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Volume 887: debated on Monday 24 February 1975

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asked the Minister of Overseas Development what are the latest figures available for British overseas aid; what proportion of this aid is in the form of loans and direct grant; what other terms and conditions are attached to aid offered; and if she will make a statement.

The provisional gross figure for 1974 is £338 million. Of this, bilateral aid and technical assistance amounted to £258 million, of which 45 per cent. was on grant terms and 55 per cent. as loans, mostly interest-free.

Repayment terms on loans vary according to the economic circumstances of the recipient country. Most of our interest-free loans have a grant element of 77 per cent. An offer of aid may specify the projects or purposes, and the extent to which funds are available for the purchase of non-British goods and services.

Does my right hon. Friend accept that the level of the loan element in our aid is far too high, irrespective of the generous conditions on which the loans are made? As we move forward to the 0·7 per cent. gross domestic figure, hopefully in the near future, will she try to reduce the loan proportion of our aid?

We want to move towards that objective. We have a very good record in this matter. The target was set by the Development Assistance Committee. We have accepted that, and our performance as between grant and loan is as good as that of almost every other donor country.