Overseas Development Co-operation (Hansard, 15 January 1997)

§ Mr. Hugh Bayley (York)

I beg to move, That leave be given to bring in a Bill to amend the Overseas Development and Co-operation Act 1980. This Bill has all-party support, and I thank the hon. Members on both sides of the House who are here to support the Bill today.

There is a great deal in the work of the Overseas Development Administration and its officials in which we should take quiet pride. We should take similar pride in the work of voluntary development agencies such as Oxfam, both projects supported by the ODA and those supported by independent charitable giving. However, that does not mean that the £2,000 million a year that the House votes to the ODA is always well spent.

In its report on the Pergau dam, the Select Committee on Foreign Affairs revealed not only that the millions of pounds of British aid committed to the project had been used to support the pursuit of a British arms contract with Malaysia, but that, in the words of the permanent secretary to the ODA, the aid had been spent in a way that was "an extremely bad buy" in development terms. In fact, it has been calculated that the Pergau dam will cost the Malaysian people £100 million more than alternative means of generating electricity.

The National Audit Office report on aid to Indonesia, which will be debated by the Public Accounts Committee next week, reveals ineffective use of British aid—for example, a £5 million investment in the Ombilin coal mine which showed a negative return—and inappropriate use of aid, such as two cases in which aid projects were supported by the Foreign Office in order to help to secure British arms exports.

The purpose of the Bill is simply to improve the quality of British aid both in terms of effectiveness, by targeting aid on poor people in poor countries, and in terms of appropriateness, by prohibiting the use of the aid budget, directly or indirectly, to promote the sale or supply of military equipment. The Bill will also set clear social, environmental and human rights standards that will have to be met by all British aid projects.

I do not in this speech want to dwell on the cut in the real value of the aid budget. The case for changing the priorities of the ODA is the same whether that budget grows or declines. But when it is declining in value, it is more important than ever to ensure that every penny of it is well spent.

This weekend in Bangladesh, the Prime Minister promised more aid for rural areas of that country. I welcome that statement. Bangladesh is one of the poorest countries in Asia, and it has suffered a cut over the past five years in United Kingdom bilateral aid—from £55 million to £47 million a year. But the question that this House must answer is: where will the extra money for rural development in Bangladesh come from? The Red Book which we considered in last night's debate on the Finance Bill makes it perfectly clear that it will not come from the Treasury. It would be wrong to take the money from development programmes in other countries that are as poor as Bangladesh. It must come from aid to high and middle-income countries.

341 In recent years, however, the reverse has been happening. Over the life of this Parliament, the proportion of the British aid budget going to poor countries has fallen from 80 to 69 per cent. British aid to India has been cut by 23 per cent., while aid to Indonesia, a country with an average income three times higher than that of India, has increased by 79 per cent.

Recently, the ODA published its latest volume of British aid statistics, which reveal some shocking anomalies in British aid spending over the past five years. St. Helena, a middle-income territory with a population of just 7,000, received £44 million in overseas aid—twice as much as the poorest Commonwealth country in Africa, Sierra Leone, which has a population of 4.5 million. The Cayman islands, the offshore banking capital of the Caribbean, with a higher gross domestic product per capita than the UK, received £7.67 per person in British aid, while Jamaica, the poorest Commonwealth Caribbean island, received £5.33 per person in aid over the past five years.

In the same period, India got 53p per person; Hungary, with a standard of living more like ours than like India's, received £2.65; and Singapore and Hong Kong, which both have a higher per capita GDP than the UK's, received more aid per person over the five years than Vietnam, the poorest country in Asia.

The Bill seeks to end aid to high-income countries; to phase out aid to middle-income countries, using the sort of graduation strategies recommended by the Foreign Affairs Select Committee in its report on the ODA's fundamental expenditure review; and to use the money instead to increase aid for sustainable development for poor people in poor countries.

This is entirely consistent with the ODA's published mission statement, which reads: ODA's purpose is to improve the quality of life for poorer people in poorer countries by contributing to sustainable development and reducing poverty and suffering. I accept that there are reasons of national self-interest that lead the Government to spend public money on other things, such as promoting trade with emerging economies, encouraging democracy in central and eastern Europe, and 342 fulfilling our historic obligations to British dependent territories. But those aims are not consistent with the ODA's mission statement, and they should be paid for from other sources—perhaps directly by the Foreign Office, in the same way as it funds the BBC World Service and the British Council. Or perhaps Parliament should vote the ODA a separate budget for these specific purposes.

My support for overseas aid for the world's poor is based partly on compassion and a belief that we should help human beings who are less fortunate than ourselves—a basic mark of civilisation—and partly on self-interest. A Bob Marley song uses the lyric: A hungry man is an angry man"— and an angry man is a dangerous man. If it addresses the causes of that anger, the ODA can make the world safer for people in developing countries and in Britain.

I am a realist. I realise that the Bill is extremely unlikely to reach the statute book this Parliament, but I want to start the debate now and to return to it in the next Parliament, after the general election.

I warmly welcome the concern for the world's poor shown by the Princess of Wales, and by the Princess Royal in her support for Save the Children, but the House cannot delegate the debate, or the responsibility for overseas development policy, to the royal family. We are responsible for public expenditure, for scrutinising Government policy and for providing the legislative framework for that Government policy. The Bill proposes good and necessary legislation, and I hope that the House will give me leave to introduce it.

Question put and agreed to.

Bill ordered to be brought in by Mr. Hugh Bayley, Miss Joan Lestor, Mr. Peter Temple-Morris, Sir David Steel, Mr. Mike Watson, Mr. Cynog Dafis, Rev. Martin Smyth, Mrs. Anne Campbell, Dr. Joe Hendron and Miss Emma Nicholson.