Know-how Fund (Hansard, 20 November 1991)

§ 2. Mr. Rathbone
To ask the Secretary of State for Foreign and Commonwealth Affairs what consideration he is giving to additional know-how support for central and eastern European countries.

§ The Minister for Overseas Development (Mrs. Lynda Chalker)
By 1992–93, we will have more than tripled the original £15 million budget allocation for the know-how fund. At this stage we have no plans for further increases.

§ Mr. Rathbone
I welcome that positive action by the Government. Will representations to other Governments be as strong as possible to encourage them to make the sort of contributions to the know-how fund and to know-how activity that is absolutely crucial for the developing economies in central and eastern Europe, and without which they will never develop democratic politics as well?

§ Mrs. Chalker
My hon. Friend knows that the know-how fund is greatly admired by other donors and is very much appreciated in eastern Europe. We are told that it is the most flexible and fast-reacting source of aid, and that is exactly why we have pursued that route. We agree that it is the best way to help those countries to establish sound democracies and a sound economy.

§ Dr. Kim Howells
The Minister will be aware that one of the most serious problems affecting the economies of central and eastern Europe is an energy shortage, which is mainly due to the destruction of hydrocarbon supplies from the Soviet Union. Will she ensure that all encouragement is given to the undoubted expertise in oil and gas exploration and technology in this country to aid the Romanians to revive their ailing oil and gas industries?

§ Mrs. Chalker
I am aware that a number of United Kingdom oil and gas companies are extremely interested. They have not come to us for specific assistance under the know-how fund. Should they do so, we shall obviously consider it sympathetically in line with the priorities that we have set. Romania has a slightly smaller programme than the other countries, but we wish it to return to the path of good government and sound economics, and the fund is part of that.

§ Mr. Atkinson
Is my right hon. Friend aware that during a recent visit I made to Albania on behalf of the Council of Europe, politicians of all parties expressed a keen interest in receiving British know-how, but were disappointed that we have yet to establish a British embassy in Tiranë? When does she anticipate that that can be resolved?

§ Mrs. Chalker
We must keep the matter under review. The economic and political position is very confused in Tiranë. We understand Albania's anxiety for British representation, and I shall keep that very much in the forefront of our consideration.

Mr. Robertson
May I associate myself with the praise that has been heaped on the know-how fund? It has been an enormous success in central and eastern Europe. Throughout most of those countries the universal view is that Britain should do more to enhance its reputation through the fund. Will the Minister ensure that pressure is put on the Treasury, and kept on, to ensure that appropriate resources are made available? Will he further ensure that there is no inflexibility in the criteria, so that British know-how in areas such as local government and social services can also be exported?

§ Mrs. Chalker
I thank the hon. Gentleman for his remarks. We are grateful to him and to all the other people who serve on the advisory board of the know-how fund. We should concentrate our help on banking and financial services. They are not the only priority, but they are the highest. The banking system and the economic reforms must work in those countries before anything else can happen. It is a crucial part of their economic regeneration, and it is on that basis that other services can follow. I very much hope that the work that we are already doing will lead to initiatives being taken by those countries as a result of the guidance that we have given at local government, as well as national, level.