HC Deb 16 January 1995 vol 252 cc450-2
30. Mr. Mackinlay

To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement defining the Government's policy as to how, and to what extent, aid should be tied to trade.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tony Baldry)

We give aid to promote economic and social development in other countries. Wherever practical, we aim to use United Kingdom goods and services to achieve that.

Mr. Mackinlay

Will the Minister reflect that there is now widespread public opinion that it is an abuse of the aid programme to tie it to trade, particularly when such projects include metro systems in Ankara, in a state which is an applicant member of the European Union? Should not aid be related exclusively to waging war on poverty and promoting health and education?

Mr. Baldry

Aid and trade provision was established by the Labour Government in 1977. Like much of Labour party policy, however, it is obviously re-written by the day. ATP has enabled the United Kingdom to promote development in areas where British companies have much to offer. It is a successful scheme. It is successful in helping poorer countries. It is successful also in that the £1.4 billion which has been committed to support development in poorer countries has led to nearly £4 billion of British exports, which must be good news for Britain, for British jobs and for countries which have benefited from such projects. Not surprisingly, the Foreign Affairs Select Committee concluded that ATP should continue.

Mr. Waterson

What is my hon. Friend's view of the Opposition's point that one should never make defence sales to countries that are in receipt of British aid? Has he figures to show the number of British jobs that would be lost if such a policy were adopted?

Mr. Baldry

It would be a bizarre approach if the Opposition suggested that we should never contemplate defence sales in countries to which we give aid. We would be entitled to ask how many employees of companies such as British Aerospace, GEC, Rolls-Royce, Racal, Perkins, Vickers and hundreds of other United Kingdom defence exporters would accept losing their jobs for such specious dogma.

Miss Lestor

First, may I correct what has been said? We have always argued that arms sales should not be linked to aid. That is a very different statement.

Secondly, as the Minister is aware, fewer than a third of ATP applications in 1989–90 and 1990–91 were granted. Surely other ATP projects could have been funded if the Government had not gone ahead with the Pergau dam project. Is it not therefore disgraceful, as many people constantly point out, for the Government to say that they cannot restore the money that has already been spent on Pergau and on other projects? The pathetic excuse constantly trotted out is that the system of annual budgets means that the books for those years have been closed. Much good could have been done and could still be done if the Government would restore that money.

Mr. Baldry

First, the House will be grateful to the hon. Lady for setting out Labour party policy. As Labour party policy seems to change by the day, we are grateful for daily updates. My right hon. Friend the Secretary of State made the position in respect of money from the court judgment absolutely clear before Christmas. It is clear, and I am surprised that the hon. Lady has difficulty with it. We decided that funding from the reserve will be provided to meet the costs of four projects, thus releasing an extra £34.5 million this year and £31 million next year for overseas development. Every reasonable hon. Member would consider that to be an equitable solution.

Mr. Jacques Arnold

Are not four-wheel drive British vehicles such as those made by Rover and also British technology in agriculture, the water industry and many public utilities vital to developing countries? Is it not good for Britain and for the developing countries if, in the process of granting such aid, we tie in trade for Britain? Does that not show the hypocrisy of the Opposition?

Mr. Baldry

My hon. Friend is absolutely right. We work with British companies and consultants, as we do with British non-governmental organisations such as Oxfam and the Save the Children fund, because they provide the advice, know-how, products and experience which are of benefit to the development of the countries that we help. We should be proud that British money, talent and expertise are devoted to helping many of the poorest people in the world.

31. Mr. Gordon Prentice

To ask the Secretary of State for Foreign and Commonwealth Affairs what criteria he uses to allocate overseas aid.

Mr. Baldry

We give aid where it will be most effective in promoting sustainable economic and social development, focused on the poorest countries, particularly in the Commonwealth.

Mr. Prentice

Does the Minister not appreciate the bewilderment of people that the largest single slice of overseas aid should go to Malaysia, a country which exports cars to the United Kingdom? Is there not a case for refocusing our aid effort to those parts of the world which are poverty-stricken and which need the support that we can give them?

Mr. Baldry

The hon. Gentleman should first read the statistics on British overseas aid for 1994. He might then pose a more accurate question. Nine of the 10 biggest aid recipients last year were poor countries in Africa and Asia, while Bosnia was the other main recipient. We have a substantial aid programme of some £2.2 billion which has been praised for its quality. The programme is focused on helping the poorest in the world, and we can all be proud of it.

Mr. Ottaway

Will my hon. Friend confirm that the aid budget is a growing and quality budget, and that it is flexible in addressing human crises? But would not the budget be better distributed on a sectoral rather than a regional basis? That would be particularly applicable in relation to population policy.

Mr. Baldry

It is indeed a large budget of some £2.2 billion and we are the sixth largest aid donor worldwide. It is growing, and the next three years will see year-on-year increases in the aid budget. It is a quality budget. Christian Aid recently commented: The UK has capacity and considerable experience both in development and in the management of crises. The quality of the UK's overall contribution to long-term development is recognised to be high. That is one of the leading NGOs commenting on UK aid.

In addition to giving money to the poorest countries, we also discuss their aid programmes with them. We seek to do that on seven principles, including support of economic reform, helping to achieve good government, enhancing productive capacity and financing activities which directly benefit poor people. Those are set out in detail in the ODA annual review. We recognise that we must promote particular policies as well as helping poor countries.