Pergau Dam (Hansard, 27 February 1995)

§ 42. Mr. Watson
To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he is able to announce in respect of funds from the Overseas Development Administration budget reallocated from the Pergau dam project.

§ Mr. Baldry
We are using the reallocated amounts this year for additional emergency aid, primarily in Bosnia, Rwanda and Chechnya, for additional contributions to multilateral organisations in health and population, and for additional country programme spending, including mine clearance in Cambodia.

§ Mr. Watson
That will clearly be welcomed by all the various organisations that will benefit from the projects to which the Minister referred. In debates in the House following the courts' finding that the Government had acted illegally in their funding of the Pergau dam project, the Government undertook to provide funding in the next two financial years, but not beyond that. Will the Minister commit the Government to going that bit further and confirm that mistakes made with respect to the Pergau dam refer to more than just the next two years and, for the first time on behalf of anyone in the Government, will he apologise for what happened?

§ Mr. Baldry
We have debated this matter at considerable length in the House. Indeed, the hon. Gentleman was present for a debate the other day on Pergau. The settlement, under which an extra £65 million has been made available to the aid budget over a two-year period, is seen by most reasonable people in this country as fair and to be commended. The fact that so much money this year is now being spent on additional programmes in Malawi, on mine clearance in Cambodia and on relief in Chechnya, Rwanda and elsewhere, is also widely welcomed. The whole House generally sees that settlement as fair.

§ Mr. Dover
Will the Minister try to ensure that as much aid as possible is bilateral, so that British goods may be exported as part of the deal?

§ Mr. Baldry
Yes, we have a substantial aid programme in this country: some £2.2 billion. We want 691 to ensure that we have a robust, bilateral British aid programme, under which, wherever possible, we use UK know-how and goods.

§ Miss Lestor
To add to the confusion over the Pergau dam, which I think the Minister will find will not go away, may I say that earlier this month the Minister for Overseas Development shocked Europe and dismayed the developing world when she announced the Government's intention to slash their contribution to Lome by 30 per cent.? If the Government really intend to cut that contribution—I hope that they will change their mind—to concentrate on the British bilateral aid programme, what additional aid programmes does the ODA plan to fund with the unexpected windfall, which will result unless he is prepared to change his mind?

§ Mr. Baldry
The facts are straightforward. The United Kingdom bilateral aid programme worldwide is widely recognised as being of high quality. However, multilateral aid is now growing to unacceptable levels; it will be 60 per cent. of total aid in three years' time. Our EC aid alone will be more than 40 per cent. That will be made at the expense of the British bilateral programme unless we can achieve a better balance—hence our offer to EDF VIII. However, our contribution to EDF will still be substantial. Our aim is to set the right size for the UK contribution, one that reflects the means at our disposal, our aid priorities and the need to ensure a robust and sizeable British bilateral aid programme.