Under-developed Countries (Aid)

Oral Answers to Questions — Overseas Development – in the House of Commons at 12:00 am on 3rd May 1966.

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Photo of Mr Frank Judd Mr Frank Judd , Portsmouth West 12:00 am, 3rd May 1966

asked the Minister of Overseas Development what target he has set, within the context of the five year plan, for the proportion of the national income to be spent on overseas aid and development.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

asked the Minister of Overseas Development, in view of the necessity for resolving the balance of payments problems, and in the context of the National Plan, if he will table in the OFFICIAL REPORT the total aid to under-developed countries; what percentage of the budgeted gross national product this will be; how much will be public aid; of the public aid, what proportion will be interest-free grants; how much will be private investment overseas planned for each of the next five years; and whether he will make a statement.

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

The National Plan states that the size of the aid programme will be reviewed periodically in the light of the progress made in overcoming our economic problems. We have been able to set out a target of £225 million for official aid in the current financial year which is expected to be about 0·7 per cent. of the gross National Product. The UNCTAD target of 1 per cent. of "national income" includes private investment, and this we are meeting.

I cannot forecast what proportion will be grants or interest-free loans nor what the amount of private investment will be during the next five years.

Photo of Mr Frank Judd Mr Frank Judd , Portsmouth West

In view of the statement made last week on aid to Indonesia, would my right hon. Friend be willing to launch a campaign in the company of many interested voluntary organisations on the importance of aid and development as a means of helping world stability?

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

I think that the importance of economic aid as a help to world stability is appreciated on both sides. I shall be glad to discuss the matter with my hon. Friend if he so wishes.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

Has the Minister now the power to correlate investment overseas with public aid?

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

That is dealt with in a later Question.

Photo of Mr Reginald Maudling Mr Reginald Maudling , Barnet

Can the Minister say whether he is proceeding with the idea of surplus capacity aid—additional aid in cases where the form of the aid is found to be available from surplus capacity in this country?

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

This is something, which we keep in mind, but on a previous occasion I have explained the difficulties of doing it. We should like to do it but it is not always possible.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

asked the Minister of Overseas Development how much of the total overseas aid to underdeveloped countries given by Great Britain in 1965 was in the form of private investment overseas; what was the value of this aid; how this compared with each of the previous three years; and what proposals he has for encouraging commercial investment overseas, designed to give a good return on the capital invested, with a view to bringing about a long-term improvement in the balance of payments.

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

Official aid was £194 million in 1965. Private investment in developing countries was very approximately £110 million—net of dis-investment—compared with £70 million in 1963 and £85 million in 1964. My primary concern with private investment is in its contribution to development and questions on general issues of trade and financial policy should properly be addressed to my right hon. Friends with major responsibilities in these fields.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

Is the Minister satisfied that the balance is right or will it be necessary to concentrate on a greater correlation with private investment overseas?

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

It is important to get the right balance between these two. There are very many economic problems involved.

Photo of Mr Robert Maxwell Mr Robert Maxwell , Buckingham

Will my hon. Friend bear in mind that while we have this very difficult balance-of-payments problem, development aid is a very serious drain on us? Will he give further consideration to using the surplus capacities of agriculture and industry in this country for this purpose until the drain on our balance of payments has been improved?

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

These are matters which we have constantly in our mind, but we have to try to strike the right balance between giving the necessary aid to developing countries and protecting our own economic interests.

Photo of Mr Bill Baker Mr Bill Baker , Banffshire

asked the Minister of Overseas Development what proportion of aid to under-developed countries was tied to British manufactured goods in the last financial year.

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

Figures for the financial year 1965–66 are not yet available. 43 per cent. of our official bilateral aid disbursed in the calendar year 1965 was wholly tied and another 16 per cent. partly tied. A significant part of the disbursement under technical assistance, pensions and compensation, will also have been spent in the United Kingdom.

Photo of Mr Bill Baker Mr Bill Baker , Banffshire

Do the figures which the right hon. Gentleman has quoted represent Government forward planning for the future? Does he consider that a good deal of aid to the under-developed countries in respect of services such as fishing boats could be produced from development areas in this country?

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

The figures which I gave were for the last calendar year, but considerations such as that which the hon. Member raised are very much in our minds and we try to get a synthesis between the interests of the countries we are helping and the economic requirements of the United Kingdom.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

Does the Minister think that the figures which he has given to my hon. Friend are satisfactory, par- ticularly in view of the fact that a Brooking's Institute Report showed that in the case of American aid about 90 per cent. was tied? Does he think that we can get away with a lower proportion than the United States in view of our balance-of-payments position?

Photo of Mr Anthony Greenwood Mr Anthony Greenwood , Rossendale

I think that the balance is about right. We do tie less aid than a number of countries but more than many others. In view of our special responsibilities to many of the independent countries of the world as well as to our dependent territories, I think that the balance is right.