§ The Minister of Overseas Development (Mrs. Judith Hart)With the permission of the House, I would like to make a statement on the future programme for overseas aid.
The House will know that the Second United Nations Development Decade begins in January, 1971. Its purpose will be to help the developing world to achieve a faster rate of economic growth so that it may begin to have a fairer share of the growing wealth of the world. It is an objective supported in all parts of the House.
The Government believe it to be of great importance that, as a major donor country, with a high reputation for the quality and organisation and size of its aid programme, we should play our full part in this new development effort. Despite our economic difficulties, we have succeeded in maintaining official aid to the less developed countries at a high level during the life of this Government and we have greatly improved the terms of our aid in particular in the provision of interest-free loans.
We have now examined our programme for the first three years of the Decade, and our purpose for the whole of the Decade in relation to the new target of 1 per cent. of gross national product set by the Second U.N.C.T.A.D. conference and the particular recommendation of the Pearson Commission concerning this.
Last February, our White Paper on Public Expenditure gave estimates of £227 million for 1969–70 and of £235 million for 1970–71 for the total aid programme. Excluding the likely defence element in Britain's special aid to Singapore and Malaysia, this gives figures for 634 economic aid of about £219 million for 1969–70 and about £227 million for 1970–71.
The Government have now decided that in 1971–72 all economic aid will be consolidated into one official aid programme, and this will be increased from £227 million to £245 million, an increase of about £18 million. In 1972–73, it will be further increased to £265 million, an increase for the year of £20 million. In 1973–74, the last year of the present Public Expenditure Survey, the programme will accelerate by a further increase of £35 million to £300 million.
These figures, together with the defence element in our special aid to which I have referred, will produce total figures of £270 million for 1972–73 and £305 million for 1973–74, which will appear in the White Paper on Public Expenditure. These figures are in cash terms throughout and relate to gross disbursements.
These, then, are our decisions about the official aid programme up to 1973–74. This is the element of total financial flows from Britain for this period which the Government can determine and about which they can give a commitment. But private flows—that is, private investment and guaranteed export credits—are the second element in total flow, as it is reckoned in terms of the 1 per cent. G.N.P. target. Net private flows, as well as net official flows, count towards the target.
The volume of private flows is not determined by the Government, although it is influenced by Government policies. Their future level is difficult to predict, and one can make varying estimates of the possible course of private flows during the 1970s. Taking a high estimate for private flows, we could expect to reach the 1 per cent. target not much after the date of 1975 recommended by the Pearson Commission.
We recognise the element of uncertainty which is bound to attach to estimates of private flows six years' hence. So we shall keep the progress of both official and private flows under review. In any case, the Government intend, unless our balance of payments position should preclude it, to reach the target of 1 per cent. total flow not a moment later than the end of the Second Development Decade.
635 We seek the end of poverty wherever we find it—whether in the Britain we live in or the world we live in. [Laughter.] I should be sorry if any hon. Members found this a subject for any sort of amusement.
Hunger and disease recognise no national frontiers. No Government has a finer record than ours in the drive to end poverty—[HON. MEMBERS: "Oh."] No Government has a finer record than ours in the drive to end poverty at home. In a renewed and strengthened international drive to end world poverty, I believe that our new aid programme can make a vital and effective contribution.
I thought it right to make this statement today, in view of the debate tomorrow. No doubt, a number of questions arising from it can be considered in the debate.
§ Mr. BraineWe shall, of course, debate the figures tomorrow, but we note that they are in cash terms and relate to gross disbursements, taking no account of capital repayments or likely movements in prices. Would it not have been much fairer, more honest and more realistic to express the figures in real terms? Will the right hon. Lady confirm that the figures mean that the Government feel unable to accept the Pearson recommendation that official aid should reach a level of 0.7 per cent. of G.N.P. by 1975?
§ Mrs. HartThe hon. Gentleman will accept that, as we roll forward in our planning of public expenditure programmes, we shall move towards the later years of the 1970s. What I have said today relates to 1973–74 as the final date, covering the dates up to which our forward-rolling public expenditure programmes relate. That is what will be covered in the forthcoming White Paper. We shall wish to keep under review both official and private flows, and we shall very much have in mind the percentage of G.N.P. which official flows are then reaching.
As for the 0.7 per cent. target itself, the hon. Gentleman will recognise that it is at present a recommendation of the Pearson Commission, which will be the subject of a great deal of international discussion in which we shall engage ourselves in the coming year. What I have 636 said relates to the prime Pearson target of 1 per cent. total flow.
§ Several Hon. Members rose—
§ Mr. SpeakerI remind the House that we have heavy business ahead.
§ Mr. BiffenThe right hon. Lady said that the net flow of private investment to developing countries was not subject to ultimate control by the Government. Does she recognise that the hostility of Governments in such countries as India and Zambia to private British investment is harmful to the development of those countries? What representations is she making to such countries, as the taxpayers of this country ought not to be asked to subsidise the political instincts of their Governments?
§ Mrs. HartThis is a complex question, as I am fully aware. I thought that it was necessary to make the statement today, in view of the debate tomorrow. I am sure that the hon. Gentleman will be glad to discuss that matter during the debate.
§ Mr. BarnesWill my right hon. Friend agree that the rate of increase which she has announced may mean that we shall not have achieved the Pearson target for official aid by as late as 1980? As the share of exports which Britain receives from all the aid which donor countries give is almost twice the share of the aid which we provide, does she not consider that quicker movement on our part towards the 0.7 per cent. target could be achieved without imposing any great burden upon us?
§ Mrs. HartI do not know how my hon. Friend measures fast movement. On the basis of the figures which I have announced, the rate of increase in official flow by the last year will be over 13 per cent., a very high rate of increase. Moreover, my hon. Friend would be wrong to assume that among the Pearson Commission targets—the Commission made many recommendations—the 0.7 per cent. target will not be in our mind. It certainly will. As I have said, we shall be discussing it in our international negotiations and reflections on Pearson over the coming year. What I have stated is that we are guaranteeing to reach the total 1 per cent. target, and we shall keep both kinds of flow very much in mind in order to do that.
§ Sir G. SinclairIn view of the continuing decline since 1964 of official aid as percentage of our gross national product, does not the Minister consider her statement extremely disappointing? If, on the basis of that performance, she is relying largely on the private sector to make up for failures to allocate Government funds, what does she intend to do about encouraging private investment overseas, either by insurance or by tax proposals?
§ Mrs. HartI recognise the hon. Gentleman's deep concern about these matters —he is well known for it—but I put this to him. If he thinks that, after all our balance of payments difficulties in the last two or three years, to achieve a rate of increase in official flows by 1973–74 of over 13 per cent., taking the whole economic aid programme up to £300 million, is disappointing, I can only say that his view will not be shared by the developing countries or by the other major donor countries with which we shall discuss these matters.
§ Mr. PrenticeWill my right hon. Friend confirm that the figures which she has announced are not consistent with reaching the 0.7 per cent. Pearson target by 1975 or, indeed, projected forward, consistent with reaching it by 1980? Will she accept—and will she persuade the Cabinet to accept, which is more to the point—that those of us who want to see a proper British effort in this direction will not now be satisfied with anything less than the Pearson targets? In view of the improvement in our economic situation, we could and should afford to do that and announce that we shall.
§ Mrs. HartMy right hon. Friend, who has been very much engaged in these matters as my predecessor, will recognise that the context of this decision has moved forward considerably from the point at which he left it. Equally, I think that he will recognise that the Pearson Commission target relates to 1 per cent. total flow and 0.7 per cent. official flow, and, in relation to that, 1980 is the latest date at which Pearson hopes that people will move towards it.
My right hon. Friend will also recognise, as will the House, that, in planning 638 public expenditure, one pushes it forward over a planned period, and, as we move on in later years, we shall begin to look at 1974–75 and beyond—indeed, we should be looking at 1974–75 next year —and in relation to that we can then pursue the question of a further rate of increase beyond 1973–74.
§ Mr. BlenkinsopDoes not my right hon. Friend acknowledge that France is already achieving the target set by the Pearson Commission, and that West Germany has made clear its determination to reach it? Is it not unsatisfactory that we are not clearly accepting the target?
§ Mrs. HartWest Germany has a particular factor of a very large private flow, and there are many circumstances affecting other countries. Having had a period when we could not increase the aid programme as rapidly as we would have wanted, because of our balance of payments difficulties, we are now pulling it up and reaching a considerable rate of increase over the next three or four years.
§ Mr. John HallWill the right hon. Lady remind the House of the percentage of the gross national product represented by Government aid now, and say what the percentage will be in 1973–74 of the then estimated gross national product?
§ Mrs. HartI cannot give a precise answer, because we do not have precise figures about G.N.P. in future years, though we make some assumptions about its growth. I can tell the hon. Gentleman, in answer to the first part of his question, that we now stand, as I have said in answer to questions, at about 0.4 per cent. in official flow.
§ Mr. PardoeCan the right hon. Lady confirm that net British aid, after capital repayments and interest payments, has fallen by an average of 3 per cent. since 1961 and that her statement means that it will continue to fall at that rate in the years covered by her statement?
§ Several Hon. Members rose—
§ Mr. SpeakerOrder. We shall debate this tomorrow.