HL Deb 20 February 1980 vol 405 cc747-56

3.8 p.m.


My Lords, with your Lordships' permission, I should like to make a Statement on overseas aid.

Soon after assuming office the Government instituted a review of the policies governing, the overseas aid programme. This review is now complete.

Our ability to support development overseas is dependent on the state of our own economy, and the need to strengthen it. Nevertheless, the Government will continue to provide aid to the developing countries on a substantial scale. Official aid continues to be an essential element in development, especially for the poorest countries. Within the limits of our resources we must seek to relieve poverty in the developing world, so as to create conditions for greater peace and stability; and to contribute to the growth of world trade, on which Britain so critically depends.

Trade is of the greatest importance for the developing countries. If the Free World were to slide towards protectionism we would all suffer, but the consequences for the developing countries would be particularly serious. We ourselves provide a substantial market for their products, and will encourage others to do the same.

Private investment can and should play a greater part in development, and we hope that the relaxation of exchange controls will further encourage British firms to invest overseas.

We believe that it is right at the present time to give greater weight in the allocation of our aid to political, industrial and commercial considerations alongside our basic developmental objectives.

We need to maintain the strength of our ties with the Commonwealth, to which the greater part of our bilateral aid now goes, and to fulfil our obligations to our remaining dependencies. We must also be able, when necessary, to offer help and encouragement to other friendly countries.

The greater part of our bilateral aid is tied to procurement in the United Kingdom and so provides valuable orders for British firms. I might add that our contributions to multilateral institutions also enable British firms to compete for very substantial business financed by them all over the world. We are examining means by which they might get a greater share of this business.

Since 1978 about 5 per cent. of the bilateral aid programme has been made available from the Aid/Trade Provision for sound development projects (which are also of commercial and industrial importance for British firms) in developing countries to which we do not normally provide aid or where the planned allocation is already committed. In order to maintain the value of this provision in real terms its share of the bilateral aid programme will now be increased.

The unallocated margin in the aid programme will be increased so that we can respond more effectively to new developments where our political or commercial interests are involved.

Our commitments to international agencies and bodies will absorb a larger proportion of the aid programme over the next few years. As we need more room for manoeuvre in bilateral aid, we shall need to look critically at our expenditure on multilateral aid programmes.

Improved inter-departmental arrangements will ensure that all these considerations are brought together.

The administration of the aid programme is being examined in a thoroughgoing management review of the Overseas Development Administration to ensure that the programme continues to be managed effectively and economically.

Much can be done with our aid programme which is to the mutual advantage of the developing countries and ourselves and we shall therefore concentrate on using it in that way.


My Lords, the House will wish to thank the noble Lord for making that Statement. We welcome his statement that overseas aid continues to be an essential element in development, especially in the poorest countries. We also agree that if the Free World were to slide towards protectionism we should all suffer. The fact that he is proposing to give greater weight in allocation of our aid to political considerations gives rise to some anxiety, indeed great anxiety, on this side of the House. Does his Statement confirm what the Sunday Press foretold: that Her Majesty's Government proposed to link aid to British foreign policy objectives; that it might involve cutting one-third of the aid to the poorer countries like India and Bangladesh and increasing it to more affluent countries like Pakistan and Turkey and even Latin America?

We very much regret that the share of the bilateral aid programme will now be increased. From what the Statement goes on to say later, we gather that this is at the expense of the multilateral aid programme which has already been cut, in real terms, by 6 per cent. When he is taking his criticial look at our expenditure on multilateral aid, we hope that he will bear in mind the masterly analysis of the Brandt Report, Programme for Survival.

Taking the Statement as a whole, although it is phrased with the elegance and subtlety which we expect, and get, from the noble Lord, we are disturbed that, together with the miserly approach to the problem of overseas students fees in this country, this confirms our fears that the downgrading of the Overseas Development Ministry has altered the Government approach to aid. If the worst effects are not yet apparent, we feel sure that this Statement will give great apprehension to the outside world.


My Lords, we, too, should like to thank the noble Lord for making this Statement. It is difficult at first glance to grasp all the implications of this complicated subject, but am I right in thinking that the general aim is as follows: a larger proportion, perhaps a far larger proportion, of our aid is now to be devoted to tied aid directed towards the poorer members of the Commonwealth with greater provision than now exists for protecting and advancing not only our own commercial but also our own political interests?

If so, I should like to associate myself with the noble Baroness in asking what exactly is meant by "political interests"? Secondly, would the Government—because I am innocent on these matters—give me a major instance of a multilateral aid project, our contribution to which is now to be examined "critically" and, by inference, to be reduced? The third question is this. As a result of these new arrangements—and I do not know if this can be worked out at present—what is thought to be, after these arrangements come into force, the actual proportion of our GNP to be devoted henceforth to aid generally? Lastly, would the Goverment not agree that one of the most profitable forms of aid, particularly now, would lie in the grant of scholarships to students from the Commonwealth and elsewhere, especially to post-graduate students? Would that now be possible, so as to mitigate the extreme severity of the recent rises in the fees payable by overseas students? I think that at least the Government should consider this proposal seriously.


My Lords, I am grateful, I think, to the noble Baroness for her gentle reproach—I should like to put it like that. I agree with her, and I think that the whole House would agree, that the more aid we can afford to give to those who are badly off through no fault of their own, we should give. We should all like to do that, and we should all like to see in present circumstances that we get something in return; because we have a considerable economic problem here at home. But the reality is that we must cut the money that we give to overseas countries according to the resources that we have. What we must do is to put our economy in order before we can increase our aid programme and before we can even keep to the sum of money which we spent the year before last. These are unpalatable facts but the fact remains that we simply cannot afford to pretend that at the moment we are a rich country. I do not think that there is anything incompatible in using aid to further your foreign policy. I happen to think that our foreign policy is a thoroughly good foreign policy, and it is in the interests of the peace of the world that our foreign policy is conducted. I believe that to tie our aid to those interests and to use it for developing countries in a way beneficial to them and to us is not discreditable but wholly sensible.

The noble Baroness asked me about the balance between bilateral and multilateral aid. The difficulty is that if you are reducing, as we have had to reduce, the aid programme, the multilateral aid is much more difficult to cut because you have a series of commitments over a number of years. Therefore, broadly speaking, it is the bilateral aid which suffers. Yet it is the bilateral aid in many ways which is the more useful for this country. What we are seeking to do, if we can, is to redress the balance. The sort of thing I had in mind, in answer to noble Lord, Lord Gladwyn, is that there are some contributions that we make to United Nations' funds which, I suspect, are now out of proportion to our gross national product as it is now compared with what it was when those figures were originally settled.

I will certainly agree with the noble Baroness. We have to take account of the Brandt Report and we shall study that with great care. The noble Lord, Lord Gladwyn, asked what percentage of our GNP is spent on aid. The last figures that we have are for 1978, and it was then 0.48 per cent. Both the previous Government and this Government are committed to get it up to 0.7 per cent., if they can. It is at the moment somewhere in the region of 0.48 per cent.


My Lords—


May I just finish answering one of his questions before the noble Lord, Lord Gladwyn, has another go.

The noble Lord asked me about scholarships. A great many things are desirable in aid. We have to devise priorities which we believe to be right. There is no intention of cutting off aid to India at the expense of someone else. The two countries which the noble Baroness described as affluent—Turkey and Pakistan—are hardly in that category. There is no question of cutting off one at the expense of the other. What we have to do, I am afraid, is to spread the butter more thinly and spread it to our advantage as well as to the recipients' advantage.


My Lords, may I ask whether, in the priorities which my noble friend will apply to the distribution of aid, he will bear very clearly in mind the importance to the developing countries of the training of their own nationals so that they can serve in those countries on their return? Although there are many demands for different forms of aid from those countries, the education and postgraduate education of overseas students in this country should take first place.


Yes, my Lords, I will certainly bear in mind what my noble friend has said.


My Lords, does the noble Lord's somewhat complex Statement—if I may say so—mean that there will be more aid or less aid? That did not emerge very clearly. If less, by what part of the proportion of the GNP will the reduction be?


My Lords, the exact figures will be published in the White Paper in a few weeks' time. I would not care to anticipate it.


My Lords, is my noble friend aware that people who live in the real world will approve his decision to take politics into account when distributing any limited aid that we may give? While the Brandt Report may be good bedside reading, it is full of clichés and much of the evidence seems to have been brought from a period in which the atmosphere was quite different from today's in terms of productivity. Let realism play a part at the end of the day, and in that way we may get the best results from everybody.


My Lords, without casting any aspersions upon the authors of the Brandt Report or its contents, I am—not for the first time or the last time—grateful for my noble friend's intervention.


My Lords, in view of the importance of this Statement, will the noble Lord kindly tell us whether there will be an opportunity for at least a short debate on it, rather than that he should have the problem of answering off the cuff vital questions to which constructive answers (not that his answers are not constructive) are needed?


My Lords, the noble Lord, I am sure, is in constant touch with the "usual channels". I am sure that will be possible.


My Lords, among the political considerations which the Foreign Secretary mentioned, will human rights be included? Also, will the noble Lord take into account the fact that some of the recipients of our aid at the moment—Pakistan and Ethiopia, to name a couple—are not by any means respectors of human rights, but are among the worst violators of the Universal Declaration of Human Rights? We are aiding these countries not only bilaterally but also through multilateral mechanisms, including that of the EEC. I have already drawn the noble Lord's attention to this.


My Lords, human rights is one of the criteria which must be taken into account.


My Lords, does the noble Lord agree that those millions of people in the Third World who are living in circumstances of the grimmest poverty and disease are living in the real world?


My Lords, I think that we all are.


My Lords, the noble Lord invited us to wait a week or two before we hear the real figures that will be announced. But are not my noble friends on the Front Bench and the noble Lord, Lord Gladwyn, perfectly correct in detecting a retrogressive attitude towards aid from Her Majesty's Government? Is it not utterly deplorable that we are hearing such a Statement in the week following the Brandt Report, which in perfectly justified tones of urgency called attention to the desperate future that awaits the world unless massive aid is transferred to the Third World? Is it not at least welcome that a leading Conservative such as Mr. Edward Heath—a signatory of the Brandt Report—is not blinkered in these matters, as Her Majesty's Government seem to be?


My Lords, it cannot have escaped the noble Lord's attention—or, if it has, I am surprised—that Her Majesty's Government are trying to cut down on public expenditure. It is a well known fact, which I draw to the noble Lord's attention as a result of the tone of his question, that if you spend more money than you have you go bankrupt.


My Lords, does the Secretary of State not agree that he might at least have disclosed an interest when indulging in his eulogy of our foreign policy? Does he not also agree that adding political strings to aid is not going to add to our standing, especially in the Third World?


My Lords, I know of no other country which gives aid and which does not take political consequences into account.


My Lords, does the noble Lord realise that a great deal of good will will be lost in the Third World by switching towards bilateral aid after the subordination of the Ministry of Overseas Development into a section of the Foreign Office?


My Lords, I was not suggesting that we switched from multilateral into bilateral aid. I was trying to redress the balance. There are certain areas of multilateral aid where there is no question of our cutting—in particular, our commitment to the Lomé Convention. We have to keep a balance between bilateral and multilateral aid.


My Lords, I wonder whether the noble Lord realises the culmination of the various actions which have been taken in this respect in recent months? There is the consternation which has been caused throughout the Commonwealth, in particular, with regard to the attitude on fees for overseas students. There are the difficulties in which the students themselves are being put. This is followed by the drastic reduction in the British Council and its activities. Only last week I listened in another part of this building to the report of a reduction by half of the British contribution regarding world population activities. It seems to me that we are embarked—and I am sorry that it should be so with a Secretary of State whom we so much admire—on a policy of almost deliberately alienating world opinion and, in particular, Commonwealth opinion.


My Lords, what we are embarked upon is a programme to put the economy of this country right. When we have put the economy of this country right, we shall then be able to afford to do all those things which the noble Lord and I agree are very desirable.


My Lords, in the course of his reply the noble Lord referred to the overriding necessity for reducing public expenditure. He will doubtless be aware that in some areas, particularly in regard to defence, there has been a very great increase in public expenditure. Will he bear in mind that a transfer of expenditure from defence to overseas aid might well in purely military terms be much more cost effective?


My Lords, that is carrying the question rather wider than the Statement that I have made.