Spending Balance (Hansard, 7 February 1994)

§ 39. Sir Thomas Arnold
To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the balance of spending as between (a) bilateral and (b) multilateral aid.

§ Mr. Lennox-Boyd
In 1992–93, multilateral aid was 44 per cent. of our total aid to developing countries.

§ Sir Thomas Arnold
Has not the trend increasingly moved in the direction of multilateral aid? Is there not a feeling in many parts of the House that that should be stopped and reversed?

§ Mr. Lennox-Boyd
It is true that over years the trend has been increasing, but it fluctuates from year to year; how significant the increase has been over the past three years, I cannot say. Much of our multilateral expenditure is by agreement with other parties—it is not entirely determined by ourselves. For that reason, we must accommodate it if we wish to remain in forums such as the United Nations, international institutions and other areas where there is multilateral spending. The most important thing is to ensure that multilateral spending is money well spent. We certainly take a great deal of trouble with the European Community to assist in that process: for example, the "Horizon 2000" declaration, which was agreed in December 1992, set out procedures to improve 17 the way in which EC funds were spent and we currently have five officials seconded to the Commission to try to improve its spending plans.

§ Mr. Tom Clarke
Does the Minister accept that the reputation of Britain's bilateral aid programme has been sullied by the decision to fund the Pergau dam project in Malaysia when his own civil servants and colleagues advised against it? Is not £234 million of British taxpayers' money being wasted in Pergau with the sole purpose of boosting the arms trade? Does the Minister agree with Sir Timothy Lankester that that was an outrageous abuse of our aid programme?

§ Mr. Lennox-Boyd
As the hon. Gentleman knows, the matter will be fully discussed by the Select Committee on Foreign Affairs, but I must make one or two points. First, our aid programme is not, and will not be, linked to arms sales. Secondly, the hon. Gentleman says that our reputation is sullied, but British aid has contributed to Malaysia's rapid economic development and to the productive relationship that we have with Malaysia in many spheres of activity, including trade. Our trade today is three times what it was in 1988.

§ Mr. Lester
Does my hon. Friend agree that this question is a matter for the aid and trade provision? Should it not be made clear that the aid and trade provision is a system of soft loans and has nothing to do with our basic aid programme—our bilateral aid programme—which is based on helping the poorest countries first?

§ Mr. Lennox-Boyd
My hon. Friend is right. I should add that the aid and trade provision is about 5 per cent. of our total aid programme and, under new procedures, is to be directed to help the poorest countries. I remind the House that the aid and trade provision was invented by the Labour party.