§ Mr. Tom Clarke (Monklands, West)Notwithstanding the lateness of the hour, I welcome the presence of the Minister for Overseas Development and my hon. Friend the Member for Eccles (Miss Lestor). It is important to have this debate, especially in the light of some of the replies that the Minister has given my hon. Friend the Member for Eccles and other hon. Members recently.
It is appropriate to discuss, in as much detail as time will allow, what the figures, statistics and all the rest that the Minister has offered mean in terms of the problems of poverty in the Third world and the Government's response to them.
I do not know how many letters the Minister has received since he took over the Department, but I suspect that the one that will be foremost in his mind will be the one that began, "Dear Chris". It was an open letter published in theSunday Telegraph on the Sunday after the Minister's appointment, and it was from his predecessor, the right hon. Member for Aylesbury (Mr. Raison). I am sure that the Minister will not be surprised if I remind him that, in that open letter, his right hon. Friend had some interesting things to say. In the quietness of the hour we can reflect on what the right hon. Gentleman said and compare it with the Minister's record in office. His right hon. Friend then advised:
Nor will you be plagued with adjournment debatesTherefore, it is right that we should be having this one.His right hon. Friend also said:
The Guardian over-stated it when they said that you seem 'to have been sadly despatched to the saltmines of overseas aid'.In one of the most acute exercises in open government, the right hon. Gentleman said:I've no doubt Geoffrey will fight the battle well. I only hope that the Prime Minister, having put you there, will be sympathetic. She has many qualities, but I can't say that over-enthusiasm for the aid programme is one of them.He continued:I couldn't help thinking, as we had our amiable farewell chat last Wednesday, that it was about the first time that I had ever had a conversation with her about what Pd been up to at the ODA.The other day, the Minister assured the House that he had had a person-to-person confrontation with the Prime Minister. Perhaps tonight we shall hear how much she said, how much he said and whether the discussion influenced Government policy.The most telling sentence in that letter, to which I want to address myself tonight, stated:
We simply don't have a large enough programme by international standards.I put it to the Minister, who is highly regarded in all parts of the House—I hope I do not damage his prospects by saying that—that we have seen no improvement in that regard since he took over this crucial responsibility.The debate is vital and absolutely necessary because of the Government's quite appalling record on overseas aid. We have a moral responsibility to aid less developed countries. As a country, we benefit from that aid through world growth and economic interdependence. That was what the Brandt report was about. The House will not forget that one of the biggest lobbies ever at the Palace of Westminster was when more than 10,000 people urged 691 upon the House the necessity to accept the principles of the Brandt report. One gets the impression that the Government hardly know that it exists.
The United Nations target figure, the internationally agreed target, is that developed countries should aim to contribute 0.7 per cent. of their GNP to less developed countries as official development assistance. In all candour, the Government's approach is an absolute disgrace and I hope that the Minister will clarify the Government's position.
The United Nations set a target not of real percentage increase, but of a fixed proportion of GNP, as my hon. Friend the Member for Eccles has consistently reminded the Minister. The principle is that, as western economies and western incomes grow, simultaneously, so will our commitment to development and overseas aid. The GNP of the United Kingdom increased by 21 per cent. last year, but that was hardly reflected in our aid budget; hence, our proportion fell. Countries that accept the United Nations target figure of 0.7 per cent.—indeed, countries that accept the principle of paying a fixed proportion of GNP—are saying that we should tie the health of the Third world to our wealth.
The target figure of 0.7 per cent. is, to some extent, our income tax due to the Third world. A strange parallel can be drawn between the Government's approach to aid and United Kingdom taxation. They have made it easier for richer people to feel that they have no responsibility to the poor by cutting the proportion of individual incomes used to fund services. Similarly, we, as a rich nation, have cut the proportion of our national income, our GNP, used to fund world development.
The lack of logic in the Government's approach can be seen by using a tax analogy. If a person's income increases, we expect him to pay a fixed proportion in tax. We do not tell him to pay slightly more tax than last year to keep pace with inflation. We do not write to the tax inspector to say that our income increased by 21 per cent. last year so we will pay 5 per cent. more in tax. That is nonsense. If we accept that domestically, why should we take this approach to the Third world? Just as income tax is the money that members of the community pay to meet their responsibilities to the community, overseas aid is the money that members of the international community pay to meet their responsibilities to it. So the Government's record is a scandal and their excuses, which we hear every third week on Mondays, for 10 minutes in the House, are tawdry.
Let us hear no more of real terms increases; let us hear when we shall increase the proportion of our GNP that goes to the Third world. That proportion has fallen by 45 per cent. since 1979. On 20 June, my hon. Friend the Member for Eccles asked:
as the Prime Minister and the Chancellor of the Exchequer repeatedly stand at the Dispatch Box and say how well off the country is, could we not expect more of that wealth to go to the Third world? Instead, the amount is declining at a time when the countries that we visited are in desperate need." —[Official Report, 20 June 1988; Vol. 135, c. 830.]Our record as a member of the international community is appalling. That is nowhere more evident than in the United Nations. In a 1987 league table of OECD contributors to UNICEF, the United Nations children's fund, the United Kingdom came second from bottom. Our per capita contribution of 34 cents compared with Sweden's $9.41. So to say that net aid is growing in real terms is not to give the whole picture. Small increases 692 now are still not making up for the real-terms losses the Government have caused over the past eight years. And the Government's published expenditure plans to 1991 still leave real net aid from the United Kingdom 12 per cent. below that of 1979. That is the first answer to the Government's pathetic excuses.The second, more important reason why the Government's opinions do not ring true is that real-terms increases do not really matter. They are much less significant than measurements of the proportion of GNP, given that in 1979 this country was well on the way to reaching the 0.7 per cent. target. The figure then was an internationally respectable 0.51 percent. of GNP. Much of the credit for that is due to Judith Hart, who did so much at the Department when it still meant something in terms of Government policy——
§ The Minister for Overseas Development (Mr. Chris Patten)Tell that to the right hon. Member for Leeds, East (Mr. Healey).
§ Mr. ClarkeIf my right hon. Friend were here he would have every reason to be proud of his record in this area —much more so than the present Chancellor of the Exchequer. The Minister should tell that to his right hon. Friend.
§ Mr. PattenThere is one important difference between the former Chancellor and my right hon. Friend, the present one. My right hon. Friend can go to the IMF and help it to lend money to other countries. The right hon. Member for Leeds, East went to it to borrow money.
§ Mr. ClarkeI look forward to an economic debate. I would be stretching the point, as the Minister tried to, if I were to argue about borrowing. I have many constituents who have been forced to borrow and borrow by this Government, so the Chancellor is not in a position to lecture Labour Members.
I remind the Minister that overseas development is his responsibility. Under his stewardship, the amount of aid given has fallen and continues to do so. The 1987 figures show that the proportion of the United Kingdom's GNP given to aid is only 0.28 per cent. The proportion of GNP given has fallen by 45 per cent. Of the 17 members of the OECD's development assistance committee, that fall is by far the largest. Those countries have Chancellors, or their equivalents, who would not dream of trying to justify the unjustifiable to their Parliaments. I hope that the Minister will not attempt to do so.
That fall should be contrasted with a 300 per cent. increase in the proportion of GNP by Italy, a 138 per cent. increase by Finland and a 43 per cent. increase by Sweden. Other increases have been given by countries such as Denmark, Norway, Japan, Holland and even the United States of America. No wonder the Minister attempted to distract us by trying to introduce issues that are not relevent to his brief.
The United Kingdom is now 14th out of the 17 countries in the OECD league table. In 1979, when my right hon. Friend the Member for Leeds, East (Mr. Healey) and Judith Hart shared responsibility for these matters, we were seventh and set to climb higher. Under this Government, who have a wretched record, we always look as though we will drop lower in the table.
693 In a reply to a written question asked by me, the Minister stated that the Government had set no target for reaching the 0.7 per cent. figure. He said that it
depends on developments in the economy and other claims on resources."—[Official Report, 27 April 1988; Vol. 132 c. 168.]Since the Government's record has been not one of gradually moving to the 0.7 per cent. but one of decline, perhaps the Minister will say when the United Kingdom will reach 0.2,0.1 or even 0 per cent. People used to believe that 0.4 or 0.3 per cent. were magic barriers below which the United Kingdom would never fall. The Government have proved that such naive optimism was quite unfounded.The Government's stock excuse is that our aid budget is growing in real terms. That is an interesting defence, and no doubt we will hear it again tonight.
§ Mr. Chris PattenThe hon. Gentleman said that he thought it more important to concentrate on increasing the proportion of GNP given to aid than increasing the aid programme in real terms. I cannot believe that he thinks that. Would he like to reconsider his remarks and say whether he believes that what matters above all is the proportion of GNP and that having a sufficiently strong economy to increase aid in real terms is not of any consequence whatever?
§ Mr. ClarkeConstant prices are important, which is why the Minister seldom, if ever, refers to them. If the Government have changed their minds about the proportion of GNP given and the United Nations' target, they have a responsibility to tell us. They have not yet done so, but the debate will give them the opportunity.lb/> A modest increase in real terms this year looks generous on paper, but we should remember that in constant 1986–87 prices United Kingdom net aid fell from £1,395 million in 1978–79 to £1,198 million in 1987–88. That is a decrease in real terms—in cash terms—of about 14 per cent. in the contributions made before the Government took office. How the Minister can justify any of those figures is beyond me. The debate will give him an opportunity to do so.
The United Kingdom's record is just as bad in other United Nations agencies. We followed the United States of America and pulled out of UNESCO, cutting ourselves adrift from the process of reform currently transforming that organisation. We stand 24th in a table of 24 OECD members in contributions to UNESCO. We are joint bottom with the United States. We are 16th out of 24 in per capita contributions to the World Health Organisation. Our pathetic and miserable 21 cents per head per year is half that of Switzerland, which is in first place. Presumably the Minister is proud of that record. I notice that he is not so keen to intervene on that point, although I am happy to give way.
§ Mr. Chris PattenWould the hon. Gentleman care to give us the figures for where we stand in volume terms in our contributions to the WHO? I am sure that he has the figures and is knowledgeable on that point.
§ Mr. ClarkeI shall give the Minister figures in the same way as he gave me figures. There were times when he was somewhat coy in response to the open questions he has put to me and which I have put to him.
694 We are 17th out of 24 in per capita contributions to the Food and Agriculture Organisation, and we contribute only 3 per cent. of the per capita figure given by Denmark, which is again in first place. I wonder whether that figure pleases the Minister and whether he regards that as progress.
If we are to continue to follow every move of United States foreign policy like timid and obedient poodles, we should also bear in mind that in league tables for the World Health Organisation, the Food and Agriculture Organisation, UNESCO and UNICEF, in no case does the United States contribute more. Perhaps the Government are racing the United States to the bottom of the heap.
The Government's response to aid is selective in the extreme. In the case of Nicaragua, in 1986 we gave less than $5,000 in bilateral aid for technical co-operation, while Italy gave over $7 million. In 1987 we could still find only £47,000 for technical co-operation, co-financed with British voluntary groups. That is a pittance when compared to the scale of suffering caused by the Contra terrorist war paid for by the United States. Our contribution to Nicaragua, in contrast to our contribution to Costa Rica and even Honduras, is far from generous. We are giving less than we gave to the Somoza regime, which left its people impoverished. The Government's attitude to poverty and health care in Nicaragua is somewhat inconsistent with their attitude elsewhere.
The Minister should be aware—it is unusual for a Minister to ask me questions on statistics, but I am always willing to help when I can—that we are second from bottom of the league table in our OECD contributions to Nicaragua. That is what I was told in his parliamentary answer to me.
§ Mr. Jeremy Corbyn (Islington, North)Before my hon. Friend leaves the subject of Nicaragua, is he aware that the Government have made no discernible move to assist Nicaragua in the difficulties it faces in borrowing money on the international money markets because it is given such a low credit rating? Is my hon. Friend aware that the British Government have taken part in giving it that low credit rating, despite its excellent record in the repayment of debt?
§ Mr. ClarkeSince the Minister became excited about borrowing a few moments ago, if he catches your eye, Mr. Deputy Speaker, he may respond to that important point.
On Kampuchea, I asked the Minister a few days ago whether he planned to organise an international relief effort. He said that the Government were considering what response, if any, they will be making to the Food and Agriculture Organisation's appeal for food aid for Kampuchea. I hope that the Minister will take this opportunity to let us know whether the Government will respond to the FAO appeal; how much food they will give; how much our contribution will be in comparison to those of our OECD colleagues and friends, and whether the Government will stop food aid going to representatives of the discredited Khmer Rouge.
On Mozambique, I am sure that the House will accept that that area currently experiences dire poverty. It has one of the highest levels of infant mortality in the world—123 per thousand in 1985. Much of that relates specifically to the policy of destabilisation by South Africa which has contributed to civil war. Therefore, as the Minister speaks 695 on behalf of the Foreign and Commonwealth Office, I must ask him what steps the Government are taking to prevent South Africa's destabilisation of the Mozambique Government.
I turn briefly to Europe and its role in development. Lorenzo Natali, the European Community's Development Commissioner, has made proposals to allow European Community involvement in microeconomic planning in the African, Caribbean and Pacific states. Those proposals are the basis for the EEC negotiations on the 4th Lomé convention, to cover the period after 1990. It would be interesting to hear the Minister's views on Europe's role in development planning and what opinion, if any, the Government have on Mr. Natali's detailed proposals. Among other things, those proposals would allow more co-ordination between the European development fund, the World Bank and the IMF on the ACP adjustment.
It would be impossible to take part in an important debate of this kind without referring, as I am sure hon. Members and especially my hon. Friends will wish to do, to famine in Africa. The House has had the benefit of what I feel was an excellent report by the Select Committee called "Famine in the Horn of Africa". Difficult though the Minister has made it for me to do so, I should like to say that the Government's response was constructive. What they said should be welcomed. The report rightly identifies one of the major causes of famine as not only the drought but civil war and conflict.
We are especially worried about Eritrea and Tigré. Therefore, we would welcome any urgent action that the Government feel free to take to find a solution to a problem which the House will accept is extremely difficult. However, if the Government decide to increase our contribution to Ethiopia, Chad, Sudan and sub-Saharan Africa, they would have outstanding support. The Minister must know that 76 per cent. of people in an opinion poll said that we should give the same or more, as against 18 per cent. who said that we should give less.
People are concerned that when funding is made available, whether on a voluntary basis or by Government, we should concentrate on measures to deal with drought, on irrigation and on agriculture, and not always on prestigious projects such as dams, airports and power stations. People accept that industrial development and agriculture are extremely important, which is why they take great exception to some of the food surpluses in the EEC and the failure to distribute adequately to those in need. People accept that the quality of aid is important. Therefore, we ask how much of our aid to Africa is going to agriculture, health care, industrial development and social needs. We urge the need for monitoring in those respects.
The absence of the political will to deal with the structural causes of poverty by Governments of North and South is all to obvious. The number of hungry people has roughly doubled over the past 12 years. The House must face the reality that 500 million people—one eighth of humanity—are suffering from chronic malnutrition tonight.
There is also the population problem.
§ Mr. CorbynWhile one welcomes aid that gets through to help the poorest people in the poorest parts of the world, does my hon. Friend share my concern that some policies, particularly those adopted by the World Bank in its advice to poor countries in receipt of loans it organises, 696 force on those countries economic models that often involve cuts in public expenditure which make the living conditions of people dependent on public services, health, education or housing worse because those countries are pursuing some economic Valhalla similar to that pursued by the present Government? Does he believe that the Government should consider their role in multinational agencies such as the World Bank as well as my hon. Friend's obvious and quite correct concern about the lack of spending on overseas aid in general?
§ Mr. ClarkeAgain my hon. Friend makes a very solid point. I hope that he will be fortunate enough to catch your eye, Mr. Deputy Speaker. I will try to provide that opportunity by drawing my remarks to a close.
There is clearly great concern about the debt crisis, interest rates and commodity prices. Those problems are very important for developing countries that are struggling to assert themselves and release their peoples from poverty. That is the challenge to the House, to the Minister and to the Government's international policy. Developing countries have to face that challenge daily.
I believe that the great mass of the British people in every part of the United Kingdom feel that we could and should be making a tangible contribution to the solution of those problems. However, they bitterly regret the fact that, at a time when overseas aid is declining to very low levels, we still find opportunities to export arms and military equipment. Perhaps we should take a sober look at precisely what we are doing. Those priorities and the policies that the Government have pursued so far do not reflect the approach of the British people, which is not only generous, but takes into account the potential for development by the peoples of developing countries. If the Government ignore that potential, the needs of others and world poverty, they do so at their peril.
§ 2.3 am
§ Miss Joan Lestor (Eccles)I congratulate my hon. Friend the Member for Monklands, West (Mr. Clarke) on getting this item on to the political agenda tonight. As he said, this subject does not command a great deal of time in the House. We have little time for it at Question Time and few opportunities to make speeches on it. I am indebted to my hon. Friend for the detail in his speech and for his dedication to the subject over the 12 months that I have been involved in it as Labour Front-Bench spokesperson.
I think that the Minister and I share a deep concern for the problems of two countries that we have visited recently, namely, Mozambique and Ethiopia. Within the limits set on him by the Budget, the Minister has done much to increase the amount of assistance and aid to the very sad and war-torn country of Mozambique, which is being destabilised and is suffering as a result of South African aggression. I believe that he has tried, within the limits, to meet some of the needs and requests that have been made.
We are left with the situation to which my hon. Friend the Member for Monklands, West referred. When the target was set by the United Nations at 0.7 per cent. of GNP, it was accepted and agreed that the industrialised countries would move towards that target. Our share will decrease and whether aid goes up in real terms will be irrelevant, because the gap between the rich and poor nations will become wider. We become richer, but we do not share our riches with the developing world.
697 The United Nations picked a percentage of GNP— which happened to be 0.7 per cent.—to meet that real difficulty. As my hon. Friend said, when the Labour party left office in 1979 we had reached a figure of 0.52 per cent. of GNP. Now, as the Minister said, as a proportion of GNP the budget is 0.28 per cent. He may say that during the past year or two in real terms there has been some increase here or there, but that is not true in all cases—and we are slipping away from the target. It is legitimate to ask the Minister whether the Government are still aiming at that target. If they are, why is it that we are slipping so much behind that target, when the Government are constantly telling us that we are improving our economic position every day and that the country is better off now than it has been for many years?
The gross public expenditure on aid is down from 1.2 per cent. to 0.90 per cent. That figure shows that, although the Minister may talk about the figures in real terms, we are giving a smaller part of a larger cake. If GNP is increasing, as we are told it is, we are giving less to the developing world.
We can take as an example the bilateral aid given to the member states of the Southern African Development Co-ordination Conference. Gross bilateral aid to those countries has fallen to 64 per cent. of its 1979 level in real terms. We are now giving much more in bilateral aid in real terms to Mozambique. I have gladly acknowledged that. However, in real terms, aid to the other countries involved with the Development Co-ordination Conference, such as Botswana, Lesotho, Malawi, Tanzania and Zambia, is decreasing, and their needs are great, too.
When the front-line states were formed as a result of the military, economic and social destabilisation by the racist regime of South Africa, it was acknowledged that, although many of those countries were, or could be, rich in some natural resources, and perhaps under normal circumstances would be able to develop, the circumstances prevailing were not normal. In addition to the problems of economic debt and the national hazards of drought and floods, the military war of South Africa has taken its toll, especially against Mozambique, Zimbabwe and Angola, and the economies of all the front-line states have suffered from South Africa's policies of apartheid and destabilisation. I know that the Minister, when he was in Mozambique recently, saw examples of that, and we have already exchanged views on this across the Chamber, so I shall not repeat them.
Women and children in front-line states have been the innocent victims of this aggression. In 1986 UNICEF estimated that 140,000 children under five years of age were killed as a result of the war in Angola and Mozambique. That leaves out of account the hundreds of children who have died as a result of famine, drought and other causes. Because of the dislocation of population in the region, 500,000 people are now threatened with starvation, and 8.5 million have lost their homes.
South Africa continues to block food and emergency relief supplies and, as a result, some 200,000 people died between 1983 and 1985. Women and children are particularly vulnerable and daily suffer the most horrendous atrocities committed by MNR bandits and South African forces. It is hard to believe what is 698 happening until one listens to the people saying what has happened to them and sees the villages that have been destroyed and the children who have been mutilated.
The Minister has done a great deal to assist Mozambique within the confines of his budget, but the fact remains that unless the Government are prepared to take on South Africa and the sanctions and investment issue, we are simply bandaging the results of South African aggression.
The result of the wars and the migration of male labour to the South African mines is that many women have been left to maintain essential services. They face additional problems for, despite the rains in Mozambique, there has been a shortage of labour. There have been other complications, as South Africa has suddenly decided that it will employ fewer Mozambicans in the mines, thus again destabilising an economy that has relied heavily on people in some areas being employed in the mines. With the destruction left by the bandits, the result is horrific.
When the South African Development Co-ordination Conference was formed in 1980, it was a positive attempt by front-line states, including Lesotho, Malawi and Swaziland, to break their dependence on South Africa and to promote and plan the economic development of the region. That is why I find it so distressing that those countries are suffering a decline in real terms in the aid available to them. Their needs and suffering are no less than those of Mozambique.
My hon. Friend the Member for Monklands, West has said much of what I intended to say, and I am grateful to him for quoting answers to some of the questions that I have asked and some of my comments. I shall not delay the House by repeating what he said. Of course I am pleased that the Government have tried to deal with some of the debt problem by continuing the Labour Government's policy of converting loans into grants. I was pleased when, a few weeks ago, the Prime Minister finally acknowledged from the Dispatch Box that that was a Labour Government initiative implemented by Judith Hart.
The debt crisis hits at the standard of living of a large number of people throughout the world. UNICEF reckons that income per head fell by 9 per cent. in Latin America in the five years between 1980 and 1985 in 17 out of the 23 countries there. There is rising malnutrition in Chile, Uruguay and Brazil. There are problems with the EECs common agricultural policy for sugar from the Caribbean, and the over-production of beef in Europe is having an effect on the Botswana economy.
I know that the Minister will talk about the increased money that he has given certain countries during the past few months, but when Italy can increase its aid budget by 300 per cent. as a proportion of gross national product, whereas ours has declined by 45 per cent. as a proportion of GNP, there is something sadly wrong. The Government cannot have it both ways.
In 1983 the Prime Minister answered a world development movement questionnaire that was sent to parliamentary candidates. I remember filling it in, and I am sure that others do. The questionnaire asked many questions but, when asked whether the Government would move towards the United Nations target of 0.7 per cent. of GNP given in aid, the Prime Minister told one of her constituents in her own fair hand:
We will move towards the UN Target of 0.7 per cent. of GNP when economic circumstances permit.699 If the country is doing as well as we are told it is, why do economic circumstances not permit us to increase our aid budget as a proportion of GNP?
§ The Minister for Overseas Development (Mr. Chris Patten)I am delighted to have the opportunity to discuss this matter which has been so thoughtfully provided by the hon. Member for Monklands, West (Mr. Clarke) on a Friday morning just before the holidays. I am only sorry that the Opposition do not choose to use one of their Supply days for an aid debate because then we could have an even fuller House to listen to our discussions. I shall not allow myself, whatever the hour of the morning, to become waspish and think, let alone speak, the suggestion that perhaps the Opposition might have as much difficulty getting their Members to attend such a debate as they have on other issues. I would not for a moment wish to say anything like that from the Dispatch Box. This is a welcome opportunity to talk about aid.
Whatever arguments there may be about the size of our aid programme—and I shall come to that with relish— there can be no argument about its quality. Certainly there is none outside Britain or in some of the multilateral institutions to which the hon. Gentleman referred and to which we make substantial cash contributions year after year. I shall be pleased to let the hon. Gentleman know about them at some time because plainly he is not as well acquainted with them as one might like. Our aid programme is widely recognised internationally for its quality and effectiveness.
Our aid is concentrated on the poorest countries. That is more the case than with Organisation for Economic Co-operation and Development donors generally. In 1987, 81 per cent. of our bilateral aid went to countries with an income per head of less than $800—that is, International Development Association eligible countries. The major recipients include India and Bangladesh in Asia and Ghana, Kenya and Tanzania in Africa. The Commonwealth continues to provide an extremely important dimension to our overall aid programme.
The grant element of British aid in 1987 was 99—8 per cent. All our aid to the poorest countries is provided in the form of grants. Britain has led the way in forgiving past aid loans. In recent years we have played a leading role internationally in helping to develop new policies towards and solutions to the problems facing developing countries. Our views have carried weight because of our success in managing our economy. It is inconceivable—this is a point I raised in an intervention earlier—that we should be listened to in the same way if the International Monetary Fund were having to manage the British economy again. Our views have also carried weight because we are recognised as a serious donor, willing to reshape our programmes to meet new circumstances and to find additional resources for key initiatives, such as the debt initiative of the Chancellor of the Exchequer and the IMF's structural adjustment facility. We have been, and will continue to be, a firm supporter of structural adjustment and economic policy reform.
I am not suggesting that we or the international financial institutions have all the answers, but I am sure that in too many countries, particularly in Africa, too many past policies have failed too many people. In 700 particular, they have failed too many very poor people. That is why we have reshaped our long-term development assistance to Africa and backed our words with cash.
We are providing substantial balance of payments support for countries able to agree adjustment programmes with the International Monetary Fund and the World Bank. In the last finacial year we spent more than £90 million in bilateral programme aid. Last December, we pledged a further £250 million of bilateral programme aid for co-financing with the World Bank over the next three years to assist the poorest and most indebted countries of sub-Saharan Africa.
As I said in a widely unreported speech in Washington recently, structural adjustment is not a short course of curative medicine. I am sure that my right hon. and learned Friend the Secretary of State for Health would agree that, like all good preventive medicine, it has to become a way of life. That underlines the need both to find ways of protecting the vulnerable groups most immediately affected by adjustment programmes—often in the urban areas—and of improving the access of the poorest groups in society to health and education services through the process of structural adjustment. In Ghana, which has the longest track record of policy reform and which since 1983 has achieved an annual average growth of 5 per cent., we are associated with efforts to do both those things. I was pleased to have the opportunity of discussing them this week with the Prime Minister, Mr. Obeng.
We are as sensitive as anyone to the growing awareness of the need to take proper account of both the social and the environmental impact of our aid. The hon. Member for Islington, North (Mr. Corbyn) has spoken in our past debates on the environmental impact of development. The Government's response to the Brundtland report "Our Common Future" was published on 22 July. It underlines what we are doing about aid and the environment. We have introduced specific measures to strengthen our internal procedures ensuring that the environmental impact of our aid programme is given the weight that it deserves in evaluation, appraisal and so on. We have made arrangements for tapping outside expertise on environ-mental issues. We are funding specific work such as the Nepal study of the interrelationship between environment-al degradation and macroeconomic policies.
Last week I approved over £14 million for a third slum improvement project in India—this time in Indore. I have seen for myself the first of those projects in Hyderabad, and an extremely successful project it is.
§ Mr. Tom ClarkeNow that the Minister has regained his composure, may I thank him for the interesting information that he is giving the House, notwithstanding the fact that most of it was already available to us in the excellent handouts that come from the Department? Before he concludes his speech, will he tell the House whether the Government still intend to aim at the United Nations figure of 0.7 per cent. of GNP?
§ Mr. PattenI assure the hon. Gentleman that I intend to deal with that point. As he laboured the issue, it would be discourteous of me not to give it the attention that it deserves, to do so with relish and to point out to him some of the intellectual shortcomings of his argument.
§ Mr. CorbynBefore the Minister leaves the subject of the environment, will he tell us how successful he has been in persuading the World Bank in particular to ensure that 701 aid programmes or development programmes that it helps to finance are much more environmentally conscious than previous ones? I have in mind the environmental disasters that have happened in a large part of Brazil as a result of mining projects partly financed by the World Bank and the catastrophic consequences for the rest of the world unless something is done to prevent the destruction of the tropical rain forest there.
§ Mr. PattenI do not think that it is going too far to suggest that a number of the environmental NGOs would concede that we have done as much as, or more than, any other bilateral donor in ensuring that these environmental issues are on the agenda for the World Bank in a more prominent place than they have been before. One of our most useful actions was to bring together the World Bank and a number of the environmental NGOs in a conference last year during which issues such as those to which the hon. Gentleman referred were discussed in what the press release might have described as a free and frank way.
These are immensely important issues, but it is important to recognise that some of those who criticise the World Bank on environmental grounds do not want any development to take place. They do not want the World Bank and international donors to spend more in developing countries. They believe that the people in those countries have a divine right to go on living in primitive conditions until the crack of doom. That is an easier proposition to advance if one lives in a comfortable suburb in Europe or North America than in dreadful conditions in a developing country.
The argument is not about growth or no growth. It is about growth that is environmentally, economically and socially sustainable, and the World Bank is acutely conscious of that, as we all should be because each year we are still desertifying an area of the planet the size of Nova Scotia and deforesting an area the size of Yugoslavia.
As I said, I was able to see for myself the slum improvement project in Hyderabad. We have just announced our third project—the second was in Vizag —at Indore, and there are good examples of how one can make aid work to assist some of the most disadvantaged groups in society and at the same time make a positive impact on the environment. The project represents an integrated approach to improving the quality of life of about 80,000 slum dwellers, enhancing employment opportunities and giving children better education and health.
Running an effective aid programme requires not only right policies but much dedicated work around the world in the careful preparation of individual projects and programmes. The ODA is acknowledged to be one of the most professional of the bilateral aid agencies and, through our five development divisions and our posts abroad, we maintain an effective presence in the field. I have had the opportunity of seeing many of our aid officials in action and I congratulate them on what they achieve. I am sure that other hon. Members who have seen our aid programme in action, whatever their arguments about the size of it, will endorse that remark.
The hon. Member for Monklands, West referred to Nicaragua and said it was an especially deserving case which needed more generous support from us. Nicaragua is not one of the poorest developing countries. There are 702 over 60 developing countries with lower incomes per head, and as per capita figures are of such concern to the hon. Gentleman I trust that that one will be of equal concern to him.
It is true that we do not give purely bilateral aid to Nicaragua on the scale of the earlier Labour Administration. British aid to that country peaked in 1977 when Somosa was in power there. I do not know whether there were political reasons for that or whether it was entirely coincidental. But the contributions that that Labour Administration made to the Somosa regime were, I am sure, greatly appreciated.
§ Mr. Tom ClarkeTory Members who have just arrived should know that I referred to that in my speech, as well as to the regrettable decline under the Tory Government. As the Minister is talking about per capita figures, how does he justify the comparison between Nicaragua and Costa Rica?
§ Mr. PattenThe figures for Costa Rica and certain other central American countries include contributions that we make to regional institutions in those countries. In our total bilateral and multilateral contributions we pick up 20 per cent. of the substantial aid that Nicaragua receives from the European Community, which totalled £6—2 million in 1986.
§ Mr. David Ashby (Leicestershire, North-West)How does this country's aid to Nicaragua compare with that of Italy and Germany?
§ Mr. PattenSpeaking off the cuff, both Germany and Italy give a lot more bilateral aid to Nicaragua. Apart from the money that we put through the joint funding scheme for NGOs, our major contribution is the multilateral contribution through the European Community. I am usually pressed by the Opposition to ensure that our aid programme achieves the maximum poverty alleviation and that money is spent as much as possible in the poorest countries. Whatever the politics of the matter, the fact that there are 60 countries poorer than Nicaragua does not seem entirely irrelevant to the argument.
§ Mr. CorbynBefore the Minister leaves the subject, will he come clean and admit that there are clear political reasons why the British Tory Government will not give aid to Nicaragua at the level that it needs and deserves because they do not like the process of reform, development and poverty removal that the Sandinista Government are doing their best to carry out? Will the Minister reconsider the position and provide the aid so desperately needed in Nicaragua, where many of the problems have been caused by the war and not for any other reasons?
§ Mr. PattenIt is perhaps even more relevant to wonder whether there were political reasons for the more substantial aid to Nicaragua in the past. I am content to rest my argument entirely on developmental grounds and to leave discussion of the political aspects to my right hon. and hon. Friends who are responsible for those matters.
§ Mr. Tom ClarkeWill the Minister give way?
§ Mr. PattenI will give way to the hon. Gentleman at every conceivable opportunity.
§ Mr, ClarkeI am always willing to rescue the Minister from the embarrassment thrust upon him by his own 703 alleged supporters. As Italy and Germany have a far better record than ours in terms of aid to Nicaragua, does the Minister believe that they were affected by the factors which he claims influenced the Labour Government?
§ Mr. PattenI could troop through the House all those countries considerably poorer than Nicaragua where we have substantially larger aid programmes than Germany or Italy. For historical and other reasons, different countries' aid programmes have different profiles. For instance, 75 per cent. of our aid goes to Commonwealth countries. Alas, that is not true of German and Italian aid, however desirable it may seem to us. I think that in the next few weeks the hon. Gentleman will come to accept that there are historical reasons why some countries have larger aid programmes in central America than ours.
The hon. Member for Monklands, East referred to Cambodia, and I shall respond reasonably fully to his comments. As he suggested, the history of Cambodia over the past two decades has been one of appalling suffering. The bloody Khmer Rouge experiment in remodelling society has been appropriately described as taking Cambodia back to the year zero. The Vietnamese invasion, which was initially welcomed as instrumental in overthrowing the Khmer Rouge, compounded the problem of the Cambodian people by extending the invasion into a continued illegal occupation that has lasted for almost a decade. During this period we have refused to give development aid to Cambodia. We believe that aid would send the wrong signal of implicit support for Heng Samrin and help to prop up his regime. Instead, our aid has been directed to Cambodian refugees in the Thai border camps, who have been made homeless by the years of conflict. Since 1979, we have contributed more than £13 million, which has been channelled mainly through international agencies such as the Red Cross and the United Nations. We are the largest bilateral donor of such assistance.
We welcomed the recent tentative signs that various factions in the conflict may be moving towards a political settlement. It is too early to judge the outcome of the discussions in Indonesia, which have just finished. We have taken note of the announcement by Vietnam that it will be accelerating the withdrawal of its troops from Cambodia. According to some reports, as yet unconfirmed, the withdrawal will be complete by the end of 1989, or the first quarter of 1990. We hope that further progress will be made when China and the Soviet Union discuss Cambodia next month.
In view of these signs, however tentative, of movements in the political situation, I intend to examine closely our aid policy towards Cambodia. We have always been prepared to consider assisting any internationally organised relief effort that sought to provide humanitarian assistance within Cambodia. I therefore propose to contribute £100,000 to the Food and Agriculture Organisation appeal that was launched in May for Cambodia. We shall be examining also whether we should now provide some support for humanitarian aid for projects administered by British non-governmental organisations working in Cambodia. It is far too early to consider aid for reconstruction. We would be prepared to reconsider these matters when a Government acceptable to the majority of Cambodians is in place.
The hon. Member for Monklands, West referred to Europe. I set out in a speech at the Royal Commonwealth 704 Society a couple of months ago, which he may have seen, our principal objectives for the Lomé renegotiation. I do not want to rehearse those again today. I agree with the hon. Gentleman's remarks about the importance of greater co-ordination between bilateral donors, bilateral donors and multilateral donors, and multilateral donors, even when they are separated by the Atlantic. it is important that the Commission and the Bretton Woods institutions engage in a closer dialogue on developmental objectives. That view is shared by Commission staff and by Vice-President Natali, who has made such a distinguished contribution to the development and strengthening of the Community's own substantial aid programme to which we contribute a large amount of money.
The hon. Member for Eccles (Miss Lestor)—I am coming to the question of gross national product—talked about African debt. Britain has been to the fore in advocating special measures for low-income debtor countries, chiefly in sub-Saharan Africa. The Toronto summit agreed on debt relief measures. The initiative behind that was launched by my right hon. Friend the Chancellor of the Exchequer in the spring of 1987. I am delighted that at Toronto other creditor nations agreed to join us in providing interest rate relief or the taking of equivalent measures. Good progress has already been made in working out the detailed arrangements in the Paris Club. These involve ways of ensuring comparability between the concessions offered by different creditors. I hope that the final agreement will allow measures to be put into effect as soon as possible. It is clearly in the interests of African debtor countries that that should be so.
Finally, let me say a few words about the size of our aid programme. We inherited from the last Labour Government a level of total public expenditure that was simply not sustainable. I do not think that many members of the outgoing Labour Government in 1979 thought that it was sustainable, and I certainly do not think that the outgoing Chief Secretary to the Treasury thought so. Between 1979 and 1983 the priority had to be to get public expenditure under control, and aid could not be exempted from that. It was during that period that aid fell in real terms.
Between 1982–83 and last year, the aid budget was broadly constant in real terms. I am delighted that as a result of the last public expenditure round, or more properly as a result of our economic achievements, we are now planning for aid to grow in real terms. We are aiming for cash increases over our 1987–88 budget of £72 million this year, £140 million next year and £185 million the year after that. That reflects the fact that with a strong economy we can afford to do more, and the fact that, used in the right way, aid can be effective in enhancing economic growth and alleviating poverty. It also reflects the recognition that an effective aid programme is in Britain's own long-term political and economic interests. We have the seventh largest aid programme among OECD donors. My job is to continue to seek further improvement in its effectiveness as the best argument for ensuring that it continues to grow in real terms.
The whole argument of the hon. Member for Monklands, West and other Opposition Members is about the 0—7 per cent. target and the proportion of GNP that we spend on aid. The Opposition always avoid any mention of the target mentioned by the United Nations for official and 705 unofficial flows—the 1 per cent. target. I suspect that they do that because of our extraordinarily good record of private investment in developing countries.
§ Mr. Tom Clarkerose——
§ Mr. PattenI keep on giving way to the hon. Gentleman. I am going to finish this point. The United Kingdom provides almost as much in private investment in developing countries as the rest of the European Community put together, but that does not suit Opposition Members' argument.
Let me now turn to the extraordinary proposition that it matters more to have a proportion of GNP increasing than to have real volume increasing. I have no doubt that, without doing anything to the volume of our aid programme, the Labour party, if in government, would ensure in a very short time that we had an increase in the percentage of GNP, because the growth rate would fall so rapidly. That is all that they would have to do.
§ Mr. Clarkerose——
§ Mr. PattenI shall give way when I have finished.
Let us follow the hon. Gentleman's perverse argument to its logical conclusion. Let us take two countries. Country A increases the volume of its aid substantially year after year, but by not quite as much as its economy grows in percentage terms. That country is bad, in the hon. Gentleman's book. Country B, which has a low economic growth rate, increases its aid programme by miserable amounts year after year, but by slightly larger percentages than its increase in economic growth. That country is virtuous.
To the developing country the virtuous country is the one that is managing its economy successfully and the one whose aid programme is growing in real terms. The resources for building roads, hospitals and schools and for the provision of technical co-operation in developing countries are provided by such programmes and successful economic management. The hon. Member for Monklands, West never talks about absolute terms, volume terms or real terms. It is about time that he recognised that his argument is positively perverse.
§ Mr. ClarkeThe Minister is taking a long time to get to the point. We still want to hear whether it is the Government's objective to achieve the 0.7 per cent. of GNP target, as accepted by the United Nations. Given that other OECD countries whose economies have developed in a similar way to ours, although they have not had the beneft of North sea oil—not one drop in many cases—have still stuck to the 0.7 per cent. objective, why are we not sticking to it, or have the Government gone back on that objective?
§ Mr. PattenI believe that four, possibly five, countries have achieved the 0.7 per cent. target, and only one has an aid programme that is larger than ours in real terms. The hon. Gentleman refuses to face up to the fact that volume——
§ Miss Lestorrose——
§ Mr. PattenI must answer the hon. Gentleman's other question, otherwise he will be on at me again.
706 The first question that the hon. Gentleman asked obliges me to agree with the previous Labour Government. My hon. Friends may think that that means that I am not entirely sound on this matter, but our views on the 0.7 per cent. target are the same as those expressed by previous Governments. It remains an objective, but we cannot, any more than previous Governments have done, set a timetable for achieving it. If the hon. Gentleman thinks that that is wrong, he must have also made that criticism of the previous Labour Government because that was also their view.
§ Miss LestorI tried to start with a note of agreement because it is the holiday period. At the beginning of this debate, behind Mr. Speaker's Chair, the Minister, in his conspiratorial way, said "I want about 10 minutes." I said "OK. It is the middle of the night and people want to get away." The Minister has now taken almost three times as long as we agreed and he still has not dealt with our argument.
§ Mr. CorbynAnd he is in a bad mood.
§ Miss LestorI do not mind that, but I could have taken an equally long time. I did not because I have a degree of honesty when it comes to agreements. My old dad was right when he said "Never trust a Tory."
The Minister is sliding away from the point. He says that he accepts the target of 0.7 per cent. but that we cannot have a timetable for its achievement. Previously he has implied that if GNP goes up it does not matter whether the target slips—that the percentage of GNP spent on aid falls to its present low level—so long as there is an increase in the volume of aid. If he was sticking to that objective and steadily moving towards the 0.7 per cent. target, the volume of aid would be greater than it is now. It is wrong to say that GNP has increased and that, therefore, the proportion spent on aid does not matter very much.
§ Mr. PattenI apologise unreservedly to the hon. Member for Eccles. I have spoken for about three times as long as I had intended and doubtless longer than my right hon. Friend the Minister of State, Foreign and Commonwealth Office wanted. However, I have given way to every intervention and I have tried to answer the questions that the hon. Member for Monklands, West asked—although I have not satisfied him. If I had delivered the carefully unprepared remarks that I had brought with me, I could have sat down after 10 minutes. However, as the hon. Gentleman made an important speech, I thought it right to try to respond to it. I have not had the advantage of hearing him in full flood before. I wish to make one more point, and then I will sit down, otherwise the hon. Member for Eccles will scold me again.
What matters to me is that we should have an aid programme which is growing in real terms, supported by an economy which makes that situation likely to continue into the future. The best justification for growth in real terms is the effectiveness of our aid programme. At the very least, the hon. Lady, the hon. Gentleman and I can agree that, although some countries would like us to do more, and although they would like us to do more overall, we have an effective aid programme which is a considerable credit to those who manage it and work in it, whether in the public sector or the non-governmental 707 organisations which play an increasingly valuable role in making sure that aid reaches its targets and helps to alleviate poverty throughout the world.
I could continue, in response to the hon. Lady, but I shall leave it at that and thank the hon. Gentleman once again for giving us the opportunity of dashing around the course. I hope that we shall have a rather longer circuit at some future date.