Overseas Aid (Hansard, 20 June 1988)

§ 74. Mr. Tony Lloyd
To ask the Secretary of State for Foreign and Commonwealth Affairs what was the value in current prices of Her Majesty's Government's overseas aid in 1979 and 1987.

§ The Minister for Overseas Development (Mr. Chris Patten)
Gross public expenditure on overseas aid, at current prices, amounted to £939 million in 1979, and £1,283 million in 1987.

§ Mr. Lloyd
Will the Minister confirm that, in real terms, every year since 1979 the amount of aid has been below the 1979 level? Will he confirm that last year, at 0.28 per cent. of gross national product, the figure hit an all-time low? Why was that?

§ Mr. Patten
If the hon. Gentleman had tabled a different question asking about constant rather than current prices, I should have given him the figures that he wanted. As it happens, I am pleased to confirm that the aid programme is increasing in real terms by 3.4 per cent. this year.

§ Mr. Lester
Will my hon. Friend confirm that this week, in addition to those figures, the Chancellor of the Exchequer announced the structural facility of the IMF loan, in which Britain has given a sixth of the capital and has been the first to provide it? Will he further confirm that in the discussions of the Group of Seven conference any solution to Third world debt problems will be in addition to the aid programme?

§ Mr. Patten
First, there is a difference between the position now and that of the late 1970s. In those days we were a main beneficiary from the IMF, whereas nowadays we are a main contributor to its programmes to help the most indebted countries. I confirm that the costs of our debt initiative would represent a net addition to the aid programme. I am delighted that we appear to be making good progress in Toronto, although we shall want to see the programme implemented in full as soon as possible. Nevertheless, progress seems to be good.

§ Sir Russell Johnston
The Chancellor of the Exchequer has received a great deal of credit from both sides of the House for his initiative on this matter. Nevertheless, will the Minister assure us that this is not simply the Government facing up to writing off bad debt, but is an earnest of their intent to change the direction of their policy and to contribute more in future towards overseas aid than they have done to date?

§ Mr. Patten
As I have confirmed now and previously, the costs of the extremely important debt initiative of the Chancellor of the Exchequer for the most indebted countries in Africa will represent a net addition to the aid programme. We have made it clear again and again that there is no point in initiatives to deal with African debt unless one spends more money. The initiative that my right hon. Friend has launched, and for which he has deserved credit, covers re-scheduling and writing off aid loans, which we have already done to the tune of £260 million for 14 African countries. It also covers a cut in the interest rate 841 for countries pursuing sensible economic policies. I hope that we can reach agreement on an initiative along those lines at Toronto, or at the latest by the autumn.

§ Mr. Wells
I congratulate my hon. Friend on the increase in the overseas development budget that he has managed to get from the Government. May I hope that he will redouble his efforts this year to ensure that we maintain that progress? Can he tell us how much of that increased budget he has allocated to Africa? In particular, can he say what difficulties he is experiencing in disbursing that increased aid, especially to countries such as Ethiopia?

§ Mr. Patten
In answer to my hon. Friend's question before that on Ethiopia, I can tell him that we shall be spending most of our increase in aid this year on enhancing our programmes in Africa, particularly our support for structural adjustment and economic policy reform. Our major assistance to Ethiopia has been for the emergency, on which the Select Committee on Foreign Affairs has recently produced such a good report. In the past 18 months we have committed £45 million on that operation. I fear that the long-term weather forecasts suggest that we may have to spend a good deal more.

§ 75. Mr. Anderson
To ask the Secretary of State for Foreign and Commonwealth Affairs when he expects to reach the Pearson target for overseas aid and expenditure.

§ Mr. Chris Patten
Her Majesty's Government accept in principle the United Nations' target for aid of 0.7 per cent. of gross national product, but, like previous Administrations, have not set a date for reaching it.

§ Mr. Anderson
It is not very good for those in desperate need that the Government accept the target in principle. Before the Government get lyrical about this year's so-called increase, had they not better accept that that increase is on a record low and that they inherited a proportion in excess of 0.5 per cent. of gross domestic product, and rising? When the Minister next meets the Prime Minister—he will recall his predecessor's complaint on leaving office that he never met her—will he gently remind her that when she next gives a sermon in Scotland, or elsewhere, she might remember that loving one's neighbour includes one's neighbour in the Third world?

§ Mr. Patten
On the first part of the hon. Gentleman's question, I am bound to say that confidence in the ability of a Labour Government to run the economy in a way that would enable them to support a large aid programme is not widespread. I am not sure whether such confidence is widespread on the Opposition Benches. As for the second part of the hon. Gentleman's question, I am delighted that this year we shall be spending about £95 million more than the likely outturn of our aid programme last year.

§ Dame Peggy Fenner
As the direction and use of overseas aid are as valuable as the percentage, may I have my hon. Friend's assurance that part of it will be directed towards the burden shouldered by women in the developing countries?

§ Mr. Patten
I wholly endorse what my hon. Friend said. Not only must we do all that we can to ensure that we support the role of women in development, but we must continue to support the poorest countries through our aid programme. As my hon. Friend will know, last year's OECD report commended us for spending more than the average spent by OECD countries on helping the poorest.

§ 79. Miss Lestor
To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has as to which Organisation for Economic Co-operation and Development Countries' aid budget as a percentage of gross national product exceeds the figure of 0.28 per cent. in 1987, or in the latest available year.

§ Mr. Chris Patten
In 1986, the latest year for which official estimates have been published, the net official development assistance of the following member countries of the OECD's development assistance committee represented more than 0.28 per cent. of their GNPs: Australia, Belgium, Canada, Denmark, Finland, France, the Federal Republic of Germany, Italy, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland and the United Kingdom.

§ Miss Lestor
I thank the hon. Gentleman for the speed with which he read out the list of names, but I remind him that the figure of 0.28 per cent. is only slightly more than half the proportion of GNP spent on aid by the Labour Government, who left office in 1979. The Minister talks about the amount having been increased, but he omits to mention how that amount has fallen as a proportion of GNP. As Britain is now 15th or 16th in the list of OECD countries, and 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.

§ Mr. Patten
I am delighted that our economy is growing strongly enough to enable us to increase our aid programme in real terms. I am also delighted that our economy is sufficiently strong for us to make such a major contribution to the IMF's enhanced structural adjustment facility and for us to have taken the lead in dealing with the debt problems of the poorest African countries. W hen the Labour party was in government we borrowed money from the IMF, rather than lent it money to give to others.

§ Mr. Jacques Arnold
Does my hon. Friend agree that it is unfortunate to measure aid in terms of percentage of GNP, because a British Government who produced a low GNP would inevitably create a higher figure?

§ Mr. Patten
I have no doubt that, without increasing the aid programme, if the Labour party were in government there would be an increase in the percentage of GNP devoted to aid, since the growth rate would fall rapidly.