FAO: UK Contribution (Hansard, 24 March 1988)

§ Lord Glenarthur
My Lords, we shall pay our contribution for 1988 no later than 31st December.

§ Lord Walston
My Lords, my understanding is—and the noble Lord will correct me if I am wrong—that the payment was due on 1st January. Shortage of cash can cause very serious difficulties to the FAO or indeed any other organisation. Can the noble Lord inform the House whether it is the normal practice, not only of this country but of all other members of the FAO, to pay their dues roughly speaking a year in arrears? If so, what effect does that have on the finances of the organisation?

§ Lord Glenarthur
My Lords, as I said, we shall meet our obligation in full and we shall not fall into arrears. I can tell the noble Lord that it has been the practice in the past for us to pay 25 per cent. of our contribution in the first quarter, 25 per cent. in the second quarter and the balance in the third quarter. That is also the practice of other governments.
I can also tell the noble Lord that it is not the case that our action could provoke any financial crisis. The director-general said that, on the basis of existing reserves and forecast contributions, the organisation does not expect to experience cash flow problems until October, even if meanwhile the United States pays nothing.

§ Lord Tordoff
My Lords, will the Minister speak to his right honourable friend the Chancellor of the 290 Exchequer to see whether I could arrange to pay my income tax on a similar basis?

§ Lord Glenarthur
My Lords, that is something which the noble Lord should take up himself.

§ Baroness Ewart-Biggs
My Lords, does not the Minister agree that the work of the FAO in the promotion of agriculture in the developing countries and in the fight against famine is vitally important? Therefore, can the Minister say whether he has some criticism of the structure of the FAO and that that is the reason the Government are getting behind with their payment? If so, will the Government try to put this right within the structure of the FAO rather than withholding vital payments?

§ Lord Glenarthur
My Lords, I willingly agree with the noble Baroness. The FAO does some excellent work in global famine information and food standards. We believe that the FAO fails to identify its priorities, and its programmes are not all focused on the priority needs of each individual country. There is no reason to believe that anything damaging would be caused towards famine relief because of the way in which the money is paid. The reason is that the FAO at present does not need our money. We have taken the money into account in deciding what can be afforded for other programmes this year. There will not be the damage that the noble Baroness fears.

§ Lord Mayhew
My Lords, if the reason was not dissatisfaction with the FAO, what is the reason for changing what was previously a perfectly civilised means of payment? Are we here in line with the EC governments?

§ Lord Glenarthur
My Lords, we are in line with nearly every country concerned. Perhaps I may refer the noble Lord to Section 5.5 of the FOA's financial regulations. He will see that that section makes it perfectly plain that while contributions and advances shall be due and payable in full within 30 days of the receipt of the communication, the regulations also say: As of 1st January of the following calendar year the unpaid balance of such contributions and advances shall be considered to be one year in arrears".

§ Baroness Ewart-Biggs
My Lords, did the Minister imply that he was going to channel funds through bilateral assistance rather than through the FAO?

§ Lord Glenarthur
My Lords, I did not seek to imply that. I hope I indicated that the way in which the money is paid is not going to damage the famine work which the noble Baroness mentioned. Emergency and relief food aid is provided by the UN world food programme, by the EC and by bilateral aid donors and not directly by the FAO.

§ Lord Mackie of Benshie
My Lords, in an earlier answer the noble Lord made or implied some criticism of the programmes. Perhaps he will give us some idea of what the criticisms are.

§ Lord Glenarthur
My Lords, I believe I gave some criticisms just now. I add that it is technical expertise which is often not used effectively because of bureaucracy and bad management. In the past information on the organisation's finances has not been fully shared with member states. The director general has been re-elected for a further period of time, and there is every hope that the deficiencies which have been identified will be improved.

Lord Oram
My Lords, will the Government resist pressure either from the Heritage Foundation or elsewhere, to deprive the United Nations specialised agencies of their rightful funds?

§ Lord Glenarthur
My Lords, there are others who do not pay their full share, and it may be that they have not done so for some time. I hope that I have indicated that we support the work of the FAO, and that is what the Question is about.

§ Lord Walston
My Lords, if I understood the noble Lord correctly, we are in arrears with our contributions which should have been paid within 30 days of 1st January. Furthermore, we are more in arrears than normal. We have normally adopted the practice of paying 25 per cent. every quarter. This year we have not done so. Perhaps I may ask the noble Lord if he would consider it reasonable as a member of a club—as I am sure he is—to be in arrears to that extent with his membership fees. Would he not be ashamed of himself? Is he not equally ashamed of being a member of a government who are in arrears with their due contribution?

§ Lord Glenarthur
My Lords, so far as I am aware, the practice to pay it in the way I have described has been the case for many years, including the period in office of other parties. If the noble Lord reads Section 5.5 of the FAO's financial regulations, he will see that, while contributions and advances normally shall be due and payable in full within 30 days, the regulations are quite clear because they also say: As of 1st January of the following calendar year the unpaid balance of such contributions and advances shall be considered to be one year in arrears.". I believe that sets out the position perfectly clearly.