UNDERDEVELOPED AREAS

§ Mr. Philip Noel-Baker (Derby, South)

The gravest short-term danger to the human race is the present arms race, with the new and fantastic weapons of destruction which it produces every year. But the gravest long-term danger is the poverty of the underdeveloped countries and the still widening gap between the living standards of the richer and the poorer nations of mankind.

This poverty of the "have-not" nations is a world-wide social waste. Our present is impoverished and our future is imperilled by what they are suffering now. In what we call the advanced countries, 400 million human beings live in comparative affluence today, while 1,000 million, perhaps more, live in conditions which we find it hard even to understand.

884 In Britain, the infant mortality rate is 23 per 1,000; in India, it is 99; in Brazil, 170; in parts of Asia, it is 250 to 500, one baby out of two dying before it is twelve months old. In Britain, the expectation of life is 68 years; in Brazil, it is 39; in India, 32; in some parts of Asia, under 30.

Last year the United Nations Food and Agriculture Organisation estimated that 58 per cent. of the population of the world ate less than half the protein consumed by the nations we call advanced. In other words, most of the 58 per cent. are hungry from the cradle to the grave. In Bolivia, 68 per cent. of the people cannot read or write; in India, 80 per cent.; in Persia, 90 per cent. The underdeveloped countries are riddled by disease — yaws, leprosy, trachoma, malaria, each killing or crippling or reducing the power to work.

The income per head in the United States is more than 2,100 dollars a year. In 60 of the 83 countries which are members of the United Nations the average income per head is about 120 dollars, less than one-seventeenth of the American standard, and many are below the average. Let us take a melancholy catalogue of countries which we ruled until a dozen years ago. The average income in Ceylon is 110 dollars a year; in Pakistan, 70; in India, 60; in Burma, 48.

We cannot begin to grasp what poverty like that must mean. The really terrifying thing is that the gap between the "haves" and the "have-nots" is still increasing. We are growing richer and many of the poor, thanks to population pressures, are growing poorer still. In the West, we invest an average of £30 per head per annum for new plant and machinery to make us richer. The "have-nots" have £30 a year or less on which to live.

Since 1945, there has been a double revolution in the underdeveloped countries, a revolt against the colonialism of the past—a nationalist demand for self-government and self-determination, now already in many countries attained—and a revolt against the indigence, the ignorance and the suffering of the past. The still widening gap between their standards and ours make that double revolt potentially a most explosive force.

885 Here in Britain we have a grave responsibility in the matter. We were the greatest of the colonial Powers—we ruled nearly one-quarter of mankind—and we have a major interest as importers of the primary products which they produce and as exporters of the manufactured goods which they require. Their prosperity and their progress are of vital importance to us now and in the decades to come. Let us remember that two-thirds of all our exports go to the countries from which the primary products come.

How can the economic progress of these backward peoples be achieved? They need health services, roads, railways, better techniques and tools and machines for agriculture. They need the development of their mineral and power resources. They need industry. Above all, they need Western capital, Western experts and Western administrative skill. How can it be given? I believe that here there is a basic cleavage between the two sides of the Committee.

In a 1957 White Paper about Commonwealth development and the United Kingdom rôle the Government said: … it is through the investment of privately-owned funds in the Commonwealth that the United Kingdom has made in the past, and should continue to make, its most valuable contribution to Commonwealth economic development. Everybody wants private investment in the Colonies, and in other underdeveloped countries provided that it is not on terms that mean exploitation. But it is a dangerous delusion to believe that private investment can be for these countries the main instrument of economic advance. Surely the past and the present condition of these countries should teach us that.

There is a second point of difference between the two sides of the Committee. We believe that the investment needed in underdeveloped countries cannot rightly be done without an overall economic plan. I think that it is important that the International Bank has made general surveys of the resources of 14 different countries. Colombia was the first and Libya the last. In every case it got the Governments to set up central boards to prepare a comprehensive economic programme. As the French delegate pointed out in the Economic and Social Council the other day, there 886 may be confusion, overlapping and waste unless such planning has been done.

Thirdly, we believe that the public funds required can be best applied, and the economic planning best effected, not by bilateral aid from one advanced to one underdeveloped country, but by a multilateral system such as is now worked on a very modest scale by the international machinery of the United Nations. I do not mean that we should end the bilateral aid already given to our dependent Colonies through commonwealth development and welfare funds, the Commonwealth Development Corporation, and the Colombo Plan. We played a major part in creating and building up these institutions before the United Nations Technical Assistance and the International Bank had seriously begun. Of course, we shah carry them on and hope to increase the C.D. and W. grants above the level of recent years—above the level of 1s. 4d. per head of Ghana's population which I believe it averaged to 1958, and above the 1s. 3d. which was the average for Nigeria.

We hope to free the Commonwealth Development Corporation from the administrative shackles of which its retiring chairman, Lord Reith, so bitterly complained. He complained about the bureaucratic interference of the Colonial Office in its decisions; the high rate of interest it was made to charge; its burden of past losses; and its inability to make grants in aid. As Lord Reith said, the shackles have kept the Colonial Development Corporation's investments in the Colonies far below the level for which Parliament voted and at which they might have been.

But we do not believe that bilateral aid can deal with world poverty, even in the Colonies which we still rule. The White Paper which I quoted ends by saying that we must attract more investment from outside the Commonwealth. That is true and here is proof, if proof is needed. Nine months ago the United Nations created a Special Fund, about which I shall speak again. So far, together with the United Nations Technical Assistance Fund, the fund has pledges of 58 million dollars for 1959. But, already, the Governments of the Commonwealth have submitted to the Director projects that would cost 27 million dollars. Unless I am misinformed, projects for 15 million 887 dollars were vetted and submitted by the Colonial Office itself.

That shows, if anything could, that the problem of our Colonies is only part of one great world problem of poverty and it must be dealt with, as in small part it is dealt with now, through multilateral aid administered by institutions of the United Nations.

Looked at in the context of the world problem there are grave objections to the system of bilateral aid. Paul Hoffman, the director of the fund, had experience of administering bilateral aid on behalf of the United States. Years ago he explained its disadvantages. It is harder, he said, for the recipient Government not to react against the donor Government's advice. It is harder for it to carry through desirable reforms which the donor suggests. It feels a kind of colonialist dependence on its benefactor. Moreover, Paul Hoffman said that bilateral aid from one Government, for example, the United States, may become a kind of competition with bilateral aid from another Government, for example, Russia, a competition which may have the strongest political overtones.

Indeed, bilateral aid has a bad name, because it has been used far too freely by both Russia and the United States as an instrument in the cold war. In 1951, an American ambassador said that 10 countries which had defence agreements with the U.S.A. had received 12 times more economic aid than had been given to 11 countries of Asia and the Middle East which had refused such military ties. Quite apart from a deliberate policy of buying military support with aid it would be very difficult to free bilateral aid, as a method of dealing with the world problem, from the suspect taint of power politics.

That is why, when the United Nations started its technical assistance in 1949, it laid it down that the assistance given should never be a means of foreign, economic, or political interference in the internal affairs of a country. There is another not unimportant point. On the bilateral basis, the Kremlin, with its power to enlarge its export surplus, may be a formidable rival. Already, says the United States' State Department, Russia has signed agree- 888 ments with 18 underdeveloped countries for a total of 2,373 million dollars' worth of aid. Its terms are very attractive. The Russians built a steel mill in India, at Bhillai. They trained Indians free of cost in Russia. Their rate of interest was 2½ per cent. Repayment will be in Indian rupees. Russia will use these rupees to purchase Indian goods. The steel mill becomes the property of the Indian Government, and not of a foreign company or corporation.

Consider, also, Colonel Nasser's dam. The Soviet Government have proposed changes in the plan suggested by the West. They have saved a great sum on the capital cost. They have reduced the time for its construction from ten years to six years, and it will be a good dam. The Russians are constructing the Bratsk hydro-electric undertaking. It will be the greatest hydro-electric power station in the world, with a capacity nine times that of Battersea power station. This shows that Russia might be a valuable partner in a world-wide co-operative effort, but that if her economic progress goes forward she might become a formidable rival in a competitive struggle in bilateral aid.

There are two further considerations. However attractive the terms, no Government of an under-developed country—least of all Colonel Nasser's—likes bilateral aid. They hate dependence on either Russia or the West. Secondly, bilateral aid is, in any case, failing to do the job. Mr. Hoffman calculates that a major new effort is now required; that a minimum of £10,000 million or 30,000 million dollars, must be provided by the advanced nations over the next ten years.

Even that, he says, if present population trends continue, will give a rise of only 20 per cent. in the present standards of the poorer nations. His plan is to administer the investment of this new capital through the various institutions of the United Nations. He thinks, as we do, that experience has shown that these institutions can do the job, and we think that they deserve far greater support than the Government have given them in the last eight years.

I now want to examine, in all candour, the Government's record in this United Nations work. I start with the most 889 successful of the institutions, the International Bank. The Bank has so far invested between £1,500 million and £1,600 million, perhaps two-thirds of it in underdeveloped countries. It has a high level of efficiency in all its projects, and a large share of matching investment by borrowing Governments in local currency. It has had some quite dramatic successes. I will give two examples.

In India, at the period of monsoon storms, the River Damodar used to rise from eight to 10 feet in a few hours. In 1943, much of the countryside was six feet under water, and Calcutta itself was threatened. In the last four years the Bank has helped the Indian Government to build four great multi-purpose dams; the floods have been controlled; great quantities of electric power have been produced, and when the scheme is completed 1 million acres will be irrigated and much of the land will bear two crops a year.

In Pakistan, an uninhabited bamboo forest has been used to make a paper manufacturing plant, which employs thousands of workers in a fine, new, well-planned town, and which saves Pakistan 5 million dollars a year in foreign exchange.

I quote those two cases of investment in the Commonwealth, because I recall that the Economic Secretary—and he will recall this, too—told us, six months ago, that in 1958 the International Bank lent no less than £100 million to the independent countries of the Commonwealth. He told us then that the Government had released to the Bank rather more than half of the 18 per cent. of our subcription of sterling which the Bank can use for loans, with our consent. I gather that we released about £42 million. The Economic Secretary went on to say that, in addition, the Bank had bought £77 million worth of sterling and had paid in dollars and E.P.U. currencies, and had raised £10 million in London by bonds. He said: That means that United Kingdom exporters have enjoyed opportunities for exports far in excess of the amount of sterling released to the Bank by the United Kingdom."—[OFFICIAL REPORT, 16th February, 1959; Vol. 600, c. 96.] We might have thought that this would lead the Government to press with all their power for the expansion of the Bank's activities, but I do not remember their doing very much. Of course, we 890 doubled the capital last year, but everybody did. There is not much credit to us in that.

§ Mr. Noel-Baker

The Economic Secretary will be able to make his case. I shall listen to him, and if I am wrong I shall apologise.

Again, I do not think that the Government's release of £40 million in sterling in twelve years is a very handsome record. When we speak of the Bank's success in doubling its capital we must remember how urgently its great expansion is required. Its total lending to the underdeveloped countries—less than £1,000 million in twelve years—is well below one-tenth of what Mr. Hoffman says is now needed. India has received the greatest total of any country—600 million dollars, which works out at two dollars per head of her population. Western countries are investing £30 per head per year. Surely we should be driving with all our power to help the Bank expand its work as widely and as quickly as it can.

From a very early stage in the Bank's activities it has been plain that the underdeveloped countries would need help of other kinds—help like that provided by U.N.R.R.A. and Marshal Aid, which brought Europe 16,000 million dollars in the post-war years. The underdeveloped countries need technical assistance, the help of foreign experts in training their own technicians, and grants-in-aid for many purposes. Again, with candour, I want to ask how the Government have dealt with the United Nation organs which exist to give such help.

First, there are the Specialised Agencies. Once more I ask the Economic Secretary to correct me if I am wrong in saying that the Specialised Agencies—I.L.O., F.A.O., W.H.O. and the others-play a vital part in the United Nations machine, through which economic aid must be administered. Their budgets ought to have been expanded in recent years, and their work much increased. Unless I am misinformed, however, their budgets have been almost stabilised, while the value of money has fallen and, in consequence, the normal activities of the Agencies have been inevitably cut.

891 I cannot recall any occasion when the British delegate has proposed that the budgets of the Agencies should be increased, but there have been a number of occasions when he has proposed that so-called economies should be made. Even to the anti-malaria campaign of the World Health Organisation—a Commonwealth interest if ever there was one—the Government have contributed not a penny piece. The Agencies have had a share in the funds given to the United Nations Extended Programme of Technical Assistance which the Assembly set up in 1949, but I want to examine how the Government have dealt with this extended programme.

No one now disputes that the United Nations is doing a splendid job. As long ago as 1952 Lord Bruce of Melbourne, in another place, said that the work of its experts was "quite first-class", and the other day, in Geneva, Mr. Hoffman said that it had turned in an astonishing performance. No other organisation has yielded so much for so little. Its total budget for these ten years has amounted to a mere 235 million dollars. But the impact of some 8,000 devoted experts, who have provided technical assistance of all kinds in some 140 territories, and of the 14,000 Fellows who have studied abroad, has been incalculable. The work has been good and we, the United Kingdom and Commonwealth, have done extremely well out of it.

In 1953, we contributed 1¼ million dollars to the Fund; we received, in payments to British experts, and from Fellows who came to this country to be trained, over 3 million dollars in foreign exchange. Last year, we contributed 2.2 million dollars, while projects to the value of 2.9 million dollars were carried out in Commonwealth and colonial countries to which we have an obligation.

How have the Government helped to expand this vital work? When we helped to set it up, in 1949, the first experimental budget was 20 million dollars. We hoped that by 1953, at the latest, it would have risen to 50 million dollars, and would go on rapidly from there. In fact, it rose very slowly to 25 million dollars and stayed there till 1959, when it rose to 31 million dollars. The Government are now giving the princely sum of £800,000, or 2.2 million dollars.

892 We know that every year sound projects, many of them in the Commonwealth, have been turned down for lack of funds. Indeed, technical assistance has remained, until today, only a symbolic experiment, a demonstration of what could have been achieved. The Government will perhaps reply by pointing to their contribution to the fund for Arab refugees. I will speak of that, if the Government so desire. If their reply is, "We are the second largest contributor to the fund for technical assistance after the United States," I would answer, "I should hope so." We are the second richest country and we have immense interests at stake. In 1959, we are second only in the absolute amount of our contribution, but on contribution per head of population we are thirteenth in the list. Belgium, Venezuela and Uruguay all give more. We are giving 4.4 cents. per head per annum, but Norway gives just three times as much, and Denmark gives even more.

These last figures show something else which it is worth while to note. It is that every £ we give to U.N. technical assistance and other U.N. work draws in further large subscriptions from nations who never had any colonies and whose interest in ending world poverty is less direct than ours. In spite of this, I believe that in eight years there has not been one British speech in the U.N. urging that the general level of contributions to technical assistance should be increased.

The same is true of another U.N. Agency, U.N.I.C.E.F., the children's fund. Its work is well known to hon. Gentlemen. Help to mothers and children of underdeveloped countries is not sentiment and it is not charity. It is investment in the physical and mental health of the future citizens of the world. In 1959, 55 million women and children benefited from U.N.I.C.E.F. work—milk, school meals, curing of yaws and leprosy, maternity services, child welfare and the rest of it—but 550 million who needed help did not get it.

Last November, the British delegate voted in the U.N. Assembly for a resolution which recognised that … the impact of the Fund on social and eonomic development is steadily increasing and … there are increasing opportunities for the effective use of U.N.I.C.E.F. aid. 893 The resolution congratulated the Fund on its outstanding achievements and expressed the hope that all Governments would contribute to the Fund as generously as possible. We voted for the resolution.

What does "as generously as possible" mean to our Government? Since it began, U.N.I.C.E.F. has received from contributing Governments about £100 million. The total British share has been about £1.6 million, or 1.6 per cent. Under pressure from these benches the Government raised the British contribution to £235,000 a year, that is 1d. per annum per head of our population. At that level we stand twentieth among the nations. New Zealand is seven times as generous as we are. The people of Brunei and Costa Rica give twice as much. As far as I am aware, never in eight years has our delegate made a speech urging that contributions should be increased. I believe there has never been a year when expenditure of U.N.I.C.E.F. funds in Commonwealth countries and here did not exceed in money value the contribution that we gave.

It was plain from the very early days that something more than U.N.I.C.E.F. and U.N. technical assistance was required if the war on world poverty was to be effectively pursued. It needed something like what Mr. Hoffman now proposes, with ample funds for giving under-developed countries grants in aid and low interest loans for basic social projects—roads, education, health work—without which economic expansion could not begin. It was this proposition which emerged from the U.N. debates, and which led to the proposal for S.U.N.F.E.D., which was to start when 30 Governments had pledged 250 million dollars a year. Even with this very modest target the Government helped to kill it dead. Year by year they opposed it, saying that they would do nothing till disarmament was achieved. Thus they gave the Russians the maximum inducement to obstruct disarmament and so to postpone effective Western aid to the uncommitted "have nots" of the world.

After seven years of opposition to S.U.N.F.E.D. the Government agreed at last, in 1958, to the special fund which Mr. Hoffman had proposed. The Assembly set a target of 70 million 894 dollars. The U.S. promised 40 per cent. if the other Governments would give the rest. Our contribution to the total wanted was 1 million dollars. One million: and the Colonial Office has already presented projects to Mr. Hoffman which would cost 15 million dollars! What kind of people must he think we are? What kind of leadership and example are we giving to the other nations who have so much less responsibility and interest than we?

I beg the Government to say not only what they said at Question Time. that they would give a further undefined contribution, but that they will, at the next pledging conference in October—it is very near—do something really generous for a change, increase their pledge for technical assistance and give at least 10 million dollars to the special fund. That might evoke a big response from the other nations. It would give Mr. Hoffman and his colleagues a chance to prepare the way for the long-term investment which there has to be.

I will say a word about another piece of U.N. work for economic reconstruction and advance, that of the High Commissioner for Refugees. Refugees and other migrants, particularly from European countries, can play a great part in economic development overseas. Argentina, Brazil and Uruguay are in urgent need of the special skills which refugees and migrants possess. These people can help to furnish what Mr. Hoffman calls the "good mechanics "—farmers, engineers, doctors and administrators—who will carry out the economic development. The Government take credit for having sponsored World Refugee Year, a great united effort to liquidate the refugee problem for good and all. They have given to the High Commissioner as their extra contribution, £200,000. I find no adjective to describe that sum.

Then there is the Inter-Governmental Committee for European Migration, I.C.E.M., which is the High Commissioner's right hand in the transport and settlement of his refugees. So far, I.C.E.M. has settled 400,000, of which 295,000 were refugees within the High Commissioner's mandate. Although I have often pressed them, Her Majesty's Government have stubbornly refused to 895 join I.C.E.M. The only ground I have discovered for this refusal is that our share of the administrative budget would be £60,000 a year.

I think that I have shown how small a part the Government have played in building up the multilateral work of the U.N. for the world war on want. We hope that the Government may have a death-bed repentence and that in September and October they may much increase their pledges to every organ of the U.N.

I am afraid that, in truth, there is a great gulf between us. We differ about the scale of the task to be accomplished, about the way in which it should be tackled and about the sort of contribution which our nation ought to make. We are pledged, when we take office after the General Election, to give 1 per cent. of our national income—that is, between £180 million and £190 million—a year to this war on want. Eighteen months ago, one of the present Ministers of State at the Foreign Office, then at the Colonial Office, said in the House: … heaven save our country if … this expenditure has to be put into effect."—[OFFICIAL REPORT, 14th November, 1957; Vol. 577, c. 1126.] Last March, the Colonial Secretary, who had not consulted the Minister of State, claimed that our nation was already investing over £200 million a year in the underdeveloped countries. He called it 1¼ per cent. of our national income. We think that this claim was a great exaggeration. At the very most, our annual aid to underdeveloped nations, towards Commonwealth development and welfare, to the C.D.C., the International Bank, and all the rest, is not more than £100 million.

We shall give 1 per cent., quite apart from whatever capital investment from the London market there may be; that is to say, we shall make a massive increase in what the nation is now doing.

§ Sir John Barlow (Middleton and Prestwich)

Do those figures which the right hon. Gentleman gave include private investment as well as public investment?

§ Mr. Noel-Baker

Our figure does not include private investment. I believe that Colonial Secretary's figure did include private investment, and it included 896 investment in the advanced countries of the Commonwealth. That is why we think that it does not deal with the subject of which I am treating today.

§ The Minister of State for Foreign Affairs (Mr. D. Ormsby-Gore)

Will the right hon. Gentleman give the assurance that, if his party were returned to power, it would, in fact, have a surplus on the balance of payments to invest? On the last occasion, of course, it had a very large deficit.

§ Mr. Noel-Baker

I certainly can, because we intend, by the plans which are well known, so greatly to increase our gross national product that we shall easily be able to carry out our policy. [Laughter.] It is no good hon. Members opposite laughing. We shall certainly do it. We started this work in the immediate post-war years. What are right hon. and hon. Members opposite talking about? Are they really trying to compare conditions now with conditions in 1948? We started this work with the intention of building upon it to do what we knew had to be done.

§ Mr. Bernard Braine (Essex, South-East)

The right hon. Gentleman is surely aware that, in the period after the war, such long-term development as was undertaken in these territories was undertaken at the cost of running up our short-term obligations. Such development took place at the expense of the Colonies.

§ Mr. Noel-Baker

I am well aware that what we did was right and that, if it had been developed by the present Government as it should have been—

§ Mr. Braine

I am much obliged to the right hon. Gentleman for allowing me to intervene again. I do not wish to confuse him on this issue, but it is an extremely important point and we should have it clear. Is he aware that only since about 1952 has this country been in a position to invest a net surplus in these overseas territories, and that the present position is that we are investing a higher proportion of our gross national income overseas, per capita, than any other country in the world, including the United States?

§ Mr. Noel-Baker

Of course, as a result of the war and our having sold our overseas investments during the war, we were 897 in great difficulties. My right hon. Friend the Member for Battersea, North (Mr. Jay), who understands these matters very well, assures me that, in 1948, 1949 and 1950, we had a surplus on our balance of payments overseas.

In any case, conditions now are utterly different. In our opinion, the Government have failed to develop the work of the United Nations and have failed to give a proper lead. We shall make a massive increase in what they are doing now. We shall do better with our bilateral colonial funds, but we shall channel a great part of the increase through the various United Nations organs which I have mentioned. We believe that, in so doing, we shall fulfil a national responsibility which is plain for all the world to see. We shall serve the interests of our own people and of people in other continents who have been our partners for so long.

We shall build up the strength of the United Nations, which is our hope for peace. We shall exorcise a potential threat of conflict which might endanger the future of us all. After the arms race, this terrible contrast of wealth and poverty between the nations of the world is the greatest challenge to the wisdom of civilised mankind. Unless we meet it, we shall spell out our moral doom.

§ Mr. John Tilney (Liverpool, Wavertree)

I do not quarrel with many of the facts which the right hon. Member for Derby, South (Mr. P. Noel-Baker) gave, though I think that he was too optimistic about our balance of payments if, by some mischance, his party were to come to power after the next General Election. I suspect that not only will our financial position cease to be strong, but we shall not have, as my hon. Friend the Member for Essex, South-East (Mr. Braine) suggested, the balance of payments surplus which is essential for this country, for the Commonwealth and for the Colonies, to which we owe such an obligation.

It may be, of course, that the right hon. Gentleman is thinking of introducing controls again. If he is, it may be possible; but I think that this ought clearly to be stated to the electorate of this country before people vote at the next election.

898 The total investment from all countries in those that are underdeveloped is far too small. I do not quarrel about that. It is 5½ billion dollars at the most, and the gap is, I agree, widening.

§ Mr. Leslie Hale (Oldham, West)

Then why did the hon. Gentleman's Government kill S.U.N.F.E.D.?

§ Mr. Tilney

I have one or two suggestions to make which are, I think, much better than S.U.N.F.E.D., if the hon. Gentleman will listen to what I have to say.

§ Mr. Hale

Suggestions now will be extremely helpful and we shall welcome them, but S.U.N.F.E.D. was murdered seven or eight years ago and nothing has been done by the Government during all the intervening years. They destroyed one of the most hopeful examples of international co-operation in almost any field.

§ Mr. Tilney

I am one who believes that much more can be done by private enterprise than can be done by what the hon. Member for Oldham, West (Mr. Hale) and the right hon. Member for Derby, South suggest. There is no reason why private investment should not be stimulated, and the two suggestions I have to make are designed to that end.

I agree with the right hon. Gentleman that there is the danger of political instability unless something is done. Communism, to many of these nations, appears to be offering more than the West, although, in fact, it is not offering more. Out of the 5½ billion dollars being given by the countries of the world, only 350 million dollars, a minute sum, comes from the Sino-Soviet bloc. It is as well to keep that in mind. I should like to see more given. I should regard it as an insurance policy in this ideologyriven world, and the money would, perhaps, be much better spent than some of the money we now spend on conventional weapons of defence.

The two suggestions I have to make would not, for the time being anyhow, cost very much. The first is for a long-term, modest step forward in multilateral co-operation, and the second is for a short-term effort which could be made by the United Kingdom itself. Both apply to private investment. Private investment, which can help world trade, 899 which is a paramount British interest, has been frightened by events in Asia and in Africa. It has not even been helped by debates in the House. Foreign investment could be increased immensely if confidence were greater in Africa and in Asia.

When I was in Nigeria a few weeks ago, I had the privilege of speaking to the Prime Minister. He told me that the national income of Northern Nigeria was no more than £17 per head per annum. In the whole of Nigeria it is no more than £22. Whatever we may do about Government to Government loans, it will not be easy to take the place of the colonial development and welfare fund money. Though I believe that some investment, such as in roads, could be made by private enterprise, because, after all, that happened in this country in the toll roads, obviously much of the development in that country must be by the Government, especially the building of schools and much long-term investment of that kind. Therefore, I should like to see some sort of Colombo Plan for parts of Africa.

But I will confine myself to those two suggestions on private enterprise. I have been privileged to be a member of a Commission which sat under the chairmanship of the right hon. Member for Wakefield (Mr. Creech Jones). It was an all-party Commission, set up by the Parliamentary Group for World Government. It has produced a Report on A World Investment Convention, published today. It is suggested that that Convention is a more flexible instrument than a world investment code, which is not a new idea. It has been put forward by the International Chamber of Commerce. It was debated by the Inter-Parliamentary Union at Rio last year.

It was suggested during the original debates dealing with the Havana Charter, in which India took part, and by Vice-President Nixon, as late as this year, when he stated that international investment was sadly in need of a code governing the relationship between investors and capital-hungry nations. The Report also says: the Prime Minister of the Federation of Malaya proposed, at the Economic Commission for Asia and the Far East, that a Code should be drawn up. 900 It has been commended by the Finance Minister of Ghana.

What is the present position? There is no effective body of law covering international investment. I therefore suggest a convention laying down broad rules of behaviour between lenders ond borrowers, with a secretariat that could help in drawing up investment agreements, under the aegis of the United Nations or a body such as the General Agreement on Tariffs and Trade, and operating not from a "have" country, but, say, from New Delhi.

Not only should there be that sort of secretariat, but there should be some appeal should a country default, There should be an arbitration tribunal, posibly appointed by the International Court of Justice, and sitting not in Europe or in Northern America, but possibly going on circuit. I do not think that there is any doubt that some borrowing nations are afraid of exploitation. We heard the past-President of Bolivia give evidence. They are afraid of strings being attached to loans, or of political discrimination.

The odd paradox in this world—I do not always agree with all my colleagues on this side of the Committee on this—is that frequently a loan without strings can achieve a political aim much better than the other type of loan. If an investing country can only go into partnership with an underdeveloped country, remarkable development occurs. I have had some experience of that in West Africa.

I enter a plea that those companies which never think of publishing a prospectus outside London should do so. If they can possibly have local money in an enterprise in an underdeveloped country, it is a good insurance for the future and brings the people of that country into partnership. They may be people who fear that giving a concession away means mortgaging their future in an indefinite equity. They are merely following the example of some European countries which are determined to have their own quota of directors on a particular company's board.

If one could produce this agreed tribunal there would be a sanction of publicity—publicity which many possibly defaulting countries would like to 901 avoid. They would much rather have their names held in high respect as keeping to their treaty obligations—obligations which they would enter into by agreement with the capital producing countries to pay compensation promptly if they should nationalise or in any way take over an undertaking.

I commend to the Committee one of the final paragraphs of this Report, paragraph 82: International trade is well served with organisations to supervise its working, of which (G.A.T.T. is the outstanding example. Foreign investment, on the other hand, has no similar supervisory body. Investment is just as essential as trade in promoting the economic growth of less-developed countries and it is high time that this gap in international organisation was filled. I should like, finally, to turn to something which Her Majesty's Government could do immediately—not a multilateral solution such as I suggested, or a long-term one, but one based on the investment guarantee programme of the International Co-operation Administration. I have sent documents to my right hon. Friend the Secretary of State for the Colonies, asking him to send a copy on to my hon. Friend the Economic Secretary. Because private enterprise is frightened of investing in Asia and Africa, something must be done. I believe that something can be done for our own Commonwealth on the lines of the investment guarantee programme, which demands as an insurance against expropriation or non-convertibility only ½ per cent. per annum on the money invested. It may never be called on.

I suggest that it should be for new money only and for the Commonwealth only. That would limit the scope, because capital is difficult to obtain. I would much rather channel it to those for whom we are trustee rather than dissipate it in a world-wide way. Already, this Investment Guarantee Programme has 1 billion dollars of projects applied for. That was as long ago as last January. If only we could have some Commonwealth development of this kind, great things might be seen from private enterprise. This is action which we can put to use now for our underdeveloped areas of the world which prefer—and I think rightly prefer—to be called "the developing areas."

§ Mr. Robert Edwards (Bilston)

I have listened with great interest to the remarks of the hon. Member for Liverpool, Wavertree (Mr. Tilney). I do not think that there will be any opposition from this side of the Committee to his suggestion that a convention should be set up to guarantee investments in the underdeveloped areas of the world. Although we are Socialists, and our preference is for investment for social and economic purposes, we realise that in our world there are mixed economies and that many forms of investment will need to flow from this country and the wealthy nations into the underdeveloped areas of the world—investments from the World Bank, from private individuals and from private companies.

If the countries of Africa and Asia want to encourage private investment they must be protected from political changes. There is no difference of opinion, as far as I can see, in the Committee on this matter. There is the need for a convention that will guarantee throughout the world the investments of private individuals. I have no doubt that even the Russians will support such a convention. They are rapidly becoming very important investors in the underdeveloped areas. I understand that the Russians have made a loan of £5 million at 2½ per cent. to the Yemen and that 150 Russian technicians are building a new port for the Yemen on the Red Sea. They are doing so only because we were stupid enough not to offer to lend the money to the Yemen because we were afraid that a new port might compete with Aden.

We spend £1,500 million a year on defence to save the Western world from the wicked Russians, yet through lack of a little common sense we have allowed the Russians, for an investment of £5 million, to penetrate politically right to the Red Sea. We refused to assist Colonel Nasser in building the High Dam at Aswan and influenced the World Bank to create difficulties. We allowed the Russians to make a loan of £37 million at 2½ per cent. so that a start could be made on the High Dam at Aswan. Again, for a very small investment the Russians have a very strong political hold in Egypt.

903 The same policy is being carried on in the Middle East and in the Orient.

§ Mr. Hale

My hon. Friend will remember that it was the sudden refusal, under American pressure, to carry out the offer to finance the Aswan dam that led to the nationalisation of the Canal, to the Suez venture and to the throwing away of more money than we had given to the United Nations Agencies over since they began.

§ Mr. Edwards

I entirely agree with my hon. Friend, but I was afraid to develop the theme because I thought that I might be out of order. I am pleased that that fact has been written into the record, even in a debate like this. Temptation to deal with the political aspects is very great, but I must resist it because time is so limited.

During the last ten years we have developed the principle of the Welfare State. We now accept the simple ideal that we are our brothers' keepers. We have made ourselves responsible for those who are less fortunate than ourselves, those in real need. The time has come when we must extend this principle all over the world. This is the only way by which we can save human freedom—by accepting the fact that we are our brothers' keepers, no matter what the colour of their skins may be.

My right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) made a human and profound speech which will be read and re-read when speeches like mine are forgotten in the dust of history. When debating the issue of assistance to the poorest people of the world, we are dealing with the greatest challenge of all time. It has been my privilege in recent years to visit quite a few parts of the world. I have been to the Middle East, from where two-thirds of the oil of the world is obtained. Oil is more valuable than diamonds or gold, yet in the Middle East the poorest people of the world live.

We are partly responsible for their position because in these areas we have supported the wrong people. We have allowed the oil revenues to go to sultans, shiekhs, kings and modern brigands and have used our military forces to keep such people in power. The money that has poured in from oil royalties has not seeped through to the people who need it We therefore have a great responsibility 904 for the political development which has taken place in many parts of the world.

Recently, I visited the Cameroons, which has been in British trusteeship for forty years, ever since the First World War. There is still only one hard road in the South Cameroons, where the rainy season lasts for eight months of the year. Normal traffic is impossible along this road. It is necessary to use eight-wheeled tractors to cover some of the roads during the very heavy rainy season. The lovable, charming and loyal people of the Cameroons are among the poorest in Africa. That road was built, not by us, but by the Germans. All the big buildings and houses and bridges in the towns were, in the main, built by the Germans. We have not done a great deal for the people of the Cameroons, in spite of their great loyalty to this country. [Laughter.] This is not a laughing matter.

In the French Cameroons, there is a great network of hard roads. The French Cameroons have developed an oil industry, with oil refineries. They have developed an aluminium industry. They made a proper economic survey of the whole of the territory, which has not yet been done in the British Cameroons. Hon. Members may laugh, but I am dealing with the facts. A citizen of the South Cameroons said to me, "It is true that the French have developed the Cameroons tremendously. They have fine macadam roads, but I would sooner be free and safe on a British dusty road than I would die as an outlaw on the hard macadam roads of the French Cameroons". He was dealing with the politics of the two countries, but at the moment we are dealing with the economic and social problems.

The World Bank and private investors have serious limitations, because it is not possible to use capital from the World Bank to build hospitals and schools. Nor is it possible to use private investment to build roads. It is not possible to use private investment for the essential social services that are so desperately needed. We cannot open up these countries without roads. Who will invest £100 million in a new road, say, in the South Cameroons? We can cut out this idea of social investments coming from private enterprise or from the World 905 Bank. It has to come from the Governments of Europe, the metropolis countries, which have taken so much wealth out of these underdeveloped areas in primary goods.

§ Mr. Tilney

I should like to suggest that it might be feasible to build some toll roads and toll bridges, as was done in this country not only many years ago, but, recently, in regard to the Mersey Tunnel.

§ Mr. Edwards

It took us a very long time to get rid of this kind of transport. It has always been opposed and caused frustration. In any case, we are dealing with simple people who have not pennies to pay for tolls, never mind the pounds that they would have to pay because of the high cost of building in these underdeveloped areas.

I should like to make one or two quick points before I conclude. The United Nations this year published an Economic Survey, covering world affairs for last year, which stated that the consequences of the deliberate inflationary policy of the Western countries—the rich countries—led to a collapse in the price of primary goods, and the extent of the decline in the cost of primary goods was 2,000 million dollars in one year. This was 2,000 million dollars lost to the producers of primary goods. These are the poorest people in the world. They are, for example, the little co-operative farmers in the South Cameroons who have organised themselves so that they can get a decent income from bananas and whose living standards have step by step increased until a few Cabinet Ministers in the capitals of the world and a few financiers behind closed doors decided, without consulting anybody, that the Bank Rate should go up to 7 per cent. As a consequence, down went the living standards of millions of people by a stroke of the pen, shattering their whole social advance in a very short time.

This 2,000 million dollars, which, according to the United Nations' Economic Survey, represented six times more than the World Bank had lent to all the underdeveloped countries during that year was lost in one year through the deflationary policies of the Western Powers. That might be clever politics, but it is immoral and fundamentally 906 anti-Christian to make wealth and try to solve some of our inflationary policies at the expense of those people who need our assistance more than anyone else.

I am sorry that I have taken so long. I have not covered half the points which I intended to make. I think, however, that this has been a useful and important debate so far and I am very proud to have made a modest contribution to it.

§ Mr. John Biggs-Davison (Chigwell)

Like the hon. Gentleman the Member for Bilston (Mr. R. Edwards), I have travelled a little in the Cameroons, but I hope that he will forgive me if I do not follow him up the road to Buea and beyond.

Earlier in his speech, he referred to the Soviet economic penetration of the Yemen, and the right hon. Gentleman the Member for Derby, South (Mr. P. Noel-Baker) spoke about the Soviet steel mill in India. There is no doubt that, particularly since the nuclear stalemate, the world conflict has shifted to trade, aid and investment. There is a world conflict. I think that the right hon. Gentleman the Member for Derby South rather suggested that we might have to meet formidable Soviet competition. It is already there. There is a conflict. I hope that an active British diplomacy will play a part in removing the causes of that conflict.

Whether or not there is an agreement at the Summit between President Eisenhower, my right hon. Friend the Prime Minister and Mr. Khrushchev, these three statesmen have already agreed on one proposition at least and that is that the struggle in the world is today mainly economic. Speaking as recently as 12th July, at Oxford, that great colonial administrator. Sir Charles Arden-Clarke, said this of Africa, parts of which he knows so well: The new states are determined to develop and will not hesitate to go elsewhere for money if it is not forthcoming from us. I think that some people who speak of a great multilateral international effort to aid the underdeveloped countries—I do not accuse the right hon. Genlteman of this—have it in their minds that the Americans will pay and that we shall get 907 some of the credit by calling it international. I do not think that we can leave this to the Americans. If one considers the state of the United States economy today and, even more, the state of mind of the American Congress and democracy, one concludes that we cannot leave this great task entirely to the Americans, generous though they have been in recent years. Our own fate here in this island is bound up with the underdeveloped countries, so many of which are within the Commonwealth. We need trade in order to produce. Our life is in our trade and in the Commonwealth. In this race we cannot afford to pull into the pits and play the part of spectators. If, on the other hand, we are to stay in the race at all we must have rapid economic expansion in this country, and that is where the difficulty comes in. I do not think that the right hon. Gentleman met the point put to him by my right hon. Friend the Minister of State when he said that under previous Socialist Administrations there was no surplus on the balance of payments and therefore they had not been able to do this job, and when he was asked by my right hon. Friend how we could be sure that they would be able to do it in the future.

The trouble is that in the past—this is not a party point—rapid expansion has meant that we have imported more, and this has meant higher prices and a threat to our trade balance. On the other hand—here I am substantially in agreement with what the hon. Member for Bilston said—if we indulge in deflation in order to keep our imports within bounds we cause a depression in the primary producing countries and, in so doing, we lose export markets among some of our best customers.

In 1958, the United Nations Economic Survey tells us, the fall in raw material prices cost the primary producing countries 2,000 million dollars which is six times what was lent then by the World Bank, of which the right hon. Gentleman has spoken so highly. How are we to have expansion without this declining spiral? How are we to keep our imports within bounds while expanding our economy in order to meet the needs of the underdeveloped lands? One method which is sometimes urged is that of monetary restriction. But. as the hon. 908 Member for Bilston has pointed out, that increases the difficulties of the underdeveloped countries. They cannot get finance on terms they can afford. Always the disadvantage of monetary restriction and excessive monetary discipline is that it tends to slow down expansion.

Lord Keynes was not always wrong about everything. He said in 1939 that this problem of excessive imports "cannot be remedied by the Treasury chastising itself with a high rate of interest." So much for monetary masochism. Then there is the other method which we sometimes have urged upon us, namely, Socialist sadism—the contrary perversion. Experience shows that Socialist controls tend to bungle, are bureaucratic and are destructive of private enterprise to which we on this side of the Committee are attached.

There is another method, and that is the flexible use of the tariff. We might learn a little about the beneficial use of the tariff from the United States, and we can also learn a little from the history of this country just before the war. We have been suffering since the war from the erosion and the obsolescence of our tariff structure. One should not have to urge upon a Tory Front Bench that the tariff is the best means so far invented of regulating free competitive enterprise at home, giving it the stability that it needs for capital formation, attracting foreign capital on acceptable terms, providing the means to bargain and cooperate abroad with Commonwealth and other countries and furnishing countries overseas with markets for the product of this development. It is no use developing an economy if, when an industry is established and set in motion, it is unable to sell what is produced.

It is astonishing how the free trade illusions of the nineteenth century have survived and have even been disinterred in the second half of the twentieth century. In shipping, in aviation and in commerce Britain is meeting with ruthless discrimination from the power which has used its world influence to write non-discrimination into international agreements which have governed the financial and commercial dealings of most of the free world—agreements which have been imposed as the price of aid in war and in cold war. The United States have assisted and 909 supported the Germans and others in erecting a barrier between Britain and the Continent. This came out very clearly in the debate on Thursday on the plight of aircraft production in this country.

Then again, the foreign trade and investment of the Communist world, whose challenge we have to meet, is sustained by the monetary power of a totalitarian State. It is regrettable, but we are just not living in a free trade world. We are living—and I think the right hon. Gentleman rather burked this issue in his speech—in a world of rival empires, of competing Continental blocs, and the whole struggle is dominated by the competition of two systems for the mastery of the world economy and the control of the resources and potential resources of the underdeveloped areas.

I do not feel that there is anything essentially new in this for Britain. We have faced a world like this before. What is new is the scale of the challenge and the stakes. What worries me is that there does not seem to be much time left for us in Britain to form our own economic association disposing of markets and raw materials in an effective and equitable partnership.

To contend with these continental blocs what must Britain do? She is called to give a lead to the oceanic countries and to form not a bloc but a free association which will be bound, not divided, by air and sea, as the land blocs are joined by roads and railways—a free association united by common interest upon a common principle of commercial and financial practice. These Continental blocs which have emerged in recent years are in part a response to new standards of mass production and territorial power, but they also reflect the new industrialism of substitutes—substitutes for the traditional products of the underdeveloped areas. So, I believe that the underdeveloped countries themselves will become enthusiastic members of an association which genuinely offers mutual help and benefit and which offers partnership and not patronage, as an hon. Member has said.

All this, of course, is in the spirit of the Commonwealth and of the Colombo Plan. It has not always been the spirit of some United States and international agencies. The adverse balances and the 910 crippling debts of many underdeveloped countries are being perpetuated by the rule of the International Monetary Fund that a member State whose holding has been exhausted must sell gold rather than other currencies. The industrial development of less advanced countries has also been retarded by the I.M.F. doctrine that if there is a deficit in a country's balance of payments, this is necessarily caused by the inflationary creation of bank credit. This point links up with what the hon. Member for Bilston said. If the I.M.F. and those behind it really accepted the principle of the interdependence of national economies, it would provide not so much for the deflation of debtor economies but for an expansion by the creditor Powers of their own imports and investments.

I have heard—and the Economic Secretary will know better than I—that there was quite a deal of resentment at the I.M.F. meeting in Delhi in October, 1958. The complaint was heard there from underdeveloped countries that the discipline imposed by the I.M.F. was already too oppressive, interfered too much with their internal affairs and that this infringement of their independence and sovereignty would increase with the expansion of liquid resources decided upon at that meeting. Again, Mr. Eugene Black said recently: In extreme cases aid poorly conceived, far from improving the economies of receiving countries, has actually added to the heavy burdens under which they are bending already. Even outside the formal limits of the Commonwealth and Sterling Area, there are underdeveloped countries which would rally to our oceanic circle. But for their benefit and our own—for out position is precarious as well as theirs—we would have to enlarge our industrial base from which we can help and equip them. Norway, Sweden, Switzerland and Austria have been concerned in the recent negotiations of what are called the Outer Seven. Their close association with Britain and the Commonwealth will be most welcome. I believe an hon. Member asked, "What has that got to do with it?" The answer to him is that if we are to equip the underdeveloped countries we must have a larger and more productive industrial base. That is why the relationship of this country with other 911 European countries is of such great importance for the advancement of underdeveloped countries oversea.

§ Mr. Hale

My right hon. Friend opened the debate by discussing those countries which have a standard of living of £30 a year and an expectation of life of twenty years. We are talking about starving kids and disease-ridden people. We have heard two speeches from the benches opposite concerned with directors' fees, dividends, and articles of association.

§ Mr. Biggs-Davison

I was not touching on those subjects, but was trying to suggest how we in Britain, together with partner countries, could help to deal with this problem, which is as terrible as the hon. Gentleman says. I am not going to do any of these starving kids—and there are many of them—any good by talking emotionally. One has to think out the means of helping them. I shall bring my speech to an end when I have made my contribution and then, no doubt, the hon. Member will be able to make his.

Such association of Commonwealth and European and other countries, developed and less developed, is in keeping with the aim accepted by the Commonwealth Economic Conference at Montreal of an expanding Commonwealth, that is, a Commonwealth that expands not by political annexation but by co-operation between sovereign partners, equal in status if not in strength.

This oceanic club, which is a sociable word for a flexible body, should, like the Commonwealth, have few rules and a very flexible constitution. May I briefly suggest the conditions under which I think it should operate? First, it would be agreed that we should limit imports from countries or blocs not importing in fair return. There would, to use Mr. Diefenbaker's expression, be a switch of trade from those countries not trading reciprocally to those who do. It is certain that Britain cannot help the underdeveloped countries if her imports from the dollar or the mark areas or from the franc zone are allowed to rise to the point where either Commonwealth production is depressed or where we face a sterling crisis. At the same time, as hon. Members have pointed out, we have got to run our economy at high 912 pressure if we are to equip the underdeveloped countries without endangering the £.

It would be agreed that members of the club would not buy outside what could be bought inside at the same price or at a lower price provided that the quality was the same or superior. Then, I believe, it would be necessary to set aside, as the right hon. Gentleman suggested, a proportion of the national income to help the under-developed countries. The right hon. Gentleman mentioned 1 per cent., but I would not say what the percentage should be.

Already a considerable sum is being invested abroad as my hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) pointed out, but we should do more and I believe our people want to do more even if it means—and I think hon. Members opposite should say this if they believe it—that we defer for a while if necessary, a further increase in our own standard of living.

Again, there must be a real attempt to stabilise the commodities which these underdeveloped countries produce. There is a plan which I believe is now receiving consideration by the Government and which has been put forward by Mr. St. Clare Grondona. I should be interested to hear from the Economic Secretary, or from whoever replies to the debate, what stage the official study of that scheme has reached and to have an assurance that if the scheme is not likely to work they will, at least, bend their efforts to produce one that will.

The membership of this circle of nations and peoples would, I suggest, be open to those who kept the rules for as long as they kept them. They could come and go as in the Sterling Area or Commonwealth. Nor is it essential that every member of the Commonwealth should undertake all the obligations. In trying to establish a Commonwealth economic policy in recent years, we have made the mistake of saying that if we are not unanimous we cannot do anything. We could have said, "All right, we will go forward. We will revive our preferential system and those who want to will come with us." I think that if we step off smartly in the right direction we shall find that others will quickly follow.

913 I shall be told, I suppose, that what I have suggested amounts to discrimination. I shall also be told, no doubt, that our American friends insist on non-discrimination, that illusory ideal enshrined in the international agreements entered into during and since the war. But, of course, it is all nonsense. Discrimination is a law of life for men and nations, and for underdeveloped countries seeking aid and development without forfeiting their independence discrimination is necessary to solvency and survival.

The law and logic of non-discrimination is their subjection to their creditors, and the best service that we could render the underdeveloped countries would be to get rid of this rule of non-discrimination. I do not believe that the American mind is really as closed as some people here seem to imagine to the realities of the world, which is not one world at all, but a world of nations and groups of nations, needing to discriminate in order to secure reciprocal treatment and exploit their resources without jeopardising their balance of payments. The United States have approved and supported the European Common Market.

True, the General Agreement on Tariffs and Trade bans a preferential tariff area, but permits a Customs union. This is something which has done a great deal of harm to the advancement of certain countries. I remember reading the proceedings of the International Islamic Conference whose members discussed the forming among themselves of a preferential tariff area which would have been greatly to their advantage. They found that they were not allowed to do so. Early in the story of the Bagdad Pact, the member countries desired to form a preferential tariff area which would also have been greatly to their advantage. It would have helped them to develop their resources, but, again, they found that they were precluded by international agreement.

Men and nations were not made for international agreements, and if international agreements do not meet their needs they ought to be revised. I do not know how long the progress of the underdeveloped countries will be retarded by the legalistic formulae of the past decade. It cannot be much longer, but my fear is that it could be long enough to give the world to Communism.

914 I think that some such plan as I have tried to sketch should appeal to the great and generous American people who have shown their desire to raise up people less fortunate than themselves. In any case, this oceanic circle of nations should be open to all who accept the obligation of reciprocity, and those who approve common markets and free trade areas cannot in conscience or reason oppose the establishment of an association of free nations which, in the current jargon, is both non-exclusive and outward looking.

§ Mr. A. E. Oram (East Ham, South)

, I found myself in a certain amount of agreement with the opening remarks of the hon. Member for Chigwell (Mr. Biggs-Davison) in which he pointed out the connection between the subject matter of this debate and the issues which we hope are due to be discussed at the Summit Conference. However, I shared the irritation of my hon. Friend the Member for Oldham, West (Mr. Hale) at listening to a speech which seemed almost entirely devoted to notions of international trade rather than to the more immediate problems of the underdeveloped countries; although I admit—as I am sure we all recognise—that there is a close connection with the problems of international trade and indeed I shall possibly transgress in that respect myself during the course of my speech.

§ Mr. Biggs-Davison

How do we secure the means to help these people except from trade? How is it done?

§ Mr. Oram

I have just said that I recognise the connection with the problems of international trade, but in a debate of this kind I suggest that it is a question of balance.

This debate is mainly on the question of how to assist the peoples of the underdeveloped countries to raise then-standards of living. When I reflect on that problem I am impressed by three aspects of it. The first is the enormity of the problem which has often been described, and was graphically described this afternoon in a few well-chosen sentences by my right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker). It was recently described by Mr. Paul Hoffman, the managing director of the United Nations Special Fund. 915 According to The Times, of a few days ago he used language which seemed to me an attempt to match the enormous severity of the problem of world poverty. He said that the dimensions of the problem were "staggering" and that the increase in personal standards of living in these countries was "dangerously too slow." That contrasted in my mind with a report which I read of the speech of the United Kingdom representative at the recent talks on world economy at Geneva, the Secretary of State for Foreign Affairs, who made what appeared to me a very complacent speech.

The second aspect of this problem which always impresses me is the enormous amount of study which has been devoted to it since the end of the war. If one starts to read about it, one is immediately faced with a tremendous amount of material. Not only from the universities and the academic world, but from the agencies of the United Nations, there has been produced a tremendous library, a tremendous record of wisdom on these problems. There is no lack of ideas about what ought to be done. The problem facing us is how to bring these academic studies down to hard reality, how to produce real results after the analyses have been so brilliantly made. That, it seems to me, is particularly the problem of the Government and of this Committee in such a debate as this.

The third aspect of this problem which impresses me is the enormous complacency which I found reflected in the speeches, and in the answers given at Question Time by Ministers of the present Government. I wish to give two examples of that complacency. The first has already been referred to by my right hon. Friend when he quoted from the Annual Report and Statement of Accounts of the Colonial Development Corporation. In that Report we find a glaring criticism by the Corporation of the attitude of the Government to development projects in underdeveloped countries. Forthright terms are used to express the dissatisfaction of the Corporation. I will read one or two of them: … unfortunately 1958 was not a happy year; many irritations; no capital reconstruction; … relations with Government departments became such that Corporation felt frustrated and discouraged. … The emphasis 916 often seems to be heavier on the negative of doing nothing than on the positive of encouraging development.… and so on.

Being impressed by that highly critical Report I put down a Question to the Colonial Secretary asking what he proposed to do about reviewing his Department's methods in assessing the projects of the Colonial Development Corporation. Despite that authoritative criticism, his Answer was that he proposed to do nothing at all—apparently continuing the policy of "the negative of doing nothing."

The other example I take from the sphere of trade—and here I follow the hon. Member for Chigwell—rather than that of direct aid to the underdeveloped countries. There is an increasing awareness that the problems of poverty-stricken countries are likely to be solved not only by schemes of aid, such as have many times been discussed in this Chamber, but also by a sound international policy regarding trade in commodities. I find increasingly that people are inclined to the concept that if we are to have wide fluctuations in the prices of the basic commodities upon which these underdeveloped countries so much depend, whatever we do by way of aid is likely to be submerged in the tragedies that come upon them when prices go so drastically against them, as they are all too liable to do.

I have made modest attempts to call attention to this problem on previous occasions and I see other hon. Members present in the Chamber on both sides of the Committee who are aware of that fundamental problem. But I should like to call attention to the fact that recently we have had outside support for that general thesis in the World Economic Survey recently published and which was discussed recently at Geneva. A large part of that Survey is devoted this year to the problem of commodity prices; how they have been behaving over the long term and over a more recent period, and what has been the effect of fluctuations of world commodity prices on the economies of the underdeveloped countries.

I will not go into the detailed arguments of the Survey. Suffice it to say that it strikes me as one of the more challenging of the World Economic Surveys of recent years in that it poses this as an important problem with which the 917 statesmen of the world ought to grapple. That is why I referred to the complacency of the right hon. Gentleman the Secretary of State for Foreign Affairs when he spoke on the question at Geneva in the name of this country.

I may be doing the right hon. and learned Gentleman an injustice because the report of his speech which I have seen is a limited one, but it struck me as being a succession of bromides which did not match the challenge presented by the Survey. In my opinion this country has a unique opportunity to take up that challenge regarding what ought to be done about world commodity prices.

Post-war Britain is admittedly not in the first rank of world Powers in the economic as well as in the military and defence sense, and it may well be that we are not in a position to take the lead in the transfer of wealth from the West to the countries of South-East Asia and of Africa in the same sense as are the United States or, in another sense, as is the Soviet Union. We have not the same economic resources as have those two vast countries.

If that is so, however, it is all the more important that we should give a lead in those spheres, and by those means that are still open to us—in getting our commodity markets on a sound international basis. What is needed in that case is not so much economic wealth or possessions as economic know-how, initiative and courage. It is that that seems to me to have been woefully lacking in the Government's recent approach to these problems.

I suggest that a British Government spokesman could well have gone to Geneva and have given a moral lead to the world on how, by international commodity agreements and in other ways we might begin to solve the world's economic problems. Our present economic situation in relation to the underdeveloped countries is parallel with the political situation immediately after the end of the Second World War. At that time, the Labour Government were faced with a great need for political changes in South-East Asia, and with a great opportunity for making those political changes. They siezed that opportunity. They gave freedom to India, Ceylon and the others, and took steps that have been 918 recognised ever since as being of really great importance.

The parallel to which I want to point now is that in economic terms there is an equal need and an equal opportunity which this Government ought to be seizing. The Government ought to be giving a lead as imaginative, as forthright as that of the Labour Government in the years following 1945. Just as the crying need then was to show the peoples of the underdeveloped countries that the Colonial Powers were willing to give them their freedom, so the crying need of the world now is to show these underdeveloped peoples that the peoples of the West are prepared to give them their economic freedom.

It is because we had the sort of speech at Geneva to which I have referred that I feel that the Government are completely inadequate in facing up to that task, and one all the more welcomes the possibility—the probability—that, before long, we will have a Government able to take the initiative in economic affairs comparable to that which a previous Labour Government took in political and constitutional affairs.

§ Mr. Maurice Macmillan (Halifax)

I am afraid that I cannot share the view of the hon. Member for East Ham, South (Mr. Oram) that a Labour Government would be so successful economically as it was politically, or that the same sort of "success" would be desirable either for this country or for the underdeveloped countres. I hope the hon. Gentleman will forgive me for not following him in the intricacies of his argument, as I intend to make only a short intervention. I will take him up on only one point, and that was when he claimed that it was entirely due to the Labour Government that freedom was given to India. It is more accurate to say that Indian independence has been the policy of all Governments practically since the Viceroyalty of Lord Dufferin and Ava.

In spite of the criticisms made from the benches opposite, a great deal has been done, but although I need not go into the details tonight, it is true to say that, however much we may admit has already been done, there is a great deal more to do both by direct help to the underdeveloped countries and, to some extent, by indirect help as well. The 919 Commonwealth Economic Conference at Montreal has made a start. It has set in train some new ideas, but there is no doubt that even with the plans put forward at Montreal there are no grounds for complacency, nor do I think that that has been shown on this side of the Committee.

There will always be a great deal more to do than any Government are doing, because the same kind of successful development of the underdeveloped countries as we have seen in this country will lead to increased demands from them just as it has, quite rightly, led to increased demands in regard to our own standard of living. It is also true to say that if the West will not help there are other countries and other sections of the world that will.

The right hon. Gentleman the Member for Derby, South (Mr. P. Noel-Baker) wanted more help canalised through United Nations Agencies. I would suggest that such direct aid is not enough; that we need the sort of aid—and the hon. Member for Bilston (Mr. R. Edwards) seemed to agree—that enables countries to develop themselves and to develop their own trade.

The hon. Member for Bilston quoted Russian penetration into the Middle East through loans and so on. In fact, his attack was really based on the Government's failure to compete with other Governments in what might be called strategically sound investment; that is to say, investments, small in cash, that produce big dividends in political influence. That is something perhaps a little outside the sphere of direct aid to underdeveloped countries, but it is something about which we cannot afford to be complacent. Perhaps I may quote a few figures.

The export trade of the Union of Soviet Socialist Republics with the non-sterling Middle East went up from 68 million United States dollars in 1956 to 150 million dollars in 1958. Russian export trade with the sterling countries in the Far East went up from £45 million in 1956 to £80 million in 1958. I do not want to exaggerate, but I think that there is here a political as well as an economic danger. I hope that in his desire to build up direct aid through the international agencies the right hon. Gentleman will not press us to divert too much 920 through those channels from what might be called the straight competition, where politics as well as economics are involved and where, as the hon. Member for Bilston pointed out, quite small investments could pay quite big political dividends.

I hope the Committee will forgive me if I keep more or less on this line of trade and expansion rather than direct aid through the agencies. The Good Samaritan had a kind heart, but he also had two pence, and it was the two pence that paid for the wounded man's lodging. I therefore hope that the hon. Member for Oldham, West (Mr. Hale) will believe that we on this side do not lack heart if in this debate we think that we might well concentrate on the pence.

Apart from the general difficulties that many bilateral agreements bring to the underdeveloped countries, they are not always in the best economic interests of the countries concerned, particularly agreements with the Iron Curtain countries. There was a case not long ago when Ceylon got rather the worst of a bad bargain. Surely, the real solution to these problems lies in the expansion of trade and, in some cases, in the diversifiction of trade. There are obvious dangers to backward countries which are dependent upon one industry or one product only. There are dangers which not only affect their own strength and their own position in world markets, but which are themselves affected by what we do in this country and by decisions taken primarily in regard to Europe.

The points made by my hon. Friend the Member for Chigwell (Mr. Biggs-Davison) about the Common Market were valid, not only directly, but indirectly. There is, for example, the question of cocoa from Ghana, which was sold very much in West Germany. Now that West Germany is part of a Common Market, in which the dependencies of member countries are included, will the cocoa from Ghana be kept out by French West African cocoa? There are other points such as these which must be borne in mind when we think about how to help these countries, and particularly those which, both economically and morally, are our dependencies. We must never let it become a liability rather than an asset for such countries to be members of the Commonwealth.

921 I do not want to anticipate Wednesday's debate, but it is worth while remembering that not least of the Government's duties in giving economic aid to underdeveloped countries is to do what they can to ensure that countries of the Commonwealth are economically viable units and are not split up and detached into units and components which can never work by themselves.

I hope, too, that I shall not be out of order in referring to books. I must declare a quite considerable interest, as a good deal of my time is spent in selling books to the underdeveloped countries. It is a material point, however, that our aid is not only financial, but technical with expert advice which involves the technical education of the countries concerned. Particularly if we are leading them towards economic and political self-sufficiency, they must be able to work things themselves.

Although my right hon. Friend the Chancellor of the Duchy of Lancaster has made a considerable advance, I should warn him that he has not gone nearly far enough. It is no good considering these problems of education and books on the sort of scale of small help to the British Council or assistance to the arts in our own provincial towns. These problems must be thought of in relation to the scale of our other economic aid, or, indeed, in relation to the scale on which we are planning our defence expenditure, because politically these are as much weapons of the cold war as any others.

I quite agree that the measures proposed by the Government to help countries which are short of sterling to spend more on books in general are very satisfactory; but the plans for the subsidy to reduce the price of individual books leave much to be desired: apart from the difficulty of choosing the books to be subsidised, apart from the fact that the method chosen will probably destroy the normal export of books to underdeveloped countries, there is the competition from the United States and from Russia to be considered.

We all know the size of the United States programme. As to Russia, I have recently been shown a technical book, which would be of great use to Indian students and a copy of which I have given to my right hon. Friend. This was 922 exported by Russia and priced in India at 8 rupees, or approximately 12s. 6d. The nearest that we could get to it from this country would be a price in India of 42s. to 50s. I do not know whether it is true that trade follows the flag, but techniques very much follow the book. If we hope to give British technical aid to underdeveloped countries, this is a point which we should bear well in mind.

It would be expensive to do it properly, but this sort of thing is always expensive and we must accept that. We must also accept that however undeveloped a country is, it does not want to share in adversity, but only in prosperity. If we want to help others, our own economy must be sound. When hon. Members opposite criticise the Government for reducing their contributions to United Nations Agencies and the rest, they are in large measure admitting the high standard which the success of the Government's economic policy has led them to expect.

In any event, how can contributions through international agencies be increased except from either increased prosperity and savings or by increasing taxation—or, perhaps, the increased contributions proposed under the Socialist superannuation scheme might be used to increase contributions to these agencies; the new pensions scheme might be an admirable source of investment which could help to provide the contributions. In any case, wherever the contributions come from, they depend upon the success of our export trade and of our balance of payments. I hope that hon. and right hon. Gentlemen opposite will recognise that this has been largely achieved by private enterprise and that they will not seek to interfere with it too much.

I do not, however, want to go further into this controversial aspect of aid to underdeveloped countries and the conditions which are its prerequisite here at home, but there is one other consequence which it is likely to have here which we must accept. Not only must we not kill the industries which have been started with our aid, but we must help them to develop and to find their markets. I do not say that we should not protect our own industries; it is difficult, though by no means impossible, to do both.

The Lancashire cotton trade has been in great difficulty. I consider that the 923 Government were quite correct in refusing to impose a quota on the exports from Hong Kong to this country because Hong Kong is a Colony, underdeveloped in relation to its increased population, for which we are entirely responsible. Whatever the rights and wrongs of the measures that the Government chose to take, I think it important that we should accept those sort of measures as a principle, so that we can achieve a proper division of labour, not only within this country, but within the Commonwealth as a whole.

The Government must accept the responsibility for developing the industries of backward countries even if they conflict with our own industries. We must also accept the responsibility of adjusting ourselves at home in a way which does not destroy the development we have made abroad. I am old-fashioned enough to believe that an increase of trade in one part of the world, if properly dealt with, leads to a general increase of trade and prosperity throughout. There are some cases in which a tariff can be helpful, but that does not always apply. We must take great care that the sort of arrangements which, say, the Belgian furnishing industry has made with its raw material producers do not damage other countries as their arrangements damage us.

In the end, the whole future of the underdeveloped countries and the extent of our aid both through United Nations Agencies and directly to help these countries develop themselves comes from our prosperity at home. I am glad to be able to end in agreeing with the right hon. Member for Derby, South in the fact that he, too, would say that the final object of this aid is not just rich countries dispensing charity to poor ones, but is establishing a world trade and prosperity which will be of benefit to us all.

§ Mr. Leslie Hale (Oldham, West)

I had not intended to seek to catch your eye in this debate, Sir Gordon, and I apologise for rising to speak without preparation and without all the figures readily and securely at my disposal. I listened to the opening speech of my right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) with more satisfaction than I have listened to any 924 speech in this Chamber for many a long day. It was a very good speech indeed. It was also a speech which I know will bring great joy to many Labour electors because of the certainty with which he spoke and the clear, unequivocal pledges which he gave.

I would be the last to accuse the hon. Member for Halifax (Mr. Maurice Macmillan) of lack of heart, and I wish him all joy in his efforts to sell books to underdeveloped or any other countries. I have spent a good deal of time trying to sell books to reluctant publishers, and I recognise that success in selling books is almost a political art. With a great deal of what the hon. Member said I am in agreement, and I have no desire for any sort of quarrel even with what has been said by hon. Members opposite, but so much of it was irrelevant to the many aspects of the subject.

Our difficulty in a debate of this sort is that we are talking of quite different and separate things. Private enterprise may have given generous subscriptions. Indeed, it has. Many private enterprise firms have been very generous, but that has nothing whatever to do with the United Nations Children's Fund, and cannot have anything to do with its organisation or operation. We are talking, on the one hand, of bringing help, light—if hon. Members like—to those who live in darkness and in the valley of the shadow of death; of bringing them life, bringing them a chance of health. I think that the hon. Member, who made a good speech, when he reads it through will, perhaps, regret the observation, "How can we do more?"

This is the Government who took £60 million tax off beer this year. To what might they not have transferred it, if they had all that money at their disposal in one year? I agree that there may have been blocked sterling, but could we not have directed it to some of these good causes? I can go to any "pub" in Oldham, where there are big-hearted, generous men who may be glad at a 1d. a pint off beer, but who would not have wished it when it might have done so much for suffering people, and when we give to the Children's Fund £300,000 a year or thereabouts—something like 1d. per year per head of the population, and when we know, from those such as 925 Ritchie Calder, who have seen them, the miracles which have been performed, literally miracles, by antibiotics in the treatment of crippling diseases. We have seen the lame, the halt and the maimed, after half a crown's worth of penicillin injection, taking up their beds and walking, again becoming fit men, women and children after having been crippled for years. And we give 1d. per year per head to this!

I am glad that my right hon. Friend was rude to the Government about the comparatively small addition to the Refugees' Fund. A few weeks ago, I had been rather polite about it. That is one of the prices one pays for an all-party resolution.

But the Government have done a good deal by comparison with many countries; the record of this is not bad. But surely there could be a little more sense of urgency, a little more sense of reality in this question. Because the United Nations High Commissioner speaks of what is not merely a Christian duty, but an economic investment. Instead of just keeping the refugees alive, by giving a little more we could provide them with rehabilitation, and a job and a home.

I have not, as I said, the figures at my finger tips, but I think I am right in saying that about £400 will rehabilitate a man, and, if he has them, his wife and family. These are things we cannot afford to be mean about. If we cannot do them because we have a Christian duty and because we believe in performing Christian duties, we can still do them on hard, realistic, economic grounds.

The hon. Member for Liverpool, Wavertree (Mr. Tilney) spoke at some length about private investment, but that sort of approach, the private investment economic approach, is still remote from the magnitude of the problems. I agree with what he said about Africa, but it is the background of expenditure in Africa that matters. One of the problems in Africa is the problem of transport. One of the immediate, political problems of East Africa is the domination of East Africa by the Nairobi-Mombasa Railway. It is a physical fact that gives political control.

The whole question of the development of Africa is tied up with large-scale schemes for the provision of trans- 926 port which can never hope to pay in terms of our lifetime or in terms of a generation and which, indeed, are not worth considering from the point of view of investment at all, except in so far as there is in the long-term background the necessity of the planning and development of a great Continent—which may have a much greater share in future history than any of us are able to perceive at the moment.

Of course, when we talk of these things we talk humbly and without much information, because no one can forecast what the coming of atomic power or the development of a whole nation will do. A former Member of the House, a man loved on both sides, the late Dick Stokes, took me "some years ago to see some of his machines used for the construction of canals, very different from those of the days of De Lesseps. Indeed, it is not easy for us to know what can be done.

The hon. Member for Wavertree referred to the Communist countries and how little they were doing through the United Nations. But how much are they doing direct? China is an underdeveloped area. China, with 600 million people, is one of the countries which, a few years ago, we talked of as one of the poorest; China, with a transport problem such that it can have overproduction of agricultural produce in a distant part of one province and a famine in a distant part of another and no communication to make it possible for the one part to feed the other. I can remember talking to a Chinese manufacturer not long ago who wanted to export eggs to earn foreign exchange to buy other food for people who were starving. That is where international planning comes in.

I ask hon. Members opposite to remember—I say it with all the moderation I can—that economic development of our Colonies