ECC 21st Report: Development Aid Policy

HL Deb 03 June 1981 vol 420 cc1226-305

3.3 p.m.

Lord Greenhill of Harrow rose to move, That this House takes note of the Report of the European Communities Committee on development aid policy (21st Report, H.L. 146).

The noble Lord said: My Lords, our committee is extremely grateful to the House for making time available for this debate. We are also very gratified that the Secretary of State has found it possible to be present at least for some of the debate. It is surely timely for us to be discussing this matter. One of the features of political life today is the greatly increased and still growing interest in development aid to the third world. Some of the interest is, I fear, based more on emotion than on reason and is in careless disregard of the reality of practical difficulties. But the interest is genuine, sincere and must be welcomed and taken fully into account, and the publication of the Brandt Report has of course contributed to it.

Although that report covers a much wider range of issues than aid—and our report is not concerned with those wider matters—the committee were largely sympathetic to one of the fundamental points made by the Brandt Report, namely, that the necessity for development aid is urgent and that it is in the mutual interests of both donor and recipient that substantial and effective aid should be given.

The committee's report concerns itself with rather a narrow section of this huge problem. Broadly speaking, the questions we asked were whether the Community should continue to be a vehicle for aid; if so, does it give aid in the right way so far as the recipients and donors are concerned; and if not, how can its methods be reformed and improved? I hope some noble Lords will have studied the committee's conclusions and recommendations and perhaps gone further and read some of the evidence, and the House will not want me now to recapitulate those in detail. Members of our committee who will speak later will no doubt wish to emphasise certain points that are of special interest to them. However, I hope the House will permit me to draw attention to a few matters which may with advantage be discussed in this debate. I dare say our discussions will range widely over the aid question, but I hope that the limited field of the report itself will get adequate attention.

First, the Community aid programme is not in itself large. The report contains some useful comparative tables with other sources of aid funds, bilateral and multilateral, and noble Lords will see that the Community's efforts are relatively minor when compared with some national donors. The British share is £107 million per annum, which is not an inconsiderable sum when properly applied, but it is somewhat less than one-eighth of the total British aid including bilateral aid and aid to multilateral agencies other than the Community. But when considering the adequacy of these sums, we should perhaps bear in mind that the British public has today bet between £25 and £30 million on one horserace.

Secondly, the source of the Community's aid funds is, of course, the individual member countries; it has no funds other than those that individual members make available to it. One might observe that the Community can do as much, if not more, for developing countries by its trade policies as by donations of aid investment. But that is another question which is not the subject of the report.

Thirdly, certain advantages are claimed for aid given by the Community. It is said that Community aid is less "colonial". It is suggested that Community aid is less tied than bilateral national aid, just as efficient and has the added advantage of promoting co-operation between the European donors. It is also important for the reputation of the Community in the third world, where goodwill towards the Community may be of value politically. It is difficult to reach an objective conclusion on these matters, but on the whole our committee thought that if member countries were prepared to make more funds available for aid, those additional funds should most advantageously go not to the Community programme but to the bilateral programmes of the member countries or to other well-established multilateral programmes, some of which have suffered cuts.

But in the view of the committee, the two main shortcomings of the Community aid programme are its regional limitations and its mishandling of food aid. For historical reasons explained in the report, Community aid is largely concentrated in the limited areas of Africa, the Caribbean and Pacific countries. Those areas have the bulk of the aid and the bulk of the staff devoted to them. Inadequate aid is given to very deserving areas—to the so-called non-associated countries like India and Bangladesh—and this imbalance should in our view be corrected as soon as reasonably possible. It is not suggested that the ACP's share of the money should be reduced, but that any further monies should be directed elsewhere, and that there is some scope for re-allocating funds away from food aid in the Community's existing programme.

The Community's main aid instrument is the Lomé Convention. This is in many ways an admirable piece of long-established machinery, which now needs some adjustment and some modification. We have suggested in the report some ways in which that should be done. Actual disbursements of money are disappointingly slow, but are apparently no slower than in other international bureaucracies. The food aid programme, which is outside the Lomé Convention, needs a thorough re-think, with development objectives more clearly taken into account. We also suggest in the report how Community aid money could be used to unlock money from other sources and so increase the total amounts available.

There is much to admire in the present Community aid programme, not least the enthusiasm and the qualifications of the persons engaged in it. It bears the firm stamp of its long-serving Commissioner, M. Cheysson, who is now Minister of External Affairs in the new French Government. He has liberal views on these matters, but he has not been neglectful of French national interests. The time is right for making some necessary changes and improvements.

Her Majesty's Government may reasonably ask what it is that we wish them to do in the light of our report. I think that I can best summarise it as follows. First, we want Her Majesty's Government to be more assertive in the councils of the EEC when aid matters are discussed. We have the necessary qualifications and experience to act in this way, and although our total aid programme may currently be being reduced, our share of aid passing through the Community will remain the same. We want more United Kingdom influence on the philosophy and administration of the Community aid programme. Secondly, we should put forward constructive proposals for reforming the food aid programme from 1982 onwards; reduce the amount of dairy food aid and concentrate on larger deliveries to fewer countries; increase the staff, and improve administration and evaluation. Thirdly, we should press for the programme of aid for non-associated countries to be put on a firmer footing. Here the Government could bring forward a proposal in the Community to change the rules governing the use of EEC aid. The non-associated countries such as India, Bangladesh, and Sri Lanka should be helped to use EEC grants to raise and service loans from other sources for development purposes.

Lastly—and this is a wider question—we should like to see Her Majesty's Government take a leading part in co-ordinating the Community in support of some of the Brandt proposals. In particular, the Government should give a new impetus within the Community to the Euro/Arab dialogue to encourage the recycling of OPEC surpluses to developing countries. The member countries of the Community, if they act in concert, have the political and financial strength to do this. It will be particularly important, if, as is possible, the numerous conferences and summits on development issues during 1981 fail to produce more urgent practical responses to the developing countries' problems. My Lords, I beg to move.

Moved, That this House takes note of the Report of the European Communities Committee on development aid policy (21st Report, H.L.146).—(Lord Greenhill of Harrow.)

3.14 p.m.

The Secretary of State for Foreign and Commonwealth Affairs (Lord Carrington)

My Lords, in common I think with most of your Lordships I have listened with much interest and general agreement to the speech of the noble Lord, Lord Greenhill of Harrow, and I believe that we all welcome the opportunity that he has given the House to discuss the development aid policy of the European Community. We would all congratulate him and his committee on the report that they have produced. I hope that your Lordships will forgive me if I am unable to sit through the whole of the debate, since I am afraid that I have some other commitments which I cannot very well miss. How-every I very much hope that I shall be able to hear the two maiden speakers who are to take part in the debate on this important subject.

Certainly the debate is welcome, because no two subjects could be more widely misunderstood and misrepresented in this country than the activities of the European Community and the Government's policy on overseas development. If one was to believe some of the tracts which have recently circulated, and the sayings of certain polemicists, for a Government spokesman to rise to debate these subjects must be as hopeful as ascending a scaffold. Your Lordships will perhaps recall Samuel Pepys's description of the demise of Major-General Harrison. He wrote, I went out to Charing Cross, to see Major-General Harrison hanged, drawn and quartered; which was done there, he looking as cheerful as any man could in that condition". If your Lordships find me cheerful today, it is because I am glad to have the chance to redress some of the misconceptions that I have mentioned. I hasten to emphasise that these misconceptions are not to be found in the serious and valuable study produced by the noble Lord, Lord Greenhill, and his colleagues.

As the noble Lord has pointed out, never has the relationship between the developed and developing countries been the subject of such intense discussion and concern as it has over the past year. Governments and public opinion are united in recognising the urgent need for more effective ways of tackling the world's economic and social problems. Indeed, public concern for this was again demonstrated impressively last week in the massive lobby of Parliament. And, if I may say so, it has been demonstrated this afternoon by the number of speakers wishing to participate in the debate, despite countervailing attractions elsewhere.

In its report, your Lordships' committee has made a most useful contribution to the public debate by focussing on an important conduit of the United Kingdom's development aid—one to which, as the noble Lord has said, we contribute substantially over £100 million annually, or more than 12 per cent. of our total aid budget. I might perhaps remind your Lordships of the scale of the aid contributions made in sum by the member states of the Community. The official development assistance provided by the Ten, both bilaterally and through the Community, approaches 12 billion dollars. This is more than half the total for the OECD countries, and, incidentally, more than eight times what the Soviet Union provides in civilian aid to the developing world.

Like the noble Lord, I shall not attempt a detailed analysis of the committee's report. The Government will shortly publish a response to their recommendations. However, I should like to concentrate on certain important aspects. First, is it right that such a high proportion of our aid should be channelled through the Community? I was interested to note the committee's view that, as, and when, more funds become available, the first priority should be to devote them not to Community aid, but to bilateral programmes and to other multilateral agencies.

The Government, too, think that priority must where possible be given to bilateral aid. Britain has a very fine record in its administration. In our national programme we can bring to bear our long experience and depth of specialised knowledge, whether it be in such fields as tropical agriculture and preventive medicine or in the execution of projects on a large scale—for example, in power generation or irrigation—and perhaps more than most we can and do apply tight financial control. We shall therefore maintain the emphasis on bilateral aid, and we consider that proposals for increased multilateral aid, including proposals from the Community, must be evaluated most carefully.

That said, I should like to place on record the high value which we attach to the aid programme of the European Community; and the value we attach to this programme is demonstrated by the way in which it has evolved since the United Kingdom joined the Community. We have had a considerable influence on that evolution. With our accession, the trade privileges and access to Community aid funds, previously available, your Lordships will remember, only to the signatories of the Yaounde Convention, were extended to Commonwealth countries in Africa, the Caribbean and the Pacific. In 1973 the Yaounde Convention covered 19 countries, with a population of some 90 million. Today, the second Lomé Convention extends to 61 countries, more than half of which are members of the Commonwealth, with a total population of about 300 million. That is a remarkable transformation.

The Lomé Convention not only maintains privileged access to the European market for sugar, bananas, rum and beef through the Commonwealth CAP countries. It also, for example, incorporates unprecedented schemes to help stabilise export earnings in key import commodities and to help over difficulties affecting mineral producers. The record of solid achievement under the Lomé Convention contrasts very favourably with progress made through other fora and negotiations, which, if I may say so, have been characterised all too often by rhetoric rather than by action.

The committee were not convinced—and the noble Lord repeated it this afternoon—that Britain had asserted its views vigorously enough within the councils of the Community. I am not sure that I or, indeed, our Community partners would agree. But be that as it may, I can assure your Lordships that the Government will continue to press for desirable and practicable improvements, such as, for example, speeding up the rate of disbursement of funds; encouraging co-financing, including co-financing with OPEC countries, under the programme for non-associated countries; and strengthening the Commission's staff in looking after this last programme and food aid.

One area in which there is, I know, scope for further development is in the evolution of a Community development policy on a worldwide basis. This has been the view of successive British Governments. It is also one of your Committee's main conclusions. On joining the Community we pressed for its development policy to cover deserving countries outside the Lomé Convention. This led to practical results in 1976, when the Community's programme of aid to non-associates was initiated. The programme has grown steadily from a total for commitments of £13 million in 1976 to over £80 million in 1981. Most of this has gone to the poorest countries of Asia. The programme of aid to non-associates and the aid programmes under Lomé have in addition been backed by the Community's food aid programme. This is now largely concentrated on the poorest countries, on a worldwide basis. Like your committee, the Government would like to see a change of emphasis, and restraint, in the food aid programme. Food aid should be designed to assist development, and should not be an instrument for the disposal of food surpluses. It should be concentrated on fewer recipient countries. This Government have consistently opposed increases in dairy food aid, though I fear it would be unrealistic to expect a major shift of policy in the short term.

Perhaps I may comment briefly on the participation of British companies in the Community's projects. It is self-evident that the Community's aid programme is not run, and should not be run, for the benefit of the industries of the member states. Nevertheless, we should of course like to see British companies playing their due part in the implementation of the programme, and this is not yet the case. When this Government took office the share of contracts won by British firms under the 4th European Development Fund was, at 9 per cent., less than half of Britain's share of the cost of the fund. The Government have made systematic and determined efforts to help British firms bidding for EDF contracts—for example, through a greatly improved information system in the Department of Trade; through the appointment of a full-time official to our representation in Brussels; and through close attention by our diplomatic missions in Lomé countries. Although I accept that there is still a long way to go, I am glad to say that the British share of contracts is now about 12 per cent; I very much hope that more British firms will rise to the challenge, so that their involvement can more closely match the level of the British contribution.

Before I conclude, I think your Lordships would expect me to say a word or two about our broad approach to relations with the developing world, and the matters covered in the report of the Brandt Commission. The next six months will see an unprecedented series of meetings focussing, largely or wholly, on the health of the world economy—the summit of seven developed nations at Ottawa in July; the preparatory meeting of Foreign Ministers in Mexico in August; the Commonwealth Heads of Government meeting in Melbourne in October; and the Mexico Summit later that month. No one would deny that the patient is unwell. His health has been examined with every available diagnostic aid. One important symptom is clearly the accumulating balance of payments deficit of the non-oil-producing developing countries, which according to the managing director of the IMF may reach the enormous figure of 100 billion dollars in 1982.

There is not yet agreement on how the patient should be cured. But, clearly, as the committee has suggested, the remedy will have to include measures to promote more effective re-cycling of surpluses. The remedy will also have to take account of the needs of the body as a whole, and not merely attend to one or two constituent parts. It would be naïve to expect the gatherings I have mentioned to come up with an instant panacea. They will not do that. We must accept that convalescence will at best be a measured and gradual process.

So far as developing countries are concerned, our efforts must run much wider than aid. They must include trade, investment and technology. Britain makes a substantial contribution in all these fields. Let me give your Lordships one or two examples. We are second only to West Germany, among our European partners, in the share of our manufactured imports which come from developing countries. We provided more private direct investment to developing countries in 1979 (which are the last figures we have) than France and Germany put together. This investment is often accompanied by an invaluable flow of technology.

Our aid programme will amount to over £1,000 million in this financial year; and its quality is very high. In 1980, over 60 per cent. of our bilateral aid went to the poorest countries, virtually all of it on grant terms. We have supported major changes in the International Monetary Fund and the World Bank. For example, the capital of the World Bank is being doubled to 80 billion dollars. The International Monetary Fund's loan commitment to developing countries trebled last year. Quotas are up by 50 per cent. Saudi Arabia has agreed to lend up to 12 billion dollars over three years. We and the other OECD countries are together making available a further one billion dollars. Special help for countries facing a sharp increase in the cost of cereal imports has just been agreed. These, by any yardstick, are substantial advances, and deserve due recognition.

The Mexico Summit in October will provide a valuable occasion for Heads of Government to review the whole range of these problems. The Government are taking this summit very seriously, and we intend to approach it in a constructive spirit.

My Lords, I began on a not entirely pessimistic note. Let me conclude in a similar vein. We face a situation which is undeniably difficult, perhaps even dangerous. But at least governments, multilateral organisations and public opinion have recognised the dangers and are working hard to do something about them. And this very much includes the European Community.

The Community's aid policy and associated trade arrangements are solid evidence that the Community and its member states are not turning their backs on the world's poor when fashioning their own common policies. The Lomé Convention and other institutional arrangements provide a direct channel through which the views, hopes and fears of many developing countries can be—and are—vigorously put to the Community: and when put forward, they are not neglected. What the Community provides to so many countries in aid, in trade preferences and in investment Britain could never provide alone.

So let us recognise it for what it is; yet another solid reason why the Community, with Britain's help, grows every day stronger on the world's stage, and yet another solid testimony to the fact that our national concerns and those of the Community are, increasingly, not in conflict but in harmony.

3.33 p.m.

Lord Goronwy-Roberts

My Lords, the House is indeed grateful to my noble friend Lord Greenhill of Harrow for presenting his Committee's report, and for doing so in such an admirable fashion. The House also appreciates the very thoughtful speech that the noble Lord, Lord Carrington, has made in this context. He picked up a number of very important points which I am bound to say struck some very favourable echoes from this side of the House and, I think it will be fair to assume, from the Liberal Benches as well. It is a report in the very best traditions of the House and it will be a definitive document on aid for many years to come—particularly as the needs and the implications of the grants revelations are properly tackled.

The first thing that this report has shown, in common with every other report on the North and South situation that I have read over the past five years, is that the tragic gap between the relatively rich countries and the poorer countries of the world is widening. Naturally that does not mean to say that the sum of poverty is actually increasing but that the gap is widening. That can create a psychological and in some cases a nationalistic sentiment which is as bad in its effect upon stability and peace as actual hunger.

This dichotomy between comparative richness on the one hand and comparative poverty on the other has both political and economic lessons for us. At the same time, aid and development contributions, as the report itself shows in at least four of the tables it presents, are growing less and less. The recession, the oil crisis, the debt problems which the noble Lord quite rightly referred to as being a problem within a problem—and possibly an insoluble one because of its nature and because of the extraordinary heights to which the price of money has grown over the past few years—are all pressing the poorer countries further and further into poverty. This is something that the rest of the countries of the world, whatever their problems, enjoying as they do comparative wealth and wellbeing, must determine to reverse. The relatively prosperous nations must face these facts about the third world. The Community has a direct interest in helping third world countries because the Community, as an aggregation of the most highly industrialised countries in the world, depends more upon the potential market and resources of the third world than does any other group of industrial powers.

In the meantime we really must increase rather than diminish our direct aid—development and other—to the third world. The noble Lord will not be surprised when I say once more how deeply we on this side of the House regret the fact that Her Majesty's Government have cut our total aid contribution by 14½ per cent. The cuts in public spending has been only 4½ per cent. but the funds to alleviate the sufferings of the third world have been cut by three times as much. This is a misconceived priority; to give only one relatively small detail but one of flourishing importance, there is the way in which we are dealing with foreign students' charges. Cumulatively this will work against our country over the next few years and thereby against the whole concept of Western democracy, both politically and economically. It is a piece of mean and thoughtless saving and, late though the hour is, one hopes that even this Government may reconsider.

When the Minister answers the debate, we should like to have an assurance that Britain's aid contributions through the Community will at least continue in real terms as at present. On the figures we have, it will not do so; it will go down. Over the next three or four years it will actually decline. We have heard figures from the other side of the House but I hope we shall not have to argue about them because this is not really a partisan issue; this is a question of such tremendous importance that we really must have the right figures so that our priorities can be right. There is some confusion as to how much we as a country are doing and how much the Community as a region is doing.

The noble Lord, Lord Greenhill of Harrow, selected the most important points in his report for comment. He pointed out that the report contains two important sets of issues in EEC policy. First, there were the mechanics of the implementation of EEC aid structures; the technical problems; the efficiency of the European Development Fund and the Community Aid Programme. That in itself constitutes enough material for a full-dress debate in this or any other House. It is of immense importance that these mechanics should be progressively examined and improved.

Secondly, there is the larger question of policy as to whether these aid structures are in themselves the appropriate ones and whether they should be extended to additional countries. I was glad to hear what the noble Lord the Foreign Secretary had to say on this, and I will press him no further on it. I think there is a consensus that this matter of the addition of other countries needs to be quickly and effectively looked at.

As the noble Lord, Lord Greenhill of Harrow, has said, the report emphasises the extent to which Community aid structures are based on the French administrative model of development co-operation. I believe that that is the respectable way of putting it. And, indeed, it remains substantially (if I may quote from the report, again being respectable): a mirror image of French policy". There is nothing wrong about a member state asserting its reasonable claims when, in fact, making a contribution to a general policy. I echo what the noble Lord, Lord Greenhill, said: that, with advantage to the Community, to ourselves and to the recipient countries, we could emphasise the British voice a bit more both in the financial as well as in the organisational conclaves that dictate this policy.

The House will know that it is unsatisfactory for other member states, and for the United Kingdom in particular, that our largest bilateral aid recipients, India and Bangladesh, are outside the ACP group. It is going to be a very big problem of including what is, after all, a sub-continent within the ambit of the very effective system that we generally call the Lomé system.

I think it will be agreed that the paramount criterion to aid is that it must be determined by the development needs of the third world and not by the exigencies of the Community's internal agricultural policies. We must not be afraid of constructive criticism over the way in which the Community's economy is operated. Yet I sometimes wonder whether we are doing a disservice to the Community in that those who have for many years worked hard for European co-operation, even integration—political federalists, if I may say so—find that whenever we point to obvious discrepancies, mistakes of calculation and of administration (as my noble friend Lord Bruce of Donington pointed out years ago) we are automatically accused of being anti-European. It is not anti-European if one is critical of the Market; but that is not necessarily the same thing. It will be helpful to the development of a sound development and aid policy if it is not bedevilled by the exigencies of the need to reform SEAP in the near future.

I will give one quick example. The Community spends a great deal of money on food aid but the policy is mainly influenced by the CAP and especially towards surplus dairy products. There is no blame on the noble Lord who early in his speech showed that he was well aware of this difficulty. It is orientated towards surplus dairy products; but dairy food products are not suitable for many development countries. Moreover, there is the great scandal (to which my noble friend Lady Llewelyn-Davies would have drawn attention from these Benches this afternoon had she not other pressing engagements) of multi-national corporations urging on mothers the use of powdered milk for their babies instead of breast milk when, without clean water and all the necessary adjuncts of Western bottle-feeding methods, powdered milk can be, and is, poison to thousands of children in the third world.

I hope that the details of our aid policy, especially in the food sector, will be gone into with great care in the next few months. Emergency aid, especially in food, there must be almost constantly. Emergency in food is more permanent, I would say, than the emergency in the supply of oil. It must be looked at and indeed attended to all the time. But when we are doing it, let us not hang on to it other considerations which, in turn, have dreadful results for those whom we seek to assist.

We would do well, as the report says, to examine what the voluntary agencies have to say about their experience of the complexities of Community aid. Oxfam, War on Want and comparable agencies make the point over and over again, both in the evidence and in their own publications, that in order to make disaster aid effective speed is of the essence. It was put to me that if Oxfam asks for help from the Milk Marketing Board, dried milk is immediately available; and in two, three of four hours is in the plane and on its way. The Community can take six, nine, or 12 months to achieve the same purpose. I quote in this regard from the report: Very often the people are dead or revolutions have intervened and the situation is wholly changed". There is a good case in this report for taking another look at the efficiency and utility of some of our major voluntary agencies in this field. There is great expertise there and, even more, there is a tremendous amount of dedication and faith.

It is a sad fact that there is some tension between voluntary agencies and Governments because, although the objectives are often the same, Governments tend to favour large projects or to favour infrastructure and to favour projects which need complicated accountancy which have to be referred for long periods back home. As some of the agencies put it—and I am referring to the voluntary agencies—the accountants and technicians are often satisfied if a road or a port has been built; but it is quite another matter if it has been built in quite the right place or whether there is anybody there to keep it in good repair. This is the follow-up: that, either through the more sophisticated voluntary agencies or through a mix of voluntary agency experience and Government agencies, we can improve the actual implementation of development aid in these countries.

In answer to searching questions by the noble Lords, Lord Greenhill of Harrow, Lord Kissin and others, the representatives on the committee suggested that EDF and the Commission ought to be more conscious of the debate now taking place in the World Bank about how to reorientate a large part of the resources to the kinds of rural development which make a real impact on the needs of the rural poor. This is a major point. Too often donor countries, whether together or individually, seek somehow to help under-developed countries to industrialise themselves as if agriculture today and the myriad industries associated with modern agriculture is not an industry at all. This is an old-fashioned view, that somehow agriculture is second class to factory industry. Indeed, it is going to be—if it is not already—more important than many aspects of manufacturing industry. Which is the most serious problem facing the world in relation to burgeoning over-population? The oil shortage or the problem of food production, its transportation and its distribution? Agriculture stands at the very head of the industries that we ought to be consciously stimulating in the recipient countries.

A good deal of psychological education is needed. I have spoken to countless people in these countries, some of them leaders, who somehow think that they are not quite a country unless they have a certain amount of hardware industry. It is very difficult to persuade some—not all—about this. The world is learning and the world can see that starvation may well be staring it in the face unless it is careful about the proper use of the earth. It is very difficult to get them to understand the importance of agriculture. The right approach of course is through the agricultural sciences—agriculture itself is a productive science and there are at least 57 varieties of agriculture, as my noble friend will confirm—and to introduce agriculture as a major industry in a given region or country as a variety of activity engendering not just the tiller of the soil but all kinds of skills as well as crafts.

Then there is the question of financial control and auditing. The report feels that here and there the Community approach to financial control is rather mechanical. Well, I do not know. It is time perhaps that we were more careful about the control of finance in the Community. Certainly we have not yet mastered the techniques of using finance and credit—credit stands of course for skill, not resources—in such a way that they are not a dole, not a grant, not even a concessive loan, but an investment by the comparatively rich in the potential of the presently poor but the potentially rich. There are areas of the world where this truth is slowly becoming more and more apparent.

I found it a little disappointing that the right honourable gentleman the Minister for Overseas Aid—for whom I have the utmost regard, both as a person and as a Minister—had been a little unsympathetic to certain approaches to him by the voluntary agencies. But I pass that. I mention it because I am sure that he is the man to reconsider the relationship between Government and voluntary action, and to do so effectively.

May I also recommend to the House the fascinating account of how the projects are designated, planned and actually carried out, in the work of Dr. Black-Campbell, and others, for which there is no time to do more than pay passing tribute. Noble Lords will note that the United Kingdom's financial contribution to European Development Fund IV was fixed at 18.7 per cent. We mentioned this in the debate that we had the other night which was taken by the noble Lord, Lord Skelmersdale. But after four and a half years of the operation of the fund, contracts to British firms totalled only 11.23 per cent. I think that the Foreign Secretary put it at 12 per cent. It is as near as makes no difference. The figure is fewer than 12 per cent. after four and a half years of the operation of the fund.

I hurry to a conclusion because there is a long list of speakers whom we are all anxious to hear. Since the noble Lord, Lord Greenhill of Harrow, has given us such a clear resumé of the report and its recommendations, and since the noble Lord, Lord Carrington, has replied so fully and given certain—I shall not call them "assurances", that would be unfair—indications of the way that his mind is working and the way that he wants to see aid policy develop, I shall not detain the House longer than to say this. It is essential that the area of assistance be expanded not only because the ACP countries (the Lomé countries as we call them) are clearly not the only countries which need Community aid but because the entire third world is at once a challenge to our humanity and an opportunity to our expertise. The two things go together.

The Brandt Commission sub-titled its report "A Programme for Survival". That is not just the survival of the third world, of the one-third of the world living on the brink of poverty, but survival of the world as a viable unit because we in the favoured West and North are dead ducks unless we have enough food, enough fuel and enough of the right metals, many of which come from across the seas and many of which may well come from underdeveloped countries where their presence is not even suspected. It is in the interests of the survival of the North and West, and the values that we stand for and will fight for, that we should extend to the underdeveloped world as much practical help as we can possibly afford. It is indeed a policy of enlightened self-interest.

4.0 p.m.

Lord Gladwyn

My Lords, whatever your individual views, I think that your Lordships will agree on one thing: namely, that "aid" is a controversial, complicated, and, on the whole, rather unpopular subject which cannot, however, possibly be ignored without very considerable risk for our nation.

The report of the Committee now before you deals specifically with only one rather small aspect of this vast subject, but within these limits it arrives, I suggest, at very reasonable conclusions. That this is so is largely due to the splendid chairmanship of the noble Lord, Lord Greenhill of Harrow, who, if I may say so, is the embodiment of that pre-eminent British virtue, namely, common sense. I do not think that the conclusions of the Committee towards which he guided us, beyond a certain difference of emphasis on the advantages of bilateral, as opposed to multilateral, aid, are seriously contested by any of the Committee's members, representative of all parties though they were. I therefore hope that these recommendations will commend themselves to the House and to the Government. From what the noble Lord, Lord Carrington, has said, although his official views will be expressed later, if I understand him correctly, perhaps in the form of a White Paper, he did not seem to be opposed to any of the five recommendations of the report. Let us hope that these recommendations will also appeal to our colleagues in the European Community. I cannot see why they should not but I should here like, very briefly to make one or two observations which may supplement what the chairman of the sub-committee has said.

The publication of our report coincides, more or less, with the recent dramatic change of Government in France and shortly precedes the British Presidency of the Council of Ministers—an opportunity for the exercise of influence in the Community which, unless I have got it wrong, will only recur in 1986. One feature of the first of these events—that is to say, the change of Government in France—will surely be welcomed by all of us whatever our political allegiances, namely the nomination as French Foreign Minister, or rather as Minister of External Affairs, of M. Claude Cheysson, until recently, in Brussels, responsible for the aid policy of the Community and therefore responsible for the whole administration of the two Conventions of Lomé. It seems certain that this excellent man, who speaks perfect English, will do his best in the Council of Ministers to advocate an intelligent policy for aid generally, and I do not think he is likely to contest very vigorously the reforms of Community aid recommended by the Sub-Committee if these are put forward in the Council of Ministers, as I hope they will be, by the representative of Her Majesty's Government.

True, he may not be too keen on expanding the scope of the Lomé Conventions—because after all they are largely his own brain child—but I think he may well see the force of the argument in favour of so doing if and when any additional funds become available. And even on food aid I feel he might be won over, if only it could be represented (as I hope it will be) as part of some agreed reform of the common agricultural policy. So perhaps the basic question is whether he, and above all the new President, François Mitterand, can be induced to contemplate anything in the way of reform of the common agricultural policy. Though I may be thought absurdly optimistic, I would not despair of progress in this direction which, as we all know, it will be one of the main purposes of the incoming President of the Council, our own Foreign Secretary, to promote.

About a year ago, as a matter of fact, I did have a long talk with M. Mitterand, whom I had met some 20 years ago when I was Ambassador in Paris, and as a "European" I was considerably impressed by what he told me. Nobody will expect him to be anything but a sincere socialist, albeit a sincerely democratic socialist. Nobody will imagine, either, that he will be slow to defend what he considers to be the national interests of France. Nobody, finally, will believe that he will be particularly favourable to any extension of the interests of the great multi-national companies whose power he will probably seek, perhaps more vigorously than his predecessor, to curb by means of some agreed code of conduct; personally I hope he will. But what I think you will find is that he will be likely to favour the emergence in the European Parliament, as a result of free and democratic debate, of compromise solutions—that is to say solutions based on a compromises between rival national interests—which may well extend to the whole field of European agriculture and thus help us and the Germans in our efforts to get with his consent, some reasonable agreed reform, of the common agricultural policy.

What seems quite possible in any case is that as a result of the forthcoming elections in France the new President will not have an absolute majority of socialists in the National Assembly but may, with luck, be able to rely on some kind of moderate or left of centre, rather than communist, votes in order to put his policies—or some of them—into effect. If so, the result would surely be, as it has been in Germany, generally progressive and left-of-centre policies. All this may go sadly wrong but, if it does not, there seems to be a real chance of French and German co-operation on progressive lines that will redound to the benefit of the Community as a whole. What I do know is that M. Mitterand—unlike, I am sorry to say, the apparent majority of British socialists—firmly believes in building up a European Community on the basis of the present membership and the existing institutions which will have a policy of its own and hence, while remaining in the Atlantic Alliance in the absence of general disarmament, to a large extent will be independent of both super powers. That is what I believe he essentially stands for.

I return to the subject of aid after that digression, which I hope your Lordships will not regard as altogether irrelevant. It seems to me that this whole subject is still dominated, whether we like it or not, by the Brandt Report which, however, if I understand it correctly, only regards direct financial aid as part of a vast concerted effort to improve relations between industrialised and non-industrialised or only partially industrialised countries, to which in shorthand (and rather incorrectly) it refers to as "North" and "South". It puts, indeed, the desirable notional total of direct financial aid at about £2 billion per annum for the next 10 years and in the light of that one can say that our own contribution is not doing so badly, even though, as I think and as the noble Lord, Lord Goronwy-Roberts, said, we cannot stay where we are and we really ought to contribute very much more.

On food aid, though Brandt thinks it should continue, he does appear to share some of the criticisms of the form of this aid which occurred to the committee. But the burden of his song is concerned, of course, with industrialisation and world trade, with commodity and trade development, with a new energy policy and above all with some world monetary order involving, as we should all hope, the transfer by some means of the surpluses of the oil producers to the development of the so-called third world as a whole. On all these matters the Brandt Committee, and more particularly Mr. Edward Heath, according to what I read in the papers, have voiced what appear to be strong criticisms of the policies of Northern Governments, not excepting our own Government. It would be interesting to hear from the noble Lord who is to wind up whether he thinks there is anything in the criticisms formulated by Mr. Heath and if so, why.

No doubt all these great matters will be discussed in the forthcoming conferences of world leaders in Ottawa and elsewhere ending at Mexico City in October. I suppose also to some extent they will figure on the agenda of the forthcoming meetings of the EEC Council of Ministers in London. The persistence of the world recession and the increasing likelihood of some repudiation of debts by various members of the third world who have seemingly reached the end of their financial resources will probably oblige the Ministers at least to try to reach a common attitude in all these respects. Nobody supposes that this will be easy, but it will surely be easier to arrive at a satisfactory solution of North/South, to say nothing of East/West difficulties, if the 10 members of the EEC stick together, than if, as is apparently desired, or at least contemplated, by some in the Labour Party, they all break up and pursue independent nationalistic policies.

I have pretty well come to the end of my 10 minutes, but I hope I have said enough to persuade your Lordships that the conclusions of the report of Lord Greenhill's committee are worthy of your general approval. In the main committee, under the able direction of the noble Baroness, Lady White, we discuss from time to time how far our reports are effective. I believe that they often are and this one is no exception. The audience, admittedly, is not enormous, but they are mostly those who can influence events in the Commission, in the European Parliament and even in the various national administrations. Unless, therefore, the Labour Party succeed in what, I imagine, is one of their major objectives—namely, the abolition of this House—I expect that this goodwill will continue.

If the Labour Party is likewise resolved—I do not know if it is so, but I am told that it is so—to take us out of the European Community as soon as possible, it may be that its interest in the administration of aid under Lomé will be somewhat limited. But for those in this country who feel that it would be madness for us to retire into political and economic isolation, and therefore to abandon the Lomé organisation, of which, seeing that it is administered by the Commission, we should not then be a part, it is obviously a matter of considerable importance how best Community aid can fit into the general scheme of things.

In conclusion, I would simply observe that the evidence presented to us was both extensive and fascinating to all interested in this great subject. I hope, therefore, that it, also, will be widely circulated. I must say, also, that we had the benefit of a really first-class secretary and an admirable specialist adviser, who kept us all well on the rails. So I have little doubt that the present debate will be useful, and that our report which is now under discussion will take a worthy place on the Library shelf, along with other noteworthy reports of this committee in the past.

4.12 p.m.

Lord Molloy

My Lords, like previous speakers I, too, should like to offer my thanks and congratulations to the noble Lord, Lord Greenhill of Harrow, and his committee for the production of this very valuable report. Indeed, I am bound to say that anybody who cares to take the trouble to look at anything which the European Community does is worthy of full support, because the Community needs watching day and night, and at any other period that might exist. When one looks at this report, and reads of some of the absurdities and of the contemptible waste that goes on in that organisation, it is bad enough, when it hurts us But when they endeavour to do things on the one hand, and then cut their own throats on the other—I wish they would do it successfully—one can understand why ordinary people in this country get very annoyed.

What I found particularly hurtful and regrettable on the very first page of this report were the words: Concern about development assistance has been increased by the intentions of some developed countries, including the United States and the United Kingdom, to reduce their aid". It goes on: and by the publication of the Brandt Report". We have those two statements in juxtaposition—what has been said in the Brandt Report, and then that the United States of America and Great Britain have been singled out in this report because of the reduction in aid which they are prepared to give to the hungry world.

Let us have none of these fancy phrases about developing countries and developed countries. Those of us who have had occasion to serve on various commissions in India, Africa and the Far East know what the word "developing" means. It means that people are starving and are still fighting ignorance, poverty and disease. We do not want these posh terms of the bureaucrats and the administrators, about developing and developed countries. We want words in the language of ordinary people, who produce the wherewithal with which to try to help those who are suffering.

Over the past decade or so we have had a number of reports. In 1944 we had the Bretton Woods conference. Then in 1945 we had the establishment of the United Nations and its charter. In particular, I would draw your Lordships' attention to Article 55 and, in the context of the report of the noble Lord, Lord Greenhill, we ought to look at how much this country, the EEC and other countries have done in trying to make a reality of Article 55.

In 1960, we had the introduction of the first United Nations development decade. Then in 1969, there was what seemed to be a very attractive proposition—the partners in development. That did not get very far, because the World Bank had its grubby fingers in it. If you want to see anything ruined by avarice and greed, invite a few bankers to give advice. These are the thoughts of the ordinary people outside this House, who are concerned and who are wondering precisely what will happen to the millions in the developing hungry countries who are suffering great privation.

The noble Lord the Secretary of State for Foreign Affairs mentioned, quite correctly, that there are many British firms which could do a little better and could show a little more initiative. It is unfortunate that the noble Lord should pick this time to chastise British firms. What they are concerned with are the hundreds of bankruptcies that are occurring every week, with firm after firm going down the drain. How can one expect the management and workers in those firms to be wholly concerned with this report, when what they are worried about it whether their firms will continue to exist and whether the workers in them will join the dole queues?

How can one expect that people outside, with over 2½ million on the dole, are going to get terribly worked up, as they ought to be, despite the fact that on the dole their standards of life are high compared to those of millions of their fellow human beings who are suffering hunger and deprivation? It is things of that kind that we must bring together, and we must make sure that we understand wholly what is involved in this report. We must also involve other people outside.

Speaking in parenthesis, I sometimes feel that, in addition to the people who gave evidence to the Select Committee—and the report is valuable reading—we should spread the net a little wider and ask for the guidance, experience and advice not only of administrators and bankers but of the real people who count—the carpenters, the joiners, the electricians, the quantity surveyors and the civil engineers. I have had the privilege of witnessing people of that kind making massive endeavours in Africa, India and parts of the Far East. Those are the people who count. All the money from the EEC and from our own nation is useless without the expertise of those who can create and construct.

The same argument applies to the young men and women whom I have witnessed in swamps, in fetid parts of the world, devoting the great knowledge which they have gathered from their own mother country, this island. They have taken that knowledge overseas and have made their contribution in the fight against disease, poverty and hunger. We shall not grasp the nettle of helping those who need assistance, unless we acknowledge that millions of able, competent people in this country, who are eagerly prepared to make their contribution to the economy of Great Britain, can also make their contribution to the millions in the world who are living on the edge of starvation.

It seems to me that we have got to do, whether through the EEC or on a world basis, what was adumbrated in the Brandt Report: when we talk of summits for peace, which are important, we ought also to talk about summits for living, summits which involve the whole of mankind, not just those who are concerned about war and peace. We have to remember that there are people who are not concerned about war and peace; death might be the only thing which would bring relief to them. This is the kind of thinking which I believe your Lordships' House ought to consider when we are discussing this problem. The rich and the poor have got to march together in reciprocity and in reciprocal activity. If the poor and the rich countries do not do so, civilisation will continue to limp.

Despite all that has been done in the past 30 years, we have not yet been able to make a dramatic attack on all the things which curse mankind in other parts of the world. It hurts me that our great nation, which once made a massive contribution, is not now being permitted to do so—not merely because of the world recession but because of that ugly blot on our economy at the moment; namely, the policy of the present Government which is bound up in one ugly, vulgar word—not compassion, not aid, not help, but monetarism. It is a word which I hope will be banished from the English language in the not too distant future.

This is a great nation. People have quoted our poets of the past. I want to do so, too. I want to quote what Milton said about the British people—that we are, a nation not slow and dull, but of a quick, ingenious and piercing spirit: acute to invent; subtle and sinewy in discourse; not beneath the reach of any point—the highest that human capacity can soar to". In conclusion, may I say that, given an opportunity to make a reality of these great assets of the British people, we shall not only lift up the spirits, the hopes and the aspirations of the people of our country and be able to make a contribution to the problems which afflict our nation. I believe also that we still have it within us to make a contribution to suffering humanity in other parts of the world. These endeavours of our nation will not only be of great joy to the people in knowing what they are doing; at the same time, they can set an example on this aspect of aid and can be of help to a suffering world. We can be an example to all those who wish to follow us and make their contribution.

4.24 p.m.

Lord Kilmarnock

My Lords, after adding my thanks to the noble Lord, Lord Greenhill of Harrow, for his extremely lucid presentation of this report, the privilege falls to me to congratulate the noble Lord, Lord Molloy, on his extremely stimulating maiden speech. I think I can say without exaggeration that it is possibly one of the more stimulating maiden speeches which I have heard in your Lordships' House. It is possible that there entered into it a whiff of smoke from a certain famous battlefield at the other end of the corridor, but I am sure that we all appreciated his contribution. We look forward to his further contributions to our debates on this and many other subjects.

I wish first to turn, although it has already been touched on by the noble Lord, Lord Goronwy-Roberts, and others, to the question of food aid. I believe that apart from its specific deficiencies it has important implications for our approach to development aid as a whole. Some, if not all, food aid is provided for the wrong reasons and with the wrong results. The food aid programme is described in terms of volume and distribution in paragraphs 30 to 34 of the report. It is more fully treated in paragraphs 78 to 93. Paragraph 79 in particular contains a pretty damning indictment by a member of the European Parliament which the sub-committee has largely endorsed.

The first thing, of course, is to distinguish between emergency aid, the need for which no-one questions and of which there should obviously be a reserve, as it were, in the Community's larder. In fact, about 10 per cent. of the Community's annual programme is reserved for this purpose. But the main body of food aid is quite different. Programmes of commodity assistance for development"— I read from paragraph 81— conceived and executed over several years should in theory not only help food deficit countries but should also not harm food producers in those countries.…In particular, food aid programmes should not deter local production". Yet there is no coherent multi-annual programme enabling recipients to plan ahead and integrate food aid with their domestic agriculture. It is an annual programme involving some incredible time lags, some of which are described in an interesting book Food Aid and the Developing World by Dr. Christopher Stephens. All the facts can be found there.

The other factor is that quite a significant part of the food aid programme, particularly in the field of dairy products, derives from European farmers' surpluses. In paragraph 81 of this report the CAP, that demon king, leaps on to the stage with a wicked chuckle, aided and abetted not only by Directorate General VIII, which is concerned with aid, but by his special henchman, Directorate General VI, which is concerned with agriculture. The committee were informed in evidence that it was barely more expensive to dispose of surplus dairy products through aid than to sell them at subsidised rates to the USSR and Eastern Europe. But this means that it gets loaded on to a fairly slim aid budget at the expense of other more pressing claims. I quote again from paragraph 81: Dairy products are not a form of food well suited to the nutritional requirements of many developing countries. Moreover, the reconstitution of powdered milk without adequate clean water supplies poses a major health hazard". This has already been mentioned by the noble Lord, Lord Goronwy-Roberts, and I will not go into it at any further length, though the evidence given to the committee by Dr. Stephens on this subject of the health hazard presented by reconstituted powdered milk is well worth reading. In fact, it appears on pages 143 to 149 of the report—that is, in the section containing the evidence.

Next, there is the question of how this aid is charged to the budget. This is described in paragraph 14 and in paragraphs 83 to 85 of the report. Believe it or not, exactly the same accounting procedure is applied to dairy products which are in surplus and which cost the Community very high storage charges as to cereals which have to be bought and paid for in hard cash on the world market. The United Kingdom's share of this in-house transaction is then imputed to the aid chapter of the Community budget at the full price, even though the dairy produce in question would not have been saleable at all on the open market. Furthermore, as your Lordships will see from paragraph 84, the Commission sometimes proposes to transfer unspent funds from other parts of the Community budget to increase food aid allocations. None of this affects our overall contribution to the EEC budget, but owing to our own aid accounting system any such increase in moneys under the aid chapter of the Community's budget would be debited to the ODA's vote, thus, I quote from paragraph 83: …reducing the scope for other development activities under bilateral aid programmes or through multilateral contributions". Now in the aid game there are bilateralists and multilateralists, but whichever camp one belongs to (the present Government, I believe, tends to favour the former) there is nothing to be said for squeezing good programmes in support of bad ones. Two conclusions, for me, emerge from all this. The first is that we should modify our own accounting procedures so that unforeseen additional food aid appropriations, which in fact involve no additional cost to us, are not debited in such a way as to decrease our capacity in other more fruitful and more beneficial sectors of the aid programme.

In footnote 2 to paragraph 85 the committee agrees with the Commons Agriculture Committee that the convention of charging dairy products against aid budgets at world prices should be abandoned at the earliest possible moment. In paragraph 14 the committee notes that: The present practice of imputing Community aid to ODA's vote is being re-examined and they hope that greater flexibility will be possible in the future, especially for food aid". I shall be grateful to the noble Lord, Lord Trefgarne, when he replies to the debate, if he will tell us whether this re-examination has now been completed and, if so, what action the Government propose to take.

The second conclusion that I draw is contained succinctly in paragraph 90 of the report: The Committee consider that given the unsatisfactory nature of the current dairy food aid programme, its relatively high budgetary cost and the dubious suitability of dairy products for many developing countries, the overall size of the food aid programme in dairy products should be reduced. The budgetary savings should be transferred into programmes of financial aid, and particularly to the programme of aid to non-associates". In paragraph 91 the report goes on to estimate that a reduction of dairy product aid and the concentration of it on about five recipients would release some £22.5 million. Some people might want the money for claimants other than the non-associates, but the main purport of this message will be unaffected and that is: let us keep this money for wells and water, roads and other vital projects, rather than putting it in the pockets of over-producers of dairy products. I very much hope that we shall use not only our best endeavours but all our influence and any muscle we may have to see that this comes about. Perhaps when the noble Lord winds up he will also indicate the intentions of the Government in this respect.

Turning rapidly to more promising avenues, perhaps the most novel proposal in the report is that recipients should be enabled to raise loans on the strength of Community aid and use that aid to service these new debts, thus considerably increasing their resources for development. This is set out in paragraphs 121 to 126. In the following paragraphs, 127 to 129 and again in 132, stress is laid on the importance of efforts to encourage the recycling of the OPEC countries' balance of payments surpluses in the direction of the developing world.

I am all for this, but I think it is important that we should not read into these proposals a suggestion that OPEC countries are doing nothing at present. I should therefore like to draw your Lordships' attention to table 1 on page vi, from which one learns that Saudi Arabia's net disbursement of ODA in 1979 was 3.13 per cent, and Kuwait's a whacking 50.14 per cent. This makes the Brandt Commission's recommendations that we should aim to reach 0.7 per cent. by 1985 and one whole percentage point by the year 2000 look tame. I should also like to direct your Lordships' attention to the very interesting memorandum by Sir Fred Warner on page 260, on co-financing with Arab development funds and particularly to the table on page 262 which shows an almost exact one for one matching of EEC and Arab investment funds.

This of course brings us into Brandt country and I noted with proper respect the suggestion made by the noble Lord, Lord Greenhill of Harrow, that speakers in this debate should keep their eyes on the ball, but having, I think, complied with this so far I must confess that I am not strong enough to resist the temptation of saying a few words about Brandt, especially as the committee devotes paragraphs 130 to 133 to it and also of course those of us who sit on this Bench have a commitment to seeing that the Brandt Report gets a fair hearing in the fora of the world. The trouble with Herr Brandt's monumental effort in my view is that it is likely to become a sort of sacred cow to which some people pay a total obeisance and at which others sneer or throw stones and about which nothing much else is done. So I think it is worth while trying to clear our minds about what it is.

Though sub-titled "A programme for survival", as the noble Lord, Lord Goronwy-Roberts, has pointed out, it seems to me important to bear in mind that the Brandt Report is predominantly about the future of market economies. The chairman met Mr. Brezhnev in 1978 and leaders from Poland and Hungary and other nations of the Warsaw Pact and Mr. Health went to China, but neither of these vast geo-political blocs was represented on the Independent Commission on International Development Issues, as Mr. Brandt's team was officially called.

Perhaps the crux of the Brandt analysis is contained in pages 237 and 238, which I will not quote, but it is worth remarking that equal concern is expressed for the poor health of the northern—or western economies, as I persist in labelling them in my mind—as for the needs of the south. There is no humanitarian appeal here; it is all quite clinical and businesslike.

On page 238 of the Brandt Commission's report we are given some OECD estimates of the amount of additional unemployment there would have been in the West and in the Community in particular if our exports to the developing world had not been on the increase. Then we come up against the growing burden of third world debt and the threat this poses to the future of such trade expansion.

According to Brandt, the principal mechanism for getting things moving in everybody's interests is a new world monetary order. In essence this is a reform of the international monetary system. It is set out on pages 219 and 220 and there is nothing particularly revolutionary about it. It has caused some alarm among major financial interests in the West but the idea is much less frightening than it sounds. It is still based on the market system and recognised international banking practices. One of the main concerns it professes is not to increase what it calls the "contractionist pressures" in the world economy.

Many other of Brandt's proposals are relatively modest. I have already mentioned the exhortation to meet the UN recommended appropriation to aid of 0.7 per cent. of GNP by 1985 and we are allowed until the end of the century to attain the mighty figure of 1 per cent. The idea of a tax on arms exports is toyed with but nothing concrete is proposed. Stabilised commodity agreements which would be almost as much to our advantage as to that of the producing countries are recommended, and so on. I really do not think that the Government, or indeed any Western Government, can pretend that a dangerous subversion of world order is implicit in any of these proposals. Subversion is rather more likely if nothing is done. As I said earlier, they are basically conceived as a rescue operation on the market economies and a way out of the recession. I do not even agree with all of them myself and I think that the humanitarian imperative could have been spelled out more strongly. But they certainly deserve a rational discussion at the highest level.

The Government have a number of opportunities coming up, as the noble Lord the Foreign Secretary told us, first at Ottawa, then at the Commonwealth Conference in Melbourne and then in Mexico in October, and although of course one must agree with him that there are no panaceas on the horizon, I was extremely glad to hear his assurance that the Government would go to Mexico in a constructive spirit.

At this point I really must apologise to the noble Lord, Lord Greenhill of Harrow, for having ducked under his guidelines and I hasten to slip back on to the straight and narrow. The transition is not really so difficult because any new initiatives are bound to draw on the experience of what we arc doing, on however small a scale, at present. The Lomé Convention may be an example of a partnership in which some partners are more equal than others, but it is at least contractual over a period of time and not a mere system of ad hoc handouts. Stabex and Sysmin are possibly forerunners of a wider network of commodity arrangements. Co-financing of projects is already to some extent taking place between Arab banks and the European Investment Bank. These steps are all to be welcomed. When I picked on food aid and particularly dairy products at the beginning of my speech, it was not to give aid a bad name but to put a warning notice on a path that the Community should not go down. We shall need all the resources we can spare—and more—to put some flesh on Brandt.

4.40 p.m.

Lord Bishopston

My Lords, I, too, seek the indulgence of the House for a maiden speech. I am not sure whether, having entered your Lordships' House only a mere 24 hours ago, I should have left a respectably longer time before I ventured to address your Lordships' House. But I suggest that one way in which I feel at home here is that I spent nearly 15 years in the other place, and I am pleased to be joining some of my former friends there on this occasion. I note that I am to be followed by a right reverend Prelate, a Lord Bishop, and this rather indicates to me that I was wise in seeking to avoid a title which would lead to my being mistaken for a Lord spiritual, a flattering prospect indeed. Yet I have managed to keep my name and also to associate myself with the city of my birth, Bristol, or a part of it—a part which was in the first constituency that I fought, in Bristol West, nigh on 31 years ago, as well as having a territorial designation referring to Newark, the place where I live and where I was honoured to represent the people for about 15 years.

There will be no dispute that the matter before the House today is of very great importance, and I think it a matter of the greatest importance, as underlined by the Brandt Report, which is an historic document. The report before us today, and the Brandt Report, highlight the appalling conditions in which millions live in the less developed countries in many parts of the world, and it is of course a challenge to the United Kingdom itself. This report on the EEC development aid policy presents us with a subject on which I share real concern with many others. I am very pleased to see the Foreign Secretary here today. I must say that I do not in any way doubt the Government's sincerity in its aid and other policies, although this is not the occasion for me to say on which conclusions or policies I may disagree; that may follow at a later stage.

I am very pleased to be able to speak on this subject, first of all, because in another place I was the Minister of State for five years—that was a time when there was one Minister of State—and I had some responsibility for the problems of dealing with technical assistance, with exports, with trade and aid to other countries, attending the World Food Council, and so on. I am pleased to be back joining my noble friend Lord Peart, with whom I worked happily, as indeed I did with many others, for some years. I join in acknowledging the contribution made by the noble Lord, Lord Greenhill of Harrow, and the work of the Select Committee on the European Communities on this very vital subject.

I am reminded that brevity is required on these occasions, so I shall limit my remarks to a few aspects, trying to avoid some of the customary platitudes with which we often associate debates on overseas aid and development aid in general. The report is a comprehensive one dealing with several disturbing aspects which need more detailed examination, and I hope the report is read not only by noble Lords but also by the wider public in the country, because there are many items there which need and deserve scrutiny.

I am sure that we appreciate that the EEC aid programme does give member states the opportunity of co-ordinating their efforts, but one sees the disturbing revelations of paragraph 9, which suggest that up to now no machinery has existed within the Community for detailed co-ordination of member states' national aid programmes, although of course the OECD does something in that respect. If we are to maximise our aid contributions, close co-ordination is absolutely essential. This is one of the aspects which deserve more attention.

I want to emphasise two main points. First, I think we are indebted to the Brandt Commission for its work in giving us research which warns the world of the consequences of failing to match up to the demands and the needs of millions of men, women and children in the third world and in the less developed countries. I am sure we are indebted, too, to the dedicated work of a commission member for the UK, Mr. Edward Heath, for his zeal in publicising the problems of our times, and indeed to others up and down the country, in individual capacities or in organisations, for the work they are doing to highlight the importance of its message. I urge that we should all be trying to take what I think is a global perspective, seeing the need not in terms of what the industrialised North can give to the needy South, but in terms of peace, justice and jobs, as the commission report puts it. The needs of both North and South are tied up together and are of great consequence to each. Further, it calls for major international initiatives if the hundreds of millions of people on the edge of starvation are to survive.

In an era of science and technology—and we have of course the micro-technology, the biotechnology and other scientific aids which will affect agriculture and food production—we have a situation which will bring quite dramatic changes in our way of life in many ways. It really is essential that these great advances in science and technology are used not only for our advantage but for the advantage of the third world as well. The so-called advanced nations will have to rethink their attitudes, including attitudes to work and leisure, and to the place of people in society. We shall all have to adapt to the changes which will he brought about, because the micro-chip is getting smaller and getting more reliable and getting cheaper. The problem we face in this country and in the industrialised countries, and indeed in the Third World, is how we shall be able to adapt to these changes so that they are to our advantage and not to our disadvantage. I am rather afraid that this great advance we have here, which has been brought in in ways we do not always ascertain, could widen the gap between the richer and the poorer nations; so more appropriate technology is necessary to accommodate their needs.

The other point I want to make is to challenge the view that we in the North cannot afford to do more to help those in the South. If we do not recognise the need to provide help for humanitarian reasons, of course there are many reasons of self-interest which are applicable, because aid and trade can be to our benefit as well. If we are told we cannot do more until we are economically stronger—and that is often the reason put forward—then it is going to be a very bad prospect for us and for them.

As a former chairman of the Economic Committee of the North Atlantic Assembly, which is a committee of parliamentarians of NATO countries, I recall producing a survey of the living standards of people in the Mediterranean countries, including Turkey, Israel, Italy and the Mahgreb States of North Africa, in order to identify some of the causes of tensions which lead to higher defence spending. I think we need to spend less on the fire brigade aspect of defence and more on the fire prevention aspects, reducing or indeed eliminating the causes of tension by trying to raise the living standards in the less developed countries in particular, although of course I hasten to say that this alone will not solve some of the problems which cause the tensions and cause defence spending to rise.

As the Brandt Report shows, we should see the needs of the less developed countries as part of our defence obligations, seeing spending on the conventional defence aspects as negative and spending on raising living standards as positive defence spending, reducing the causes of tensions which at present cause us to spend on negative defence. I should certainly like defence Ministers to see their relevance in Mexico and some of the other conferences that the Foreign Secretary mentioned, because if we could get a great crusade of the Warsaw Pact countries and the NATO countries, seeing the problems of the Third World as being within the terms of defence, this would give us far better hopes for the future. There are, as we know, millions of doctors and nurses and scientists and technicians, not only in this country but in the EEC, without jobs. I do not necessarily accept that they have nothing to do here, but if there is this potential available surely there could be, in a spirit of crusade for change and improvement in the less developed countries, a job for them to do either in the short or the longer term.

I believe that the need of our time is to stimulate new attitudes to aid, seeing it not as a charity and as a good turn but as a duty—loving our neighbours as ourselves. I believe that we need a new outlook seeing the relevance of the spiritual as well as the material aspects and recognising the value of every individual in our society whether he lives in Birmingham or in Bombay. If we were talking about poetry, as my noble friend did a moment ago, I would quote John Donne, who said that we are all part of the main and that each man's death diminishes us all. I am afraid that we have been diminished for too long and the challenge is here for us to face in the immediate future.

4.50 p.m.

The Bishop of Salisbury

My Lords, we on these Benches are grateful to the noble Lord, Lord Greenhill of Harrow, for his report and also for the conciseness and clarity and example to preachers with which he introduced it. I should also like to congratulate the noble Lord, Lord Bishopston, on the fact that he is only three letters away from episcopacy. As also he is on the Houses Committee of the Church Commissioners and I am a parson's son, he has housed me for nine months pre-natally and 70 years post-natally and, when I retire in 120 days to a property owned by him in Maida Vale—a basement which I shall call, of course, a lower maisonette in Little Venice—it will still be under the auspices of the noble Lord. Also, I hope that I shall be at least on the steps of the Throne to hear him again. I should like to say how grateful we all are.

It was, I think, in October last year that the Director of the United Nations Food and Agriculture Organisation signalled a global alert to all member Governments about the imminence of a second world food crisis. Then in August last year the Central Committee of the World Council of Churches also issued a statement alerting member Churches to the crucial problem of hunger among millions of people.

Evidence of the imminence of this emergency came to us again in the pages of the present report. I should like to refer to two particular examples. It says: Only 8 or 9 countries in the Lomé Convention are succeeding in keeping their per capita food production going ahead of their population growth, despite five years of Common Market aid and trade privileges". To the following question put to a Member of the European Parliament: What I mean is, are we winning? Is there more or less poverty in the world than there was when we joined the EEC? came the answer: Poverty is increasing … the population of the world has gone zooming up". So in the midst of our mountains of food surpluses in Europe we are alerted in the report to the growing multitudes entering the Valley of the Shadow of Death from hunger and starvation. As a result of the report I suggest that we renew our resolve and strengthen our grasp to tackle the task that lies before us.

Why should we? I should like us to think about why we should engage in this battle. Again the report offers us some good reasons. Among the general conclusions stated in paragraph 133, the report recognises the problem of poverty as posing, a serious threat to world stability". Whether we are thinking of Mediterranean islands like Cyprus and Malta, or whether we are thinking of the member states of the Lomé Convention like Ethiopia and Somalia in the Horn of Africa, or whether we are thinking of what are called the non-associated territories like India and Bangladesh, there is a serious threat to world stability caused by increasing poverty and the collapse of a nation's economy.

The European Community inherits a pattern of relationships with developing nations from the era of the British and French colonial empires. There is, therefore, a strong political and economic reason for the Community engaging in this battle against poverty and hunger. Over centuries we have derived vital raw materials of food, timber and mineral ores from these countries. As the Lomé Convention says: the post-colonial model for the relationship between developed and developing nations is now provided". So I think that there are powerful political and economic reasons for the European Community engaging in this battle against poverty and hunger, and the Brandt Report had the honesty to recognise mutual interests of both developed and developing countries in tackling these problems.

I should like to add another reason. A statement from the Central Committee of the World Council of Churches, to which I referred earlier, begins by declaring its belief that: Guaranteed access to a healthy diet is a fundamental human right", as the noble Lord has just said. During the last war your Lordships will remember that it was the people of a member country of the European Community who conceived of the idea of what they called a "final solution" for ridding themselves of certain problems. But their humanity and that of the whole world was called in question by the outrageous policy to which they resorted. To guard against any such resort to dehumanising policies as will exploit hunger and starvation as political weapons, the United Nations' Covenant on Economic Social and Cultural Rights states in Article 11: The fundamental right of everyone to be free from hunger", and recognition is given in the report to that fundamental and humanitarian reason for our engaging in these problems. Perhaps the clearest statement comes in the report where the Director of Oxfam says: We believe that there is an area of response to human suffering which is beyond the immediate requirement of political divisions—that there is a common humanity to which civilised people ought in all circumstances to respond.". Both the world community, through the Director of the FAO, and the Church community, through the World Council of Churches, have been alerted to the imminent crisis of hunger and starvation to which the report refers. I have stressed the three reasons for the European Community engaging fully in this task. The report examines carefully the progress made and the reforms necessary and the manner by which this engagement can most effectively be carried out.

I wish to turn to the question of the education of the people of this country in the issues of world development raised in the report. Paragraph 2 states: Details of the (European Community) policy are not widely known in the United Kingdom.". I suggest that that is a masterly understatement. I have with me the "league table" of the expenditure per capita on development education. It says: Sweden, 15p; Netherlands, 10p; Norway, 10p; Canada, 7p; Denmark, 4p; Germany, 2p; and the United Kingdom, 0.3p. Surely even Mr. Ron Greenwood would feel unhappy about that. It sounds exactly like the football league table and the English achievement.

The Government must surely be urged to restore their Development Education Fund so that the public can learn more of this vital work. Paragraph 620 of the report says on page 180 that co-financing between Oxfam and the EEC is taking place, but it is: a very, very small public opinion forming educational co-financing work.". I submit that that is a wholly inadequate attempt to help the people of this country to understand the policies for world development which we are debating today.

I welcome the two statements in the report which refer to the Brandt Commission—and we must be disciplined about that, as the noble Lord has warned us. Do we not in our debate today want to endorse entirely the plea by the Member of the European Parliament when he expressed the hope that Lord Greenhill's committee would be effective in persuading the Government that they should take initiatives in this respect?

Finally, I am much helped by the tragic saga of Samson and Delilah, with which your Lordships will be acquainted. Your Lordships will remember: Out of the eater came something to eat, Out of the strong came something sweet". I submit that there can be no doubt that the common agricultural policy of the Community enables us in Western Europe to eat, and to eat very well. But this same policy must not be the means for us destroying the rural agricultural programmes of developing countries, because we dump or export surplus food as food aid, and as an expedient and short-term palliative to the problem of hunger.

By all means, out of a Community which eats well, let there be sent something for others to eat as well, but let us recognise the advance that we make when we enable these rural developing communities to produce enough to eat for themselves.

Out of the strong came something sweet". Ought we not to recognise the absurdity, as it seems to me, of guaranteeing through the Lomé Convention imports of 1¼ million tonnes of raw sugar cane and then exporting more than I million tonnes of processed and refined sugar back to them, when we have derived benefit from shipping, insuring and processing their own raw materials?

In paragraph 690 we read of the change of thinking that has taken place in developing countries between the 1950s and the 1960s, when all they wanted was aid for prestige projects, and the 1980s when they will tackle problems of rural agriculture. Therefore, in this country let us also register the need for reform and change in our attitudes in the 1980s, stop increasing our acreage of sugar beet, and stop a policy of processing the third world's exports of raw materials when they urgently need to earn the profits from refining their sugar for themselves.

That is the lesson that I learn from Samson's riddle. Noble Lords will remember that Samson was a strong man—except when he became involved in unfortunate women's lib—and the Community, too, is a strong trading influence within the world economy. Ever since the General Synod of the Church of England first debated the entry of the United Kingdom into the Community in 1972, that same Synod has stressed that: The Community has to be guided and influenced in such a way that it uses its giant economic strength to help the welfare and progress of all humanity".

5.2 p.m.

Lord Home of the Hirsel

My Lords, the Motion so admirably introduced by my noble friend Lord Greenhill of Harrow is certainly timely because, as the Foreign Secretary has said, it anticipates the series of conferences which are to be held later this year when every aspect of the assistance to the developing world will be discussed and at which we hope that new decisions will be taken. It may be that some of the suggestions made in your Lordships' House today, including those of the maiden speakers from whose speeches we have benefited, will be of value.

The report of the Select Committee, of course, deals with Europe's contribution to this problem and it has the benefit of the experience so far gained from operating the Lomé Convention. I shall not disguise my opinion from the House that Europe's trade is far more important to the third world than Europe's aid; trade makes work and work is essentially what these third world countries need. Nevertheless, the report makes a case for proceeding with the third stage of Lomé, and if that is to be done the Community's activities in this field of aid and development will be very important, particularly if they are extended to what are called non-associated countries. It is important for both the donors and the recipients that future schemes should be well laid.

Everyone knows—and the right reverend Prelate the Bishop of Salisbury has quite properly drawn our attention to it again—that there is too much poverty, too much hunger and too much malnutrition in the world. I think that it is conceded in the Western democracies that there is a moral obligation for the richer parts of the world to help the poorer. I have no reason to doubt that the will is there. The difficulty comes when one tries to find the means and what it is right and best to do. It is quite understandable that those below the poverty line should convince themselves that there must be some short cut which will bring them level with the industrial Joneses. However, the truth is that there is not. In reply to the noble Lord, Lord Molloy, who was looking for some such, what he called, dramatic impact, development and aid simply do not work that way.

Mr. Nehru was a very high-minded man and a man with infinite compassion for his fellows all over the world. He told me that the greatest mistake in his life had been to try to industralise India before the basic plans had been laid and put into operation for self-sufficiency in the production of home-grown food. That was his judgment on his own career.

He sent me to see some of, what he called, his community education schemes. I shall never forget the experience. The district officer and I sat in the middle of a village of some 300 or 400 people; he played to them on a one-stringed instrument and the burden of his song was this: If a cow is not kept in the house, the water will not be contaminated and there will be no disease. If the packet of seed is not poured into one hole, but distributed through many holes, the yield of the crop will be larger. If the hillside is terraced and the water not allowed to sweep away the soil, the vegetables will be better growing". It was as elementary as that and it was as slow as that. I asked the district officer whether this very simple, elementary teaching would bear fruit. He said, "You must wait 15 years". I waited 20 years and now India, in a year of good harvest, is self-sufficient in food. But it was carried out in that slow, difficult way. There is a lesson to be learned there. It was entirely due to the emphasis being placed on basic, grass-root teaching on the growing of crops and food.

Many under-developed countries today are as backward as India was then. But I believe that the lesson is still valid for development and for aid. The first priority must be—and the noble Lord, Lord Goronwy-Roberts, made this point very strongly—home-grown food. The second must be supervision by people with a knowledge of the techniques of farming on the spot. Whether it be in South-East Asia, South America or in Africa, the techniques will be different; the experts are very important. Thirdly, priority must be given to the transport network necessary for the distribution of that food in the most economical way.

I insist on the key role of the expert in these matters with some reason. I happen to have experienced two schemes in Africa. The first, as your Lordships will well remember, was the groundnut scheme in East Africa; and the second was the afforestation of Swaziland. The first was horn of the highest Christian ideals, but sentiment would not grow nuts and the spectacular failure of that groundnut scheme, because there was no research and it was ill-prepared, did great harm to the impetus of development over future years.

The second case was quite different, the afforestation of Swaziland. The research was meticulous. The preparation was detailed. The expertise accepted and applied, and, as anybody who goes to Swaziland today will understand, it was a triumphant success both in terms of economic return and in social wellbeing to the people of that country. There is a contrast between two approaches to development and aid, and I think that the proof is that there must be expertise applied and accepted.

The lesson there is that there must be partnership between the donor and the recipient. The donor from the Western capitalised countries has to accept some risk, but it is reduced to the minimum if you employ people who know their job. And by the recipient the thought of neo-colonialism has to be put out of the window. It is high time it went out of the window anyhow, but it still lingers on, but if we are to make progress together in this matter then neocolonialism must not influence the minds of the recipients any more.

I should like to conclude by saying a word about aid. I am not talking about emergency aid. I think that is best initiated by the United Nations calling upon the particular countries who are in a good position to help in any crisis. I am talking really about aid in grain to poor countries which are hungry. Again, if I may, I shall draw on a practical experience from India. I happened again to be with Mr. Nehru when there was a grave shortage of grain in India. Because I knew that Canada had a surplus, I suggested to him that Canada would gladly send a cargo or two of grain if asked. I recall his reply very well. It was, "No, not unless the situation deteriorates to one of desperation, because unless the Indian people can learn to grow their own food we will never build ourselves into a self-reliant nation". That in some ways sounds harsh, but it is true. It is the growing of food in the country concerned that is going to lay the foundations for all the progress after that.

When funds are limited there is of course the exploration for, and the exploitation of, minerals, but everything I have seen over the years underlies the absolute importance of basic instruction in the development of food. I think that in the European plan, such as it is for the future, food must come first. I detect one slight shadow not in this debate but on the whole question of aid from the West to the developing countries. I got a hint of it on the wireless yesterday morning when Herr Willy Brandt said—and his sentiment was echoed to some extent by the Commonwealth Secretary-General—that he hoped that the United States, Britain, and West Germany were not going to isolate themselves from the problems posed by the world problem of development and aid.

I should hope not. If the United States, Britain and Germany were to hesitate and halt and falter in their resolution and in what they are doing now, the kind of thing of which the Foreign Secretary spoke to us today, the scheme would completely collapse. There would be virtually no aid of any consequence for any of the developing countries. I do not think that there is any danger of that at all, and I hope that potential critics of the performance of the United States, West Germany and this country will read what the Foreign Secretary had to say today, and I believe they will get some encouragement from it, because it is essential, if we are to make an impact on this problem, that donors and recipients should co-operate with no recriminations but with a joint purpose to help where help can do most good.

5.15 p.m.

The Principal Deputy Chairman of Committees (Baroness White)

My Lords, as chairman of your Lordships' Select Committee on the European Communities I have the particular personal pleasure of thanking the noble Lord, Lord Greenhill of Harrow, and the members of his sub-committee for what I think all of us would agree is an admirable report. I should also like to put on record our appreciation of the excellent work done by the specialist adviser, Adrian Hewitt, from the Overseas Development institute, and also, perhaps unusually in this House, might I thank the Clerk to that committee, Francis Hawkings, a person of quite outstanding ability and dedication who, alas, is leaving the service of the House shortly to re-enter academic life. We appreciate very much indeed the work of all concerned in the production of the report, which is I think also responsible for the excellent debate we have had so far this afternoon, and in which I was very glad indeed that two of my former colleagues in another place have been able to join.

There is one voice which I would much wish to have heard this afternoon, which, alas, will be sadly missing, and that is the voice of Lady Jackson of Lodsworth, much better known as Barbara Ward, who died last Sunday. When she became a Member of this House I believe she already knew that her health was precarious. Her energies had to be conserved for matters of the closest interest to her, and consequently we never fully enjoyed the benefit of the contribution which we knew she could have made, most particularly on the subject before us today. Hers was a voice to which North and South, old world, new world, third world, listened with attention, and they did so because she combined moral concern with practical objectives. She combined concern for persons and communities with a vivid recognition that any sustainable development programme had to work with the laws of nature and not against them. She was one of the first and most eloquent of those who pointed out the need to link development aid programmes with environmental knowledge and wise resource conservation practice.

She undoubtedly believed, as I do myself, that those who regard development aid exclusively in terms of economic viability are mistaken. As the noble Lord, Lord Home of the Hirsel, so rightly said, the partnership between donors and recipients is not just a trading transaction or an engineering contract, or a soft loan, although it may involve all three. It is, or should be, a common endeavour to improve the human condition, and to do that in a world where in the last couple of decades we have, for the first time, woken up to the fact that even our global natural resources are finite and that there are consequential limits to growth.

To acknowledge this should not turn one into a doomwatcher. Personally I have considerable confidence in human resourcefulness in face of need. But, as the energy crisis has so clearly demonstrated to us in the last few years, we in all parts of the world, rich or poor, are much more interdependent than most of us realised. Sooner or later we all have to share the resources of what Barbara Ward's best known book called, Onley One Earth; and her sub-title read, "The Care and Maintenance of a Small Planet". We neglect this care and maintenance of our planet at our peril, whether we are the donors or the recipients of aid.

We should of course distinguish what type of aid we are discussing, and I thought the noble Lord, Lord Home, properly drew the distinction between emergency aid—the immediate impulse to send supplies, quite rightly, when hurricane, flood, earthquake or other natural disaster strikes (and similar conditions can arise in a war zone)—and development aid, which is what the report now before us is mainly about, which is an entirely different matter, although the two kinds can of course sometimes converge. In development planning, one's criterion of success or failure must be how far the aid proferred—be it in cash, kind, loans, technical assistance or terms of trade—helps the recipients to help themselves, and that to my mind is the crucial principle of successful development aid. That the donors too may benefit in one way or another—from consultancy fees, contracts or whatever it may be—is a totally legitimate objective, but the achievement of what is commonly called sustainable development by the receiving community must be what matters most.

In my view, it is against that background that we should try to evaluate the effectiveness of the European Communities' aid effort. There are a number of noble Lords who took a full part in the work of the subcommittee; I was able to attend a hearing or two but no more, and I feel therefore that it would be presumptuous of me to go into any detail into the administrative and financial considerations in particular which they studied so carefully, except to endorse what has already been forcefully said from all quarters of the House, namely that we feel it to be urgently necessary—and I hope the noble Lord, Lord Trefgarne, will deal with this matter when he replies—to urge our partners in the Community to review the whole question of food aid in terms of the way which it is currently dealt with. It is doing no kindness to a country to send food aid from our ill-considered surpluses in a way which positively deters food production in the countries to which it is sent; and it is still worse, of course, if in an emergency situation the delays are such that we do not even tackle that efficiently.

However, I wish to question particularly—because this is one of my personal strong interests—just how effective in the planning, execution and follow-up of these development projects is the ecological or environmental input in any situation where one is dealing with natural resources (be they crops, forestry, mineral exploitation, hydrological developments for energy, irrigation, fish cultivation, water supply or the like) and what land use considerations are studied before a project is agreed. There is no lack of fine words on the matter. I have with me the Declaration of Environmental Policies and Procedures Relating to Economic Development, signed in New York in February of last year by the presidents of no fewer than nine international aid-giving institutions, including the World Bank, UNDP, various regional banks and by Mr. Roy Jenkins himself on behalf of the European Development Fund and the European Communities. The declaration is full of the most proper and appropriate sentiments.

In the second Lomé Convention, in Article 112, there is specific reference to environmental requirements and, in the report, the last question but one on the last page but one, about the form which an applicant for aid sends to Directorate VIII in Brussels, asks for information on the expected environmental effects of the relevant project. For me, it is all too reminiscent of our United Kingdom Section 11 of the Countryside Act 1968, which enjoins all Ministers in all Administrations to, "pay attention to the environment"—admirable in intention, but in practice honoured as much in the breach as in the observance. Again, in June 1977 at the Council of Ministers' meeting which determined the content of the Second Action Programme of the Community on the Environment, it was decided that the Commisssion would take new initiatives to ensure that considerations of environmental protection, in particular the long-term conservation of natural resources, became fully accepted as an integral part of the development aid programmes of EDF.

That is splendid so far as it goes as a declaration of intent. But I should very much like to know what influence the Environment and Consumer Protection Service (or Directorate, as it has recently become) in Brussels has on the development directorate known as Directorate VIII. Do they ever speak to one another and do they really consult about these matters? Nowhere in the Commission so far as I have been able to discover—or, for that matter (and I must be frank about this) in our own overseas development administration—can I find a really effective point of ecological input. The economists, cost accountants, lawyers and engineers are mandatory. But what we do to Mother Earth is left largely to non-obligatory advice or to the professional conscience of those whose competence lies in much narrower and more specialised fields, lacking the synoptic experience needed for adequate resource and environmental appraisal.

Ecological considerations should be part of the total planning and subsequent processes, and not an optional additive. There must be a genuine source of knowledge and concern in the planning team, whether in Brussels or in the field, and it should be there right from the start. Otherwise, wrong decisions will be made which at a later stage cannot be corrected without much greater trouble and expense. It is no use the economists and technocrats shrugging off resource protection studies as an extra time-consuming filter in their project programme. Properly organised and integrated, the non-quantifiable inputs of the sociologist and ecologist—even if one calls them by less grandiose names—are essential to successful operation in the field.

If that is not accepted, the European Development Fund, like other aid donors all over the world, will go on failing to learn, or to persuade the partner countries to learn, from earlier mistakes. We shall have the same sorry stories of deforestation, soil erosion, silting up of reservoirs in seven years instead of the estimated 40, intensified market agriculture which simply intensifies impoverishment of the soil, schemes too complex or too expensive for the local population to carry on once the project team has left, inadequate time given for the population to learn to adapt its customary farming practices to the new notions, and so on.

The catalogue of eco-sociological failings stretches on. The European Development Fund is, I am sure, no worse than other donors. It has tried to evaluate its work, for example on rural integration in Black Africa (its term, not mine) and I understand that for its part the Environment and Consumer Protection Service in the Commission has put in hand a study of how to secure a more effective ecological input into development aid planning in the Community. But I should like to know how much consideration is given to these matters by Her Majesty's Government. I gave notice to the Minister of my intention to ask that and I hope he will say how far the United Kingdom representatives concerned with these matters pay more than lip service to these considerations, which, in the view of many of us, are basic to a considerable proportion of Community development aid projects, and I shall be very interested to receive his reply.

I would also ask the Minister, because of its great importance to developing countries in many parts of the world, what role the United Kingdom sees for itself in the United Nations Water Decade. The noble Lord, Lord Home, rightly said that food was the most basic commodity, but I would say that water was its equal. I say that for various reasons. It is obvious that without water and food, life is impossible; but without water, food is impossible. But it has much greater effects indirectly on almost every type of rural development aid at least, in that water-borne diseases in particular are among the most debilitating diseases in the world, and, as those who have any personal knowledge at all of parts of the developing world will be aware, one cannot succeed with rural problems or get people to grow enough food and undertake the various necessary endeavours to keep their villages healthy and clean it they are suffering from the kind of debilitating diseases which sap all energy and endeavour.

It is not only the question of disease—and I am not usually an ardent feminist, but I feel very strongly about this. In most villages in many of the countries that we are discussing it is the women who have to carry the water, and in many cases this means the most arduous task not just occasionally but every single day of the year. A woman might have to go miles and miles to get water, which, when she brings it back, possibly infects the family and other disasters occur. I feel that the emphasis which we should be laying in our development programmes on the adequacy of water and sanitation (which is stressed in the United Nations' Water Decade) is one of the matters of the closest concern to anyone who feels a sense of responsibility about these questions, and here again I should like to know what Her Majesty's Government consider is their role in this extremely important effort.

My final concern is with the effect of European or other developed world commercial practices on some of our European Development Fund objectives. My noble friend Lord Goronwy-Roberts and others have referral to the baby food scandal. As he very rightly said, and as the report indicates, the trouble here lies in the appalling inadequacy of clean water in so many third world countries, with the consequent disease and malnutrition if one uses food that is improperly prepared. The scandal concerns not only the milk products multinationals. I would suggest that the multinational tobacco companies are even worse offenders, competing in the aggressiveness of their advertising with the milk products enterprises in pressing health hazard products on unsophisticated people.

If ever there was an unacceptable face of capitalism (to use Edward Heath's words) it is the commercial visage of the milk products and tobacco multinationals in the third world. This is not a topic on which one can expatiate at length, but it is one on Which many of us feel extremely strongly. One must ensure that EEC aid is never used, as some aid donors funds have been used in the past, to further these particular unscrupulous interests.

The Lomé Convention in particular is a partnership. We are only one part of one side of that partnership. But that does not absolve us from using our judgment in these matters and making our position clear to the administrators in Brussels. Neither human beings, nor natural resources, should be improperly exploited, if we can avoid it. If we have to compromise, we should at least know what we are doing, and not simply acquiesce through inertia. My Lords, those are some of the topics that are not very fully ventilated in the admirable report that we are considering this afternoon. I hope that your Lordships will accept that they help to round out the picture and that they have great importance in their own right.

5.33 p.m.

Lord Holderness

My Lords, I hope that I may be allowed to express my congratulations to the two noble Lords who have made their maiden speeches this afternoon. Having heard them both on many occasions in another place, I was delighted to find that their translation in no way diminished their skill. Having suffered recently from great trepidation on a similar occasion, I was deeply envious of the fearless competence of the noble Lord, Lord Molloy. With regard to the noble Lord, Lord Bishopston, for whom I have long had great admiration, I am sure that the House greatly welcomed his desire and intention to speak without losing more than a few hours following his Introduction, and hoped that we shall not have to wait very long before we hear him again.

As a comparative newcomer, I was very grateful to be allowed to join in the work of the sub-committee, and I had a particular pleasure in returning to work under the robust, but sensitive, chairmanship of the noble Lord, Lord Greenhill of Harrow, and among the critical and analytical skill of other noble Lords on the committee. I am relieved that nearly all noble Lords who have spoken so far in the debate have found it as difficult as I shall find it to examine the report without mentioning rather wider considerations of aid policy, and without looking at the probable growth of the Community's role as we approach the 21st century.

I agree entirely with the noble Lord, Lord Greenhill of Harrow, that interest in development aid has grown and is growing, and I hope that it will continue to grow. But my own fear is that the interest is still confined to a minority in this country who think that we should do more, and a rather smaller, but very often vociferous, minority who think that we do too much. It is between these extremes that there lies the weight of public opinion, which is not generally deeply concerned. But several noble Lords have observed, as I, too, have observed with great satisfaction—I think that the noble Baroness touched on this matter—that a substantial proportion of this middle opinion is aroused by the great natural disasters, such as flood, earthquake and famine, and I hope that I am not being too optimistic if I say that I think it not impossible that this occasional concern could be harnessed to the more general purpose of aid, much of which aims to prevent the occurrence, or recurrence, of such disasters, and to limit the consequent human suffering from things such as hunger, disease, or disablement.

Judging from the parallel response which I believe exists in other nations in Europe, I think it realistic to hope for a similar development of opinion throughout the Community. Those who retain their faith in the Community—which I still consider is a great concept, with a vast potential—believe that it can not only increase the unity and the prosperity of its member nations, but collectively make an important contribution to the stability and wellbeing of the human race.

The committee's report makes clear that the Community's contributions to world development are, and are likely to remain, both collective and individual. Nearly three-quarters of our own aid programme is provided bilaterally to recipient nations. The proportion of France's programme so provided is rather greater, while those of Germany, the Netherlands, and Belgium are smaller. It is only Italy in the Community, with a much slighter total programme, which directs most of its available funds through European channels.

I have asked myself whether, if our commitment to Europe and to a European aid policy is genuine, the balance of its main aid donors—Britain included—should be tilted more distinctly towards a collective policy, away from a mainly bilateral policy, which we have at the moment. Similar questions arose in relation to other multilateral agencies long before we acceded to the European Community. Then my view leant, and it still leans, towards a predominance of bilateral effort. I believed, and I still believe, that there were, and are, some objectives which are likely to be achieved much more easily through multilateral agencies. I have in mind, for instance, large projects involving dams, great irrigation programmes, and so on, which are too extensive for national financing. On the other side, I have in mind politically sensitive matters, such as population control. I believe that these are all better achieved by the multilateral agencies.

But to the greater ease of controlling bilateral projects was added, in my experience in a number of cases, though not all, the preference of the recipients for the bilateral donor. Familiarity with a known donor was of importance, and familiarity with recognised methods of project planning was equally important. Therefore, I had no difficulty in subscribing to the general view of the committee that if more funds could be made available they should in the main be directed bilaterally. In any case, I felt that the aggregation of aid provided by the Community's member nations was of greater importance than its division between collective and individual contributions.

A further question I asked—and it has been asked by a number of noble Lords this afternoon, I think—was to what extent this view depended on the historical accident that Yaounde and Lomé were not concerned, in the main, with a number of large and very poor countries; and obviously in most of our minds is the example of India, with whom Britain has had a longstanding and very substantial aid arrangement. This relative unconcern of the conventions certainly strengthens the argument for preserving and, if possible, adding to our bilateral programme; but I myself should rejoice if this argument were weakened by the complete incorporation of countries like India into the scope of the European aid programme.

Here I think it is necessary to enter a reservation to the widely held view that the main thrust of development aid should be directed towards the poorest countries of the world. The committee, in paragraph 96, believed that, the Community's aid policy in the 1980s should be determines on the basis of need". Many would consider this more or less self-evident; and, indeed, two-thirds of the ACP countries are justifiably described as "least developed". But—and here is my reservation—although we naturally agree with the right reverend Prelate the Bishop of Salisbury that the relief of human suffering is urgent and imperative in the poorest countries, I still believe that an important objective of the Community's, and indeed all, aid programmes is to quicken the economic tempo of the world; and if this be so there is surely a strong case for directing a considerable proportion of the world's available aid towards countries within a closer reach of individual economic take-off.

The committee's report contains a number of important recommendations on which a number of noble Lords have spoken, and no doubt will speak, with much greater authority than I can possibly command; but I believe that no issue that we considered during last winter is of greater significance to the world's future than the development, as time goes by, of the Community's attitude to the Brandt Report, which has been much mentioned this afternoon. In the debate which was instituted by the noble Earl, Lord Listowel, last year, I think it was generally accepted that the objectives of the Brandt Report could be achieved only by the sharp quickening of political will among the richer nations, which both have resources to invest and can provide—and I think my noble friend Lord Home made this very important point—expanding markets for the products of the developing world. Aid alone would not be enough, and the Brandt Commission rightly put the problems into a far wider context.

The committee's recommendations on this matter, which were numbers (xviii) and (xix), the last of our recommendations, are very cautious, and I have to admit that the recommendations could mean much or could possibly mean rather little. But I fully shared the Committee's option for caution because I am not convinced that the Community is yet ready for a significant Brandt initiative; and while most of its individual members, as I think they are at present right to do, attach predominant importance to their own bilateral programmes, the collective resources at the European Community's disposal are likely to remain very small indeed, and probably too small to give such an inititative any real meaning.

None the less, as my noble friend the Foreign Secretary has pointed out, the total contribution of Europe to world development is already far larger than that of other major donors, like the United States, Japan and, far more, Soviet Russia. Europe still has to learn to speak with a single voice, but as it learns to do so and as its contribution grows both in volume and in proportion to its aggregate gross products, then I think Europe can rightly claim to be the leader of the world's development effort and to be the most important single agent in the solution of the vast problems which the Brandt Report has clearly put before us.

5.45 p.m.

Lord Kissin

My Lords, after so many formidable speeches in the debate I cannot hope to add any points which have not already been mentioned. But I should like to expand and support the excellent summary that our chairman, Lord Greenhill of Harrow, has given to the House. I share his view that all aid programmes carry very high priority in government. There is, of course, good reason for it, and one ought not to be too hypocritical about it. They are motivated by a mixture of humanitarianism, political expediency and economic self-interest. The Community's programme can be no exception, and for these reasons it is difficult to give a fully comprehensive evaluation of the EEC's aid policies.

The Committee's report attempts to get behind the figures and the political justifications, and to examine how the EEC programme operates on the ground. In all aid programmes political and media attention is focused on the act of giving. The planned expenditure of aid as a proportion of GNP appears to be the main target, but the Committee has drawn attention not only to what is actually spent but also to how it is spent, and has tried to find out whether it does any good.

From the report it becomes apparent that the late entry of Britain into the Common Market has somewhat prejudiced our flexibility and our freedom of participation in the formation of the aid policy. Africa accounts for 98 per cent. of the total population covered by the Lomé Convention, yet this represents, as previous speakers have noted, only half the population of India, which, together with the rest of the developing countries in Asia and in Latin America, is left out. Britain's own bilateral and multilateral aid programme does not therefore entirely fit in with the Community's policy, and there is a lack of harmonisation of member states' development policies.

Further, it is no good shrinking from stating in the clearest possible terms that it is necessary to point out if one aims at a Community programme there should be no nationalistic bias in the selection of candidates to fill all the echelons of the administration of the EEC, and particularly in the aid areas. If a Community aid programme is to succeed in the eyes of the recipient, no country should place its flag on any portfolio, especially on the aid portfolio, since it is in this area that the Commission, and not the member states, which decides how the total cake is to be divided between countries and projects. I cannot help but feel that, as yet, Britain has an inadequate representation among the EEC officials—I think the committee got this impression quite clearly—particularly EEC officials who are placed in developing countries. These officials have the crucial task of preparing and appraising projects, controlling tendering procedures, monitoring the technical and financial aspects of development, and evaluating the completed projects.

It is not surprising that the older members of the Community are using their diplomatic and bureaucratic muscle to the detriment of other Community members. In fact older members are doing a great deal better out of EEC development contracts, the majority of which are not awarded by open tender but by direct award and mutual agreement. For example, France contributes 26 per cent, of the total aid budget but her exporters receive 33 per cent. of all contracts. The United Kingdom contributes 18.7 per cent. of the budget, but receives only 11.2 per cent. of the contracts—or as the noble Lord, Lord Carrington, said earlier, 12 per cent. These figures are even more uneven in the case of valuable works contracts, where France's share is 43 per cent. compared, to the United Kingdom's share of 7 per cent. The United Kingdom does better on consultancy contracts, but there we have a restriction to a quota entitlement related to our budget contribution.

It is not only a question of the United Kingdom losing out, because the present bias of the system is not in the Interests of the Community as a whole. In spite of the assurances given by the noble Lord, Lord Carrington, in my view the British Government should adopt a more aggressive approach in the corridors of power in Brussels and insist on a more balanced representation, which would enhance the Community's image in the developing world.

On the other side of the coin, United Kingdom businessmen tend to assume that if other countries are doing well then it is because those other countries are using undue influence and doubtful methods which we would not use to obtain contracts. I doubt the value of that argument but, to enable our business community to play a more successful part, our own Government officials and diplomatic representatives overseas should do all they can to awaken the United Kingdom companies to the economic conditions in the aid programmes and to pinpoint business opportunities associated with EEC development projects. When I listened to witnesses at the committee hearings, I was intrigued to hear how relatively ineffective in their view is EEC aid in promoting economic development compared with how effective it could be.

One has to ask the question: are the aid criteria justifiable among the recipient countries or is there a need for greater consistency and a more acute awareness of global needs? The same question arises with regard to the financial assistance given to certain Mediterranean countries and the Food Aid Programme. Mediterranean countries are, on the whole, creditworthy. Algeria is an OPEC member and the case for continuing to give concessional finance is weak. I fully accept that it is important for the Community to maintain good relations with the Arab world and to reassure the Magreb and Mashreq countries about the effects of EEC enlargement. However, I believe that these two objectives can and should be successfully pursued separately by different agencies and that the aid link is not necessary and could be phased out.

The report is critical of the Community's Food Aid Programme and has posed the question, would this sort of programme best be executed by a non-government organisation such as OXFAM and the existing United Nations agencies, which have the experience, the resources and the manpower to handle emergency aid more efficiently? In the EEC aid programme, the bureaucratic process which is in existence appears to play an important part. Witnesses drew attention to the fact that when there are large agricultural projects, EEC aid involves problems of expenditure which is released very slowly and after a lot of consultation. Such aid seems to involve a lot of bureaucracy, particularly when large projects have to be approved by the Commission. Practically all witnesses pleaded for a reduction in bureaucracy and the committee could not but recommend greater freedom to EEC officials to approve projects, within an agreed framework, without further reference to Brussels.

Bureaucracy appears to be a major problem but other aspects of the EEC aid programme are equally disturbing from the recipients' point of view. Previous speakers have rightly drawn attention to the fact that the evidence suggests a large number of projects are designed to meet the needs and interests of the community's member states and exporters rather than the interests of a recipient country. It appears that more has to be done to evaluate the socio-economic impact of EEC expenditure. Monitoring techniques leave a great deal to be desired. The exporter is happy as long as he is paid for his goods and services, and the recipient Government are sometimes easily satisfied by the gift of foreign exchange—particularly for the erection of prestigious projects, which may have very little development value.

If EEC aid policy is to have any meaning, then a different system of co-operation between local officials and consultants is essential in project evaluation. The question the Committee had to examine continuously was whether the funds could be put to better use elsewhere. Consequently the Committee's recommendation, which I fully support, that more money should be channelled to non-associate developing countries deserves consideration. However, given the present administration of the European Development Fund, the expansion of the EEC aid budget cannot be justified if it can be done at only the expense of the member states' own programmes, to which I attach much greater importance.

One important point the committee could not consider because it was outside the committee's brief, but which the noble Lord, Lord Home of the Hirsel, rightly raised, was that of trade and its contribution to economic development. This issue has to be taken into account in any attempt to answer the fundamental question as to whether member states should have a collective policy in addition to their own aid programmes. I do not want to go into details of the ACP exports and the limitations which restrict the degree to which ACP countries can sell industrialised or processed commodities to the EEC, but it is no secret that the present provisions regarding the rules of origin have been subsequently designed to protect EEC industry. I am of the opinion that it has to be resolved whether a less protective trade policy aimed at providing better access to the EEC market for third world projects could do as much if not more in the long term to stimulate economic development in the third world than the whole of the EEC's aid policy. I believe this option is one which deserves serious consideration by the Community.

5.59 p.m.

Lord Selsdon

My Lords, I begin my intervention today by expressing a profound regret that the United Kingdom has failed as a whole to play a major role in the implementation of the Lomé policies. My noble friend Lord Kissin has pointed out that not only have we failed to secure contracts but, perhaps more significantly, we have on numerous occasions failed even to attempt to make a contribution. I am not quite sure where the fault lies in the United Kingdom as a whole. I think it lies somewhere between the public and the private sectors. We are faced with a situation today where (if I interpret properly the rumblings in relation to British aid policy) we say that, with cash limits, we can afford to contribute no more. Yet perhaps we, of all nations, should recognise that we are more dependent upon international trade than any other developed nation in the world.

We are dependent, as are many other countries of the Community, upon the third world on raw materials. We face today a situation where approaching 50 per cent. of the exports of the Community go towards the third world. Perhaps more significantly, we face a world recession with no sign of the developed world arising from it. Even the most optimistic of forecasters would fail to say that more than two or three of the developed countries will show a balance-of-payments surplus over the next few years. This may be due in part to a rise in oil prices, but if there is a continuing deficit, we shall see little growth in trade in the developed world.

I have always been led to believe that in normal times something like 30 per cent. of the British economy depends upon trade. This compares with 14 per cent. for Japan, 8 per cent. for America and between 25 per cent. and 27 per cent. for France. In a recession, a greater proportion of our economy, of jobs and demand, depend upon international trade and it would lie at the moment between 30 per cent. and 40 per cent. Many Governments—and I submit that our own is no exception—and many international institutions often believe that in order to stimulate economic activity you must provide money. When economic activity does not take place, somebody says, "We must provide another sort of money"—and a new fund is born. This happens continually within the European Community and it happens in our own domestic economic policy in the United Kingdom. When there is no investment, someone in Government tries to devise a new scheme in the belief that it is money that will solve all problems. I submit that it is demand that solves problems and international demand that creates economic growth.

Thus, if we, as a nation, are so dependent upon international trade, perhaps even within whatever cash limits Governments may prescribe from time to time, we should allocate more of our resources to matters that relate to international trade and, in particular, to matters of development finance for developing countries. One asks oneself why was it that British companies, British Governments and British institutions years and years ago went out into what we now call the lesser-developed or the least-developed countries, lost lives, and, maybe, they exploited—but they were there because of the resources there which contributed to their own economic development; and many of those resources are still there. It is sad for some of us who go to Africa from time to time to talk with some of the old people there, to hear them say, "Once we were prosperous and successful. We had copper that we sold on the world market". When one looks at these raw material resources, one finds that many of them are under-utilised or not used at all. Yet, in theory, the money is there because the assets have value and demand in the international market.

Why is it that we ourselves are not playing a greater role in third world development? I think, frankly, that it is because we live in a mixed economy and that, because of such phrases as "public accountability" and such like, it becomes impossible for the two sides of our economy to mix. Thus, the technology needed or the drive, management and equipment needed to implement a project may often be found in the private sector while the financial resources are in the public sector. The public sector find it impossible to be selective when dealing with the private sector. This is not true of many of our competitors or colleagues within the EEC.

France has done a remarkable job in relation to utilising the resources of the Lomé Convention to assist her own industry and, equally important, to assist her former dependent territories. We, on the other hand, recognising that over half the Lomé countries are Commonwealth or former dependent territories of the United Kingdom, have failed to sit down with these territories at an early enough date and to ask, "What is it that we can do to help you implement a development programme which will help your people?" As a result, all too often programmes are committed or indicative programmes are drawn up and the die is cast for the allocation of funds from the Community or from other multilateral aid organisations.

Therefore, suddenly our companies are urged to bid for contracts. They receive short notice and are unable to get their tenders in in time and many of them do not know where the countries concerned are. We find that whenever a bid is asked for from the Community—because to a degree the Community is the customer—the British submit on average seven-tenths of a bid and the French submit three or four. We win the same proportion of the bids that we submit as do the French of the bids they submit. So to some extent the fault lies with us.

I see no solution to this unless a way can be found with our own Government and its agencies and the institutions to which it subscribes to sit down at an early date face to face with the Government of a Lomé territory or third world country and say, "We have certain resources that we can allocate to you. They may be financial or technical. Maybe we can buy from you. How can we put a package together so that we can implement what you want to our mutual benefit at an early date?" Then on their behalf we can make submissions to the Community and ask for their support. I have found a remarkable collection of people in Brussels who will respond willingly to any initiative that will encourage an early development or early implementation of a development programme.

That is one aspect of the points that I wish to raise. The second lies in more money. If we ourselves are short of money, where did all the money go? As we know, most of it went to OPEC. The Arab world territories themselves have a problem of self-interest, have a moral conscience, too, and a great desire to contribute to development programmes in the third world. We often forget the importance of religion worldwide. There are some 300 million people in black Africa and some 100 million of them are Islamic. The countries from which they come are entitled to benefit from many of the Islamic funds made available by the Arab states. But the Arab states have problems. They do not have engineering companies or consultants of their own and they are permanently nervous about having their funds exploited by one of the western capitalist countries. Thus, the original idea of a triangle of Arab wealth with western technology and equipment together with the third world will never work unless we are to some extent equal partners.

The Euro-Arab dialogue has on many occasions tried to find a way whereby Arab money could be brought together with Community money. This is happening in about 11 projects in Africa where Saudi or Arab funds are coming together with Community money. The interesting thing is that the third party in these ventures is not one of the British agencies. Instead one sees such strange initials as CCCE (Caisse Centrale de Coopération Economique) or names which I have only just managed to learn, of other aid agencies who are bilateral, who use their limited bilateral aid to initiate a project, seeking the bulk finance from a multilateral organisation. We are not totally to blame for the Community situation, because we were one of the latest members. It takes time to get to know the countries concerned, to visit them, to encourage companies to bid for contracts abroad. This is an uphill battle. The Department of Trade and Government departments as a whole do all that they can to help. They are normally in a position where they should be providing a response function.

A company should say, "I wish to do something, can you help?" Rather than having Government having to go to companies saying, "Please will you bid in some of these territories?" because industry will not do so. That is not through lack of initiative, it is through lack of knowledge. It is probably a failure to understand the Community itself is the payer. Many people still do not understand the Lomé Convention as such. They are unaware of the vast amounts of development finance washing around in multilateral agencies without the project into which the money could be put.

Lord Davies of Leek

My Lords, will the noble Lord give way for a moment? I am very interested in this point. He obviously is aware of the workings of the international monetary system. Is he aware that the Economist Intelligence Digest dealt with this very problem of special drawing rights which were first introduced in 1968 under the dollar and now they are trying to introduce it under a different kind of currency which will make liquidity easy for the international markets? That is a necessary point to develop foreign aid in the future.

Lord Selsdon

My Lords, as a banker I am aware of that. It has a certain relevance. But money is often an unnecessary means of communication that was invented when all other forms of communication broke down. What I am saying is that the United Kingdom at this time needs orders, contracts and jobs. A third of our economy depends upon international aspects. I should like to feel that we could allocate more of our domestic resources to increase bilateral aid but in perhaps a more pragmatic way than has been done in the past.

I dwell briefly on the food situation with only one comment. I think that someone said that when Queen Victoria came to the throne approximately 15 per cent. of land was desert. Someone told me last year that it was approaching 40 per cent. It was not the lack of money that caused this; it was perhaps in many cases lack of will and implementation. I was most impressed by my noble friend Lord Home when he made the simple comments about how one produces food. It is very sad that many of these states, particularly the Arab states which were once the granaries of the Roman Empire, such as Algeria, should feel that it is almost socially beneath them to pursue an agricultural policy when ultimately it is food that will cause or keep the stability of the world.

6.13 p.m.

Lord Walston

My Lords, I must start with an apology. Unfortunately, a long-standing engagement takes me away from your Lordships' House in a short while and I am not sure that I shall be able to extricate myself from it in time to return for the final stages of this debate. In that case, I apologise to those noble Lords who will be speaking and particularly to the noble Lord, Lord Greenhill.

The next point that I should like to make is to congratulate from this Bench the noble Lord, Lord Bishopston, on his admirable maiden speech which was so full of knowledge and wisdom. I share the hopes that others have expressed that we shall hear him frequently again, possibly even speaking from the same Bench as myself. I should also like to add my congratulations to the noble Lord, Lord Molloy, a former colleague of the European Parliament. I, too, in company with other noble Lords, look forward to hearing him speak again when he is untrammelled by the lack of controversy which is normal in maiden speeches.

My third introductory point is to echo what my noble friend Lady White said about Barbara Ward, Lady Jackson. She was, as my noble friend Lady White said, one of the great pioneers in this movement concerning the third world both of making us in this part of the world conscious of the problems of the third world and in gaining the confidence of the third world itself, the people in it, and bringing her wonderfully acute mind and warm heart to bear on those problems. She is a very great loss not only to us but to the whole world. We are grateful for the contribution that she made.

I must also thank the noble Lord, Lord Greenhill, for his speech, for giving us the opportunity of discussing this extremely important subject and for the admirable report which he and his colleagues have produced. I find myself in complete agreement with most of it. I certainly agree with what was said in the report and with what other noble Lords have said concerning the dangers of food aid. Valuable though it may be, it cannot be used simply as a means of disposing of our own unwanted and embarrassing surpluses. I shall not develop that; other noble Lords have done so very adequately.

I also believe that it would be right for the community as well as ourselves in this country to extend our aid still wider particularly with reference to Latin America and to Asia. I add my strong warm praise for the concept of Lomé and the Stabex system. I underline the word "concept" because I am afraid that in its actual implementation it has not yet lived up to the high hopes which those of us who were to some extent involved in it in its early days had for it. Undoubtedly, great credit should go to its main architect Claude Cheysson. It is sad that he has left his important post in Brussels; but it is good for Europe and good for the world that he now occupies an even more important post in Paris.

When all is said and done we cannot expect to get any significant improvement in the third world without a massive transfer of resources from the North to the South, from the rich to the poor and from the developed to the developing countries of the world. Unless that is done the gap will continue to widen and relative poverty will grow and absolute poverty will remain.

The noble Lord, Lord Home, was very right and wise in pointing out to us the importance of countries producing their own food and the very long term process that this is. I would not disagree for a moment with him. I agree with every word that he said. To my mind that underlines—if it needed It—the urgent need for greater resources to be made available at the present time. If by making available new resources within six or nine months, poverty would start to diminish, maybe there will be something to be said for saying: "Well, we are going through difficult times ourselves at home, let us postpone this for a few months or possibly a year or two". But when we know full well that it is going to take 10, 15 or 20 years for the result of aid from the developed world to start to fructify, to start to improve the lot of the poor, the hungry, the undernourished and the actually starving, then there can be no time to be lost whatsoever.

It has been done in certain areas in India, as the noble Lord said. It has been done—and I was glad he mentioned this—in Swaziland. But those are all long-term projects. The infrastructure is needed in the countries: the drainage and the water supplies, the irrigation and the building of roads and communications. Also, there should be the training of the people who are actually going to the do work, the training of those people at the higher levels of education, at the intermediate levels and the very lowest village levels. Then in the villages themselves people at least would know how to read and write, know the significance of figures and the application of fertilisers and things of that sort.

That makes still more sad the decision of Her Majesty's Government to reduce the number of students who are coming here to learn our techniques and to learn those very things which are so essential to their own countries if the problems of poverty, starvation and hunger are to be conquered. I know we are told the whole time that "much as we would like to increase our aid or at least to maintain it, our own economic position at home is such that for the moment we have to retrench".

There are three reasons that I wish to touch on, I hope briefly, in order to refute that argument. First, there is the problem of trade which had already been touched on by the noble Lords, Lord Kissin and Lord Selsdon. Of course what is needed to increase trade—and we, as the noble Lord, Lord Selsdon, so rightly said, are more dependent on trade than any other country in the developed world—is demand. I would suggest the demand is there-people want what we produce but they do not buy it because they do not have the money with which to pay for it and we do not let them have it without money.

I came across this in a simple way some 25 years ago when I started farming in the Caribbean and the Eastern Caribbean. At that time the banana industry was just beginning. Aided by a variety of means—long-term contracts, stability and remunerative prices—that industry developed enormously and with it developed the wealth of the Eastern Caribbean. That resulted in a higher standard of living for those who lived there. It resulted in more investment in schools, hospitals, water and communications. But it also resulted in more trade with this country because there was then generated out of the profits from the crops exported sufficient money to buy corrugated iron to roof their houses with, instead of palm fronds; bicycles, cars, tractors, fertilisers, radios and even some of the, to them, higher grades of protein foods.

I will not weary your Lordships with the statistics, but trade from this country to that small area increased enormously with very great benefit to the recipients, to the buyers, and was of considerable benefit, though on a modest scale, to industry in this country. If that were extended throughout far larger areas of the developing world today, our unemployment might not cease but it would certainly diminish. Our output would increase, our prosperity in this country would go up and therefore anything we can do to increase purchasing power in the third world will have a very direct and rapid effect upon unemployment, productivity and general economic well-being at home also.

The second point I would make is one which was touched upon by the noble Lord, Lord Bishopston. That is the matter of defence. Of course, we must defend ourselves and we must spend a very large part of our national product upon defence. Obviously, this is not the right time to go into details of the balance of our defence expenditure, but we must not be so led astray by the immediate threats from immediate enemies and potential enemies that we ignore entirely the causes of threats and instability in the future. Much of our trouble today has come about because 20 years ago we did not give sufficient attention to what was going to cause threats and instability today.

There can be no denying the fact that the greater the disparities between different parts of the world and between rich and poor, the greater will be the tensions and the threats to world peace. If we are to diminish those threats in 20 years' time, we must take steps now to see that those discrepancies diminish rather than grow, and at the same time we must take steps to see that many of the countries of great strategic importance to us in the event of a war do not fall under the domination of our potential enemies, providing them perhaps with military bases, with naval bases, with over-flying rights and with vital mineral and other resources. So from the defence point of view, too, an expenditure of money wisely allocated throughout the third world is a necessary part of our whole defence strategy.

Thirdly, we must remember what it is that we are trying to defend, what it is that we value and what it is we are proud of in the western world. We consider ourselves to be a bulwark of civilisation based upon the Christian ethic; and if we are to defend our values we cannot turn our backs upon the teachings of the Christian ethic, whether or not we are Christians ourselves. I do not want to trespass on the soil of the right reverend Prelates who frequently speak here on matters such as these; but after all it was Christ who told the rich young man to sell all that he had and give it to the poor if he meant to follow Him.

It was St. Martin, Bishop of Tours, who cut his cloak in half when he saw a cold beggar, so that he could wrap himself up and be warm. One was told to give 100 per cent. and one gave 50 per cent. and was canonised for it. We are giving half of 1 per cent.—and that we are reducing now because we are so poor. We are so poor that people are able to go to the Derby and people who cannot go there can watch on their televisions. All these are aspects that we know so well of the affluent life that we lead here. In spite of our poverty, our unemployment and other hardships, collectively as a nation we are still incomparably richer than those countries of the third world with whom we are dealing.

The noble Lord, Lord Home of the Hirsel, said, "The will is there to give, but are the means?" Yes, my Lords, the means are there. We have the means to give another £100 million, £500 million and so on without really feeling it. The trouble is that the will is not really there. We mouth our desire to help the poor, but not at the expense of any sacrifices. We will not sell all that we have and give it to the poor. We will not sell one-tenth of 1 per cent. and give it to the poor. As long as we retain that attitude of selfishness, and lack of understanding and love for others, any attempt that we make to help the lot of the poor cannot be successful and cannot be regarded with sincerity. We must have a change of heart within ourselves before we can make available those funds which still are here even in our impoverished state.

6.30 p.m.

Lord Hunt of Tanworth

My Lords, I should like to begin by joining other noble Lords in thanking the noble Lord, Lord Greenhill of Harrow, and his committee for this immensely interesting and valuable report. It is all the more valuable for dealing with a complex and technical matter in such a clear and concise way. It has attracted a great deal of interest and a large number of speakers which, for me, has two consequences: first, I must be selective in what I say and, secondly, I fear, like the noble Lord, Lord Walston, I may be unable to hear the closing speeches, so I shall read them with great interest. I apologise for that.

I should like to confine myself to making one general observation and two comments. The report asks "Why a Community aid policy?" and it concludes that, on balance, there is a role for Community aid in certain areas. I do not disagree with that general conclusion, though I should like to put it a little more positively. I think it is fair to put the Committee's question the other way round: "What if there were no Community development aid policy?"

The Community should be more than a Common Market for the benefit of the relatively rich industrialised nations of Western Europe. Already its members negotiate as a Community on trade and agricultural matters, many of which affect the developing world. We want to see the process of political co-operation taken further, so that the Community can exercise a greater influence in foreign policy matters. Against that background, is it really conceivable that the Community should take no interest and play no part in helping the developing world? And does not the existence of the Community aid policy, in addition to the aid it provides, play some part in developing the Community's general attitude towards the developing world in related matters? Would we want to see this interest diminished? I suggest that the answer to all those questions is, No.

I recognise, of course, that the Government have expressed a preference at the present time for bilateral rather than multilateral aid, so that greater weight can be given to our political, industrial and commercial interests. It is, however, arguable that Community aid is not truly multilateral aid, and I was glad to note the warm way in which the Foreign Secretary spoke about it.

Its origin is, of course, political and most of the aid goes to countries with whom members of the EEC, including ourselves, have long ties. Its programme is administered exclusively by nationals drawn from the members of the Community. It is not truly multilateral aid and I am making this point not in a semantic way, but for a purely practical reason. So far as the United Kingdom is concerned, we contribute 18 per cent. of the EDF and a further significant amount to other EEC aid programmes through the medium of the EEC budget. Thus, we have an important stake in EEC aid and also—whether in the Council of Ministers, in the European Parliament or in discussion with the Commission—an influential voice in its development.

That voice, as we all know, was influential in the development of the original aid policy, from the Yaoundé convention to the Lomé conventions, to the benefit of many former British territories. It ought to be no less influential in the further development of that policy when, as the committee rightly points out, the percentage of United Kingdom aid channelled through the Community is, in any case, likely to rise as a consequence of the reduction of our overall aid programme and our new commitments to the enlarged EDF in 1980–85. So I hope that that voice will be heard strongly in the councils in Brussels. There are a number of interesting developments, some of which have been touched on today, which could well be argued for; in particular, a greater tilting of the balance in favour of the poorer non-associates and, perhaps, some co-financing of projects with OPEC.

That is my general observation. The first specific point that I want to make concerns food and emergency aid. Since the role of the voluntary organisations has been mentioned, I ought perhaps to tell your Lordships that I am chairman of the Disasters Emergency Committee, which is the medium through which the Red Cross, Oxfam, Save the Children, Christian Aid and CAFOD operate jointly when they make a joint appeal on the occasion of a major overseas disaster. All these charities have their own interest in EEC aid policy and, for example, would welcome anything which would simplify the arrangements for the co-financing of projects jointly between the EEC and the voluntary organisations; and, of course, the Director General of Oxfam gave evidence to Sub-Committee B.

The comments I now want to make are mine alone and it should not be necessarily assumed that these charities agree with everything I say. Food aid is an emotive subject and anyone who questions its wisdom may appear to be indifferent to hunger. Of course, some food aid is normally vital for refugee feeding and for emergencies. But, even here, there must be some doubt whether a body like the EEC is best placed to respond quickly enough to emergency needs, except through the process of purchasing food in the region of the disaster.

Certainly—and I agree with what other noble Lords have said—food aid ought not to be seen as a way of disposing of the surpluses of the common agricultural policy. It is true that its origin lay partly in that, but the problems of food surpluses need much more radical solutions which tackle them at source. I understand that the EEC have themselves been recently buying food regionally after disasters. I think that this trend should be encouraged not only because it provides it more quickly, but also because that food is often bought in developing countries and benefits them, also.

But aside from food aid at times of emergency or disaster, the case for it is much more questionable and, at the very least, it ought not to be doled out indiscriminately. In economic terms, it is obviously of benefit if it is incremental, or if it substitutes for commercial imports and is thus the equivalent of balance-of-payments support. But leaving aside the risk of changing dietary habits and the question of artificial milk, on which other noble Lords have touched, food aid can, and does, tend to depress the price of food in the local market and thus to discourage local agricultural production. In other words, since it is an aid to consumption rather than to investment, it can, by dealing with the problem of hunger separately from the problem of overall development, result in treating the symptom rather than the disease.

I was very interested in what the noble Lord, Lord Home of the Hirsel, said about his conversations with Mr. Nehru. I would support what he said with one fact, which is that many people would, with hindsight, feel that PL480 food supplied to India was a mistake. It was supplied with the best of motives at the time and had some success. But when President Nixon, as a mark of displeasure with Indian policy, cut it off the result was a stimulus to Indian agriculture. So I would argue that food aid should be given only where it is incremental to local production, and where it is consistent with overall development policy; and that far more of the EEC's aid should put greater emphasis on agricultural development rather than food aid.

Finally, I should like to comment on the statistic which has been given much prominence; namely, that we contribute nearly 19 per cent. of the EDF, but by mid-1980 had obtained only 11 per cent. of the contracts awarded to date and only 6 per cent. of the major works contracts. I accept the point which one noble Lord made, that aid is not given for the benefit of the donors. Nevertheless, aid to projects and to contracts leads to work, and it is only fair that we should do our best to get our share of them.

I suggest that there are two myths, or semi-myths, which die very hard in this country and with which we often tend to console ourselves for our lack of success and sometimes even for our lack of effort. The first of these is that the Commission is a vast and impenetrable bureaucracy. The second is that all our partners cheat whereas we play by the Queensberry Rules. Of course the Commission is a bureaucracy, though we sometimes forget that the whole of the Commission is a good deal smaller than many Whitehall departments. And of course dealing with any bureaucracy involves both mastering its procedures and enduring a certain degree of frustration, though I think that those who have dealt with it will agree that the Commission is remarkably open to outsiders and ready to see people and to talk to them. I do not believe that there is any real evidence that the game is rigged against us. I note that the Department of Trade witnesses to the committee said that: the Commission endeavour to be fair and that the main impediments to the success of British firms were lack of experience, lack of knowledge and sometimes lack of willingness.

To me, by far the most revealing piece of evidence contained in the report, to which no noble Lord has yet referred, was that given by a witness from industry (it is on page 109 of the report) who argued that the business is there if you take it seriously and work at it. He quoted the example of his own firm. They started trying to obtain consultancy arrangements under the EDF in 1977 and obtained nothing. In 1978 they obtained two contracts, in 1979 again two contracts, and in 1980, five contracts. The witness said: It has been a learning curve and stressed the importance of maintaining and developing contacts both in Brussels and also in the developing country where the work was.

I hope, therefore, that this debate will contribute something to the efforts which I know are already being made to make British industry more aware of the possibilities which are open to it under the EDF. To sum up, therefore, I suggest that a Community aid policy is desirable and that there is much in the existing arrangements which we should welcome. They should not however be seen as static and we should lose no opportunity to influence them in the direction of development aid for the poorer countries.

6.43 p.m.

Lord Sainsbury

My Lords, Sub-Committee B, under the very able and distinguished chairmanship of the noble Lord, Lord Greenhill of Harrow, are to be congratulated upon producing a most valuable report and affording us the opportunity for such an important and wide-ranging debate. I should like to confine my remarks to food aid. As the noble Lord, Lord Hunt of Tanworth, has just said, this is a subject which has strong emotive appeal, one which many regard as a humanitarian and high-minded way of getting rid of surpluses.

In my opinion, the first thing to realise is that food aid in the long term is not a major solution to the problems of development. It is not an adequate substitute for food production in those countries which are suffering from food deficiencies. It can have negative effects, by discouraging local production, by depressing prices or by changing the dietary habits and import patterns of the country concerned. Food aid should not be a tool of foreign policy, or be suspended for political reasons or, in the commercial field, be a first step in a market development strategy by which donors turn rice eaters into bread eaters and then proceed to sell them wheat.

The first criterion for distributing food aid must be, above all, the true needs of the receiver country. This might appear to be obvious but one witness said, The pressure for the EEC's food aid programme comes from within the Community by the people who produce the food and want markets for it. Finally, without consideration of nutritional needs, food aid can be very harmful. For example, as the noble Lord, Lord Goronwy-Roberts, and others have pointed out, the distribution of skimmed milk powder to areas with polluted water supplies will have obvious disastrous effects. The problem of hunger and malnutrition is as much one of poverty as of food shortage. Many of the countries with a food deficit can improve output by developing farming systems appropriate to local circumstances—by reforming the system of land tenure to overcome the effects of excessive fragmentation of holdings, for example. It is in this area of rural development and the building up of an infrastructure that aid is needed, with projects properly organised by local personnel.

In my opinion, the EEC could take their lead from the World Bank, its procedures and practices, and its aim of increasing incomes in the rural areas. As one witness summed up the problem, food aid is the wrong use of scarce resources. Money should be spent not on giving food away but on enabling countries to grow food themselves. Food aid for disaster relief will no doubt always be needed and it is the least controversial of all food aid, but it must be clearly distinguished from development aid policy.

At present, EEC development aid policy is weakened by conflicting objectives. It wishes to reach a large number of countries and thus spreads the aid too thinly, yet at the same time it wishes to give significant quantities of aid to a small number of countries. Also, as the report recommends, if more resources become available in the next decade there should be a shift in direction to take account of the needs of the people in the poorest countries of Asia and Latin America. So far, EEC aid has had little impact on the populations of India, Bangladesh, Indonesia and Brazil. EEC aid to such countries, as the report points out, amounted in 1979 to only 3 per cent. of the total.

Community aid programmes inherited their geographical imbalance in response to colonial legacies and this should be righted over time. Also, concentration on food aid with a relative neglect of financial and technical aid to the poor countries should cease. Food aid on an annual basis makes it difficult to assess the true longer term needs of the receiver country. Any abrupt change obviously affects their balance of payments. Therefore, as the report recommends, the United Kingdom Government should encourage the Council of Ministers to adopt multi-annual planning of food aid.

My Lords, I realise that I have touched only on the fringe of the problems. It is difficult to do more in a short speech. I conclude by hoping that the world statesmen have the vision and the will to act before it is too late on the development issues which have been so clearly analysed in what has become known as the Brandt Report.

6.52 p.m.

Viscount Rochdale

My Lords, I add my congratulations upon the two maiden speeches which we have heard this afternoon, which again confirm what a tremendous volume of expertise and experience we can always rely on in your Lordships' House. Also, as a member of the sub-committee who was with it throughout the whole of the preparation of this report—and I like to think that I did not miss any of the meetings—I should like to say how fortunate we in the subcommittee were that our chairman was able to bring to it such a vast amount of experience gained in his past career—experience which was of immense value in dealing with the complex subject with which we were concerned.

I should also like to join with other members of the sub-committee in paying tribute to our clerk and also to our specialist advisor and as the noble Baroness, Lady White, has said, may I say how sorry I am that our clerk is going to leave the service of your Lordships to enter academic fields in the very near future?

When we started our work, I must admit that this complex subject was very much a closed book to me, but I soon realised what an important and difficult subject it was, how far-ranging and how important, not only to recipient countries but in a variety of different and very important ways to the donor countries. As we progressed, certain basic questions formed in my mind, which I should like briefly to rehearse to your Lordships, and I must apologise because inevitably, in doing so, I shall be guilty of repetition. However, I hope it will be felt that this repetition is rather more an underlining what is in the report and what so many of your Lordships have already referred to.

The first question that comes to my mind is what really is the advantage of Community aid over member states' considerable bilateral aid or over other existing multilateral agency aid schemes, such as the World Bank?

My next question is this: what was the purpose of this aid? Was it, as the report itself hints, to give the Community a visible presence in the third world?—to me a very important consideration if one values the whole concept and existence of the Community in its widest sense. Was it that the Community aid has fewer strings to it than much bilateral aid and could it be expected therefore to have fewer colonial overtones? If that was indeed a worry to some potential recipients (which I trust it was not), it would seem to me to be a sorry condemnation of the past if an ex-colonial power was regarded as suspect simply because it sought to retain some friendly and practical contact with ex-dependent territories and indeed felt a measure of responsibility to do so and to be seen to be doing so.

Was it perhaps that it was felt that the combined examples and influence of member states could be expected to do more than individual states by themselves to encourage OPEC countries to recycle more of their surplus funds to developing countries, whether by way of co-financing or other schemes? In passing, I would repeat what other noble Lords have said—that some money already goes from OPEC countries and we do not want to discount the importance of that at all.

It is not my purpose to say anything about food aid, but there is one general question which crosses the barriers between food aid and technical aid which I should just like to ask—and I am not at all referring to emergency aid. Undoubtedly, food aid has a considerable importance, but is the Community's food aid policy primarily a convenient way of offloading its agricultural surpluses, which arise from what some people would regard as rather selfish domestic policies, or is it really intended as a sincere, altruistic effort to reduce world malnutrition and starvation? The answer may perhaps be judged by the extent to which the Community might be prepared to switch some of what it spends on food aid to what is regarded as technical aid, helping recipient countries with equipment, with infrastructure and with continuing advice as to how better to feed themselves. In certain circumstances, that policy might be more expensive to donor countries, but I am quite certain, as I have also gathered from what other noble Lords have said this afternoon, that it is infinitely better all round for everyone.

Those are the main questions that came to my mind. They are of course difficult questions, it is not easy to answer them and there are many other questions that the report poses and discusses which I am not going to mention, but against the background of those questions, I want to say a few words about the Lomé Convention. I would not wish to disparage in any way either the achievements or the enthusiasm of those who operate that convention, whether in Brussels or in the field. As others have said, it has much to its credit but it is unfortunate that, because of its historical background, it does not operate evenly round the world. It may even be said at times to operate unfairly, and it does not cover the whole third world. Here we have the ACP states and the non-associated states, notably, as mentioned earlier, India, Bangladesh and countries in Latin America. Of course these areas receive aid through other channels, including from ourselves in the United Kingdom and from the Community itself, but it seems to me that we have here an unsatisfactory and untidy situation.

Certainly as the years go by the historical reasons for this imbalance in treatment of countries will recede, and for the future I personally should like to see a more determined drive beginning now towards the equivalent of a worldwide Lomé. But with that I should like to see some generally recognised mechanism to cover the position of those countries which surely must grow beyond plausible justification for being regarded still as developing countries. Unless there is some such progressive disqualification of developing status, I can see a situation arising where the burden of such an enlarged Lomé could present donor states with such a problem that it would be to the detriment of their own very important bilateral schemes, or alternatively result in aid available to the really deserving countries being spread too thinly. This could well be.so even if we allow for a possible repetition of the experience we have had with Lomé 1 and 2; the relatively small ratio to date of factual dispersements to allocations.

In passing, as regards bilateral schemes there does seem to me to be evidence that they can offer considerable advantage to recipients, if only by cutting out some of the delay along the rather tortuous sequence of stages from conception of a loan aid project through to execution and final settlement.

I want finally to make two further points affecting the United Kingdom. I entirely agree with Lord Greenhill of Harrow that we should work for the United Kingdom having greater influence on the philosophy and administration of the Community aid programme. This is not merely a matter of national pride. I believe we have much valuable experience to offer, and, like other members of the committee I was disappointed at the relatively low proportion of contracts, other than consultancy contracts, gained by United Kingdom firms. There may be some justification for this. The report goes into some detail as to why this should be so. Most Lomé contracts are let out by a system of qualified open tenders, though a sizeable proportion are granted by direct award, meaning that they are not open to tender.

I certainly got the impression, listening to what witnesses told us, that as regards those open tender contracts there was room for improvement in the monitoring, early advice and information available to United Kingdom firms, and perhaps Her Majesty's Government could look into this, although I believe they are very well aware of this point of view. In the last resort, of course, responsibility must rest with tendering firms, with the facilities, the expertise, the productive capacity, and, above all, the enthusiasm that firms are prepared to and can make available to projects of these kinds. I gather that encouraging headway is already being made in this direction. Although we were unable to interview many individual firms, those few firms that we did see certainly impressed me tremendously by their determination to get results and their confidence that they would get results. The noble Lord who spoke a few moments ago, Lord Hunt, was I think referring to this. They were very impressive.

The whole question of aid to the third world, wherever it comes from, whether from the Community, individual member states or elsewhere, is of course urgent and very important, particularly at this time of worldwide flux and ferment, and the Brandt Report left us in no doubt about that. But if aid is to achieve anything of lasting value—and I am not talking about emergency or first aid, but aid such as we are considering today—it surely must be seen by all not as charity, however well intentioned, but rather as something that is obviously and naturally and commercially of benefit to recipient and donor countries alike, so that progressively over the years it will make for a better and easier understanding between those countries, with a growing degree of mutual confidence and co-operation, and so for a more stable world.

My Lords, I am indeed grateful to have had the opportunity of taking part in the deliberations of Lord Greenhill's sub-committee, and I can only hope that the report will prove of some value to those on whom the onus of future vital decisions will rest.

7.6 p.m.

Lord Brockway

My Lords, I wish to do much more than thank the noble Lord, Lord Greenhill of Harrow, for initiating this debate. I want to congratulate him and his colleagues on the Select Committee on European Communities for their work. We know very little of what is happening in the European Community, but the Select Committee here is giving far more consideration to it and evidence about it than any similar body in another place. The report which the committee has produced is typical of their work, the thoroughness, the evidence of experts, and their own report, and I suggest to this House that we must find some new method of considering their recommendations and their evidence—otherwise it may disappear into thin air. I doubt whether very many of us would even have studied this report if it had not been the fact that we were having this debate today.

While saying that, I am very critical of the report. I find it terribly inadequate to deal with the problem of poverty in the world. Despite the recession which is taking place in Western Europe, our countries are still the most affluent in the world, and indeed rich in comparison with the conditions of life in South America, the whole of Africa, the greater part of Asia, where, in the words of Robert MacNamara of the World Bank, 800 million people are on the brink of death. We have a right to ask whether the European Community should take some responsibility for dealing with this situation. I suggest they should, because they are the joint voice and the co-ordination of the peoples of most of Western Europe. Apart from humanitarian considerations, the political and economic relations of Western Europe with the third world demand that we should be active in this sphere. It is in our own interests to demand it. Lift the standards of life of the millions of people in Latin America, Africa and Asia and inevitably the result will be a demand for our goods. It will make a contribution to ending the recession in the West and reducing the terrible unemployment which we have here.

This report shows that the present extent of aid from the European Community is very limited. It represents 5.7 per cent. of the European Community's total expenditure. That 5.7 per cent. includes the European Development Fund associated with the Lomé Convention. There is 5.7 per cent. to end hunger in the world, but 73 per cent. of the expenditure of the European Community is for its own agricultural development.

Lord Greenhill of Harrow

My Lords, I am sorry to interrupt the noble Lord but is he drawing a clear distinction, as perhaps he ought, between what the Community does through its Community machinery and what it does as individual member states? I think that the picture he is giving is rather misleading, because he uses the term "Community" sometimes referring to the machinery of the Commission and so on and sometimes referring to the member states.

Lord Brockway

My Lords, if the noble Lord, Lord Greenhill, knows me he would expect me to deal with that problem before I conclude my speech.

Lord Greenhill of Harrow

My Lords, I am glad.

Lord Brockway

My Lords, as I have said I am shocked by the Committee's indication that they regard this 5.7 per cent. of expenditure as "reasonable". The Committee urges instead that the major responsibility should be with bilateral aid and through the multinational agencies. The noble Lord, Lord Carrington, has today endorsed that view of preference for bilateral aid. But how utterly inadequate bilateral aid is. The report gives tables which show that only Saudi Arabia and Kuwait, from their vast oil profits, have reached the accepted target of 1.7 per cent. of gross national product in each country.

Lord Drumalbyn

My Lords, will the noble Lord confirm the figures of 1.7 per cent., because the figure I have is 0.7 per cent.

Lord Brockway

My Lords, I must apologise to the noble Lord. I am getting a little older and I did not hear his intervention. However, I hope that what I shall continue to say will meet the point that he has made. I was saying that except for those two oil-rich countries every country has failed even to reach the 0.7 per cent. target of the gross national product—the Soviet Union, 0.14 per cent.; the United States, 0.20 per cent.; and the United Kingdom has done a little better 0.52 per cent. But in addition to inadequacy, bilateral aid has great disadvantages. It is frequently tied to political motivation and economic compensation rather than meeting the needs of the poor of the world. It is directed both to military and ideological alliances and secondly, to commitment to contracts with the purchases from donor countries.

When we turn to multinational aid we find that it is even more inadequate in the world situation than bilateral aid. The table in the report shows that multinational aid is a mere fraction of even the meagre bilateral aid which is given. As regards the United Kingdom, 72 per cent. of our aid is bilateral aid and only 16 per cent. is multilateral aid. As regards West Germany, 65 per cent. of its aid is bilateral and only 26 per cent. is multilateral. As regards France, 63 per cent. is bilateral and only 10 per cent. is multilateral. I just mention that in the case of France, with the socialist party becoming dominant, there is now a prospect of those figures being greatly changed.

The Brandt Report shows that aid, to be effective, must be mainly multinational, must be global. These problems are to be discussed shortly at a series of conferences, as the noble Lord, Lord Carrington, has indicated. For seven years there has been absolute deadlock in the negotiations between the North and South of the World. An absolute revolution in attitude is required, including the attitude of our own Government, if this problem is to be dealt with adequately.

There is now some hope for changing attitude even in the countries of the European Community. This is particularly the case with the election of the new Socialist President of France and the response made to his proposals by the Chancellor of West Germany. In the European Community itself there is new hope in the appointment of Edgard Pisani as commissioner in charge of relations with the developing countries. Edgard Pisani was a member of the Brandt Commission. These are signs of hope, but what I want to emphasise in conclusion is that the peoples of this country and the peoples of Western Europe are now ready for the change in attitude if this problem is to be solved. In this country it was shown only last week by that unprecedentedly-large lobby in favour of the Brandt Report. In all the Western European countries—France, West Germany, Belgium and Holland—similar movements are now arising showing that the people are beginning to realise that they must act to save the starving millions in the world.

We must seize the opportunities of this year to end the hunger—the unnecessary hunger—of millions in the world, and, even more important, by beginning to construct a new world order, uniting the present divided North and South of the earth so that they may, in co-operation and partnership, end poverty in the world.

7.21 p.m.

Lord Vernon

My Lords, I should like to begin by welcoming this report and to congratulate the noble Lord, Lord Greenhill of Harrow, and his colleagues on the work that they have done. In particular, I welcome the second recommendation, that as more resources become available, the first priority should be to restore and increase bilateral programmes of member states and their contributions to other multinational agencies. However, as a firm supporter of the EEC, I think that it is highly desirable that aid should also be distributed by the EEC in its own right. It helps to build up the importance of the Community in the eyes of the world and to increase its own self-confidence. Such aid also, as is emphasised in paragraph 111, tends to have fewer colonial overtones than that offered bilaterally by member states.

However, it is disappointing that the total EEC development assistance of £593 million for the year is only a little in excess of that of Sweden, a country with a population of 8 million people. That is not a very awe-inspiring sum for such a relatively wealthy group of nations. But I appreciate that these figures do not take into account the bilateral assistance given by member states. One must still hope that the EEC's contribution will in due course be raised.

I want to confine the remainder of my remarks to what I regard as an unfortunate omission from the report and from its recommendations. I refer to the implication of the present world population explosion on aid efficacy. No mention is made in the main body of the report of this all-important aspect or of the need of both member states and the EEC itself to take population growth into account in the disbursement of their aid. Aid for family planning projects as a component part of an overall development plan, which includes maternal and child health care and improvement in the education and status of women, is surely the most important and most effective of all types of assistance which we can give to developing countries at the present time, a time when the population of the world is due to increase by between 3,000 to 4,000 million people within the next 20 to 30 years.

The noble Lord, Lord Brockway, who preceded me, mentioned—and I think that he was quoting Robert MacNamara—that 800 million people were already on the brink of starvation. One can imagine how many more people will be on the brink of starvation when there are another 3,000 to 4,000 million mouths to feed.

Table 6 on page xii of the report notes the 11 leading recipients of EDF aid in 1979; all were African countries, with a total population of 108 million. I have ascertained that the doubling time of the population of these 11 countries is 25 years. In the case of Kenya, it is 18 years. What conceivable gain can there be in pouring aid into such countries if it is not accompanied by a determined effort to keep their population growth within reasonable bounds and to educate these rather backward people, not just on the advantages of family planning, but on the absolute necessity of it if they are to survive and to better the abject conditions of health and poverty under which so many of them exist? We are wasting our money and we are certainly doing them no service if we pretend otherwise.

Mention has been made this afternoon by the noble Lord, Lord Home of the Hirsel, and others, of the tremendous agricultural advance which has been made in India in the last two decades. Indeed, it is a marvellous achievement that they are now able to feed themselves. But the achievement will be turned to nothing if they cannot do something to curb their population growth. They are, indeed, doing something. They are trying their best, but they also need our help. So far as I am aware, the only assistance approved by the EEC specifically for population projects has been transmitted through the nongovernmental organisations.

I understand that in the last five years, the EEC has co-financed 700 projects through 124 NGOs in 91 countries; no mean achievement and one for which, I think, they deserve great credit. The total funds spent in this way amount to some £27 million, but of this total, only £166,000, or a tiny 0.006 per cent., has been devoted to population projects. Two months ago I witnessed for myself how some £20,000 of this £166,000 was being spent on an integrated rural development project which included a family planning element in the Jabalpur area of Central India. The NGO to which the EEC money had been disbursed was Population Concern in the United Kingdom. The project was being administerd by the Family Planning Association of India, in conjunction with local government officials. Significant results were being obtained and the enthusiasm generated by the infusion of this EEC money was tremendous. One can only regret that a higher, percentage of the funds is not made available for such purposes.

I have heard it suggested that third world countries resent the tying of overseas aid to population projects and prefer to decide for themselves how the aid is allocated. Having spoken to a number of the people concerned in these countries, I do not believe this to be true. Because of the intense social and economic pressures on their Governments, it is sometimes difficult for them to devote as much of the aid as they would like to population projects, which inevitably produce long-term results. They therefore welcome any aid which is designated specifically for family planning and population education.

To emphasise the report I should like to quote from paragraph 9 of the final communiqué issued by the International Conference of Asian countries on Family Planning held in Djakarta from 26th to 30th April this year. This was not, it will be noted, an occasion when Western countries were lecturing the less developed countries on what they should do; it was a question of the latter appealing for Western help. I quote from paragraph 9: There is an urgent need to increase current expenditure in developing countries from an estimated current one billion dollars to approximately three billion dollars annually in order to meet population and family planning programme needs. Countries providing development assistance should increase then support of population programmes from the current 2.1 per cent. of development assistance outlays"— and in this country it is not 2.1 per cent., it is 1 per cent— to at least 5 per cent. At the same time the developing countries should substantially increase the proportion of their public expenditure which is allocated for family planning programmes". I should like to conclude my speech by an appeal to the Commission in Brussels to reconsider the existing very low percentage of EEC aid which is allocated for family planning purposes. I hope that the amount given to non-governmental organisations can be increased, and I hope also that the Commission will consider making funds available to the multilateral agencies in this field such as the International Planned Parenthood Federation. If, as I imagine, the objective of overseas development aid is to help raise the living standards of the people of these countries, no money could be more effectively spent.

7.33 p.m.

Lord Pitt of Hampstead

My Lords, I agree with what has been said by the two speakers who have preceded me, but in my case I want to deal with the Lomé Convention. First, because I have a personal interest in it, in that I was an observer of the first meeting in Brussels and I know some of the problems and some of the battles which took place behind the scenes to mould the ACP together into one group. In fact, it was taken for granted that the French would be able to deal with it in the way that they had dealt with all previous conferences, by leading the francophone countries in one direction and leaving the others to battle for themselves. But in effect it was only because of the work of the present Secretary General of the Commonwealth, Shridath Ramphal, that the ACP countries were brought together and moulded into the group they are now. Therefore, I have a strong personal interest in the success of Lomé.

Although I accept and agree that we have been led away by the excess of rhetoric over Lomé, I hope that the fact that we have not quite achieved the objectives that have been declared will not lead your Lordships into dropping the concept behind the Lomé Convention. Of course if you talk about partnership—and it is a partnership between very rich countries who are the donors, and very poor countries who are the recipients—it is obviously not a partnership of equals. Although in the rhetoric one talks as though it is in fact a partnership of equals, I do not think that at any stage the ACP countries thought that in fact it would really be a partnership of equals. They knew that they are in fact the junior partners. They were the receiving group, and the other rich group were the ones who were giving, and therefore the rich group would wish to control the way in which the matter is dealt with.

But the institutions which were set up in fact enable a dialogue between the donors and the recipients, and enable the recipients to carry some sort of influence on the donors. The influence is not the influence of equals, but it is influence all the same; it is the influence of people who have an equal interest. Therefore, the institutions of Lomé are in fact important. One of the things that has worried me is the extent to which we often fail to use, for example, the Assembly. I was disappointed in reading that in many instances ACP countries send ambassadors to the Assembly rather than members of their Parliaments. That is an obvious mistake. The ACP countries must use the institutions to the fullest extent, and one of the things that members—it would not be this place, it would have to be the European Parliament—need to do is persuade their counterparts in the ACP countries that they must play their full part in the Assembly.

The Lomé Convention has six main parts. There are the provisions for financial and technical co-operation, including aid through both the EDF and the EIB. I agree with those who have said that the stress should be on agricultural development. But I hope you will note that already a fair amount of EDF funds is used for agricultural development.

In talking about Lomé, and at all times in dealing with it, I am anxious that we should build on the foundations that are there. What we should be doing is to encourage a greater use of EDF funds for agricultural development. I agree with all the previous speakers who have said that one of the first objectives in any developing country must be to feed itself. Aid to that country must be aid geared to enable them to achieve that particular objective. On the EDF the ACP countries feel two things. First, of course, the funds are not enough. That is fair enough. Secondly, that the Community is a bit over-bureaucratic in the way in which it deals with the control of the funds; that there is too long a delay between commitment and disbursement, and that as a consequence of that long delay the fund is reduced. Everybody recognises that. If you are promised £1,000 today, and you get it five years hence, if there has been a lot of inflation it is probably worth only £800.

When we come to negotiate Lomé 3, the question of indexing the fund should be gone into very thoroughly. We may not be able to have complete indexation, but indexing should be explored. To add a suggestion of my own—in that I have not heard it from any ACP country—we should not expect the EDF to pay the expenses of EEC delegates in the various ECP countries. That should be an expense on the budget of the Commission, thus increasing the fund and making it of greater value.

There are several legs to the convention, but the second is represented by the trade provisions. Here again, there has been criticism over the country of origin provisions. It has been suggested that the provisions have been so strictly applied that the benefits which should flow from those provisions are not being gained because there are always technical objections to particular products. Therefore, my second suggestion in relation to dealing with Lomé is that there should be some flexibility in the country of origin of products. We must remember that we are dealing with countries which must often make a slight addition to products before they can be produced as manufactured goods. It is therefore wrong to enforce the country of origin provisions as rigidly as is happening at present.

The next leg is Stabex, which is a good benefit for the developing ACP countries. The only problem with Stabex is that it should cover many more commodities than it does at present. If we are really trying to help these countries, it is rather absurd to say to a country like Zambia, "You depend on copper. When the price of copper falls your income is very low. However, we cannot regard copper as a product that should be included in Stabex". In saying that, we are not being as helpful—I am selecting as mild a word as possible—as we should be, and I hope that through the institutions which exist we will explore the possible expansion of the number of commodities accepted for Stabex.

We have just introduced Sysmin, which is designed to maintain the levels of production and export of certain minerals. What the ACP countries were asking for was that minerals should be included in Stabex, but we have produced a different system, one which—let us be honest about it—is geared more to helping the EEC countries than the countries producing the minerals, so on this one we have not quite played cricket. I am not suggesting that Sysmin should be abolished—because it is good to try to maintain the levels of production and export of certain minerals—but I am suggesting that there should be some bringing together of Sysmin and Stabex with a view to helping the producing countries concerned.

The next leg is the special arrangement for industrial co-operation. That has not got very far, and the general experience seems to be that it is very difficult to carry out the transfer of technology about which we all talk but which we find so difficult to do. I had intended to refer to the question of co-financing, but that has been dealt with by several other noble Lords. I would only say that we must think of co-financing at different levels: there is co-financing between the Community and non-governmental organisations for small projects, and that is very useful; there is co-financing between the Community and the ACP countries for what are called mini-projects, and that is also very useful; and there is co-financing with OPEC, about which we heard earlier.

I hope we shall take some initiative over Brandt and that we shall be prepared, if the conference in Mexico does not produce the results for which we are hoping, to take up with the OPEC countries (by "we" I mean the EEC) the question of a partnership. The Lomé institutions are already there and in effect they could be extended into the sphere of the EEC, OPEC and the countries which are benefiting from the new arrangement. There is no reason why we should not explore that possibility if we cannot get the sort of agreement we are hoping for in Mexico; of course, if we can get proper agreement in Mexico, that will be the better option.

My noble friend Lord Brockway and others have spoken about multilateral and bilateral aid. My honest view is that there are certain things best done bilaterally and others that are better done multilaterally, and I am not so sure that the conflict between multilateral and bilateral aid is as big a conflict as some tend to make out. My view is that some things are best done bilaterally but that many other things are better done through multilateral aid and that we should see to it that the things which need to be done by way of multilateral aid are done that way.

Let us be honest and admit that there is one advantage in bilateral aid. It is that one can say to the people of the country concerned, in our case to the people of the United Kingdom, "We are undertaking this project in that particular place and it is providing a certain number of jobs for people in this country". That is a straightforward statement and it has an obvious advantage. However, let us also face the fact that people are beginning to understand the whole position of the North/South dialogue, of the need to mobilise our resources so that in effect North and South can benefit. That I think explains why 10,000 people came to Parliament to lobby on Brandt. It means that the people in this country are beginning to understand what is behind the need to come together in order to survive.

In thanking the committee for its report, I would add that I hope that we shall regard the whole question of using the resources of the North to meet the needs of the South as being what Brandt said it is: a way in which can make sure of our survival. We can make sure, for example, that the 3 million people unemployed in the North, and the underused resources of the North, will give to the people in the South who are hungry and in need those things that they need, so that we can both move forward together. Finally, I wish to congratulate the noble Lord, Lord Greenhill of Harrow, and his committee on the thorough job that they did in collating all the facts relating to Community aid, and to thank them for giving us this valuable report.

7.52 p.m.

Lord Drumalbyn

My Lords, I can follow straight on from where the noble Lord, Lord Pitt of Hampstead, has left off, since it would be very remiss of me if I were not to express my appreciation of what the noble Lord, Lord Greenhill of Harrow, has done in preparing the report. I was his immediate predecessor as chairman of the sub-committee concerned, and I realised how extremely lucky we were to persuade him to take on the job of considering the question of development aid. The job was almost tailored for him and he has certainly done it superbly well.

Inevitably in a debate of this kind we have, as the noble Lord, Lord Greenhill, expected we would, ranged very far and wide from the immediate question in hand; namely, the place of EEC aid in future aid programmes. Of course we were bound to have this point in mind to some extent in considering the place that aid would have in any developments such as are suggested by the Brandt Committee. As the noble Lord, Lord Home of the Hirsel, has said, the debate is extremely timely in view of the conferences that are to take place during the remainder of this year.

I should like to start with a little historical perspective. I have not heard this point covered so far in the debate, even though I have been in the Chamber all afternoon. We should do well to remember that EEC aid stems directly from Articles 131 to 134 of the Treaty of Rome (now over 20 years old), under which the member states then agreed to associate with the Community the non-European territories which had special relations with one or other of them. As has been mentioned, effect was given to that by the Yaoundé agreement, signed in 1963, when all the African states, plus Madagascar, adhered to the agreement. The exception was Guinea, which joined in 1969.

The purpose of the association—I mention this because I think that it is extremely important in providing the background to the matter—was to promote the economic and social development of the countries and territories and to further the interests and prosperity of their inhabitants in order to lead them—I invite your Lordships to note the words "lead them"—to the economic, social and cultural development to which they aspire.

I say at once that I entirely agreed with the noble Lord, Lord Pitt, when he spoke about the dialogue that developed under Lomé. In a sense it was a "polylogue", because there was a dialogue between the EEC and the various countries concerned not only collectively but also individually, and I believe that this has proved immensely valuable.

When the Six became the Nine, there were added similar territories in Africa, the Caribbean and the Pacific islands with special relations with Great Britain, and within a couple of years a new agreement was reached—the Lomé Agreement. But the larger territories which had formed part of the British Empire, such as India, East and West Pakistan (as they then were) and Ceylon, were not included. I think it is just as well to point out why they were not included. It was because it was felt that they were submerged, so to speak, and also because at that time they were in a different state of development and civilisation. We know from our historical experience that Africans and Indians do not always get on extremely well together.

Over, above and beyond the collective responsibilities assumed by the European Community, there were the individual responsibilities undertaken by member states under the United Nations and the various agencies of the free world, together with the bilateral aid which individual member states negotiated with them and other non-European countries.

Table 3 on page viii of the report sets out very clearly the proportions of total aid contributions of the main EEC donors made in 1979—these have been quoted by a noble Lord opposite—by way of bilateral aid, and contributions to the EEC programmes and to multilateral agencies respectively. In all cases the contributions to the EEC programmes are by far the smallest of the three forms of aid—in the case of Britain being about 12 per cent., or £107 million, out of a total of £891 million.

The report is concerned not so much with the question of whether that is too much or too little as with the effectiveness of the way in which the aid is spent, and this is where I would differ from the approach of the noble Lord, Lord Brockway. It is not so much a question of the amount of the aid, but rather the way in which it is spent—and I would add, to some extent in comparison with other forms of aid. The British percentage of GNP worked out in 1979 at 0.52, which was less than that of France and more than that of Germany, which were both far short of 0.7 per cent. which I understand is the target for 1985.

Far and away the highest percentages were achieved by Saudi Arabia and Kuwait, which of course have very high balance of payments surpluses. However, the oil-rich countries want to invest the surpluses in ways which will retain their real value against the time when their oil resources are exhausted, and of course this will be very difficult to achieve. But in as much as the way in which they can be persuaded to invest their money can benefit the world as a whole, they will also be benefiting themselves.

Because of our economic difficulties, Great Britain has of course had to cut down on aid somewhere, and the main cut has fallen on bilateral aid. Mention has been made of a figure of 14½ per cent. There is one very good reason for this; namely, that our contributions to EEC programmes are contractual, so we cannot cut them without default. This is indeed one of the main advantages of Lomé for the ACP beneficiaries. Under Lomé 1 and 2, programmes are fixed for each beneficiary for five years ahead, and contributions are called forward by the Commission every six months until the projects for which the money is pledged are completed. I am not absolutely certain whether that is the right statement or whether it is until the money pledged has been spent. It is very important that we should know what is the answer there.

As I think the noble Lord, Lord Pitt, also mentioned, like everyone else Lomé suffers from inflation. One starts with an agreed sum of aid, which is divided between the beneficiaries. By the time the projects in the various countries are decided upon, contracts allotted and so on, a considerable proportion of the five years has already elapsed. It is hardly surprising that the proportion of the total sum actually spent by the end of the five-year period is alarmingly small; and all the time the costs are rising, with no provision for indexation, as the noble, Lord Pitt, mentioned. So how are the approved projects to be completed without a revision of the limits? I hope my noble friend will be able to answer that question, because it seems extremely important.

In a sense, of course, this would be a way of indexation; but what is much more important is that this is a project-based scheme, and therefore projects undertaken should be completed. This is a cause of grave concern to both donor and recipient, and gives rise to growing disenchantment on the part of both. Nevertheless, continuity is important, and, indeed, it is being maintained. Above all—and here I echo what many speakers have said—the principle of co-operation is maintained; that is, co-operation between the EEC as an entity and a large number of territories on a basis of common purpose and friendship. That continuity and that co-operation makes for stability in troubled times.

Whatever may be the shortcomings of the system, the evidence we received left us in no doubt that with good will and experience they are being reduced. As one witness put it, things are getting better, and they can be expected to get better. I perhaps rather regret some of the criticisms which have been made today, because they are probably already out of date to a considerable extent, and improvements are being made all the time. Naturally, in the early stages of a great venture of this kind there is bound to be some over-centralisation of decision-making, and also a degree of local supervision which could well be reduced as time goes on. Communications have surely reached the point now where there could be less central and more regional control, such as is exercised by the World Bank. This could enhance both efficiency and economy. One example given in evidence was that delegations consisting of teams of experts need hardly be kept in each territory, or at any rate in a large number of territories, but could be based at focal points and could service groups of countries. Equally, more financial responsibility could be devolved to the regions, and even to the representative of the Commission in any given territory.

The committee also felt that more of the European Development Fund aid should be devoted to programme aid rather than aid for particular projects. Again, as adjacent countries of the ACP become more accustomed to working together, this may well come about. The main object of the exercise, after all, is to enable the associated territories to provide for themselves a rising standard of living in the widest sense to themselves. I may be wrong, but I would imagine that more thought is given by the Commission and by the territories concerned to dovetailing the projects than would appear from the lists of projects approved. Here, again, I think this is a practice which is growing.

As to the distribution of grants, the report draws attention to the apparent disparity in the amount of aid per head of population given to the various territories. Without knowing the form and amount of bilateral aid afforded to them, it is difficult to form a judgment on this; but what seems clear from the evidence we received is that British influence has helped to ensure that aid should be given primarily on the basis of need, and that preference is now increasingly being given to the most needy countries.

EEC aid is not confined, of course, to the ACP countries, but the aid given to non-associated territories is relatively small. I think that only about £21.5 million was spent over the four years 1976 to 1979. Unlike Lomé, this is non-contractual land somewhat spasmodic. It is also largely used to co-finance projects with other agencies. Personally, I feel that it would be nice if, as the report suggests, the Ten were to promote: a balanced world-wide programme of financial assistance". But I doubt whether at this stage it is really possible, or, if achieved, would be very effective. The jam would be spread too thinly, and the administrative costs would be likely to be even higher than the administrative costs are at present. It seems to be much more important that the EEC should make a success of Lomé as it develops—I mean develops in efficiency and in scope, though one would hope that in future it would be possible to spend more upon it—and also that individual member states should choose for themselves with whom to make bilateral arrangements and with whom to join in financing multilateral arrangements.

Some noble Lords today would have liked to see Lomé extended to those other territories previously associated with Britain. But there is, I think, as I have already said, the danger of lack of cohesion and common origin between the Indian sub-continent and the African continent, and a lack of domination of the latter by the former. As for the EEC aid to the Magreb and Mashrak countries, which have not been mentioned at all, I think, the object surely should be to maintain peace and friendly relations, which may not prove too easy for the years immediately ahead, and in the meantime to continue to devote such limited funds as we can muster to that end.

Finally, a word on food—a subject which is not unconnected with the Community's agricultural policy. Briefly, what I think emerged from our studies was that the paramount object of our aid policy should be to concentrate our efforts on assisting the poorer, and especially the poorest, to become self-sufficient, and in the meantime to do all we can to ensure that they do not go hungry. This, I think, has been broadly borne out by what most speakers have said today. The spectre, or the mere thought, of others going hungry—of chronic famine—raises the deepest emotion and compassion. Nevertheless, we could not fail to be impressed by the weight of expert opinion that unwise, ill-considered and ill-organised donations of food could not only be wasteful but could have exactly the opposite effect to that desired. The effect might well be to keep the needy needy.

My conclusion, if it was not made clear, is that what is required is a closely co-ordinated plan to raise food production in the countries concerned and to deal with food emergencies by ensuring adequate supplies for those in need in the meantime. It is, of course, easy to say that but it is an extremely complex procedure. I share very much the feeling expressed by the noble Lord, Lord Home of the Hirsel, that this is not something that can be brought about in the twinkling of an eye, and that patience will be needed to achieve this over, perhaps, a decade or two; but that we must press on in this direction and there should be a high degree of co-ordination somewhere or another.

We had some evidence of information sharing about bilateral, multilateral, and Community aid so as to avoid overlapping, and also of a growing degree of co-financing, and clearly there is a long way to go on this. In general, in considering our report we felt that there was a danger of over-simplification and of trying to achieve too much too soon. One thing that is absolutely clear to my mind—and it is something that was said by one of our witnesses—is that the whole question of poverty and development cannot be dealt with by one or even two gigantic world organisations. Such organisations may very well set out the way in which problems should be dealt with, but it must be left to the enterprise and ingenuity of a large number of bodies in order to get the best results.

8.12 p.m.

Lord Beaumont of Whitley

My Lords, as we cross the gap on the list of speakers I think there must be an element of relief in some of your Lordships' minds; not that the speeches we have heard have been too long or too many. It is a sign of great interest and commitment on the part of a large number of the Members of your Lordships' House that—very unusually for a speakers' list of this length—only one speaker has "scratched", and the speeches have got no shorter as the afternoon and the evening have gone on. That is because your Lordships have all had a great deal to offer to this debate in terms of both knowledge and care. There have been some very notable speeches. We have heard two maiden speeches, both of them in their own way delivered with great feeling and passion. I think that is something we all ought to value very much in this debate. Although there are many speeches I should like to mention, if I were to mention just one it would be that made by the noble Baroness, Lady White, and her tribute to Lady Jackson.

I will not attempt to pick up the threads of the debate. I think it would be impossible to do so. The debate has been of such quality that many of the threads which seemed to be loose at the beginning have been picked up by someone and woven into the whole. Instead, I will concentrate for a very few minutes on one particular element of the aid programme about which my party is extremely keen. It is the development of agriculture.

This is a debate about European institutions as much as about anything else, and Europe is fortunate in that it can feed itself. I believe that is something we ought to be proud of and it is certainly not something we should throw away. It is quite probable—and indeed a lot of experts hold the view—that Britain could even feed herself if she put herself to the task, although it would be difficult at this moment. But undoubtedly Europe as a whole is capable of feeding itself and of looking after itself. On that basis Europe has an element of richness which, whatever may happen to the balance of payments throughout the world or to the price of oil, is a richness that it will never lose, we hope, short of a catastrophe. That is a blessing we should concentrate on helping the rest of the world to achieve. It is our duty in Europe to help the rest of the world out of what is our real richness, and we must recognise that duty. I believe the word "duty" was the one used by the noble Lord, Lord Bishopston, and a sense of duty should be at the heart of what we are saying today.

Although it is true that aid is in the long term self-help, surely that should be an extra. For as long as gaps between the rich and the poor countries increase, the fact that to help the poor would be to help ourselves would be very nice and a useful way, probably, of helping a number of people to see that it is worthwhile. Nevertheless, it is marginal. In a recent television broadcast the noble Lord, Lord Greenhill of Harrow, let slip the remark that only once in 20 years of dealing with Foreign Secretaries had he ever heard one talk about the good of mankind. In some ways, of course, there is an advantage in that: it means an avoidance of cant. But, on the other hand, there is a disadvantage, and I believe there is a necessity to realise the moral basis of some of the foreign policy and some of the home policy which we must undertake.

In a notable speech made in another place my honourable friend Mr. Russell Johnston pleaded for acknowledgement of the need for unselfishness in foreign affairs, only to have his speech contemptuously dismissed by the speaker who immediately succeeded him. I believe, and my party believe, that we must increase the quality of our aid and, at the very least, not diminish its quantity. There are those who feel that we must diminish the quantity. In a recent speech in your Lordships' House the noble Lord, Lord Boyd-Carpenter, said: I know that overseas aid is a sensitive subject, but can a country faced with the problems we face really continue it on quite this scale? There are still directions in which further reductions need to be made". The reductions which the noble Lord wanted to see are already happening in terms of both quantity and quality. In 1979–80 the aid-to-defence expenditure ratio was 1 to 10; in 1983–84, according to present plans, the ratio will be 1 to 13. As to quality, we are told that greater weight is being given to political, industrial and commercial considerations. This point was quoted on one or two occasions today. That must be to say that less weight is being given to what the recipients need.

In the cuts which are being made, there are disproportionate cuts in aid. The great principle behind the biblical injunction to tithe was that if one gives a proportion, one gives a proportion whether one is rich or poor. It is very important that we should try to stick to the target of 0.7 per cent., or whatever it may happen to be at any particular time, and that we should not diminish what we give out of proportion to other items on which we are cutting back.

I think that on the European level we may hope for a quality of aid which sometimes has not come through on the purely bilateral arrangements. If the Community merely represented the sum of the selfishness of its members, we should be in a bad way; but I think that, acting on behalf of all of us, in many ways it tones down the selfishness of the members and that there is a considerable case for having this Community aid as well as the aid of the individual countries.

I said at the beginning of my speech that it was Europe's duty to help feed the world and if I emphasise food it is because it is basic. You cannot build a steel-works if you are starving and nor is there any purpose in doing so. There are two ways in which we can help with food. Most importantly, European aid, or British aid in particular, should go to help the renewal of sound, peasant agriculture wherever we can find it. Secondly, while soils which have been ruined all over the world are being revived—and we have heard in one speech today of the amount of land which is now desert which was not desert before—and we are helping with that and while land tenure is being reformed, we can sometimes help with food at the periodical crises which will occur—although I accept the warnings given by the noble Lord, Lord Sainsbury, and the noble Lord, Lord Hunt of Tanworth, and others about the danger of direct food help.

We need to see a move in world terms away from the cash crops of no nutritional value such as coffee, tea and tobacco which are grown in order to earn foreign currency; we need to see a move away from them and towards more staple and more nutritional crops. We want to see reliance not on miracle crops and imported petrol-based fertilisers but on gradually-improved crops, natural fertilisers and more ecological ways of approaching the growing of food in the developing countries; renewable power, small-scale hydro-electric plants, biomass, fuel plantations and methane digesters—all those things which the noble Baroness, Lady White, touched on. These are the kinds of development which countries can deal with by themselves without straining their balance of payments.

In order to facilitate that, we need peasant or co-operative ownership. This will not be easy. I take the point of Lord Sainsbury about putting holdings together to make them viable but there is the question of seeing that people have a stake in the land and that they get the maximum amount of food; and one gets the maximum amount of food by having a large number of people on the land. That will not be easy. Of the land owned in blocks of over 100 hectares in the world, over half are owned by 0.2 per cent. of the landowners. We must move away from that. The facts and the figures are too overwhelming and frightening. If one wants an object lesson, one looks at El Salvador where 14 families possess the fertile land in order to produce coffee and the result—and it is the result and is not incidental—is a civil war between two nasty armies and two factions for either of which there is not much to be said, widespread malnutrition and widespread poverty. On the other side of the coin is China, South Korea, Japan and North Vietnam. They may not be countries that we would want to live in, but they have the least land on average per person in the world and they produce the most food. It is only on a basis like that that you produce a sound economy.

I am aware that there is one major problem with what I am saying which a number of noble Lords will have picked up. It is that there is a certain amount of Western arrogance in standing up in the Chamber and telling other countries what they need. I certainly would withdraw from the stark terms in which I put that; but I do not completely withdraw. There is a duty to learn from one's own mistakes, both the mistakes of our own development and the mistakes that we have made in helping other people, and we have plenty of experience to draw upon. It is a typical example of trahison des clercs to shy away from that duty and to say that we must not dictate to the less-developed countries. Of course not, but we have a duty to advise and to consult; and one or two noble Lords touched on that point and said that when you come down to it and talk to them face to face, it is not too difficult to get to what needs to be done. We need to do that, and we need to concentrate on those countries and those projects where people are willing to use the resources that we have to offer to build up a strong indigenous agriculture.

I started my argument with perhaps slightly sanctimonious remarks about unselfishness. But that last point I have been making is the opposite of that; it is hard headedness. I think that none of us can avoid the conclusion that a very great deal of aid in the past has been wasted. Those of us who believe in aid passionately would admit that as much as those who were rather dubious in the first place. But we must not waste it; that is of no help to anyone. The critics have a case only too often; and we must see that they do not.

We may not be a rich country any longer, whatever that now means, but we are in some comparisons (as noble Lords have said) very rich. But we have experience of our own and experience from the days of the Commonwealth and, before that, of the Empire. If we can generously contribute that, as well as keeping up the fundamental financial and substantial and material aid and channel it through the European initiative, we shall be doing well.

8.28 p.m.

Lord Stewart of Fulham

My Lords, we are all indebted to my noble friend Lord Greenhill of Harrow for initiating this debate and for providing us with the report that we have been discussing. I think and hope that he will feel rewarded by the fact that there has been a well-informed and interesting debate. It has been enlivened by two maiden speeches from my noble friends Lord Molloy and Lord Bishopston and it was a pleasure to me personally to meet them again in this House. We shall look forward to future contributions that they will make to our debates.

Although the debate has dealt with very wide issues, the report itself deals only with a quite limited question about aid. It is the aid programme of the European Community; not of the Member States of the Community but the aid that goes through the Community's own channels. That is a small part of all the aid that is provided in the world; and all the aid that is provided in the world is small in comparison with the need for it. I am sure that that is true. This has not, in the main, been a controversial debate but I am sure that my noble friend Lord Goronwy-Roberts—and he regrets that health does not allow him to be with us at this moment—was right to stress at the beginning that it is a profound mistake on the part of the Governments to have made the cuts in the aid programme that they have. The programme is still desperately small in comparison with world needs; and that point was made also by my noble friend Lord Walston.

At this point I must take up the very interesting contribution made by the noble Lord, Lord Home of the Hirsel. He was counselling us, if I understood him rightly, against trying to do too much too quickly and was emphasising the primacy of helping poorer countries to produce more food and produce it more efficiently. I am sure that he is right about the primacy of food production. Of course, there are some countries which by their nature are not capable of feeding themselves and they must get their food by developing such resources as they have for export. But that is by the way. I would add this to what was said by the noble Lord. The more efficient growing of food is not merely a matter of acquainting unsophisticated people with fairly simple rules of agriculture and the terracing of land. It may require large industrial and engineering projects. It may require dams and irrigation; it may require the development in their own countries of the making of agricultural machinery. It may require railways and other forms of transport. More than once in the world there have been famines due not to shortage of food but to shortage of transport facilities to get the food from where it was to where it was needed.

There is bound to be a certain industrial element even in aid to the poorest and least sophisticated countries. But when we look at the food aid programme of the European Community, it is the decisive conclusion of the report that this has been thoroughly bad from beginning to end. I do not think that I am exaggerating the report's judgment on it. That has been the opinion of everyone who has spoken about it in the House. The conclusion we come to is this. Emergency aid is a quite distinct problem from development aid, and I do not know that we need discuss it very much. The problems can be terrible but they are straightforward and simple and it ought not to pass human wit to know how to deal with them. But when we are concerned with development aid we ought not to be concerned with providing the recipient countries either with food or probably with things for consumpton of any kind. We ought to be enabling them to produce for themselves the things that they need for consumption. That is to say, to provide them with both the equipment and the knowledge needed to do that.

It should be remembered—though not a great deal has been said in the debate—that an important part of aid is the provision of skilled personnel and partly giving to people from poorer countries the opportunity to come to countries like ours and learn that what some economic textbooks call "non-material equipment", the knowledge that helps one to produce wealth, is as essential as equipment in the ordinary sense of that term.

If we regard that as the function of development aid, I would add this: I do not believe that there is very much danger of our rushing in so quickly with a great fund of resources before we have decided how to use them properly. If I may say so, the noble Lord, Lord Home, rather exaggarated that danger. It can happen of course that you can embark on ill-considered projects. But I do not think that we can possibly defend the smallness of the world's present aid programme on the ground that there are not enough useful viable projects available for it to be worth while spending any more money at the present time.

I believe one could double, treble or quadruple what is now being spent and there would not be a shortage of useful projects, provided that—and this is a proviso one must make whether the total programme is large or small—one uses common sense and makes use of whatever expert knowledge there is available. As John Ball, who led the peasants' revolt 600 years ago, said: Let skill go before will. We hope that there is the will for international aid. Skill and knowledge must go in front of it, preparing the way so that goodwill does not run to waste.

If I am right in thinking that that is the real nature of development aid, to enable the recipient countries to provide for their own needs with increasing efficiency, then I think, judging from the report, the Community aid—food aid apart—does not come out too badly. One of the things that we admire about the report is its careful and balanced judgments.

The noble Lord, Lord Drumalbyn, suggested that some of the defects it points out are already in the process of being remedied. We may reasonably hope that that is so. When one has read the report, when one has made the necessary allowances for the difficulties of the operation in itself, I think that we can conclude that, on the whole, Community aid—again, food aid apart—has a reasonably good record.

If we ask the question: Do we need this particular channel of European aid as distinct from aid by the individual member states or through other multilateral agencies?—one answer I would give is that it is inevitable that aid will operate through a number of different channels. The report points out, for example, that non-governmental organisations start with a rather different philosophy of aid from that of the official agencies. But that does not prevent them doing extremely useful work. I would not think it would be right, therefore, to try and cut off in the interests of tidiness any particular channel of aid that may be operating with reasonable efficiency at the present time.

The other thing I would say for Community aid is the real value of the example that has been set by Lomé. I know of course that it is said in the report that some of the very high hopes expressed about Lomé have not been fulfilled. But as that is true of practically everything that the human race has ever attempted, we need not lay too much weight on that criticism.

I believe that it is true that the working of Lomé has encouraged a frankness of discussion between donor and recipient that has been useful and that sets a good example for the future. I was suggesting that the nature of aid should be to help the developing countries to manage for themselves and stand on their own feet. One of the things one must have if that is to be efficiently done is a programme of priorities. There I think that the technique of frank discussion between donor and recipient which should operate under the Lomé Convention is helpful.

I remember when I held the office of Secretary of State for Economic Affairs going round the various regional economic planning committees. It had been their job to draft a programme of priorities of all the things that they felt needed to be done in their regions. It was usually my job to go round and tell them that they had done an excellent job but unfortunately the resources for carrying the programme out were not yet available. None the less, I am quite sure that the task of working out a programme of priorities was a useful one, and that is the kind of thing which can be done and is encouraged to be done in the working of the Lomé Convention.

One or two matters of administration come out from the report and it would be worth seeing what the future tells us about them. One is the need for continuity—the desirability of having multi-annual programmes instead of arrangements merely for a year and nobody knowing for certain whether they will be continued in the following year. I gather that there are to be regulations to facilitate this and I hope that that will go ahead.

The other is co-financing, work in co-operation with sources of finance other than the Community, and the very interesting suggestion, if I have got it right, that the recipient country should be able to borrow on the strength of the undertaking from the Community that it is to receive aid. That seems to be an imaginative and useful suggestion. I am afraid I was not able to hear the whole of the speeh of the noble Lord, Lord Selsdon, but if I understood him rightly he also urged that what the EEC is doing should be made more fully known to businessmen than it is at the present time. He considered that this was a weakness, and again I think it is a weakness that can be corrected.

Finally, I would repeat what I said at the beginning. This is dealing with a small part Of the whole world aid problem, dealing simply with the aid administered through the Community. The report does not claim to do more than that and, if I may say so, I think my noble friend Lord Brockway was a little less than just to the report when he criticised it because European aid was so small. It is by no means certain, even if we could greatly increase the total of world aid, that we should necessarily want to expand Community aid in proportion to the total expansion of world aid. It might or might not prove to be a useful thing to do; and what this report tells us is how European aid has got on so far.

That has been an extremely valuable piece of information to us; but we do the report an injustice if we suppose that the members of the committee allowed their horizons to be strictly limited by what I suppose were their terms of reference. We see right at the end of the report, for example, recommendation (xvii), which says that the Community should increase efforts within its existing aid programmes to work with the OPEC countries—already looking beyond the Community itself—and then review still further the positions of member states in international gatherings on development issues during 1981, and that the United Nations global negotiations must be co-ordinated. Member states should act together to accelerate acceptance of a more urgent approach to the problem of global development and the expansion of world trade. It then goes on to make suggestions on what they should do if no significant progress is made in international meetings and negotiations. I think that it can therefore fairly be said that the report, while it is concerned with European matters, is very well aware of the wider issues and the need for action in the world as a whole.

There are going to be quite a string of meetings, and may I say this to the Government: I think that when we come to be judged people will not be greatly interested in how many meetings there are or how delicately worded the communiqués are, but whether there is at the end an expansion of aid on something like the scale which the Brandt Report envisaged, because unless we get somewhere there, really we shall go on with this insoluble problem. It need not be insoluble, but it does require an effort of generosity and of imagination. I see no reason why that should not be forthcoming. I am afraid that the public is pretty apathetic about aid and a good deal of opinion, if more was known about it, might be hostile; but I think that that is something that can be dispersed, given a resolute lead from governments.

It is no good asking human beings to be 100 per cent. unselfish; that is not possible. But they are not absolutely 100 per cent. selfish either. They can respond to an appeal for generosity if you can show them why it is important and that their efforts will not be wasted. It is possible to show them both those things. People sometimes argue as to whether we ought to approach aid as an act of generosity and ask how much weight we should give to the element of self-interest; but in the end it pays us all that world poverty should be alleviated. I do not examine that question too closely. One conviction was borne into me when I was at the Foreign Office, and the longer I was there the more deeply it sank in. It was this: if you can get people to do humane and sensible things, do not inquire too nicely as to their motives. The fact that they will do them is something to get on with and it is something that is of use to mankind.

The debate was also enriched by a contribution from the right reverend Prelate the Bishop of Salisbury. Since there are none of the Lords Spiritual here, perhaps I might venture on a theological quotation which I might have been timid about if any of them had been here. It was, I think, St. Augustine who when discussing alms giving, said: When we give alms we do a work not of charity but of justice, for God intended that there should be enough for all".

8.46 p.m.

Lord Trefgarne

My Lords, we have, as so often on these occasions, listened with the greatest interest to this afternoon's debate, which has, I suggest, most certainly done justice to the Select Committee's thoughtful and constructive report. As every noble Lord who has spoken has already said, our debate has been much enhanced by the interventions of the two maiden speakers whom we heard earlier this afternoon. I hope, as I am sure all your Lordships will hope, that we shall hear both noble Lords again soon and often.

As other speakers have already pointed out, the report and also this debate have come at a good time. By 1979 spending under the Community aid programme had already increased to the equivalent of £600 million a year, and that figure has further increased since then. Britain pays for approaching one fifth of this and, given the likely rate of expenditure on commitments already entered into, the share of our aid programme at present accounted for by Commnuity aid—about 12 per cent. in 1979, as the report brings out—is likely to increase in the years ahead. Therefore, we need to take careful stock from time to time of the Community aid programme and to consider whether it is attaining its objectives and whether we agree with them. The report and this debate have made a substantial and valuable contribution to this process of review.

Let me turn now to some points which have been raised during the course of our discussion. In opening the debate, the noble Lord, Lord Greenhill of Harrow, referred to a number of points, including in particular the further growth of aid to non-associates. A lot must depend on the economic climate and on other claims on our aid funds. As long as we are obliged to find savings in spending programmes, including aid, our main priority in respect of the non-associates programme must be to get it properly established under the recently-agreed enabling regulation and to get the administration arrangements improved. In the longer term I certainly hope to see a substantial and effective aid programme, but at present we regard the 1980–81 total—that is, the aid to non-associates—of 150 million units of account in new commitments (it was only 138.5 million in 1980) as entirely reasonable.

Again referring to the remarks of the noble Lord, Lord Greenhill—and this point was also picked up by other noble Lords—he asked about the position of OPEC surpluses with regard to this matter. The current balance of payments surpluses of the OPEC countries has, of course, been accompanied by widespread deficits among both developed and developing countries. Such imbalances give rise to a need for a substantial level of financing flows, particularly for non-oil developing countries. The principal capital markets are expected to continue to play a major role in recycling the oil surpluses, as they did after 1973, but for the poorest countries there will continue to be a need for a significant level of official flows, both on a bilateral and on a multilateral basis. European Community governments, including the United Kingdom, have actively encouraged greater OPEC involvement in both areas.

The international financial institutions are particularly important. The United Kingdom has supported the concept of an enlarged role for the IMF, and has agreed that the fund's resources will need to be correspondingly augmented. Arrangements are being made, whereby Saudi Arabia will make available up to 4 billion SDRs to the fund over the next 12 months, and a further 4 billion SDRs over the following 12 months. Virtually all the fund's recent lending has been channelled towards the LDCs. There will be continuing discussion of these matters at the forthcoming meetings of the relevant international bodies, and the needs of the poorest developing countries will therefore be kept under review.

The noble Lord, Lord Greenhill of Harrow, and, indeed, the noble Lord, Lord Gladwyn, made this point, and asked me particularly about details of the Lomé Convention arrangements and the evaluation of Lomé programmes. There is an evaluation unit within DG.8 in the Commission, which has undertaken sectoral studies leading to useful guidelines for future projects. There have also been country studies by independent consultants. The United Kingdom has welcomed all this, has taken part in discussions and has encouraged the extension of evaluation activities, but we should certainly like to see more, not just of Lomé aid.

There has been a suggestion—though not, I think, made by the noble Lord, Lord Gladwyn, or the noble Lord, Lord Greenhill—of evidence of bias towards francophone ACP countries in the distribution of Lomé aid. Distribution is a matter for the Commission which uses objective criteria, such as size of population and GNP per capita. Recipients, however, may not be disadvantaged by new accessions and that does, to some extent, protect the benefits previously granted to the Yaoundé associates.

The noble Lord, Lord Goronwy-Roberts, who I am sorry is not in his place—I understand that he is not too well—and, indeed, the noble Lord, Lord Stewart of Fulham, among other noble Lords, referred to our aid policies generally and to the cuts in our aid programme—somewhat disapprovingly. It is essential for our economic future to bring inflation under control. The most effective contribution is to reduce public spending and it is not practicable to exempt overseas aid from these reductions.

The Government's record on aid terms, on absolute size of aid programmes and geographical allocation of resources, remains a good one. Other areas of public expenditure have been reduced by more than the aid programme. I think it was the noble Lord, Lord Goronwy-Roberts, and the noble Lord, Lord Beaumont of Whitley, who raised that point. It is not true to say, as has been suggested, that our aid budget has been peculiarly disadvantaged in respect of the cuts that have had to be made in public-expenditure generally.

The fact is that there are a number of other areas which have been subjected to a greater percentage reduction than the aid budget. Certain industry, for example, has been affected to the extent of 48 per cent; certain housing programmes about the same; energy by 28 per cent.; employment by 26 per cent. and trade by about 20 per cent. So those figures will, I believe, show that the aid budget has not been peculiarly attacked, as we have been accused of doing.

The noble Lord, Lord Gladwyn, asked me to comment on the remarks of my right honourable friend Mr. Heath, which were published recently. I have read my right honourable friend's paper with the closest attention and, indeed, we share many of his objectives. His suggestions for policy will, of course, be taken fully into account in the preparations for the forthcoming summit meetings in Ottawa, Melbourne and Mexico.

The noble Lord, Lord Kilmarnock—also on the general aid matter—referred to the percentage of GNP which we now spend on aid, and I think that the noble Lord, Lord Brockway, referred to this as well. Aid, measured as a percentage of GNP, fell from 0.52 per cent. in 1979 to 0.34 per cent. in 1980. The fall in the 1980 figure is largely explained by technical factors; for example, the non-deposit of an IDA.6 promissory note, because a replenishment agreement was not ratified; and also because of sluggish bilateral drawings by some recipients, notably India.

This, I think, highlights the artificiality of targets like the 0.7 per cent. one, in that the figures can vary substantially from one year to the next for reasons quite unconnected with the basic programme which is being maintained. I have said before to your Lordships that the Government accept the target of 0.7 per cent., but we have not been able—as, indeed, were our predecessors—to put a timetable on attaining it.

The noble Lord, Lord Kilmarnock, the noble Lord, Lord Sainsbury, the noble Baroness, Lady White, and, I think, a number of other noble Lords, referred to the question of food aid which is, of course, referred to in the report. We agree with many of the Committee's comments and conclusions about the Community's food aid programme. We consider that the programme should be recognised and implemented as an instrument for development, and not as a means for disposing of Community food surpluses. Progress has been achieved in recent years and, like the committee, we are pressing for the early adoption of a food aid management grant regulation. This will provide a proper framework for strengthening of the programme and for putting it on a sounder basis.

Like the non-associates programme, the food aid programme needs a reinforcement of its staff by transfer from other parts of the Commission which are under less pressure. We should like to see the Commission provide more information to justify the allocation of food aid to individual recipient countries, to enable the Council to make more informed decisions. Like the committee, we should like to see the programme concentrated on fewer recipient countries. So far, there has been only marginal progress in this direction. There are obvious difficulties in reducing the list of recipients.

I should like to make it clear, however, that we have reservations about the developmental benefits of food aid. In Brussels, we have consistently opposed increases in the dairy food aid programme and we have noted the report's recommendation that dairy food aid should be reduced. We cannot, of course, achieve a reduction on our own and I am afraid that it would be unrealistic to expect a major shift, but we will persist in our efforts. However, we should recognise that, at least, dairy aid does provide for a large multi-year commitment to India to help Operation Flood, which is developing India's dairying industry and providing direct services for farmers. I am glad to say that the Community has now also accepted the need for multi-year commitments of cereals under pressure from us and others, including the Commission.

The noble Lord, Lord Kilmarnock, criticised the valuation of dairy products aid and the way in which our share is now charged to the British aid programme.

As the sub-committee were, I think, told, all food aid is internationally valued at world market prices, to prevent donors claiming as aid other elements which are really there to support their own farmers. About this, I hope there is no dispute. But the question raised is really more arcane: does this financial valuation reflect the economic value of such aid? The Government agree that it does not, but it is necessary to distinguish between economic value and actual cost. The Community budget measures actual costs; it does not attempt to assess economic value.

Confusion may arise, because it is natural to think of food aid from surplus stocks as having no actual cost, except for transport and administrative expenses, but this would not reflect the actual operations of the Community's food aid arrangements. Given the present system, a reduction in the monetary value of food aid would not reduce the overall cost of this aid to the European Community budget. The present system of splitting the cost between chapters 6 and 9 of the budget, and the practice of attributing the United Kingdom's share of the amount charged under chapter 9 to the United Kingdom's aid programme, has existed for some itme. A study commissioned by the European Community on the true costs of food aid and its value to developing countries is due to be completed later this year. In the light of this, the Council will consider whether any changes should be made to the present arrangements. There is no procedural obstacle to transferring savings on dairy food aid to other parts of the budget such as, for example, non-associates aid, but the benefits of any possible transfer would have to be judged against our policy of placing more emphasis on bilateral aid.

Your Lordships will forgive me for having dealt with that matter at some length but it is an important issue which has been raised by several noble Lords. My noble friend Lord Home of the Hirsel, who again was unhappily unable to remain with us, asked about the importance of food production. I am certainly happy to agree wholeheartedly with everything which my noble friend said about this. We can all be reassured that this is seen to be the number one priority by all countries. This was clearly affirmed in the conclusions of last week's meeting of Ministers of the World Food Council. I shall ensure that a copy of the document which followed from that meeting is made available in your Lordships' Library.

The noble Baroness, Lady White, started with a tribute to the late Lady Jackson, with which I would certainly wish to be associated. The noble Baroness, Lady White, asked how the various organs of the Commission co-ordinated their approach to see that environmental considerations were properly taken into account in Community aid. I can reply that the question is one for the Commission itself but that in such aid weight is given to environmental questions. As an example, I can quote from the guidelines agreed at the highest political level between the Community and the ACP on the basis of joint recommendations from Community and ACP experts. These deal with the design and carrying out of agricultural projects. Among other things, they instruct that account must be taken of the environmental risks that the introduction of certain techniques of intensive crop production may entail. The noble Baroness also asked what we were doing about the United Nations water decade. I believe that my honourable friend's department—that is, the ODA—has recently put out details of this help. If I may, I will write to the noble Baroness with some details.

The noble Lord, Lord Selsdon, the noble Viscount, Lord Rochdale, and the noble Lord, Lord Hunt of Tanworth, asked about the arrangements for Britain to get her share under these various funds. The United Kingdom share of business funded by EDF IV falls some way short of our contribution, which is 18.7 per cent. I am glad to say, however, that over the past year the United Kingdom share of projects under the Lomé Convention has risen from just over 9 per cent. in the period up to 30th June 1979 to 12.1 per cent. in the period up to 31st December 1980, which slightly corrects the figure given by the noble Lord, Lord Goronwy-Roberts, which has been updated since then. Of that 12.1 per cent., 6.8 per cent. is works and 17.8 per cent. is supply, while 16.3 per cent., I am informed, is consultancy. Ministers, as did my noble friend earlier this afternoon, have expressed concern about the lack of interest shown by United Kingdom exporters in pursuing EDF business. They, and officials, take every opportunity to impress upon businessmen the opportunities available. What is needed, I fear, is more effort from our industrialists, particularly contractors, to pursue these opportunities.

I have covered the OPEC point which was also raised by the noble Lord, Lord Pitt of Hampstead. Several noble Lords referred to the problems of the administration of the Lomé Convention, again in particular the noble Lord, Lord Pitt of Hampstead. Several of the improvements which the noble Lord suggested have already been put into effect into Lomé II. For example, the cost of European Community delegates is no longer paid from the EDF. The Stabex system was designed essentially to help agricultural producers. Export earnings support for all product shortfalls, including copper, is available for all countries from a special compensatory financing facility of the IMF which has been successively increased and improved. The Community feels, and we agree, that Sysmin is a better way of dealing with the problems of copper producers within the Lomé framework. I am glad that the noble Lord, Lord Pitt of Hampstead, recognised that this has some positive advantages.

On rules of origin, the Community is concerned to prevent other developed countries—the United States, Japan or even the USSR—from setting up industries in the ACP with a token ACP input and then exporting their output to the Community. We have lent our help to solve particular problems, such as Kenya's and Malawi's fishing flies.

The fact that your Lordships have demonstrated such interest in the subject is a welcome sign that the Community's role and performance in terms of development aid is now seen to be one of its more important activities. The report itself and the speeches of my noble friend the Foreign Secretary and others have rightly drawn attention to the way in which the Community tries to integrate trade and aid in a coherent approach to the Third World. The report has suggested ways in which Britain could try to improve things. By and large, however, it suggests that we should push harder on the same sort of issues as we have been pursuing as priorities since our accession—for example, a more global approach, a more discriminating use of food aid, and so on.

There are, however, limits to how far we can push things quickly on our own, especially when our own aid resources are necessarily limited and when we wish to place renewed emphasis on bilateral aid. We have to take things more slowly, more deliberately. This means a lot of detailed practical work and playing a full part in the Community's deliberations. I believe that in doing that since our accession we have established our role as one which is particularly listened to within the Community when aid matters are discussed. We have much to offer in terms of experience and knowledge. The Government are determined to ensure that it continues to be given proper weight in the Councils of the Community.

9.7 p.m.

Lord Greenhill of Harrow

My Lords, members of the committee will draw great satisfaction from the debate which their report has stimulated today. If it has ranged more widely than the subject of the report, this is what we expected. Indeed, this is what we desired. On hehalf of the committee I should like to thank very much those Members of the House who have found the time and the wish to intervene in this discussion and at times to speak kindly of the report and its conclusions. The impression that I take away from this six hour long debate is that there is a very large measure of consensus within the House about this extremely important subject. The fact that this consensus exists is a matter for encouragement and hope for the future.

On Question, Motion agreed to.