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grounds to seek to provide improved services for the local inhabit- ants of our Dependent Territories, so as to pre-empt criticism that Britain is committing them to independence under discreditable social and economic conditions. Conditions vary from one dependency to another but such an objective might imply, for example, open- ended commitments to the provision of subsidised housing; a level of commercial-type services (water, electricity etc) not supported by the prices charged for their use; communications by road, air and sea which do not increase the revenue earning capacity of the territory, and impose a recurrent burden.

18.

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To gear aid policy to consumption rather than to investment in this way is difficult to reconcile with the encouragement of

progress towards political independence, since such a strategy would inevitably tend to prolong economic dependence. On the assumption that the territory concerned could absorb the additional aid, a substantial proportion would in practice be devoted to social infrastructure and the territory would inevitably be committed to increased recurrent expenditure not matched by local revenue. Even if local resources were tapped to the limit through taxation, the end result in many territories would be prolonged if not permanent and possibly increasing financial dependence on Britain both for budgetary aid and for expatriate personnel. These long term risks therefore would have to be weighed against any short term political

advantages in choosing this option. However in the case of those territories (relatively few) which are judged unlikely to be economically viable, HMG may have to continue to subsidise many of the public sector services: the question remains, at what level?

Conclusions and Recommendations

19. To sum up, it is timely to review our policy towards the remaining seventeen Dependent Territories in terms both of their future political development and economic aid. In doing so we may have to make a choice between HMG's own interests which generally

tend to lie in the direction of "accelerated decolonisation" and

those of the inhabitants of the territories, which in some cases at least might lie in continued dependence. We may be faced with a rather similar choice in considering future aid policy, that is

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