies, but the less developed independent territories merit equal consideration. The activities of the Corporation in regard to the Colonies should be largely channelled through direct projects, although, as my right hon. Friend said, there is a case for finance house type of investment in the Colonies. That is not so in the independent territories. They now have access to the Commonwealth assistance loans, and it would be wrong, if the basis of the Corporation was changed, for it to indulge in that type of finance house business in the independent Commonwealth countries.
It cannot be said that there are not opportunities for direct projects. Hon. Members know that since Ghana achieved independence, three years ago, a large number of industries have been established there—soap making, breweries, and even an iron foundry and very many others which do not come to mind immediately. The Corporation did not invest to any great extent in the Gold Coast, as it was then, when it had the opportunity. It may have had many reasons for that. Perhaps it was reluctant at that time to indulge in direct projects because of its disastrous experience in the past. But it has emerged from that and is now sure of its ability to run direct projects at a profit. The fact that these industries have sprung up in the last three years in Ghana is an indication of the great possibilities in this field which remain in other Colonial Territories and also in the less developed independent territories.
I conclude my remarks by explaining the difficulty I feel. I think that I express the wishes of all hon. Members if I say that I want to see the financial structure of the Corporation changed. I should certainly like to see the losses written off, but if that is not possible under the terms of the Act, I should welcome the adoption of the recommendations of the Sinclair Committee. That, at least, would give the Corporation an opportunity of showing real profits in the future without the most discouraging and deadening reservations which it has had to make up to now.
I must conclude, to my great regret, by saying that if I had a choice of voting—I hope that the choice will not be put before me—on the Motion or on the Amendment, my sympathies would be strongly in favour of the Motion.
Following the intelligent and most useful speech just made by the hon. Member for Liverpool, Kirkdale (Mr. N. Pannell), it is quite apparent that there is great agreement on this problem on both sides of the House, except for the Colonial Secretary, who now appears to be a very lonely and isolated man, attacked from this side of the House and from the benches behind him.
Within three weeks this House will rise for the Summer Recess, and I have been wondering what sort of end-of-term report a headmaster would prepare. On mast subjects for which Her Majesty's Government are responsible, the comment would be, "Results not very satisfactory". On the development of the economy of the Commonwealth, the comment could well be, "Performance does not match promise."
My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) quoted the communiqué of the Commonwealth Prime Ministers, which The Times described in a headline as innocuous in its wording. We now know how innocuous its words were. Earlier than that, in 1958, we had the Report of the Commonwealth Trade and Economic Conference, presented to the House by the Chancellor of the Exchequer and by the Minister of State for Commonwealth Relations, in which we read:
The main burden in carrying forward economic development programmes is being shouldered by the under-developed countries themselves. In this task, however, they have to rely and will continue to have to rely on the help of other friendly countries and international institutions.
In an earlier part of the Report there appeared these words:
…we agreed that we must do all we can, even to the extent of some sacrifice, to assist in the solution of these vital problems.
What sacrifice are the Government making? We understand from the Colonial Secretary that the amount being provided is no more than £35 million, plus the amount which was already there and which will be revolving. It appears
that Mr. MacWonder's disguise is beginning to wear a little thin, and that he is becoming Mr. MacBluff. We could, perhaps, say that while, through the Prime Ministers' communiqué, we are shouting a lot of encouraging slogans to the driver, at the same time the mechanics are dismantling the engine. The tools to do the job of economic development within the Commonwealth are to be blunted.
The C.D.C. is a case in point, and I should like the House to hear the cri de Coeur from Uganda contained in the statement of the chairman of the Uganda Development Corporation at its eighth annual general meeting. The chairman said:
Although progress in some of the African underdeveloped areas is substantial it is nevertheless not easy to narrow the gap of living standards when compared with conditions in western countries; in fact, at times, that gap widens, particularly with reduced local spending power brought about by lower prices of primary produce.
Behind that statement, of course, is the fact that in the last few years the prices of primary products have gone down, and the prices of the manufactured goods that those countries have to import have gone up, so cancelling out the financial aid given. The chairman also said:
It seems also that high level declarations of imperative assistance to such areas are at times more wordy than material and additionally, overseas manufacturing industry, reaching out for exports, usurp our natural market at prices, if not distressed, certainly lower than their own domestic prices.
Behind these words is an appeal from Uganda, an appeal for new aid and increased aid in order that the wonderful job being done by the Uganda Development Corporation can be enlarged and extended.
It is apparent from the Colonial Secretary's speech that he is a very unhappy man. He made his speech looking over his shoulder all the time, and on that shoulder is the dead hand of the Treasury. So cold was that hand that we felt the temperature go down appreciably, even on this side of the Chamber. The right hon. Gentleman spoke about the lack of capital available for financial aid. I could not help thinking as he spoke of the Government's tremendous waste on such projects as Blue Streak and others where hundreds of millions have been wasted. The amount which has been made available to the Colonial Development Corporation is a paltry sum compared with the tremendous need not only in the colonial countries but in the newly independent countries and those soon to reach independence.
My hon. Friend the Member for Flint, East (Mrs. White) has already referred to the contraction of the area of operations of the Colonial Development Corporation. By area, the reduction is 26 per cent. and by population the reduction is from 85,690,000 to 40,700,000. But, of course, during the next twelve or eighteen months, other nations in addition to those considered by the Sinclair Committee will be reaching independence. Tanganyika is almost there, and Uganda, perhaps, in the next two years. Will the Government make up their mind what is to be the function of the C.D.C. in those countries after independence? It will be very difficult indeed for long-term plans to be worked out in relation to those countries if projects are likely to be strangled because of the coming of political independence.
The Sinclair Report itself referred to the need for more capital development to be made available. On page 3, speaking of the funds available at the time of the writing of the Report, £40 million to £50 million, the Committee said:
…that is not a large figure either in relation to the amounts already made available for development from other sources or in relations to the need which seems still to exist.
It is quite apparent from the Sinclair Committee's Report that the Government are concerned for not making more funds available to the C.D.C.
A public corporation is useful because it enables investment to be carried out without regard to short term return on the investment or high profits. One of the great advantages of the C.D.C. has been that it has been able to stimulate projects even if the profitability of them was not likely to be great within the early years. Also, it has made possible participation by people and bodies locally in the countries concerned, bringing them into the partnership.
This partnership is most important particularly as political independence is achieved, and it is a partnership which must continue even after independence.
I was very interested in the Colonial Secretary's remarks about the susceptibility of countries to investment from outside. I wonder whether it would not be useful to send a copy of the report of this debate, with the Colonial Secretary's remarks underlined, to Fidel Castro, who may be very interested in his remarks. It is significant that when these under-developed countries do not have public money invested in them through some international corporation, money which is invested in conjunction with the Government concerned, they have to accept private investment over which there is very little control. Surely the only alternatives available to these under-developed countries is public investment or private investment from outside, and it is more likely that they will be able to influence public investment coming through such organisations as the Colonial Development Corporation rather than through private companies which are notoriously interested in short-term profit and a quick return on investment and are not likely to undertake the sort of development which is vitally necessary in these territories if the economy is to be built up to any real strength.
The argument for extending the work of the Colonial Development Corporation to include independent as well as dependent territories is particularly applicable to a country like Uganda. I have the Annual Report of the Uganda Development Corporation in my hand. It has done a really remarkable job. Its activities extend to tea plantations, hotels, a cement industry, metal products, a manufacturing company, the textile industry and also the Kilembe copper mines, in which it has a close association with the C.D.C.
The Colonial Development Corporation has acted as a prop to the Uganda Development Corporation which should continue after independence, when it will be retained, we hope, by an African Government. Africans are already playing a very big part in the operations of the Corporation under the inspired leadership of the chairman, Mr. J. T. Simpson. Do the Government really suggest that after Uganda achieves independence in eighteen months or two years' time the prop of the Colonial Development Corporation should gradually be pushed away? If so, is this any real encouragement to these inspired men who have been working in the development of this public corporation in Uganda? It has done such a remarkably successful job that I am sure it will appeal even to the capitalists sitting on the benches opposite. The profit has been considerable. [Interruption.] We are often told by hon. Members opposite that we must judge these questions from the point of view of success in monetary terms. Here we have it—a profit after paying tax of £382,000. A profit has been enjoyed from most of these enterprises of the Uganda Development Corporation for some considerable time, particularly from the copper company.
I think that it was agreed by both sides of the House as a result of legislation which was introduced some time ago that any established enterprise run by the C.D.C. in a country before independence can continue with the co-operation of the Corporation after independence. I therefore do not see that the hon. Gentleman's argument is carrying us very far on the problem of Uganda.
The point that I am making is that there are other projects which need to be developed. As the copper industry in the Kilembe area becomes more established, so will the consumer industries in that locality to serve the miners, their dependants and other people attracted to a newly developing industrial area grow. Is it suggested that the Uganda Development Corporation's job of developing those new undertakings cannot be done with the assistance of the C.D.C.? That, surely, will be the position, because investment can continue only in the copper company itself.
I shall bring my remarks to a close as soon as possible because we are all very anxious to hear the hon. Member for Somerset, North (Mr. Leather). We all know of his great interest in this subject and we hope to hear from him that he will be supporting us in the Division Lobby tonight.
I want to say this about the future of the Colonial Development Corporation. I hope that it can be transformed into a Commonwealth Development Corporation, as suggested by my hon. Friend the Member for Cardiff, South-East. I would go further. I think that it should not be run merely by the United Kingdom. I would bring in the co-operation of Canada, Australia and other Commonwealth countries, including the newly-independent countries, and give them a part in running this new Commonwealth Development Corporation. Few of them, of course, will be able to make any contribution in terms of capital. Canada probably could provide a considerable amount. It is this sort of aid that we should encourage Canada to give. She did a very good job for the Colombo Plan, and there is a big field of endeavour, particularly in African countries, if a Commonwealth Development Corporation could be established.
The changing of the name and the emphasis of the Colonial Development Corporation to the Commonwealth Development Corporation would remove all the arguments which the Colonial Secretary deployed this evening. It would also, we hone, remove the sentence of execution which the Government have already announced on the Corporation or, perhaps I should say, the threat of slow strangulation.
Finally, I make the point that it is economic development in these territories, not only in the dependent but in newly independent ones, which really counts in terms of the welfare of the people of those territories. We are very glad that in many cases they have jumped over the political hurdle, but, having got over that hurdle, there is still the race towards better living standards to be run. I hope that this country and other more established members of the Commonwealth will be able to continue to give their aid to those nations through the development of strong institutions like a Commonwealth Development Corporation in order that they should have not only words of encouragement but really useful tools to get on with the job.
I am sorry to have to follow the hon. Member for Wednesbury (Mr. Stonehouse), because as the hon. Member for Cardiff, South-East (Mr. Callaghan) and the hon. Lady the Member for Flint, East (Mrs. White) made perfectly clear, and as has been abundantly clear through the debate so far, we have for years been engaged in an all-party effort against the Executive to take effective action regarding the Colonial Development Corporation. The hon. Member for Wednesbury has for the first time tonight introduced a note of party rancour.
No, it was not. In any event, the hon. Member has been here only a short time. Until that moment, our argument had been kept consistent, as my hon. Friend the Member for Liverpool, Kirkdale (Mr. N. Pannell) said. My hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) indicated his hope that we could avoid dividing on party lines tonight, because there are many of us on this side who have the greatest sympathy with the Motion. With those remarks, I will certainly do my best to avoid being drawn into the trap of replying to the remarks of the hon. Member for Wednesbury. Many of them were irrelevant to the issue and certainly they do not make it easier for us to get together in something which is much more important; that is, the future of the Colonial Development Corporation.
I must say frankly, as several hon. Members on both sides of the House have said, that I was singularly disappointed with the speech of my right hon. Friend the Colonial Secretary. For the first five or ten minutes of my right hon. Friend's speech, I had the feeling that, to pervert a well-known American phrase, we would get "the real Macleod". At some stage, however, my right hon. Friend seemed to start getting the official brief. I noticed it particularly when my right hon. Friend used, tersely and momentarily, the argument that the Colonial Development Corporation could put management but not capital into the emergent territories. It may have been purely accidental, but my right hon. Friend stopped right in the middle of that sentence and took a close look at his notes. I wondered whether he was finding it difficult to believe his own eyes. It may have been pure chance, but that is how it appeared. I should much prefer to see the Government's Amendment, not as an Amendment to the Motion, but as an addendum to it. If the Motion and the Amendment were put together, I should be glad to vote for them.
The hon. Lady the Member for Flint, East referred to our previous debates on the subject. She referred in particular to the debate in November, 1956. I do not know whether my right hon. Friend has yet had an opportunity to refer to that debate. I remind my right hon. Friend the Minister of State for Commonwealth Relations, however, that on that occasion we had agreed, as one usually does in this House, between the usual channels that having had a good debate, we would withdraw our Motion. At the end of the day, my right hon. Friend's predecessor at the Commonwealth Relations Office made such a deplorable speech that the entire House ganged up against the unfortunate Minister and the Whip and our Motion was passed. The following week, his noble Friend proudly claimed in the House of Lords a great step forward in Government policy. Needless to say, nothing was done, but that was what happened.
I recollect the report of that occasion. I think I am right in saying, however, that my right hon. Friend the Minister of Works holds it against my hon. Friend the Member for Somerset, North (Mr. Leather) that he did not fulfil an undertaking which he gave at that time that in certain circumstances, which eventually came true, he would eat his hat.
I admire my right hon. Friend's courage. That was a good ball, but, alas, I was not the person who gave the undertaking. It was somebody else. I do not feel, therefore, that I am I.b.w.
The argument which my right hon. Friend finally put forward concerning the emergent territories, and which was so strongly reinforced by my hon. Friend the Member for Reigate, carried great weight. My right hon. Friend will, I hope, forgive me when I say that at that moment he put me in mind of a venerable Member of the House in the last century of whom it was said that he came to his opinions instantaneously and thought up the arguments for them afterwards. One had the impression today that my right hon. Friend had been told, "This is what the Government think" and then somebody said, "Thank heaven, at long last they have found a chap clever enough to think of a good reason for it." The argument concerning the question of priorities of the great developments which are yet to be carried out and are vitally needed in the poorer territories which will remain dependent was, on balance, convincing on that specific point.
Then, however, we go on to the Government's Amendment, which says that we look forward "to future successes…" My right hon. Friend will agree that we cannot look forward to anything until we have got the questions of the financial structure and the Sinclair Report clearly established in our minds. My right hon. Friend at least took us some way tonight. At long last, we have succeeded in getting a member of the Government at least to acknowledge that the Sinclair Report has been considered. This is a great step forward and I am not one to look a gift horse in the mouth. We have been fighting this battle for a good many years. I am grateful to my right hon. Friend for getting us this little bit more forward.
With the great respect and regard which I and all of us have for my right hon. Friend and his predecessor, no one would ever accuse him or my right hon. Friend the Member for Mid-Bedfordshire (Mr. Lennox-Boyd) of slacking on the job and not working hard enough. They have successively spent their time and exhausted their energies in travelling the globe and dealing with one constitutional problem and crisis after another. Time after time the country and the House have had reason to be grateful to them. But I implore my right hon. Friend please to stay at home long enough to look at this economic problem. If this debate achieves nothing else except, for the first time in ten years, to persuade the Colonial Secretary to look at these economic matters himself it will have served a useful purpose.
We think of the continuous hamstringing of the C.D.C. and of the continuous efforts primarily by the Treasury to wreck it. We all know that the Treasury wants to wreck it. Then we look at what happens in the territories that emerge. They immediately go somewhere else for their economic aid—not here but to the United States, to an international organisation, or to Russia or China. We look at what is happening in Nigeria. I am told, and I believe that it is true, that almost the entire medical service there is quitting. I do not pretend to know much about Somaliland but I am told that there is a real risk that it may collapse completely.
These are economic problems of adjusting aid and of the means of giving it. Throughout this field, wherever we look, there is a story of continuous failure. If only the Colonial Secretary will himself take charge of this and look at the C.D.C. and questions of economic aid, I certainly have enough confidence to be able to sit back and say that at long last we shall get somewhere. We have certainly got nowhere up to now.
As for the Sinclair Report, the question of the financial structure has been dealt with at length in the debate and I am entirely with those on both sides of the House who have said that they hope that the Government will take the Report seriously. A further matter in the Sinclair Report which is vital to the domestic operation of the C.D.C. is the problem of accountability to Parliament. I cannot help feeling that someone is pulling an awfully fast one somewhere, somehow.
We have had consistent complaints over the years from successive chairmen of the C.D.C. that they have been constantly hamstrung by the Treasury. There have been complaints that we pass an Act of Parliament and give the Corporation a directive to do certain things and promptly it is told when it comes to do them that they can be done only with the permission of the Treasury, and time after time that permission has not been forthcoming until so many months and sometimes years of argument have elapsed that the project has become impossible anyhow.
Paragraph 68 of the Sinclair Report says:
We also realise that there is probably no feasible alternative in principle to the present
system, but there is no reason why it should not be operated sensibly.
That is a strong phrase for a body like this to use. It adds:
The Board of the Corporation is appointed by the Secretary of State as a responsible body of men with ability and experience It is almost axiomatic that its investments outside the 'finance-house' field are attended by some degree of risk. It cannot be to the interest of the Corporation, or the territories it is designed to assist, that it should embark on a project which has no prospect of success. In submitting a proposal it can state the degree of risk involved and why, despite that risk, it considers it worth doing. If it is not contrary to public policy and is within the Act, it would seem to be right that the Secretary of State should not, unless in very exceptional circumstances, question the wisdom of the Corporation's undertaking it.
If we take out the phrase "Secretary of State", which the Committee uses politely, and put in "the Treasury", we in this House should know exactly where we stand.
We are told that the Corporation must always get permission for doing this, that and the other because of the vital importance of accountability to Parliament for the use of the taxpayers' money. There have been times when quite a number of us in this House in the last few months have wished that the Treasury would take such scrupulous care of the expenditure of the taxpayers' money in other directions, but it is extraordinary how in this one it seems to be so peculiarly immaculate in carrying out its duties.
When it comes to international bodies over which this House has no control at all, the Treasury Ministers and Departments can urge that we should vote vast sums of money, hundreds of millions of pounds, to the International Bank for Reconstruction and Development. Not so long ago, we voted a vast sum—I cannot remember how many million—to an international development authority—was it £50 million? They come here and urge us to vote millions to the United Nations Agencies. Is it suggested that these bodies are accountable to this House for the expenditure of the taxpayers' money? Why is it that, when we come to bodies over which we have complete control, on which our Ministers appoint every single director, this doctrine has to be applied to every single project down to the expenditure of only £100,000?—It must be put under a magnifying glass and torn to pieces before it can go ahead, in order to satisfy the doctrine of accountability to Parliament. Yet, in many other fields, including this particular kind of field, under international organisations, apparently, the doctrine is never put forward at all. This seems to me to be an extraordinary anomaly.
This is a problem we have been wrestling with for a long time. I am in favour of getting more aid for the underdeveloped territories in the Commonwealth. I am all in favour of helping the United Nations to deal with unfortunate starving children in Indonesia or anywhere we like, but I am much more interested in doing something ourselves for the people in the British Commonwealth. In heaven's name, if it means anything at all, charity—or business—ought to begin at home. We seem to take a very generous attitude on the foreign front, but when it comes to the home front we are extraordinarily stingy.
I implore my right hon. Friend the Minister of State for Commonwealth Relations to try to give us some encouragement so that the debate will not end in a Division, because if he does not do that, we could be in a very odd and unpleasant position. Of course, the party Whips can muster a substantial majority of Members who did not listen to the debate to vote for the Government, while a large percentage of those who did listen to it might end up in the wrong Lobby.
As is often said at that Box, that, I am afraid, is not a question for me. I am very grateful to the hon. Gentleman for putting it to me, and, speaking purely for North Somerset, I accept it. I hope that my right hon. Friend will take a similar view. I feel that we have had a very useful discussion, when a new Minister, whom everyone wishes well and for whom everyone has the greatest regard, has for the first time had a chance to face the united opinion of both sides of the House of Commons on this matter. I feel sure that he has got the point and that he has seen how we feel. He has certainly listened to arguments which I have no doubt he has not had before. If we can feel that as a result of the debate tonight, the Secretary of State will tackle these things himself and get down to them, I think both the Opposition and those of us on this side of the House will have fulfilled a very useful purpose this evening.
I am sure that the Secretary of State and the Minister of State will not be surprised that I, too, prefer the Motion to the Amendment, although I would not mind seeing the two attached together. I would not have risen had it not been for the very startling words, which I know to be true, of the hon. Member for Somerset, North (Mr. Leather), which said that the entire medical service in Nigeria was walking out.
I know very little about the techniques of capital investment, business structure, profitability, or lack of profitability of business ventures, but I know a little about the need for skilled personnel, both in the colonial and the emergent territories, in particular, about the value of technicians and especially medical personnel.
I put a Question on the subject to the Colonial Secretary today, although it was not quite fair to him. I asked him whether he would take steps to integrate the Colonial Medical Service with the National Health Service. I did not expect him to agree, but we got some information from him. He said that he had 50 vacant places in territories for which he was responsible. Although I asked him the Question and have a similar question to put to the Minister of State, what I had in mind—and I think that the right hon. Gentleman understood—was this.
We are not able to send our own people to help either the Colonies or the emergent territories because we have not put the matter absolutely right. That is to say, our young talented men are frightened to leave our own National Health Service—and this applies to all technicians as well as doctors, to engineers, for instance—because they are afraid of losing promotion and finding that there is no place for them when they return home.
I am certain that skilled human beings are as important as capital in both Colonial and emergent territories. The Colonial Secretary said today that the large territories in East Africa were increasingly using local doctors qualified at the medical school at Makerere. He went on to say something hopeful. He said that arrangements were already in force for doctors in the National Health Service to serve overseas while preserving their pensions rights here and, in cases where the home employers were able to keep the post open while a doctor was serving abroad, secondment was arranged.
That last phrase is not always applicable. Posts are not kept open sufficiently frequently to permit what we all want, which is to give the kind of assistance abroad which we want to give and to give our men the experience which they would like to have and ought to have. I urge that this be considered as a matter of urgency. It applies to the new emergent territories even more than to the Colonial Territories. They have a tendency to say that they do not want our men and that they must go home. A little later they send their emmissaries to this country to recruit personnel from here, but when that happens it is already too late because of the difficulties I have mentioned.
The Colonial Secretary and the Minister of State need to take a number of administrative actions. One is to make certain that when a territory gains its freedom it should understand how dangerous it is to throw away a skilled Civil Service, especially a technical Civil Service, which is available to it. Secondly, it should encourage those men to stay on and not go home and accept their pension rights, or surrender them and take another post. The third part of their duty should be to make it easy for young men who are not in the Civil Service to go out on tours of duty.
If I have been a little wide of the mark, I apologise for raising this matter, but I think that human beings who are technically trained and who can go out from this country to the emergent territories or Colonies are as important as capital investment.
At the conclusion of his speech, the Colonial Secretary forgot to move the Government's Amendment. I must confess that I was not surprised. I think there may be something in the theory of the hon. Member for Somerset, North (Mr. Leather) that the right hon. Gentleman was put out of his stride by the kind of brief that he found himself reading. It was one of the most disappointing speeches that we have heard from him since he took his present office.
We have become accustomed to regard him with gratitude as a politically progressive member of the Conservative Party in colonial policy, but after his speech today we must regard him as an economic reactionary on colonial matters. I hope that this is because he has not yet had time to study the full implications of what he told the House.
We have had a remarkable debate, though not one that is out of continuity with the whole series of debates on this subject over the years. All of the speeches, without exception, have given more support to the points which have been put from this side of the House than to those put by the right hon. Gentleman. Indeed, we had the hon. Member for Reigate (Sir J. Vaughan-Morgan)—with whom I went recently to the West Indies—stating that his only reason for not supporting us was that we had not censured the Government adequately for something that was not in our Motion. Both the hon. Member for Liverpool, Kirkdale (Mr. N. Pannell) and the hon. Member for Somerset, North —whose interest in this goes back many years—made it clear that they thought the Government, on balance, were wrong in this matter.
It has been generally agreed by all members who take an interest in these affairs that the C.D.C. is that kind of sensible partnership between public enterprise and private enterprise on which, in many ways, the future of the economically under-developed territories very much depends. What kind of future have the Government offered for this Corporation in the right hon. Gentleman's speech?
In the first place, the Government—and I want to be as fair as I can—have agreed that there is a need for some alteration in the capital structure of the Corporation. This is rather a modest concession in the form in which it comes from the Government at this stage, because the report of the Sinclair Committee has been in the hands of the Government for almost exactly a year, and we were not told, in the right hon. Gentleman's speech, what alterations he was thinking about. We were given no details.
There was no answer to the question asked by my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) as to whether the Government were proposing legislation in the immediate future on this subject. I hope that we may have more information on that tonight. The fact is that over twelve months, as I understand it, the Government have had no discussions on the recommendations of the Report with the Corporation. It is rather astonishing that we should have this debate tonight, and that the Government should be so vague about what they are to do when they have not had consultations with the Corporation most directly affected.
What is more important is that the Colonial Secretary enunciated a general financial philosophy for the future of the Corporation with which we on our side cannot agree. He said that the Corporation should acquire fresh capital for further activities by means of selling its successful developments. When my hon. Friend the Member for Cardiff, South-East was mentioning the successes of the Corporation, my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) interjected that the Corporation was so successful the Government were almost certain to be tempted to denationalise it. His joke was taken a little too seriously by the Colonial Secretary, because, in some ways, that is what is being proposed.
Then the Colonial Secretary recommended that the Corporation should expand the finance house part of its business rather than its economic development side. Further, he said that there was to be no more Government money for the Corporation, certainly in the immediate future, and that it would have to rely on what it could raise in the market within the limit of the £20 million to which it is entitled. Finally, he said quite frankly that he foresaw the Corporation having to operate within narrower and narrower geographical limits.
As I have said, hon. Members on this side of the House object in principle to some of these economic proposals, but we do not press that side of our opposition in this debate. We are more concerned about the practical results, which can be achieved by the Corporation, and which enjoy the general support of interested Members on both sides of the Committee. The kind of future which the Colonial Secretary has outlined tonight is bound to mean that the Corporation will not be able to retain the services of its best and most vigorous people in future. It will not be able to attract the enthusiasm, devotion and skill in the future that hon. Members on both sides have talked of tonight if its future is to be contracted within the financial limits described by the right hon. Gentleman. I believe that his proposal that the Corporation should operate within ever narrower limits is a disastrous doctrine.
What case does the right hon. Gentleman put forward in support of his proposal? First, he puts the general point that the real question is not so much whether the Corporation would operate in the newly independent territories of the Commonwealth, but what amount of capital can be made available to these territories. He said that in his view the capital available was very limited. There are bound to be limits to the amount of capital which can be made available by this country to the under-developed countries that we wish to help, but we feel that the Government could do a great deal more than they are doing.
The main point, however, is that, in its way, the Corporation is a unique asset, in terms of managerial "know-how" for the development of underdeveloped territories. It is that which gives the Corporation its special place and its special importance in dealing with the problems of the under-developed territories. As anybody who has had any sort of experience of these problems knows, it is not only a question of getting enough capital but of making sure that that capital is properly used when it is sent to these territories.
I have recently returned from the West Indies, where I saw excellent developments being undertaken by Governments with the best interests of their citizens at heart. These developments, under the colonial development and welfare funds, were in some instances being delayed, or were not taking place as quickly or as efficiently as they might have been, simply because an adequate amount of knowledge, skill and technique was not available. It is this knowledge, built up very painfully, and at great expense to the British taxpayer over the years, that the Corporation possesses. It is that which we wish to preserve, and which we believe is threatened by the Government's attitude towards the Corporation's operations in the newly independent territories.
It is a mistakenly legalistic attitude that when independence comes the Corporation should no longer be allowed to start new projects in the territory concerned. It is true that at the point of independence there is a clean break in terms of legal relationships between this country and the formerly dependent Colonial Territory, but there is not a clean break in terms of economic relationships—except in the mind of the British Treasury. The economic relationship between an ex-Colony and ourselves has deep historical roots, which are not pulled up overnight by passing an Act of independence.
The Economic dependence of a former Colony remains even when it becomes fully independent politically. So we say that there is need here for economic continuity. It is our view that the Government have given away their case on this issue because their argument that we ought not to go on with new projects in the territories of independent members of the Commonwealth is that it would be incompatible with the financial responsibility of the Government to Parliament. In fact, 44 out of the 88 projects listed in the Corporation's Report are in territories either already independent or about to become independent.
The projects will go on. The Corporation can expand them and, indeed, it has done so in Malaya. It can set up subsidiaries. It can do a great deal, and everything is done with our money in the independent Commonwealth coun- tries. The projects fit into each country's own development plan, no doubt in their own way, but that does not prevent us carrying on that kind of activity.
It seems illogical that the Government should let this large amount of economic activity be carried on in the new countries, but not allow the Corporation to have the incentive of new and exciting projects to provide wider horizons for its staff. I say this with respect, but I think that the Secretary of State was in a condition of some intellectual confusion on this issue, which is unusual. The right hon. Gentleman talked about the need to conserve the funds of the Corporation for what he called the truly underdeveloped countries. By that I took him to mean that the formerly dependent territories which became independent were no longer truly underdeveloped and that the only truly underdeveloped territories are those which remain dependent.
In our hands today there is a Supplementary Estimate for a fairly large sum of money for economic assistance to the new independent country of Somaliland, and that is a good thing. We shall shortly move towards independence in Sierra Leone. Both are underdeveloped territories. Why is the Corporation to be prevented from doing new work in that sort of country? I think that the answer is this. We have seen great alterations in the face of Africa over the last few months. We have had the Prime Minister's famous wind of change blowing through Africa and through some sections of this House, but I agree with the hon. Member for Somerset, North that it has not blown through the Treasury yet.
The importance of giving enough aid from highly developed countries to underdeveloped territories and using it effectively with experience and skill is one of the great challenges facing our country in this generation. I believe that the Government have shown themselves lacking in adequate vision. They are short-sighted and unimaginative in the face of this problem. I hope that I may yet be wrong.
The hon. Member for Somerset, North said he would be prepared to see the Government's Amendment as an addendum to our Motion. My hon. Friend said that we had no desire to divide the House on this matter on which so manys of us are agreed. I ask the Minister whether, in view of the degree of unanimity and the importance of the work of the Corporation in the future, he would accept my hon. Friend's offer and allow this Motion, with his addendum, to go forward as the unanimous opinion of the House of Commons.
When the time comes, if indeed it does come, to vote on the Motion and the Amendment, I hope that the House will recognise the narrow limits which are represented by the wording of the Motion itself.
We have discussed a great many aspects of the problems of the Colonial Development Corporation tonight and that, I think, is what the whole House would wish, but the Motion is essentially a narrow one. It is not, for instance, limited to a point which seemed to be very much the concern of the hon. Member for Stoke-on-Trent, Central (Dr. Stross) and in some degree the concern of my hon. Friend the Member for Somerset, North (Mr. Leather), at any rate in part of his speech—that is, the sort of thing to which this type of money, this type of assistance, should be devoted.
I think we could have followed them into an argument whether in fact the money which is being devoted through the C.D.C. might not have better been employed through C.D. and W. funds, but that is not the issue tonight.
It is not the issue as to whether the proposals of the Sinclair Committee are advisable or not. I think, and I know my right hon. Friend understands this well, that hon. Members opposite have been extremely unfair to him in the way in which they have approached the statement he made earlier about the Sinclair Report. It is not easy by any means to reach final decisions on matters which not only affect the organisation of a great national corporation, but also the general policy in regard to development in the Commonwealth Territories. My right hon. Friend, as I think hon. Members will agree when tomorrow they have read his remarks, gave a very clear indication, in a preliminary form, of his general approach to the recommendations of the Sinclair Report.
The right hon. Gentleman accused us of being unfair. Does he really think it unfair to accuse the Government of indifference when they have had that Report in their hands for a year and yet have not entered into discussions with the Colonial Development Corporation about how it should be implemented?
That is not indifference at all. This is an extremely difficult policy decision, and the fact is that my right hon. Friend said that he hoped he would be able to provide a White Paper on the subject as soon as possible. That, however, is not the issue before the House at present. The issue is an extremely limited one in one sense of the word. It is, how far the activities of the C.D.C. should be extended to the independent Commonwealth.
I quite agree with the hon. Member for Cardiff, South-East (Mr. Callaghan) in his newly-found statistical analysis that this probably is the eighteenth time in which a Minister has endeavoured to explain to him and to his colleagues some of the problems which are involved in this particular aspect of policy in regard to the C.D.C. I hope that, as a result of a few minutes' hard work, I may be able to help the hon. Member a little way on the road to full understanding.
What is the issue? The issue is fundamentally as follows. The funds which are available for Commonwealth development are necessarily limited. The hon. Member agreed that in his speech. Therefore, it is not unimportant that we should make certain that those funds which are available go to the sort of things on which we would wish to see them employed. The funds which are available to the C.D.C. are directed, as my right hon. Friend said, to the dependent territories. I feel certain that hon. Members on both sides of the House would not claim that the funds which are available are more than are necessary for the purposes for which they are required.
I, and I think a number of hon. Members on both sides of the House, have seen the C.D.C. in action. We know the value of the work it does, particularly in those territories which do not make an immediate appeal to ordinary investment and whose resources are by no means great. I think in particular of the three High Commission Territories with which I am concerned, Basutoland, Swaziland and Bechuanaland.
The contribution which the C.D.C. has made, as the right hon. Member for West Bromwich (Mr. Dugdale) pointed out, to Swaziland and Bechuanaland is substantial. The sums of money involved run into many millions of pounds, either committed or approved. This has almost revolutionised the prospects in Swaziland, through the work of the C.D.C. and private enterprise working either in co-operation with or alongside the C.D.C. I will not say that it has revolutionised the position in Bechuanaland.
In Basutoland that has not happened. In Basutoland we have had great difficulty in finding a particular project which would be suitable for the expenditure of the kind of finance which the C.D.C. has available. After I paid a visit there two years ago, the C.D.C. made a second investigation of the possibilities in Basutoland and, as far as we can see, the only development which will offer prospects for the immediate future —and it might be the middle future for all I know—is that of the water and hydro-electric power potentialities of Basutoland.
That will require a great deal of money. It will require, admittedly, co-operation among the consumers, who will probably be in the Orange Free State as well as in Basutoland, the mining interests and so on, if this great scheme comes into being. But we have great hopes of Oxbow; we hope that it will be of great importance to this territory, where the alternative resources open to development, to put it at its highest, are extremely limited.
If the field of operation of C.D.C. were extended to other countries of the Commonwealth, the chances would be automatically reduced of the very substantial finance which will be required for Oxbow. Let me take an example which the hon. Member for Cardiff, South-East himself gave. He used the phrase that the C.D.C. should be allowed to invest "wherever the investment opportunity arises." In Canada? In Australia? In India?
I am not putting words into the hon. Member's mouth. I am dealing not only with the logic of the Motion but also with a point made by my hon. Friend the Member for Liverpool, Kirkdale (Mr. N. Pannell), who pointed out the difficulties which the C.D.C. would have if its investment were to be directed, let us say, towards Australia. But if not Australia, what about India?
I have referred to the small territories in which the C.D.C. can properly operate, to which it has made a substantial contribution and for which the resources which are likely to be available to it during the period ahead, which must be limited, will be no more than adequate for their needs, even allowing for the fact that Nigeria may become independent in due course. Are we to prevent those small countries from obtaining that assistance because it is the wish of many people connected with the C.D.C. and of hon. Members opposite that the activities of the C.D.C. should be directed in future to a field in which it was never at any time intended to operate?
The right hon. Gentleman knows perfectly well that it is not our intention. He is putting up ninepins in order to knock them down again. We are asking that the C.D.C. should be allowed to continue in areas in which it now operates and from which it will be artificially cut off because of the accident of independence. That is all there is to it. The case has been made many times. The right hon. Gentleman is wasting time by putting up false arguments.
That is not what the Motion says, it is not what the hon. Gentleman argued in his speech, and it is not what is happening at present. I ask hon. Members to consider Nigeria. The hon. Member for Flint, East (Mrs. White) said that there was a complete cut-off of assistance to Nigeria when it became independent. The fact is that the C.D.C. already has authority to spend £7 or £8 million on a number of projects there. Of this, only £2 to £3 million have so far been spent. Through the development companies in the Eastern and Northern Regions and through the Federal Investment Company of Nigeria, the Corporation will continue to be associated with development projects. Similar arrangements apply to other territories which have already reached, or will soon reach, full independence. So long as the project has been approved before independence, there is no limit on when the C.D.C. may draw the money. That is perfectly clear, and it is precisely what we want.
"We" in this case are those who have given the matter great thought and have, as I agree that hon. Gentlemen opposite have, a sincere interest in the problem. What we want to see is that the C.D.C. continues to fulfil the essential rôle for which it was set up, which was to help underdeveloped countries which were the direct responsibility of the United Kingdom to achieve higher standards of living as a result of our association with them.
We believe that the hon. Gentleman's plan, although it is undoubtedly put forward sincerely, will deflect the C.D.C. from carrying out its proper rôle, when indeed there may be no other Corporation of its like to act as its substitute. The truth is that this is not a question of cutting off financial aid as soon as independence is achieved. I have already shown that the C.D.C. continues to operate in the existing established field of its activities after independence.
Last week we announced in the House a Commonwealth Assistance Loan for India. We hope in a very short time to be able to complete discussions on
some form of financial assistance to Pakistan. Since the Commonwealth Assistance Loans have been brought into being, we have an alternative and, in our view, far more effective and appropriate, means of providing for independent countries the financial assistance that they require within the resources available. It might have been reasonable for hon. Gentlemen to have argued as they did before the Commonwealth Assistance Loans came into being, but it is no longer logical or appropriate.
In spite of all the opportunities that Commonwealth countries have had up to the present to take such advantage as they can without financial contribution of the services of the skilled men available to the C.D.C., they have not used them. Why? Because what they are concerned with primarily is, on the one hand, the provision of the money which they can use at their own discretion in accordance with their own economic policies for the economic and social development of their countries and, on the other hand, that they should have available from this country and through United Nations sources technical assistance, which is of great importance to them.
Therefore, I ask hon. Gentlemen on both sides to consider the Motion very carefully. I hope that they will agree and approve the Amendment which we have tabled to the narrow and, as we believe it to be, unwise proposal represented in the Motion.
|Division No. 137.]||AYES||[9.59 p.m.|
|Ainsley, William||Butler, Herbert (Hackney, C.)||Foot, Dingle|
|Albu, Austen||Callaghan, James||Forman, J. C.|
|Bacon, Miss Alice||Castle, Mrs. Barbara||Fraser, Thomas (Hamilton)|
|Beaney, Alan||Corbet, Mrs. Freda||Gaitskell, Rt. Hon. Hugh|
|Bence, Cyril (Dunbartonshire, E.)||Cullen, Mrs. Alice||Gordon Walker, Rt. Hon. P. C.|
|Blackburn, F.||Davles, Harold (Leek)||Gourlay, Harry|
|Boardman, H.||Deer, George||Griffiths, Rt. Hon. James (Lianelly)|
|Bowden, Herbert W. (Leics, S.W.)||Dempsey, James||Griffiths, W. (Exchange)|
|Boyden, James||Diamond, John||Grimond, J.|
|Braddock, Mrs. E. M.||Dugdale, Rt. Hon. John||Hale, Leslie (Oldham, W.)|
|Brockway, A. Fenner||Ede, Rt. Hon. Chuter||Hall, Rt. Hon. Glenvil(Colne Valley)|
|Broughton, Dr. A. D. D.||Edelman, Maurice||Hamilton, William (West Fife)|
|Brown, Alan (Tottenham)||Edwards, Robert (Bilston)||Hannan, William|
|Brown, Rt. Hon. George (Belper)||Edwards, Walter (Stepney)||Hart, Mrs. Judith|
|Brown, Thomas (Ince)||Fitoh, Alan||Hayman, F. H.|
|Healey, Denis||Mayhew, Christopher||Small, William|
|Henderson,Rt.Hn.Arthur(RwlyRegis)||Mendelson, J. J.||Smith, Ellis (Stoke, S.)|
|Herbison, Miss Margaret||Millan, Bruce||Sorensen, R. W.|
|Hill, J. (Midlothian)||Mitchison, G. R.||Soskioe, Rt. Hon. Sir Frank|
|Hilton, A. V.||Morris, John||Spriggs, Leslie|
|Holman, Percy||Moyle, Arthur||Stewart, Michael (Fulham)|
|Holt, Arthur||Noel-Baker, Francis (Swindon)||Stonehouse, John|
|Hughes, Hector (Aberdeen, N.)||Noel-Baker,Rt.Hn.Philip(Derby,S.)||Stones, William|
|Hunter, A. E.||Oliver, G. H.||Stross,Dr.Barnett(Stoke-on-Trent,C.)|
|Hynd, John (Attercliffe)||Oram, A. E.||Summerskill, Dr. Rt. Hon. Edith|
|Janner, Barnett||Oswald, Thomas||Swingler, Stephen|
|Jay, Rt. Hon. Douglas||Owen, Will||Sylvester, George|
|Johnson, Carol (Lewisham, S.)||Padley, W. E.||Symonds, J. B.|
|Johnston, Douglas (Paisley)||Pannell, Charles (Leeds, W.)||Taylor, John (West Lothian)|
|Jones, Jack (Rotherham)||Parker, John (Dagenham)||Thompson, Dr. Alan (Dunfermline)|
|Jones, J. Idwal (Wrexham)||Parkin, B. T. (Paddington, N.)||Thomson, G. M. (Dundee, E.)|
|Kelley, Richard||Paton, John||Thornton, Ernest|
|Kenyon, Clifford||Pavitt, Laurence||Ungoed-Thomas, Sir Lynn|
|Key, Rt. Hon. C. W.||Pentland, Norman||Wainwright, Edwin|
|King, Dr. Horace||Plummer, Sir Leslie||Warbey, William|
|Lawson, George||Proctor, W. T.||Weitzman, David|
|Ledger, Ron||Pursey, Cmdr. Harry||Wells, William (Walsall, N.)|
|Lee, Frederick (Newton)||Randall, Harry||White, Mrs. Eirene|
|Mabon, Dr. J. Dickson||Rankin, John||Whitlock, William|
|McCann, John||Redhead, E. C.||Wiloock, Group Capt. C. A. B.|
|Mclnnes, James||Reynolds, G. W.||Williams, Rev. LI. (Abertillery)|
|McKay, John (Wallsend)||Roberts, Goronwy (Caernarvon)||Wiliams, W. R. (Openshaw)|
|Mackie, John||Robinson, Kenneth (St. Pancras, N.)||Woof, Robert|
|Mallalieu, E. L. (Brigg)||Silverman, Julius (Aston)||Wyatt, Woodrow|
|Manuel, A. C.||Silverman, Sydney (Nelson)||Zilliacus, K.|
|Mapp, Charles||Skeffington, Arthur|
|Marsh, Richard||Slater, Joseph (Sedgefield)||TELLERS FOR THE AYES:|
|Mr. Mahon and Mr. Probert.|
|Aitken, W. T.||Fraser, Ian (Plymouth, Sutton)||Loveys, Walter H.|
|Allan, Robert (Paddington, S.)||Freeth, Denzil||Low, Rt. Hon. Sir Toby|
|Alport, Rt. Hon. C. J. M.||Gardner, Edward||Lucas-Tooth, Sir Hugh|
|Ashton, Sir Hubert||Gibson-Watt, David||McAdden, Stephen|
|Atkins, Humphrey||Glover, Sir Douglas||MacArthur, Ian|
|Barlow, Sir John||Glyn, Sir Richard (Dorset, N.)||Macleod, Rt. Hn. Iain (Enfield, W.)|
|Barter, John||Goodhart, Philip||McMaster, Stanley R.|
|Batsford, Brian||Goodhew, Victor||Macpherson, Niall (Dumfries)|
|Beamish, Col. Tufton||Grant, Rt. Hon. William (woodside)||Maddan, Martin|
|Bennett, F. M. (Torquay)||Green, Alan||Maltland, Cdr. Sir John|
|Bennett, Dr. Reginald (Gos & Fhm)||Grimston, Sir Robert||Manningham-Buller, Rt. Hn. Sir R.|
|Berkeley, Humphry||Hall, John (Wyoombe)||Marples, Rt. Hon. Ernest|
|Bidgood, John C.||Hamilton, Michael (Wellingborough)||Marshall, Douglas|
|Biggs-Davison, John||Harris, Frederic (Croydon, N.W.)||Marten, Neil|
|Bingham, R. M.||Harris, Reader (Heston)||Mathew, Robert (Honiton)|
|Birch, Rt. Hon. Nigel||Harvey, John (Walthamstow, E.)||Matthews, Gordon (Meriden)|
|Bishop, F. P.||Harvie Anderson, Miss||Maudling, Rt. Hon. Reginald|
|Bossom, Clive||Heald, Rt. Hon. Sir Lionel||Mawby, Ray|
|Bourne-Arton, A.||Hendry, Forbes||Mills, Stratton|
|Box, Donald||Hicks Beach, Maj. W,||Montgomery, Fergus|
|Boyle, Sir Edward||Hiley, Joseph||Morgan, William|
|Brewis, John||Hill, J. E. B. (S. Norfolk)||Neave, Airey|
|Brooman-White, R.||Hirst, Geoffrey||Noble, Michael|
|Browne, Percy (Torrington)||Hobson, John||Oakshott, Sir Hendrie|
|Burden, F. A.||Holland, Philip||Osborne, Cyril (Louth)|
|Campbell, Gordon (Moray & Nairn)||Hornby, R. P.||Page, A. John (Harrow, West)|
|Garr, Compton (Barons Court)||Howard, Gerald (Cambridgeshire)||Page, Graham|
|Clark, William (Nottingham, S.)||Hughes Hallett, Vice-Admiral John||Partridge, E.|
|Cole, Norman||Hughes-Young, Michael||Pearson, Frank (Clltheroe)|
|Collard, Richard||Hutchison, Michael Clark||Peel, John|
|Cooper, A. E.||Iremonger, T. L.||Percival, Ian|
|Cooper-Key, Sir Neill||Jackson, John||Pitt, Miss Edith|
|Cordeaux, Lt.-Col. J. K.|
|Cordle, John||James, David||Pott, Percivall|
|Costain, A. P.||Jenkins, Robert (Dulwich)||Powell, J. Enoch|
|Craddock, Sir Beresford||Johnson, Dr. Donald (Carlisle)||Prior, J. M. L.|
|Crosthwaite-Eyre, Col. O. E.||Johnson, Eric (Blackley)||Proudfoot, Wilfred|
|Cunningham, Knox||Johnson Smith, Geoffrey||Ramsden, James|
|Dalkeith, Earl of||Kerans, Cdr. J. S.||Rawlinson, Peter|
|d'Avigdor-Goldsmid, Sir Henry||Kimball, Ma[...]cus||Redmayne, Rt. Hon. Martin|
|Deedes, W. F.||Kirk, Peter||Renton, David|
|de Ferranti, Basil||Kitson, Timothy||Ridsdale, Julian|
|Duncan, Sir James||Leavey, J. A.||Robinson, Sir Roland (Blackpool, S.)|
|Eden, John||Leburn, Gilmour||Roots, William|
|Elliott, R. W.||Legge-Bourke, Sir Harry||Scott-Hopkins, James|
|Emery, Peter||Lewis, Kenneth (Rutland)||Sharples, Richard|
|Farey-Jones, F. W.||Lindsay, Martin||Shaw, M.|
|Farr, John||Linstead, Sir Hugh||Shepherd, William|
|Finlay, Graeme||Litchfield, Capt. John||Litchfield, Capt. John|
|Fisher, Nigel||Lloyd,Rt.Hn. Geoffrey(Sut'nC'dfield)||Smith, Dudley (Br'ntf'rd & Chiswlok)|
|Fletcher-Cooke, Charles||Longden, Gilbert||Smithers, Peter|
|Soames, Rt. Hon. Christopher||Tweedsmuir, Lady||Wolrige-Gordon, Patrick|
|Stevens, Geoffrey||Vane, W. M. F.||Woodhouse, C. M.|
|Steward, Harold (Stockport, S.)||Vaughan-Morgan, Sir John||Woodnutt, Mark|
|Stodart, J. A.||Vosper, Rt. Hon. Dennis||Woollam, John|
|Studholme, Sir Henry||Wall, Patrick||Worsley, Marcus|
|Taylor, W.J. (Bradford, N.)||Ward, Dame Irene (Tynemouth)||Yates, William (The Wrekin)|
|Temple, John M.||Watts, James|
|Thomas, Leslie (Canterbury)||Whitelaw, William||TELLERS FOR THE NOES:|
|Tiley, Arthur (Bradford, W.)||Williams, Dudley (Exeter)||Mr. E. Wakefield and Colonel J. H. Harrison.|
|Tilney, John (Wavertree)||Williams, Paul (Sunderland, S.)|
|Turner, Colin||Wise, A. R.|