Budgetary Aid
21.
In addition to development aid and technical assistance, we shall continue to provide budgetary aid to those dependent territories whose own revenues are insufficient to cover their recurrent expenditure; that is to say the day to day running costs of their administrativa
economic and social services.
In 1971/72, seven dependent territories will receive this form of aid at a total cost to HMG of roughly £3,000,000.7
22.
Neither we, however, nor most of the territories concerned, like
this form of aid. We do not like it for two reasons. From HMG's own
In point of view, budgetary aid represents an open-ended commitment. common with the peoples of the under-developed world generally, the inhabitants of the dependent territories expect to share in the increase in world prosperity; they expect better schools, medical services, roads and administrative services generally. This is only natural and just. But to the extent that the revenues of the dependent territories do not grow pari passu with the cost of those services, a growing burden of budgetary support is thrown on the British taxpayer. From the point of view of the dependencies, budgetary aid is by its very nature an unproductive form of aid; of itself it creates no new economic resources or sources of revenue. Moreover, territories receiving budgetary aid are subject to financial control from the United Kingdom. The degree of control has been progressively relaxed in recent years; but even so it inevitably has an inhibiting effect on local endeavour. This tends to militate against our traditional policy of encouraging the peoples of the dependent territories, through their elected or nominated representatives, to assume increasing responsibility for the
conduct of their affairs.
23. We intend, therefore, to bring budgetary aid to an end wherever possible. This does not mean that we propose to limit the dependencies' expenditure more rigorously. On the contrary, the emphasis is on increasing their revenues; we shall assist them liberally with both technical assistance and development aid to exploit their natural resources to that end. The economic outlook for most of the remaining dependent territories has undergone a remarkable change in recent years.
9.
/Who