Poland: Assistance (Hansard, 23 October 1989)

§ Lord Trefgarne
My Lords, we have established a know-how fund for Poland to help provide the skills needed to run a fully democratic system and a market-based economy. Through the European Community, we are helping to supply free food and to fund projects in the agricultural, training and environmental fields. International financial help will become available when Poland h as agreed a reform and adjustment programme with the IMF.

§ Baroness Macleod of Borve
My Lords, I thank my noble friend the Minister for his encouraging reply. However, can he specify the quantities of food that have been sent by this country and by the other European countries to what we understand as that very beleaguered country which is part of Europe? We owe Poland and her people a great debt of gratitude for all that they did for us during the last war.

§ Lord Trefgarne
My Lords, the know-how fund to which I have referred will represent £25 million over five years and the cost of Community food supplies is already over 100 million ecus, which is equivalent to about £70 million. In addition, Community project assistance, which is aggregated with that for Hungary, is valued at about 200 million ecus, which is about £140 million.

§ Lord Cledwyn of Penrhos
My Lords, if we are to support Poland in the historic developments which have taken place there, should we not be doing rather more than the noble Lord described—although we welcome that? Is it not the case, for example, that Germany has offered £1 billion to Poland in order to assist its economy to develop further, and that Italy has offered £400 million? Can the Minister tell the House whether we are proposing additional assistance? Further, can the Minister say whether we propose to help Poland in rescheduling its debt?

§ Lord Trefgarne
My Lords, regarding rescheduling the debt, it is important for the Poles to agree with the IMF on a programme. I understand that the views of the Polish Government and the IMF are close on this matter and that therefore a programme is likely to be agreed in the not too distant future. It will then be possible for the Polish debt situation generally, which the noble Lord will be aware is considerable, to be considered carefully in the so-called Paris Club. We shall be anxious to play a full part in that. Indeed, once the IMF programme is in place and the Paris Club has done its work, that will open the way to substantial support for Poland in a variety of ways; and we shall be anxious to play our part.

§ Lord Bonham-Carter
My Lords, I thank the noble Lord for that answer. However, does he not agree 1139 that one of the greatest threats to economic and political reform in Poland is inflation? Does the noble Lord further agree that the price of food is one of the most dangerous manifestations of that inflation? If therefore the £70 million in food supplies which we are giving Poland is not sufficient to increase supplies so that prices go down, will Her Majesty's Government keep an eye on the situation and be ready to increase that amount in order to achieve the objective that I have suggested?

§ Lord Trefgarne
My Lords, yes, I believe we shall. The sum of money to which I referred is the amount that has been agreed so far with the European Community. I am certain that the Community will hasten to agree further supplies as and when they prove to be necessary. I must agree with the noble Lord that that seems likely to be a little while ahead yet.

§ Lord John-Mackie
My Lords, I spent a couple of weeks in Poland nearly 20 years ago looking at agriculture in that country, and I was impressed with it. Before we give aid now, should we not investigate why production has dropped so badly as to require aid?

§ Lord Trefgarne
My Lords, if we were to delay unduly the provision of the food aid to which I have referred we would further exacerbate the serious problems that already exist in that country, where there are acute food shortages. We attach great importance to improving the competence of the Polish agricultural sector, and indeed of other sectors. That is why we attach such importance to the £25 million of know-how assistance that we are providing, which I hope the noble Lord will agree will contribute to a solution to the problems in that country.