Overseas Aid: Allocation (Hansard, 14 December 1989)

§ The Minister of State, Department of Trade and Industry (Lord Trefgarne)
My Lords, the resources available for aid announced in the Autumn Statement on 15th November mean that the aid programme will continue to grow in real terms over the next three years. The Government will play their full part in helping to promote sustained and sustainable development, including support for economic reform, and will be committing more resources to meet environmental concerns, especially in relation to tropical forestry.
Our concern is to ensure that a growing aid programme is used to greatest effect, not to speculate about possible percentages of GNP over the next three years.

§ Lord Hatch of Lusby
My Lords, is the noble Lord aware that, according to the Autumn Statement, and the analyses made of it, although the resources are planned to grow in monetary terms, they will grow at a lower rate than the present rate of inflation which means that there will be a cut? Does the Minister accept that? That is what was stated at the time. When the noble Lord refers to the percentage of GDP, is he aware that when the Government took office the proportion of GDP allocated to overseas aid by the previous government was 0.53 per cent. and that, despite a slight rise last year, it is still only 0.32 per cent.?

§ Lord Trefgarne
My Lords, I am aware that in 1979 the aid figure was a higher percentage of the GDP than it is now, but in 1979 we inherited a very modest GDP from the other party which was in power up to that time which, if I may say so, explains that phenomenon. I am sure that the current figures will be of more interest to the noble Lord. The aid programme is now planned at £1,587 million for 1990–91, growing to £1,680 million and £1,750 million respectively, in the next two years. Those figures represent a cumulative real-terms increase of 9.3 per cent. compared with the £1,430 million originally planned for this year.

§ Lord Renton
My Lords, is my noble friend aware that much of the overseas aid granted by this country in the last 40 years was intended not only to relieve poverty and to overcome drought problems, but to stimulate production in the third world countries? Therefore it is not realistic to think in terms of maintaining a particular percentage of our own GNP for overseas aid.

§ Lord Trefgarne
My Lords, I could easily be persuaded to agree with my noble friend. But the fact of the matter is that we have accepted the target to which the noble Lord, Lord Hatch, referred, but, like our predecessors, we have been unable to say when we can achieve that. As regards the central purpose of our aid programme, I can put it in a nutshell by saying that it is to help those countries to help themselves. That is why we concentrate no less than 70 per cent. of our aid programme on the poorest 50 countries of the world.

§ Lord Diamond
My Lords, if the GDP which the Conservative Government inherited was as modest as the noble Lord claims it to be, can he explain how it came about that it fell in 1981?

§ Lord Trefgarne
My Lords, it was because of the economic difficulties that we encountered when we came into office.

§ Baroness Ewart-Biggs
My Lords, is the Minister aware that the plight of the third world countries has been highlighted this week by the launch of UNICEF's annual report into the state of the world's children? The report shows that 40,000 children die each day of preventable illnesses and malnutrition and that if this trend continues in the next 10 years 100 million children will die. Therefore, will not the Minister agree that Britain's position of being 14th out of 18 in the league of aid donors is deplorable? Will the Minister give a commitment to increase the aid from 0.32 per cent. of the GDP?

§ Lord Trefgarne
My Lords, I should have thought that the real growth to which I referred just now of 9.3 per cent. is a very substantial figure indeed, leading as it will in a year or so to a figure of £1,750 million of which 70 per cent., as I said earlier, will go to the poorest 50 countries of the world. Fifty per cent. of that total goes to African countries—an area of the world where I know the noble Lord, Lord Hatch, has a special interest.

§ Viscount Caldecote
My Lords, can my noble friend confirm that it is the intention of Her Majesty's Government to move steadily towards the OECD target of 0.7 per cent. of GNP for overseas aid?

§ Lord Trefgarne
My Lords, we have accepted the target in principle but, like previous administrations and many other donors, we are unable to set a date when we shall achieve it.

§ Lord Merrivale
My Lords, as many francophone African countries are very desirous of increasing their commercial and cultural contacts with this country and do not wish to be considered a chasse 1395 gardée francais, can my noble friend say whether the aid to francophone African countries is on the increase or decrease?

§ Lord Trefgarne
My Lords, I do not have figures for the francophone countries alone in front of me, but I shall see if I can find them and then write to my noble friend. While we cannot as yet set a date when we hope to attain the 0.7 per cent. target that has been referred to, we have already met the 1 per cent. GNP target for total flows to developing countries.

§ Lord Hatch of Lusby
My Lords, is the noble Lord aware that the total resources directed to the third world last year fell by 1.9 per cent. and that it is now the case that resource flows are coming from the third world to the developed world as a result of the payment of interest and debt? When the Minister speaks about the increase in real terms, what is the figure for inflation that he is taking into account when calculating those figures? According to the analysis of the Autumn Statement, if the inflation figure remains as it is the increase will be less than that 7.3 per cent. and in fact there will be a cut in the actual value of overseas aid from this country.

§ Lord Trefgarne
My Lords, I really cannot accept that. The figures I gave earlier were for the real increase we expect, which of course takes into account the relevant rate of inflation. That is not a simple calculation because it depends on whether one takes into account inflation in this country, or inflation in the recipient country, or perhaps an average of the two. Different calculations have to be made in different cases. I stand by the proposition that United Kingdom aid is growing in real terms over the period that I referred to.
The noble Lord referred to the repayment of debt by recipient countries. He may wish to recall that we have written off no less than £1,000 million of old aid loans, including some £300 million for Africa.

§ Baroness Llewelyn-Davies of Hastoe
My Lords, does not the noble Lord agree that for the Government Front Bench to justify their present policies so often by derogatory remarks about their predecessors reveals a certain weakness?

§ Lord Trefgarne
My Lords, I think I am entitled to point to the shortcomings of the policy of the previous administration when they compare their performance with ours.