HC Deb 04 March 1981 vol 1000 cc374-89 10.34 pm
The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd)

I beg to move, That the draft International Development Association (Sixth Replenishment: Interim Payments) Order 1981, which was laid before this House on 20 February, be approved. I hope that it is not impertinent of me to congratulate you, Mr. Deputy Speaker, on your appointment and, with respect, to welcome you on your arrival in the Chair.

I move the order in the place of my hon. Friend the Member for Banbury (Mr. Marten), the Minister for Overseas Development, who is on an official overseas visit to aid projects. He hoped and expected to be back in time for the debate, but it has been somewhat brought forward, which is a good thing in itself. I am forced to take the place of my hon. Friend.

The House will recall—and this is the starting point of our present discussion—the draft order that was approved on 17 June last year. That order authorised the United Kingdom to take part in the sixth replenishment of the International Development Association. A very large sum is involved. The total United Kingdom contribution to the sixth replenishment will be £555 million, promised over three years from 1 July 1980 to 30 June 1983.

My hon. Friend explained in June last year, when submitting the order, why we felt it was right to contribute that large sum to the IDA. He explained that the IDA is an affiliate of the World Bank which gives loans on highly concessional and highly favourable terms to the poorest countries in the world. The House may like to know that over 60 per cent. of the IDA loans go to Commonwealth countries.

My hon. Friend also made it clear on that occasion—this is the key to our present debate—that the replenishment of the IDA depended on necessary legislation being passed in the United States Congress. He added that if that legislation were not carried the replenishment could not be effective and the order which the House approved in June could not be given effect. Unfortunately, that is what has happened.

Up to now there has been no American legislation and, therefore, there has been no sixth replenishment. Replenishment of the funds of the IDA has not, in the jargon, been triggered. It has not been able to start. As the House would expect, that has put the IDA in a difficult position. As has happened before in previous replenishment operations, the suggestion was made to the major donors that there should be a bridging operation to tide the IDA over the gap.

We felt it right to join in the bridging operation needed to allow the IDA to continue its work. The terms of that operation were published and laid before the House in Cmnd. 8156 on 19 February. The bridging operation is already in effect and about half the donors, including most of the large ones, are taking part. Consequently, the IDA has enough funds to maintain its existing programme until the beginning of April. Our proposed contribution embodied in the draft order would extend the programme for several weeks beyond that.

The draft order authorises Her Majesty's Government to contribute £185 million to the bridging operation. That is equivalent to the first year tranche of what we would have contributed to the sixth replenishment. If the draft order is made, we propose to deposit at once a promissory note for about £92 million, which would be half the sum authorised in the draft order for the bridging operation. That would be a sensible way of handling the matter. That is in line with what several other donor countries are doing. It means that the British Government would shoulder a reasonable part of the burden created by the hiccup, or gap, in the replenishment operation.

The essentially technical arrangements that I have described will have a substantial impact on a matter that I know is of great interest to the hon. Member for Glasgow, Queen's Park (Mr. McElhone) and to the House generally—that is, Britain's 1980 aid performance measured as a proportion of GNP. It is worth explaining why, because this is the kind of technical point that occasionally can go astray.

It was decided recently by the development assistance committee of the OECD, which organises these statistics, that the promissory notes deposited with certain international financial institutions, including the IDA, which is much the largest of them, should count towards the annual total of development assistance. That means that they should count in the calculation of aid performance measured as a proportion of GNP.

The House will understand from the explanations that have been given that we have not, during the calendar year 1980, put in a promissory note representing one-third of our commitment to the sixth replenishment of the IDA simply because the replenishment has not been triggered. Therefore, that promissory note has not been lodged and will not count as part of our aid performance during 1980. We are still a little way away from the stage where we can give the House even a provisional figure for our aid performance measured as GNP during 1980 because both halves of the statement are still somewhat uncertain.

The hiccup over the replenishment of the IDA will mean that the figure of aid measured as a proportion of GNP for 1980 will be substantially lower than it would have been if the replenishment had gone ahead without difficulty. This is a technical point. We are talking not about a reduction of money spent in aid, but about a reduction in money promised for that aid through the IDA machinery through no fault of our own.

Mr. Frank Hooky (Sheffield, Heeley)

I do not understand this point. I think that the Minister said that by depositing the note that counts as part of the annual aid contribution. If, because of forces outside our control, that note is not valid, that must surely release funds that can be spent in other directions. The Minister cannot have it in both ways, counting it in favour of our aid figure if it is valid, by saying, if it is not valid, that the money is not free to be spent on other things.

Mr. Hurd

If the hon. Gentleman reflects on the matter, he will admit that an aid programme cannot be run on those lines. We are asking the House for authority to issue the promissory note which would normally have been issued during 1980. Now, with a delay of several months only, we are going ahead. We should look remarkably foolish if we had in some way committed that sum last year and then found ourselves, as we do now and as we knew we would, in the position of having to commit it over again.

We are trying to warn in advance of the figures that this technical delay in the lodging of the promissory note will affect the figure of our aid performance in 1980, when it emerges, as a proportion of GNP. That alteration will not be a true measure of what has been spent on the aid programme. It is simply a technical result of the way in which the development assistance committee requires us to present the figures.

I turn to the future. I am glad to tell the House that the United States Administration have now told the IDA that they propose to ask Congress to authorise the full United States contribution to the replenishment. The American appropriations under the plan to be submitted to Congress will run behind schedule for the first two years, but at least they will be enough to start the replenishment. It is not for the House or the Government to say when Congress will approve the Administration's proposals. When it does the replenishment will begin, although late, and the bridging operation will be finished. I fear that the House will then have to approve a new order. We believe that it is best to proceed with absolute correctness. The draft order approved last June will not suffice in those circumstances. A fresh order will be required when the replenishment begins.

If the House approves the order tonight, the money contributed by Britain under the bridging operation will be attributed to us in credit for the first year of the replenishment. It will be a book-keeping transaction. When replenishment begins we shall be credited with the amount of the promissory notes made under the bridging operation.

These are technical matters, but it is necessary to put them to the House because they are the justification for asking it to approve a new order when in essence it has already discussed the matter last June. The basic point is not technical, however. Large sums of money are involved, which is an important political and economic point. We have a major international programme—the largest multilateral programme for the great majority of recipients in the poorest countries. It was threatened with interruption, which could have been serious.

In theory, it would have been open for us—if we had been as mean-minded as is sometimes suggested—to take shelter behind the problems of the United States Government. It would have been open to us to have refused to take part in a bridging operation. We did not take that step as we did not think that it would be in the interests of Britain and its contribution to world development. We accepted that we had an interest and a responsibility to ensure that the IDA could continue work that we believed to be good. I hope that the House shares our judgment and that it will approve the order.

10.49 pm
Mr. Frank McElhone (Glasgow, Queen's Park)

May I take this opportunity to offer you my sincere congratulations on your new appointment, Mr. Deputy Speaker? You have always been a highly respected Member of the House. I have no doubt that you will bring a great deal of respect to the Chair. I wish you well.

I shall not attempt to repeat the arguments advanced by my right hon. and hon. Friends when the House debated the same subject on 17 June last year. I was not present during that debate, but on reading the report of the proceedings it appeared to me that my right hon. and hon. Friends were in no way satisfied with the Minister's answers. If he checks the Official Report I am sure that he will agree with me. We support the order, but I want to take the opportunity to ask several relevant questions and to follow up particularly the last comments of the Minister.

The hon. Gentleman mentioned the difficulty that has led to this debate. As I understand it, from the memorandum to the report of the Select Committee on Statutory Instruments: The replenishment has not come into effect as intended because of the failure of the United States Congress to authorise the United States' contribution". I am pleased that the Minister indicated that that promise has now been made. From discussions with colleagues who are very experienced in this matter, I understand that promises have been made before by Administrations in the United States and difficulty has then been experienced in getting the replenishment through. I therefore look at that promise with a certain degree of caution. It is a pity that the Prime Minister did not take the opportunity to raise this matter when she was discussing many things in Washington last week. It would have been of greater benefit to the image of this country than discussing support for the United States in its policy towards El Salvador.

Cuts in aid from the United States as a major contributor are extremely serious and have an effect on the attitude of other countries. That is why this is important. I have already made the point to the Prime Minister's Parliamentary Private Secretary, as I know that neither he nor the Prime Minister will be present tonight.

As a major contributor to this association we should take some responsibility for its projects. I therefore hope that the Minister will take note of some of the questions. If we are providing the substantial sums of money that he indicated, I hope that he will agree that responsibility for the way in which the money is allocated is a major part of our function, because we are a governor of the association as well as a part I contributor.

The latest report of the IDA that is available in the Library is that for 1978. On reading it I was rather disappointed to learn that parts of the programme concerning education, water and sewerage and population seem to have a very low priority. I acknowledge that agriculture has the highest priority, and I am not complaining about that, but the other three important elements of any Third world programme have a very low priority.

I refer the Minister to page 24 of the IDA report of that year. Talking about project appraisal it says: Project appraisal involves more than saying 'yes' or 'no' to a proposal. It requires detailed investigation of at least six different aspects of the proposal: economic, technical (including environmental), managerial, organisational, commercial and financial. I should like to touch briefly on two of the criteria for the allocation of the money. I ask the Minister if he would reply to me—not tonight—regarding a very serious issue raised in The Observer and The Vole magazine last weekend about the dumping of pesticides in Third world countries. These do enormous damage. In the IDA report this question is asked: Will the project have adverse effects on the environment of the country or on the health and well-being of its inhabitants? So that organisation itself poses the question how our money and money from other countries will be used. The Minister should look at The Observer and The Vole magazine. The House is indebted to these two publications for highlighting that matter.

There is another important matter. One of the major criteria in allocating money is an economic investigation of projects to ascertain the number of jobs that it will create, and the rate of return. I hope that that is not acceptable. The IDA is part of the United Nations development programme, in one sense. I was disturbed to read in The Observer last Sunday that in Nepal children of 7 years of age are working a nine-hour day as labourers carrying 20lb loads of gravel for 30p a day. I ask the Minister to investigate that report.

If the Minister expects the Opposition to support an order for £555 million of the British taxpayers' money to be allocated to the IDA, the Government, as a governor of the association, have the responsibility to investigate such reports. It is soul-destroying to read such reports and it is abominable to have to talk about them. I hope that they will be investigated.

Finally, I should like to touch on the beguiling explanation that the Minister sought to give on another matter. I should like to get from him the answer to a question that I put to him a few days ago: what is the net amount of official development assistance for the calendar year 1980?

The total amount coming through the aid programme, whether to multilateral programmes, such as that of the IDA, or bilateral programmes, which are especially important to the poorer countries, will represent a dismal picture. It is all very well to say that we did not get the promissory notes tacked on to the 1980 programme because of the failure of the American Congress to agree, but we know that the Minister or his right hon. Friend will have to make a dismal announcement.

We know that these promissory notes are deposited with the Bank of England, with the rest of the contributions, to make up the total amount expressed as a percentage of GNP. During the period of the Labour Government it was not counted in that way. It looks better for the Government when done in this way. Therefore, I ask the question, to which I am sure he knows the answer—if not, he can get it from the box before the debate is concluded: will he either confirm or deny that the net amount of official development assistance for the calendar year 1980 is not above 0.34 per cent. of GNP?

I do not wish to appear petulant, but when the hon. Gentleman responded to the debate on the Brandt report in December, in the course of which I put four specific initiatives to him, I did not receive a reply from him at the Dispatch Box and I have not received an answer by letter. It is discourteous to the House not to reply to a member of the Opposition, whether he be a Front Bencher or Back Bencher. I hope that that message is not lost on him or on the people advising him.

I press the Minister to give me an answer now. It will be painful medicine, and it will cause dismay throughout the Third world and to committed people in this country. Bad medicine is easier to swallow at this time of night, but it will cause a great deal of dismay not only to people in this country but to the Third world.

10.59 pm
Mr. Nigel Spearing (Newham, South)

Mr. Deputy Speaker, I should like to echo what has been said by my hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) about your presence in the Chair. We are sure that you will not only maintain the high standards to which we are accustomed but give Back Benchers the benefit of the doubt when doubt arises.

Yesterday the House dealt with the nuclear sword, and this evening those of us who are interested are dealing with the ploughshares. As the Minister said, the International Development Association contribution of Britain is perhaps the most important, significant and, I am sure, major part of our multilateral contribution. Therefore, it befits a little more examination than we have given it up to now. The sum of £500 million, even over three years, is substantial.

Although, as my hon. Friend the Member for Queen's Park has mentioned, there is an annual report for 1978 in the Library, will the Minister enlighten us a little more on the current programme? We have before us today Cmnd. 7900, which is the sixth replenishment document, issued by the executive directors on 15 January 1980. However, that document relates largely to the collection of money. It tells us what countries are contributing what sums. There is not much indication of the past and future distribution of those moneys. When we have these debates, we usually debate a White Paper relating to payment of sums.

Will the Minister say whether there is any opportunity to discuss how the money is used other than in these debates? The control of the House over its moneys is exercised at the time of voting the money, and that time is now. I take it that the Minister will probably say that this is the occasion—and perhaps a future occasion, if we have one, as he said.

Paragraph 1 of the report on the IDA, Cmnd. 7900, says: The development projects financed by IDA must meet the same economic and financial standards; the procedures for credit appraisal, approval and supervision". Those are the same as the other projects which are financed by the International Bank for Reconstruction and Development or the World Bank. I suggest that that is all right, within reason.

However, everyone knows that the soft loans, which are the speciality of the IDA, are for those nations which have the minimum resources. Where natural resources are limited, most effort is required to provide reasonable standards for the people of those countries. Those people are often in the most remote areas about which least is known, from which cash or kind returns are already low and whose inputs, or the inputs required, need to be much greater in order to provide any measured return.

I have no doubt that the criteria applied to the IDA loans are not the same as those applied to the IBRD or World Bank loans of the other type. However, I question whether the difference is sufficient. Will the Minister give us particulars about that matter, either now or at some other time.

Understandably and properly, in paragraph 8, the report states, with reference to the least developed countries, that despite some large urban concentrations, the bulk of the population lives in rural areas and it is the investments necessary to raise agricultural output that will be crucial for achieving faster growth and alleviating poverty. The report states that 46 per cent. of the lending and 45 per cent. of the operations are in the agricultural and rural development sector.

In paragraph 10, the report states: Extending across all sectors is an attempt to design IDA projects to increase the income and employment opportunities of those in the poorest income groups. This trend is exemplified by IDA lending in rural development for projects aimed to expand output of small scale farmers and tenants and bring the land less into the productive process.

Mr. Bowen Wells (Hertford and Stevenage)

One of the main purposes of the IDA, as I understand it—I wonder whether the hon. Gentleman agrees—is to make available what would in our society be described as equity capital. Small businesses and small agricultural operators cannot work and cannot guarantee to repay loans at the interest rates which have to be applied by the World Bank. The IDA gives that opportunity, and it is not necessarily to the poorest countries and the poorest people. It is the people with initiative and enterprise who simply cannot be financed in any other way. This is the importance of the IDA subscription.

Mr. Spearing

I think that I would half agree with what the hon. Gentleman says, but the point he makes—that it depends upon those with initiative and enterprise to get things off the ground—is at odds with the point which I have just quoted, which means that it is those who have least to provide who need aid most. Without going further into the matter, I must point out to the hon. Gentleman that the very objective of the IDA itself in the macro-scale has to be repeated on the micro-scale on the ground if the IDA is to achieve its aims, and what I am not sure about is whether that happens in the application of similar criteria.

I was about to say that the Labour Government's White Paper,"More Help to the Poorest", Cmnd. 6270, reflected that philosophy in Britain's aid programme. My information is that there has been a modification in that regard in respect of the United Kingdom's aid programme itself, and I draw to the Minister's attention the report of the former Select Committee on Overseas Development regarding aid to India, in which a number of recommendations were made to follow that very type of policy. The Government's response was not encouraging.

I shall not go into that now since that is not the purpose of this debate, but I put it to the Minister as one of the points which he should now consider and perhaps pass on to his hon. Friends, because it illustrates what my hon. Friend the Member for Queen's Park said about the ironic fact that our debate tonight, and indeed the recycling of this contribution, is necessitated by the attitude of the United States.

I do not say that that is the attitude of the President of the United States. It is clearly at present a matter for the American Legislature. But the fact that nothing was said by the Prime Minister on her return from the United States about a possible conversation on issues relating to the North-South dialogue was a notable omission from that announcement. It was not just what the President said but what was not discussed which was of great significance. For the Prime Minister, or, indeed, President Reagan, to think of Western security only in terms of arms—which was the clear impression which the House received on her return—shows how narrow the horizons of that gentleman and the right hon. Lady seem to be.

I notice from the report that El Salvador is a contributor to the IDA, as are many other perhaps less well founded countries, but it does not figure in the list of recipients. Ghana does, and so does India. I wonder why that should be. Is it that the regime in El Salvador was not particularly willing to have the sort of project in which the IDA specialises?

If we are to ensure that there is freedom from want, that there is freedom from fear, if there is to be freedom from exploitation and if there is to be real security, the activities of the IDA are much more likely to supply those benefits than are the activities of military advisers. That is at the heart of what is perhaps one of the major debates in this country today. We have witnessed a considerable increase, and a quite proper increase, of interest in matters relating to the North-South dialogue.

I have been told by colleagues that the number of meetings which they have been asked to attend and address where people come and respond to what is popularly known as the Brandt report is a marked feature of British life today. It is significant that this has occurred at the same time as the Government, as we heard last night, are preparing to spend not £500 million but goodness knows how many more millions, albeit over a much longer period, on something entirely negative. I believe that that is against the present predilections and interests of the British people. I have tried to show that if we want real security and freedom, attending to the matters to which the IDA attends is much the more likely way to achieve them.

Mr. Edward Lyons (Bradford, West)

Does my hon. Friend agree that, if one could achieve some degree of multilateral disarmament, the amount of money that would be freed for assisting the underdeveloped countries would be vastly greater than it is today? One of the great prizes that would result from disarmament—either entire or to a degree, mutually agreed—would be that those vast resources could rejuvenate large parts of Africa and Asia, including perhaps getting rid of sleeping sickness and other terrible diseases which also damage productivity so greatly in those areas.

Mr. Spearing

I entirely agree with my hon. and learned Friend. I am saying that we should start with equivalent concern at the outset. But it is clear from the events of the last few days that the Government do not have that in mind.

IDA is one of the brighter spots, all being well and America permitting. I am not sure that that great nation, which itself was in the forefront of the fight for freedom against an overseas autocracy to which it was subject, has fully grasped the world dimensions that it now has to face. I hope that the American Administration will learn quickly. I am sure that certain members of our own Administration will try to help them learn. I hope that the House of Commons will do so at the same time.

My final point relates to a nation which does not appear in the IDA report because I do not think that it existed on 15 January 1980. I refer to the independent nation of Zimbabwe. In that country, many of the problems of the world can be seen almost in microcosm. They include disarmament, to which my hon. and learned Friend the Member for Bradford, West (Mr. Lyons) referred. A number of people there are certainly not disarmed, and that country certainly needs to see them disarmed, as indeed does the world as a whole. Within that country's own boundaries, the geographical and income divisions between North and South are reflected. It is a country which has great potential for development, but in which large numbers of people live in conditions comparable with those that the IDA fund seeks to alleviate.

I realise that on a per capita basis Zimbabwe may not qualify in quite the same way as other countries, but the tables show that India benefits from the IDA as being in the dualistic category, so it may be that in the future Zimbabwe, too, will benefit from the sixth replenishment.

I hope that in the short time at my disposal I have put to the Government some of the discontents of people who are by no means pacifists in the strict sense of the term. Whatever one's personal views, I think that the majority of people in this country are not of that description. But I also believe that by far the overwhelming majority would wish to see Britain's economic effort placed behind activities such as that pioneered by the IDA because therein is real security and real freedom. Through activities of that kind, we can ensure that those who peddle arms and alien political philosophies will not have the justification or excuse which unfortunately in many places they at present have.

I am not sure that the Government have yet taken that point of view. I hope that in succeeding debates on issues of this sort the Government will begin to understand that. I hope that in the not-too-distant future the same will apply to the United States of America.

11.15 pm
Mr. Frank Hooley (Sheffield, Heeley)

As a fellow Methodist, it gives me particular pleasure to congratulate you, Mr. Deputy Speaker, on assuming the Chair and joining a long line of distinguished Methodists in that place in the House. I wish you a long and happy tenure of office.

I welcome the fact that the Government have taken part in this bridging operation in the IDA. I certainly welcome the order. However, the reasons for having to introduce it are quite deplorable. The failure of the United States Congress to live up to its international obligations in this respect—I say"obligations", although I accept that this is technically a voluntary contribution—is quite deplorable and highly damaging to the image of the Western world.

In fact, after the refusal to ratify SALT, refusal to take part in the IDA must rank as one of the most short-sighted acts of policy since America failed to join the League of Nations in 1919 or thereabouts.

Mr. Hurd

Has the hon. Gentleman thought about the Soviet contribution to IDA?

Mr. Hooley

We are dealing with the reasons for bringing the order before the House. As the Minister explained, the failure of the United States Congress to authorise the United States contribution is directly relevant to that. I say"Congress" because, as the Minister fairly said, the United States Administration have recommended this once already, and the new Administration are recommending it again. Therefore, the fault lies firmly in the laps of the Representatives and Senators in the United States Congress. It is quite deplorable that it has failed on this occasion, as it failed so disastrously to ratify SALT, with what may be appalling consequences for the world at large in the near future.

In fact, as my hon. Friends said, it is depressing that when the Prime Minister came back from Washington, so far as I recall—I am subject to correction—she had absolutely nothing to say on the subject of the replenishment of IDA or, indeed, of Washington's attitude to the North-South dialogue at large. However, there was a long diatribe on the subject of the rapid deployment force and weapons, armaments, and so forth.

Whereas the American Administration have suddenly found it expedient, within a short time, to pour hundreds of millions of dollars into supporting a corrupt and discredited Government in El Salvador, they have over the past six months or more failed to authorise this replenishment to the IDA, which would do far more for democracy and peace and the well-being of the ordinary people of countries such as El Salvador than sending military advisers by the dozen, score, or 50 and pouring in money in order to back up a discredited regime.

I understand that a fair number of the donors to the IDA are taking part in this bridging operation. I very much welcome that. In my speech in June last year I referred to the rather poor performance of Japan and West Germany, but I am glad to say that since that date both countries have announced substantial increases in their aid programmes. That is a welcome move, particularly from two such important and wealthy OECD countries.

It is, therefore, even more regrettable that this should be offset by a failing on the part of the United States of America and, to some extent, by our prediction of cuts in the aid programmes. It is a great pity that Congress has not yet taken the necessary action. We are approaching the important summit meeting in Mexico. I assume that the United States of America will take part in the summit. Indeed, I gather that the United Kingdom will also take part.

The United States of America will not approach that summit in a strong or helpful position if its contribution to this very important international fund remains unratified. From the Minister's statement, I was not sure whether the American Administration were simply making a recommendation to Congress in the hope that the replenishment would be made or whether there was an indication that Congress would fulfil its obligation to stump up the money. During our last debate on this subject we were told that the American Administration had made that recommendation. It was hoped that Congress would play its part. However, in the event that did not happen.

I turn to a specific point that was raised during last June's debate but to which we did not receive an adequate answer. The Minister for Overseas Development said: We have therefore agreed with IDA management, with the understanding of the other donor countries, a special arrangement whereby the drawings against our contribution will be lower than they would otherwise have been for the first six years. That formula will enable us to reduce substantially the cost to public funds over the next few years of contributing to the replenishment. In other words, although the promissory note would be deposited for the full amount, there appeared to be a private understanding that we would not pay out the money, or that the IDA would claim only a limited amount of money against that promissory note.

I sought some clarification in that debate. I made the following observation: Clearly, if for some reason the drawing by the IDA were limited by some informal understanding, which is not on the record and which is not even explained to this House, we might find that instead of our aid programme including, say, £50 million to the IDA in a particular year, the effect was about £25 million. Then we would come to the end of the financial year and, lo and behold, to our surprise, the aid programme would have again been underspent by £20 million or so, instead of its reduced aggregate being spent right up to whatever the new figure is. We need some clear explanation of these limitations on drawings, what the practical effect will be and, in short and simple terms, what is likely to be our expenditure against the aid programme on the IDA—I emphasise 'expenditure', not 'commitment'".—[Official Report, 17 June 1980; Vol. 986, c. 1486–96.] I do not recall receiving a clear explanation from the Minister about the extent of the financial commitment within the aid programme in respect of the promissory note. I understand that the promissory note will be deposited and that that constitutes a commitment by the United Kingdom to stump up £184 million. However, the Minister pointed out that there was some private agreement about the limitation on the drawings by the IDA. I wonder whether the bridging operation also includes that agreement. If so, to what extent? What impact will it have on our disbursement? Presumably, there will be nothing in the current financial year, as we are practically at the end of that. However, it would presumably have some effect on the financial year 1981–82.

We would need to be assured that underdrawing might be offset by expenditure elsewhere. I take it that the Treasury will certainly not permit any overdrawing. We need to know the effect of this commitment to the IDA in cash terms in 1981–82, although I fully support the order and feel sure that it will be approved without opposition from the Labour Benches.

11.25 pm
Mr. William Hamilton (Fife, Central)

I add my congratulations to you, Mr. Deputy Speaker, on your appointment. As a fellow North-Easterner, I expect preferential treatment in subsequent debates in the House!

It would be remiss of me to compare the motivation for this debate with the motivation for debates that occur on many other occasions in the House. Most hon. Members who are present are genuinely concerned, on what I hope is a non-party basis, with the problems of the underprivileged sections of the world. There are hundreds of millions of people who will not be sleeping tonight in a bed and who will not know when they will get their next meal. I am sure that I shall have the support of Conservative Members when I say that it is a relief to get away from the internal squalor of my own party's theological discussions—I put it as mildly as I can—and listen to a debate of this kind.

I must compare the atmosphere tonight with the atmosphere engendered by the Prime Minister when she reported on Monday on her return from the United States. She reminded me very much of a female Hitler—the bellicose noises that she made, the sabre-rattling, the phraseology, couched in militaristic terms, against the Soviet Union and against anyone who dared to challenge the authority and the power of the United States. It is one of the great attractions of this House that one can move from the atmosphere created by a Prime Minister whose policies are in ruins around her and who, because of that, has to make bellicose noises about the threats from outside to what we are discussing now.

The threat to world peace is not what the Prime Minister described on Monday. It is not from the Soviet Union. It is the indescribable poverty and misery and deprivation of three-quarters of the world's population. The IDA and other bodies are trying to tackle this problem, but they are not even scratching its surface. This Government will go down in the records, irrespective of the complete failure and ruin of their domestic policies, as the Government who failed to meet the challenge of the Third world. The name of this Government is mud in the Third world. At the same time that they come to the House and say that they will spend £5,000 million over 15 years—it will be a lot more than that—on a militaristic weapon against an unknown enemy, they say that they cannot afford 0.7 of 1 per cent. of total GNP to help hundreds of millions of starving people. It is an obscenity for which the world will never forgive us.

My hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) said that the 1980 figure would be 0.34 per cent. of the GNP. The Minister had better say whether that is right. We expect an answer, and we shall find out in due course whether there is any substance in that suggestion. Certainly the figure is well below the 0.7 per cent. that is the recognised minimum target throughout the developed world.

Mr. Robert Rhodes James (Cambridge)

If £5 billion is spent over 15 years on the Trident missile programme, on present projections we shall be spending £13 billion on overseas aid in that period.

Mr. Hamilton

I cannot challenge those figures now, but I hope that the hon. Gentleman will give me chapter and verse. I very much doubt that they are facts. But let us assume for the sake of argument that they are. What conceivable defence is there for spending those enormous sums on military might when there are massive problems in the world? There are no civilised grounds for that kind of priority.

My hon. Friend the Member for Newham, South (Mr. Spearing) talked about people flocking to meetings throughout the country, not on military might but on development of the poverty-stricken world, which is crying out for such resources to be devoted to it. I wish to quote from an article in The Times on 24 February; I am sure that the Minister has read it. It was headed:

West needs to refine strategy for Third World, report says". The article told of a study produced by the British Atlantic Committee's defence and overseas policy working group, whose chairman is Marshal of the Royal Air Force Sir Neil Cameron. The document is entitled"A Global Strategy to meet the Global Threat: A British Initiative". The article in The Times said: A more constructive overseas aid programme, freer trade—with an end to creeping protectionism'—more effort in the areas of peacekeeping and disaster relief, are also among proposals put forward. My next quotation answers in part an intervention by the Minister. I agreed with him when he asked one of my hon. Friends"What about the Soviet Union?". Although I am criticising our aid programme, we should compare it with that of the Soviet Union. The article continues: the West should also ensure that it gets the credit"— for whatever it is doing, however little we are doing. Few realize that it already provides 30 per cent. more aid than does the Soviet Union—two-thirds of whose aid is military equipment anyway. The Opposition are here to criticise the inadequacies of the Government's policies, but we must put them in their context to answer those other critics on the Left who pretend that we are doing nothing—certainly not as much as other people. It is important to put the Soviet Union's activity in that context.

The article says that the working group proposes a"transatlantic forum", whose first purpose would be to stem the Soviet advance in the third world, where the Russians have built up a 'spectacular' capacity to interfere with the flow of oil, raw materials and trade. They now have many more airborne troops than the United States, and could land 50,000 men in 1,000 aircraft in the Gulf within 48 hours. I presume that it was that kind of threat that induced the Prime Minister to say in America that we were prepared to put an advance force in the Gulf virtually at a moment's notice.

I do not believe, and large numbers of people in this country do not believe, that that military response is the answer to the major world problems that we are facing. I am sorry that the House is so thinly attended and that we are discussing this matter at so late an hour. The response that we ought increasingly to be making to the world problem is not in terms of military hardware, but in terms of financial and technical aid to people who are crying out for it and who have no use for military equipment, sophisticated or otherwise. If the debate serves no useful purpose other than to focus attention on that problem, it will not have been in vain.

11.36 pm
Mr. Hurd

This has been a short but interesting debate, and I should like to reply briefly to some of the points that have been made.

I came to the conclusion that one or two of the speeches to which I listened, including that of the hon. Member for Glasgow, Queen's Park (Mr. McElhone), must have been written on the assumption that the Government were refusing to take part in the bridging operation and were turning their back on the IDA. One would have thought that, however grudgingly, the Opposition would welcome the Government's policy in this respect, and I suppose that the reason why they did not was that it contradicted many of their criticisms of our general attitude to these matters. Given the fact that this is a major decision, involving large sums of money, with which, to judge from the speeches, the House agrees, one would have thought that there would be a welcome for it. The hon. Member for Sheffield, Heeley (Mr. Hooley) was the only person who had the grace to say that. I should not claim this on many occasions, but I think that for once we are entitled to have a certain need of praise.

The hon. Member for Queen's Park, in a reasonable and agreeable way, raised a number of detailed points. I am sorry if he feels aggrieved because I did not answer his last speech in detail. I have looked it up. There were a number of controversial proposals—some of which have been dealt with in other speeches—about Southern Africa and EDF. I apologise for the delay, but I shall write to the hon. Gentleman on the specific points that he raised.

The hon. Gentleman spoke this evening about the priorities of education, water/sewerage and population. Taking the World Bank and IDA together, one finds that the three sectors of education, water/sewerage and population accounted for large sums of their lending, namely, 10 per cent. or $1,200 million in the year to 30 June 1980. I think that that shows the priority that they give to these subjects, and they agreed two years ago to a rise in education lending to about S9 million a year. By a decision of the board in July 1979 health and population aid are being expanded, and the bank will concentrate on primary health care.

We accept that we, as a leading member, have a responsibility to comment on the technical and economic aspects of the projects, through our director, when they come to the board, and this applies to bank and IDA-financed projects.

Mr. McElhone

I discussed this matter with World Bank officials in Washington not long ago, and they pointed out that only 4 per cent. of the World Bank programme has been allocated to education. I think that education is a primary factor. These figures might be wrong, but on looking at the 1978 report I was disturbed to see that compared with the assistance provided by other regimes to the Third world education and water/sewerage have a low priority, and population control is not even mentioned.

Mr. Hurd

I have already given rather more recent figures than those that the hon. Gentleman has quoted. I shall make inquiries about 4 per cent. for education. However, it is difficult to assess priorities among these desirable projects.

As for pesticides, I seem to recall that The Observer article referred to the FAO and not the IDA. The Nepal scheme is nothing to do with the IDA. It is the responsibility of the UNDP, or another United Nations agency. I shall undertake an investigation and tell the hon. Gentleman what we know about these matters.

The hon. Members for Queen's Park, Newham, South (Mr. Spearing) and Heeley talked about America. It is not reasonable to ask me to add to what I have already said. The United States Congress did not act during last year. The new United States Administration, contrary to some press predictions, have decided once again to submit to the United States Congress legislation for the sixth replenishment. I cannot say whether Congress will deal with that swiftly or whether it will approve it in its entirety—these are not matters for me—but we hope that it will do so. We were told of the policy decision by the new Administration before my right hon. Friend the Prime Minister went to Washington. It was already in the bag as part of the Administration's policy. I do not think that there is any mystery or difficulty about that.

The hon. Member for Heeley is usually fair about these matters, but he was using dark and violent adjectives about the United States when the Soviet bloc was absent from these helpful activities. It is not fair for us to criticise the United States because there is a hiccup in the large sums that it provides for this and many other enterprises, without directing some of our adjectives to those who take no part in these matters and whose aid efforts are directed to an amazing extent to the distribution of arms and military equipment.

The hon. Member for Heeley pressed me legitimately on the question of what my hon. Friend the Minister for Overseas Development said in June about the arrangements that have been made to reduce the drawings on our contribution to the sixth replenishment. My hon. Friend explained in June that these arrangements, which are set out in the Command Paper, would reduce the drawings on our contribution during the first six years to 7.6 per cent. of quarterly drawings instead of 10.1 per cent., and that that difference would be made up in the last four years of the period over which drawings under the sixth replenishment are expected to last.

I have already described the financial arrangements for the bridging operation. They are not affected by the arrangements for the full replenishment, which my hon. Friend described in June and which I have repeated.

It is not possible to give figures for the exact cash spending under these arrangements in any given future year, but I can say that the effect in 1981–82 is certain to be very small.

Several hon. Members, especially and most eloquently the hon. Member for Fife, Central (Mr. Hamilton), ranged widely with your permission, Mr. Deputy Speaker, and dealt with the crucial balance between the efforts that we and our allies make in security and economic development. It is correct to say that there is great interest among British people in this issue, especially among the schools, universities, Churches and charities. I welcome that. The more that we can discuss important matters and move away from some of the artifical sparring that vexes us all, the more any real politician should welcome it. I do, and I think that all my hon. Friends who take part in these discussions outside the House welcome it also. The more one discusses these matters the more one gets away from a simple feeling that the only measurement is the measurement of official aid. Of course that is a factor and, with the poorest countries, an important factor, otherwise we should not be discussing the order. But it is not the only one, as is becoming clear.

The hon. Member for Glasgow, Queen's Park (Mr. McElhone) twitted me—I do not complain, and I was not surprised—about the aid performance and the ratio to GNP. The figures are uncertain, and I shall not give uncertain figures tonight. The hon. Gentleman did not question me when I explained why, in one important technical respect—which falls directly into the debate, because it is concerned with the IDA—the figures will be substantially lower than they would have been if there had not been this hiccup over the IDA. The hon. Gentleman and his hon. Friends are in possession of that fact. When the figures are out we shall watch carefully whether they play fair or explain this important technical consideration to their hon. Friends.

The hon. Member for Fife, Central made a great deal of noise about how disgraceful it would be if the figure were low. I am not sure whether he was in the House when I dealt with the matter, but if he was he has already forgotten. There is a great task of education before the hon. Member for Queen's Park, who is fully seized of the importance of the technical argument. We shall see how he discharges that responsibility.

Mr. McElhone

The Minister is trying to do a difficult job with the best spirit that he can muster. Like the rest of the Government, he is acutely embarrassed. Will he help his Prime Minister? The right hon. Lady has a supplementary answer burning a hole in her memory because of the way she described the aid handout. She is greatly disturbed by the figure. If the Minister will not tell us the truth, let him help the Prime Minister and tell us the shocking figure. It will be easy for him, because it is late at night.

Mr. Hurd

My right hon. Friend needs no help from me. I am doing my best to explain the basic facts that underly the figure in one important respect, when it is possible to produce a reasoned estimate of what it is.

Quite apart from the arguments about human suffering that the hon. Member for Fife, Central deployed, it is true that world stability depends to a substantial extent on the efforts made to relieve world poverty, not just by us but by the oil producers, OPEC and the others. There is a connection. If there were no such connection we should not be making the substantial effort that is illustrated by the order.

The hon. Member and his hon. Friends should not claim that this is the be-all and end-all. It is no good telling the people of Afghanistan that their problems are caused by inadequate expenditure by IDA, the World Bank or the other agencies of the United Nations. That is nonsense. In Zimbabwe economic assistance is enormously important, but the pressing need is to prevent the outbreak of a new form of civil war. What we are doing in the way of military training to a large extent comes under our defence budget, to which the hon. Member for Fife, Central is so passionately opposed. What we are doing in Zimbabwe is just as important as the lead we have given in giving economic aid to that country. These things must be considered together, if one is talking about the real world and not a world of fantasy.

Mr. James Johnson

The Minister goes to Africa, as I do. Is it not his experience, when he talks to local people in Khartoum, Lagos, or anywhere else, that they are disappointed with our performance—that it is not what they expect? They feel that we have done better in the past. We are doing less and less, on the excuse of the economy at home. Are not they calling out loud for teachers and for other help with the English language, which is vital for our merchants exporting goods?

Mr. Hurd

That is not my experience. I have not been to Lagos but I have been to Khartoum and I have had discussions with the President on exactly these matters. I know that in Khartoum, where we are proposing to put a lot of money into the new power station, which is crucial for the life of that city, so far from disappointment or the kind of grudging remarks that come in abundance from the Labour Benches, we find a great deal of appreciation. Of course, they would like us to do more. That is natural. We should like to do more. I do not accept the argument put rather crudely from the Opposition Benches about our name being mud. That does not accord with my experience.

A clear balance is required. If we are to have a stable and more decent world there must be political activity, an economic effort—of which this order is an illustration—and a sustained, sensible and intelligent effort on security. In discussing one, do not let us dismiss the need for the others. It is in that spirit that I ask the House to approve the order.

Question put and agreed to.


That the draft International Development Association (Sixth Replenishment: Interim Payments) Order 1981, which was laid before this House on 20 February, be approved.