HL Deb 09 June 1988 vol 497 cc1493-6

3.25 p.m.

Lord Hatch of Lusby asked Her Majesty's Government:

What proportion of the gross national product of each member state in the European Community is devoted to official overseas aid.

The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur)

My Lords, precise figures are only available for the eight European Community countries that belong to the Development Assistance Committee of the Organisation for Economic Co-operation and Development. The figures, which show net official development assistance for 1986 as a percentage of GNP, are as follows: Belgium, 0.49; Denmark, 0.89; France, 0.72; Germany, 0.43; Ireland, 0.28; Italy, 0.40; Netherlands, 1.01; and the United Kingdom 0.31.

Lord Hatch of Lusby

My Lords, I am afraid that the noble Lord is not up to date with his figures. The latest figure officially given for United Kingdom development assistance is 0.28, not 0.32; that is for 1987. Those are the figures for which I asked. Is the Minister not ashamed at that Answer when, according to his own Answer, only one country in the DAC spends less of its GNP on overseas aid than this country, that country being Ireland? Is that not something of which to be ashamed, and how does it equate with the Prime Minister's statement two weeks ago in Scotland that as the British people become better off so they share the fruits of their work with others?

Lord Glenarthur

My Lords, the noble Lord is quite right when he says that the figures that I gave refer to a particular year and that others are to come. The figure which the noble Lord, Lord Hatch of Lusby, quotes has not yet been published, though the figure he gives is likely to be the case; I stress: likely to be the case.

The noble Lord suggests that the United Kingdom figure is shamefully low. It is not as simple as that. One reason is that GNP is half of the equation. That has gone up dramatically and I can quote figures on that. The net official development assistance figure for the calendar year 1987 compares with a net public expenditure provision for overseas aid of £1,247 million in the financial year 1987–88. Perhaps the noble Lord will realise that, when we take into account GNP as well as the actual figure and the fact that future real growth in aid will be 1 per cent. or more, matters are not nearly as bad as he says.

Lord Boyd-Carpenter

My Lords, is not my noble friend aware that the official aid figure is not the only figure that matters? Is it not a fact that investment by the public and the private sector of this country in the developing world is at a highly creditable level and is at least as important as official aid?

Lord Glenarthur

My Lords, my noble friend is quite right. There are all sorts of other factors which have to be taken into account. Indeed, the figures which I quoted just now could be misleading. There is official development assistance and there is the net aid programme; there are calendar years and financial years; there are different UN targets for different categories of assistance. Together with factors outside our control, including statistical freaks, which was the case in 1987–88, all these factors can make it difficult to draw meaningful comparisons from year to year.

Baroness Ewart-Biggs

My Lords, is the Minister aware that it was reported in the Observer in particular on 29th May that Britain's aid is now more than £1,100 million less each year than it would have been had the previous Labour Government's programme continued? Will the Minister confirm that that is so? If it is true, why have the British Government decided to slash their overseas aid programme at a time when third world countries are clearly suffering greatly in economic terms?

Lord Glenarthur

My Lords, one other thing may also have been the case if the party opposite had still been in power—we would not have had growth in 1987 provisionally estimated at 4.5 per cent., which is faster than that of any other industrial country. We are about to enter our eighth successive year of growth and that is what enables us now to produce an aid programme which is increasing in real terms.

The Earl of Onslow

My Lords, when is aid going to end? Are we to have the third world perpetually holding out the begging bowl to the more successful countries? Has aid actually done any good to Tanzania, for example, which has had £3,000 million of aid but has seen its agricultural production fall by 3 per cent. a year? The amount of aid which has been given to Ethiopia is enormous but that country has managed to make a mess of its own economy. Should we continue subsidising crooked, third world countries just to salve the consciences of the party opposite?

Lord Glenarthur

My Lords, I am afraid I do not wholly agree with my noble friend. The fact is that we have much to be grateful for ourselves, as do many overseas countries. Not only have we done much in the way of aid, and will continue to do so, but we have also done a great deal under the debt initiative of my right honourable friend the Chancellor of the Exchequer.

Lord Oram

My Lords, the Minister said that the figure of 0.28 quoted by my noble friend Lord Hatch has not been published. Is he not aware that it was given in a Written Answer in another place just before the Recess?

Lord Glenarthur

My Lords, I am afraid I was not. My information is that the figure for 1987 quoted by the noble Lord, Lord Hatch, was likely to be the case but that it had not been published. If it has been published, I apologise.

Lord Renton

My Lords, is my noble friend aware that the indebtedness of overseas governments in third world countries to Her Majesty's Government is also an important factor? When the President of France announced yesterday that one-third of the indebtedness to France was being remitted, he was merely following the excellent precedent set by Her Majesty's Government who, moreover, have reduced interest rates.

Lord Glenarthur

My Lords, my noble friend is right. My right honourable friend the Prime Minister received a letter from President Mitterrand yesterday setting out his proposals. Indeed, the Prime Minister expects to discuss them further when she meets the President tomorrow. At least one of the French alternative proposals, that creditors should lower interest rates on rescheduled debts, is close to the initiative already taken.

Baroness Macleod of Borve

My Lords, does my noble friend agree that not only do we give financial help to countries that are less well off than ourselves but we also send abroad people of particularly high quality to help such countries? Those countries much appreciate that.

Lord Glenarthur

My Lords, my noble friend is right. I have seen those people at work and I know the valuable input that they make.

Lord Hughes

My Lords, the Minister said that he did not wholly agree with the extraordinary views put forward by his noble friend. Can he perhaps tell us with which part of that supplementary question he did agree?

Lord Glenarthur

My Lords, my noble friend to some extent rightly pointed out that aid was an expensive item. I said to my noble friend—or words to this effect—that there are endless examples of where aid was extremely successful.

Lord Kennet

My Lords, rather than putting up the smokescreen of other figures and comparisons than those mentioned in the Question, would not the Government be better occupied in explaining why being second from bottom in the league table is an acceptable place for this country?

Lord Glenarthur

My Lords, the noble Lord fails to take into account the fact that GNP has increased. That is why the proportion appears to be lower than it is. The noble Lord should be under no illusions. We have a substantial aid programme amounting to £1,305 million in the current financial year. That is planned to grow by £70 million in 1989–90 and £115 million in 1990–91. That is an increase in real terms of 1 per cent. over the figure for 1987–88.

Lord Diamond

My Lords, the Government are putting forward the extraordinary argument that the richer we are (unexpectedly so) the less we are capable of giving a share of our GNP to countries that need it. Is that the latest example of Conservative morality?

Lord Glenarthur

My Lords, the noble Lord is misquoting me. Growth has not been unexpected. If GNP increases—and it has—then naturally the proportions of it devoted to any particular sector may be difficult to keep up. As I have said, the fact is that the aid programme is presently increasing.

Lord Hatch of Lusby

My Lords, is the noble Lord aware that he cannot have it both ways? When the overseas aid budget was cut four times as heavily as other public expenditure the Government said that they reluctantly did so because of the depression in the country. The Minister who answered an earlier Question this afternoon claimed that there has been growth for the past eight years. How is it that that coincides with a fall in overseas aid? Is the Minister aware that in a poll taken last year 62 per cent. of those polled said they were prepared to pay higher taxes if those taxes were to be allocated to helping the poorer countries?

Lord Glenarthur

My Lords, the noble Lord must get the position into perspective. The fact is that in 1986 the amount of aid we gave was the sixth largest among Western donors and was geared to the needs of the poorest countries. I have described how the aid programme is now planned to grow in real terms. The noble Lord should not always look back but should endeavour to look forward as well.

Lord Mackie of Benshie

My Lords, would it not therefore be better to have an aid programme on the same basis as the poll tax where the rich and the poor countries pay the same?

Lord Glenarthur

My Lords, I think I have said enough on the community charge.