HC Deb 21 March 1994 vol 240 cc17-8
42. Sir Michael Neubert

To ask the Secretary of State for Foreign and Commonwealth Affairs what changes he proposes to the criteria for the choice of countries to receive overseas aid from the United Kingdom.

Mr. Lennox-Boyd

We continue to give aid in the light of need and to promote economic and social development.

Sir Michael Neubert

Is not Dr. Mahathir's letter to the Financial Times confirmation of the damage done by the persistently negative character of our media, aided and abetted by Her Majesty's official Opposition, who are, with cavalier disregard, prepared to put, in the one case, proprietorial profit and, in the other, partisan political advantage, ahead of British people's jobs? Will my hon. Friend make it clear that the money for the Pergau dam was in the form of a loan, that that loan, with a British project, would have gone towards paying a British company and that, in the world we live in, such assistance makes every kind of sense?

Mr. Lennox-Boyd

I can confirm that it was in the form of a loan on concessional terms. Of course we are proud of the fact that we have a free press in Britain, but I have to agree with my hon. Friend that some newspapers have written nonsense and made some serious inaccuracies. As for the role of the Opposition in that, I can conclude only that they somehow seem to believe that there is good politics in destroying British jobs.

Sir David Steel

Will the Minister consider the example of the Governments of Japan, of the Netherlands, of Denmark and of other countries, all of whom make the spending of the recipient country on military matters one of the criteria for deciding their aid budget? If they decide that Indonesia is rich enough to spend vast sums on armaments, why do we alone decide that it should receive large quantities of aid?

Mr. Lennox-Boyd

The right hon. Gentleman is wrong to allege that Indonesia is spending such a high percentage of its gross domestic product on armaments. It is spending less than 2 per cent. of its gross domestic product on armaments. Indonesia is a fine example of a country with a sound record of economic management. In 1970, about 60 per cent. of the population was living below the poverty line; by 1990, only 15 per cent. were. When we speak about what other countries are doing, I should like the right hon. Gentleman to bear in mind the fact that 5 per cent. of the British aid budget is for aid and trade provision projects such as Pergau, compared with the 14 per cent. of the German aid budget and the 28 per cent. of the Austrian aid budget spent in that way.

Mr. Wells

Will my hon. Friend include in the criteria that he is developing countries whose economies have been ruined by policies pursued by the European Community—for example, the banana protocol and banana GATT arrangements, which will undoubtedly undermine the Caribbean banana industry?

Mr. Lennox-Boyd

We shall consider in any part of the world countries with the right criteria—those with a per capita income of less than $700 a year—for ATP projects that would benefit the country, the aid programme, British industry and British jobs.

Mr. Tom Clarke

Does the Minister accept that the Opposition will always support projects that are developmentally sound? If so, I trust that he will dismiss the views of Sir Timothy Lankester, which have been disowned by the hon. Member for Romford (Sir M. Neubert). On the allocation of limited aid funds, does the Minister accept that some countries are absolutely crippled by debt? For instance, a third of Uganda's revenue is being used to service debt at the expense of health, education, pure water and other important needs. Will he therefore encourage the International Monetary Fund and the World bank to take a more reasonable view of those appalling problems than that taken by some Conservative Members?

Mr. Lennox-Boyd

I am glad that the hon. Gentleman supports the ATP programme, because it was invented by the last Labour Government. I am glad to say that the Pergau project will be worth 29,000 man years for British workers and that 110 British subcontractors and suppliers will gain business from it. The hon. Gentleman knows that Britain has led the way in debt relief. In 1990, we launched the Trinidad terms—18 countries, 13 of which are in Africa, have benefited so far from that—and we have relieved developing countries of more than £1 billion of the aid debt burden.