HC Deb 14 October 1991 vol 196 cc16-7
39. Mr. John Marshall

To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the use of the know-how fund in eastern Europe.

The Minister for Overseas Development (Mrs Lynda Chalker)

The know-how fund is used to finance technical assistance projects in Poland, Hungary, Czechoslavakia, Bulgaria, Romania, the Baltic states and the Soviet Union. We spent £15 million last year and plan to double that this year. The know-how fund is admired by other donors and greatly appreciated throughout eastern Europe.

Mr. Marshall

While I welcome the assistance provided under the know-how fund, does my right hon. Friend agree that it is also essential to provide a market for the beleaguered economies of eastern Europe? Is it not incredibly selfish of our European partners to refuse to do that?

Mrs. Chalker

All eastern European countries, including the Soviet Union, need to earn foreign exchange. Therefore, they need access to markets. We have led the way to enable those countries to export to western Europe. A substantial part of the package of food aid credits for the Soviet Union which is agreed in principle is to buy food in eastern European countries for consumption in the Soviet Union. My hon. Friend is right. We have had to fight our way through a block in the Food Advisory Committee with regard to those matters and we hope that by continually pushing with our partners—as we did in negotiating the Lome agreement—to get access for east European countries to western European markets. That is essential.

Sir Russell Johnston

While I accept that the know-how fund does very useful work, does the Minister believe that there is no overlap between the various forms of assistance being offered by different western European countries? Is there a case for co-ordination, possibly through the Council of Europe?

Mrs. Chalker

First, I do not think that there is much overlap because there is so much need. Secondly, as the hon. Gentleman knows, our emphasis has been on banking and finance which are a crucial part of the economic regeneration of eastern European countries. Without those services there would be no channel for private investment, nor indeed chances for small business to develop. We have not seen any signs of duplication. We have seen a growing agreement on the part of Governments and the companies that they are now forming to turn to us, and not to anywhere else, for that essential economic regeneration advice.