HC Deb 24 February 1997 vol 291 cc14-6
30. Mr. William O'Brien

To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress of Her Majesty's Government towards achieving the United Nations target of 0.7 per cent. of gross national product to development assistance. [15549]

Dr. Liam Fox

We have agreed to move towards this target but not to a timetable for doing so. Levels of development assistance will continue to depend on our economic circumstances and other demands on public expenditure.

Mr. O'Brien

Is it not extremely disappointing that over the past 17 years overseas aid as a proportion of GNP has fallen from 0.52 per cent., when the Labour Government left office, to 0.28 per cent. in 1995 and that it is still falling? When will the Government stop this decline in aid to overseas countries that need assistance? If our economy is as great as people are led to believe, why is the overseas aid budget falling as a proportion of GNP?

Dr. Fox

There were three points in the hon. Gentleman's question. First, in our next term we shall continue our policy of providing a reasonable proportion of GNP. Of course, the difference is that under a Conservative Government the GNP is worth a great deal more than it ever was under a Labour Government. Secondly, the hon. Gentleman betrays what Labour always betrays by such questions, which is that it looks only at state money and does not regard private flows as important. We exceed the UN target for private and public flows. When developing countries need money they do not care whether it comes from Governments, the private sector, the Commonwealth Development Corporation or anywhere else. Labour never seems to be able to accept that. What amazes me about the hon. Gentleman's question is that Labour has the gall to raise this matter once again in relation to the Government's spending plans, when the shadow Chancellor has told us that all our spending is exactly correct and that, should we suffer the dreadful misfortune of a Labour Government, they would do exactly the same. Either what the hon. Gentleman says is true, which is that Labour would raise the money and the shadow Chancellor's comments are completely laughable; or, the shadow Chancellor is correct and we have made the correct economic decisions for the past 17 years, increasing our GNP and therefore the money that we can give in aid.

Mr. Jessel

Can my hon. Friend confirm that a great deal of our development aid has been highly successful—for example, in India, where the economy is now growing well and the standards of living are improving every year? Can he also confirm that our development aid amounts to more than £2 billion a year, which works out at well over £100 per United Kingdom household; and that we would be able to contribute much more if we did not have to contribute through the Common Market as well?

Dr. Fox

Our aid is made through bilateral and multilateral programmes, and this year the Government have decided to protect our bilateral programme for the very reason that my hon. Friend gives, which is that we think that our bilateral programme is the best in the world. It gives value for money, it is not overly administered, as are many of the other multilateral programmes, and it gives a level of expertise that is simply unrivalled anywhere else. We have moved away from the bricks and mortar type of aid programme, which is still evident in many other countries, towards an expertise-based programme that provides long-term sustainability. We have much to be proud of.

Miss Emma Nicholson

Is the Minister aware that his original answer was almost word for word drawn from the 1974 Conservative party manifesto for the second election? While it is comforting to hear that today the Treasury Bench supports a former Prime Minister whereas only yesterday it was being extremely rude about him, does the Minister recognise that the percentage of aid is now 0.29 per cent. whereas in 1974 it was considerably higher? Is it right that 67 per cent. of today's aid should be tied? I challenge the Minister to adopt the Liberal Democrat conference resolution to reach the UN target within 10 years.

Dr. Fox

The hon. Lady knows more than I do about what prospectuses were like in 1974 as she was still supporting the Conservative manifesto at that time and I was 13 years old. We certainly believe that our aid is unsurpassed. It is not simply a question of what we give directly through state aid, but what is given by the private sector. Our private funds are flowing into developing countries and are making a real difference. There are two UN targets not only for the proportion of GNP but for the combined flows. Only the United Kingdom and the Netherlands exceed that. Even the Liberal Democrats should recognise that.

Mr. Cunliffe

Does the Minister feel a sense of shame about the fact that in the Budget the Government cut 26p off a bottle of gin, and followed that with a £170 million reduction in overseas aid? That is a callous act, given the hundreds of thousands of starving families in Africa and Asia. Those people have to survive on a starvation diet and need vital aid. In those circumstances, to knock 26p off a bottle of spirits was a disgrace.

Dr. Fox

That would be true were it not for two things. First, we protected our bilateral programme in the Budget. We also said that should the multilateral aspect increase, it would be funded directly by the Treasury. Secondly, it is extraordinary to hear such remarks from a Labour Member, as the shadow Chancellor has already given his full backing to our Budget proposals.