Bilateral Aid (Hansard, 25 June 1997)

§ 5. Mr. Luff
To ask the Secretary of State for International Development what plans she has to increase the proportion of the aid budget spent on bilateral aid. [3859]

§ Clare Short
As the hon. Gentleman will know, or should know, the previous Government made an agreement that led to 40 per cent. of our expenditure being channelled through the EU. A further 15 per cent. of our expenditure meets our UN and World bank obligations.

§ Mr. Luff
I am sure that the right hon. Lady will be aware of the warm welcome across the House for the Prime Minister's statement yesterday about the new priority for aid to sub-Saharan Africa, but does she agree that her ability to reprioritise spending within her Department is limited by the high volume of multilateral aid? I accept the figures that she gave in her answer. Does she understand that any effort that she makes to repatriate responsibility for the aid programme from the EU to her Department will be widely welcome around the House?

§ Clare Short
It does not help to moan about what the previous Government did. Given that the commitment carries through to 1999, it is important that we improve the quality of the EU programme, which at the moment is patchy. Some of it is good and some of it much less good. A report of the development assistance committee of the OECD is quite critical. As part of our presidency of the EU, we have made it clear that improving the quality of EU performance and getting more collaboration between nation states and the EU rather than competition will improve the quality of our development strategy.

§ Mr. Campbell-Savours
I recognise the distinction between aid and trade provision and tied aid under the bilateral programme, but can we have an assurance that ATP is fully protected?

§ Clare Short
I made it clear during our previous Question Time—I do not know whether my hon. Friend was present— that we are reviewing the aid and trade provision. There is much evidence that it is neither developmentally nor commercially beneficial. That review is under way, and we shall make an announcement when it is complete.

§ Mr. Goodlad
I add my personal congratulations and good wishes to the Secretary of State on her appointment.
Can the right hon. Lady confirm or deny reports that it is her intention to end the tying of any bilateral aid to the provision of British goods and services? What studies has she made of the likely effect of such a move on British jobs?

§ Clare Short
I thank the right hon. Gentleman for his kind remarks and welcome him to the Opposition Front Bench to serve what is probably the most noble cause that one can serve in politics.
As I have said, we have already made it clear that we are reviewing the aid and trade provision. The Prime Minister's announcement at the Denver summit is part of a worldwide movement to untie aid, because the OECD and everyone else recommends that there should be a change, as the 831 present system is basically inefficient. The number of British jobs that may be affected is marginal, but I am sure that Conservative Members would not want to featherbed the inefficiency of British companies by a sort of backward-looking tying of minor parts of the aid programme, when all the evidence and research undertaken by my Department and the OECD shows that it encourages inefficiency and damages the developmental quality of aid projects.