Overseas Aid (Hansard, 7 April 1981)

§ Lord Hatch of Lusby
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne)
My Lords, the latest Public Expenditure White Paper, Cmnd. 8175, shows that net overseas aid rose by about 2 per cent. in real terms between 1979–80 and 1980–81 and that it will decline by 7.7 per cent. between 1980–81 and the current financial year, reflecting the Government's planned reductions in this sector.

§ Lord Hatch of Lusby
My Lords, is the noble Lord the Minister aware that, in addition to the decline of 7.7 per cent. that he mentioned, the Public Expenditure White Paper also provides for a further decline in the following year of over 8 per cent., making over 15 per cent. in total, and that this is nine times as high as the average Government expenditure? Can he tell the House why overseas aid has been picked out in this way? Is he further aware that the reduction already made brings down the British contribution to overseas aid to just over 0.3 per cent. of the gross national product, round about half the figure in 1960, when the country as a whole was half as wealthy as it is today?

§ Lord Trefgarne
My Lords, I cannot of course answer for the aid policies of the previous Administration, which I fancy could not have been sustained in the light of current economic circumstances. As for the charge that our aid cuts have fallen unfairly on the aid budget as compared with other expenditure programmes, I should perhaps point out that trade, agriculture, employment, energy, industry, and housing will all fare worse, so that that is not a charge which can be sustained. As for 1981–82, gross aid in that year will be £1,037 million, the first time in fact that British aid has exceeded £1 billion, and an increase of about 8 per cent. in cash terms on the money available last year.

§ Lord Kilmarnock
My Lords, does the noble Lord not agree, though, turning to Cmnd. 8175, that the 434 figure of £1,037 million which he has just given to the House in fact includes capital repayments of £64 million, and that therefore the percentage decrease of which he has informed the House is in fact even greater than he has stated?

§ Lord Trefgarne
My Lords, I gave the cash figures for 1981–82, which are in fact as I described. I think that the noble Lord may be referring to the figures adjusted for inflation, which are of course a different matter. We have made no secret of the fact that our aid budget must be trimmed to coincide with our resources, and that I should have thought was a prudent policy.

§ Lord Goronwy-Roberts
My Lords, can the Minister indicate now or later what percentage of the GNP of this country has been devoted to overseas aid in the three years indicated in the Question of my noble friend, and indicate also how far short in each year we have been of the United Nation's target of 0.7 per cent. of GNP? Moreover, will he confirm, or not, that in those three years between 1979 and 1981 we have fallen behind our competitors in Europe and elsewhere in the amount of aid we extend overseas, with the result that, compared with them, we are suffering diplomatically and commercially in those countries?

§ Lord Trefgarne
My Lords, I do not think that our aid performance compares at all badly with that of a great many of our European colleagues. Indeed, compared with some Eastern European countries and Soviet countries, our aid is many times the modest expenditure which they feel able to support. As for the question by the noble Lord about the percentage of GNP which we achieve in this matter, we of course accept in principle the 0.7 per cent. of GNP aid target but, like our predecessors, including the noble Lord himself, we are not committed to a timetable for achieving it. Progress must of course depend upon our financial and economic circumstances, and indeed the other calls on our resources.

Lord Paget of Northampton
My Lords, since the reduction in our aid payments in terms of proportion of our GNP has been going back since 1960, can it really be ascribed to our relatively new impoverishment? Is not the real reason that we have found by experience that so much of our aid was not achieving the objects for which we intended it, because it was being diverted by corrupt Governments? In fact, would it not be far more important to turn our mind to control of the expenditure of our grants in aid as famine aid or as real investment rather than passing it into the hands of Governments which have been very unsatisfactory recipients?

§ Lord Trefgarne
My Lords, I should want to refute the charge that this Government have been responsible for irresponsible allocation of aid monies. Indeed, I think I should be prepared to defend the previous Administration against that charge as well, because all Governments of every complexion have to a greater or lesser extent been determined to ensure that aid monies are properly disbursed, and indeed almost all capital aid that we disburse these days, not only under 435 this Administration but under the previous one, is tied in some way or another to the purchase of British goods. As for the percentage of GNP to which the noble Lord referred when he pointed out that this percentage had declined somewhat over approximately the last 20 years, the fact is of course that that percentage is calculated by reference not only to the amount of money that we spend but also to the GNP itself, and as the GNP increases of course the percentage, if the amount remains constant, drops.

Lord Morris
My Lords, does my noble friend agree that the measure for evaluating overseas aid as a proportion of GNP is in itself a criterion that is wanting because there are many other factors that ought to be brought into account?

§ Lord Trefgarne
My noble friend is certainly right, my Lords, in that the percentage of GNP which is used by some as a measure of aid performance is at best an imperfect measure, and sometimes other figures are more helpful.

§ Lord Goronwy-Roberts
My Lords, the Minister gave an interesting answer to my former supplementary but it was a rather adroit, misleading one, if I may say so in all friendship, when he compared our performance in this field with that of Eastern Europe. Would he now compare it with our friends and partners in Western Europe? They are very much more our commercial competitors in the countries of aid than we are competitors with the Eastern European countries.

§ Lord Trefgarne
My Lords, I do not have in front of me the figures of the aid performance of our other immediate European neighbours. I recall discussing this with the noble Lord across the Floor of the House and I seem to remember telling him from the brief I then had in front of me that our performance compared very favourably even with our Western European partners.

§ Lord Glenamara
My Lords, is the Minister aware that hardly any of us on this side would share the view of my noble friend Lord Paget on this subject, and that most of us regard this cut as quite appalling and shameful, in that a still relatively rich country like Britain should be cutting its aid in this way when there is so much grinding and appalling poverty in the world? Is the noble Lord aware that it is a shameful thing to do?

§ Lord Trefgarne
My Lords, noble Lords opposite are comparing what is now a realistic aid programme with the moonshine, if I may call it that, they thought they were going to achieve when they were still in office.

§ Lord Alport
My Lords, would my noble friend agree that the amount of aid in money terms is less important than what is produced for the assistance of overseas countries as a result of the employment of funds from this country? Would he agree that the most important and economical way of assisting developing countries is the provision of instructors for the schools and 436 institutions of higher education there and the provision of opportunities at our universities and institutions here for their students to come to the United Kingdom?

§ Lord Trefgarne
My Lords, my noble friend, not for the first time, has put his finger on a crucial aspect of our present aid policy, which is to get the maximum value for money. I believe that the training we can offer to overseas students in various ways is one of the very best uses for our aid monies.

§ Lord Blyton
My Lords, is the Minister aware that while I have no objection at all to the giving of overseas aid, in this country rents have gone up, as has the price of gas, electricity and rates? Would he not agree that in the context of Government policy the people of this country should receive some economic aid from the Government?

§ Lord Trefgarne
That is another view, my Lords, but I find it difficult to relate it to the view advanced by so many of the noble Lord's noble friends.

§ Lord Hatch of Lusby
My Lords—

The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)
My Lords, I suggest we have given this Question a good run for its money and that it would now be appropriate to move on.

§ Lord Hatch of Lusby
My Lords, may I ask a quick question?

Several noble Lords
No!

Earl Ferrers
My Lords, I should have thought that if anybody was going to ask a question it should have been the noble Lord, Lord Brockway, who I notice tried to get in half a dozen times without success, so I think we should move on now.