Eastern Europe: Aid (Hansard, 2 July 1990)

The Minister of State, Foreign and Commonwealth Office (Lord Barbazon of Tara)
My Lords, we are helping Poland, Hungary, Czechoslovakia and the German Democratic Republic bilaterally through the Know How Fund. This will be extended to other countries once they are fully committed to reform. We also contribute to multilateral aid, including the European Community's structural aid and European Investment Bank lending for Poland and Hungary, food and humanitarian help for Poland and Romania, debt relief, the stabilisation fund for Poland and the new European Bank for Reconstruction and Development.

§ Lord Rodney
My Lords, I thank my noble friend the Minister for that Answer. It should be appreciated that this country took a lead in this idea which, I understand, is being followed by many other European countries. However, can he tell the House what other resources are being devoted to this fund?

§ Lord Brabazon of Tara
Yes, my Lords. We certainly took a lead so far as concerns Poland; indeed, we were the first in the field with the Know How Fund. We started with individual country pledges—for example, £50 million for Poland and £25 million for Hungary. However, now that the programme has been extended to include other 1887 countries, separate country pledges are less relevant and could restrict room for manoeuvre in responding to the needs of individual countries.

§ Lord Cledwyn of Penrhos
My Lords, as the noble Lord knows, the Dublin summit set up a study by the European Commission, involving the IMF, the World Bank and other organisations which he mentioned in his initial reply and in consultation with the Soviet Union, to study or to ascertain how best to assist that country in creating economic stability in that crucial part of the world. Does the Minister agree that the current discussions in Moscow make it clear beyond doubt that that study could be of historic importance? Further, can the Minister tell the House when that study is likely to be completed and to what extent Her Majesty's Government are committed to comply with any of its conclusions, provided that they are reasonable?

§ Lord Brabazon of Tara
My Lords, the noble Lord is certainly right in that it was agreed at the Dublin summit that this problem required close examination before we decided on the remedies—hence the Council's decision to ask the Commission to initiate a study involving experts from the international financial institutions. As he said, this is certainly of great importance. However, I am not quite sure about its timing. I know that the Commission has been asked to carry out this task as quickly as possible, but I am not sure about the expected date of completion. Naturally, when the recommendations are available, we shall look closely at them with a view to participation.

§ Lord Boyd-Carpenter
My Lords, is it not difficult to justify giving aid to the Soviet Union while that country continues to maintain its present high level of defence expenditure which takes a substantial proportion of its national product?

§ Lord Brabazon of Tara
My Lords, that my well be the case. The Soviet Union is a potentially rich country which has been subject to over 70 years' mismanagement on a monumental scale. Economic help can make no sense until there is real economic reform to support.

§ Lord Cledwyn of Penrhos
My Lords, is it not the case that if we do not encourage moderate policies in the Soviet Union the arms to which the noble Lord referred may well soon be used?

§ Lord Brabazon of Tara
My Lords, we are straying a little from the Question on the Order Paper. I am not sure whether Russia is included in the definition of Eastern Europe.

§ Lord Mellish
My Lords, are the Government pro-Gorbachev, against Gorbachev or neutral?

§ Lord Brabazon of Tara
My Lords, that is a different question, but we have supported Gorbachev throughout in the reforms that he has tried to make.

§ Lord Bonham-Carter
My Lords, will the Minister be so good as to tell your Lordships whether any steps have been taken to monitor the Know How Fund aid that we are giving and the aid that goes through the European Community to discover which type of aid is most effective and what impact it has had on the economies of the countries in question?

§ Lord Brabazon of Tara
My Lords, the Know How Fund is closely monitored. I could give your Lordships a list of all the projects so far allowed or in the pipeline. They are tailored mainly to what countries require and what they believe we are best placed to help them with. In respect of the European Community, the Commission is the body responsible for co-ordinating the assistance. I am sure that it will closely monitor the effects.

§ Lord Molloy
My Lords, does the Minister agree that whereas the Government have shown a lead in giving aid to some Eastern European countires, it might make political sense to give aid to the Soviet Union so that we might, in years to come, enjoy good trade with it? As a result we would not have to give aid but could enjoy a sensible trading agreement with that country.

§ Lord Brabazon of Tara
My Lords, I believe that I have dealt with the question of the Soviet Union. I have nothing further to say at the moment.

Lord Oram
My Lords, is there not a danger that aid given to Eastern Europe may be at the expense of that given to the developing countries? For instance, are not some ODA staff already being transferred from third world duties to Eastern European duties? Will the Minister give a water-tight undertaking that those people will be replaced in their original posts by people of similar calibre and experience? Is it not clear that the ODA will need more money if it is to undertake the additional duties it is being given and if the aid programme to developing countries is to go unharmed?

§ Lord Brabazon of Tara
My Lords, we have already given an assurance that aid to Eastern Europe, of the type that I have described today, is in addition to our existing aid programmes for other parts of the world. I am afraid that I cannot answer the noble Lord's question about where staff in the ODA come from or whether they will be returned to those duties subsequently.

Viscount St. Davids
My Lords, is it not important that we should not give aid to any former communist countries until it is clear that communism and socialism have ceased to exist in those areas? Throwing good money after bad is no way to help them. That money will be needed when they have recovered in order to give them the proper help that we wish them to have.

§ Lord Brabazon of Tara
My Lords, our aid and that of the Commission are tied to a number of criteria: that there should be free and fair elections in a pluralistic democracy; respect for human rights; the rule of law; the introduction of a market 1889 economy; and freedom of the press. So far the countries that I outlined in my original Answer have met those criteria.

§ Lord Whaddon
My Lords, bearing in mind the importance of moral gestures, as well as financial help, do the Government feel that the time has come to reconsider the return of General Sikorski's ashes to Poland? Will the Minister take up that question with the interested parties?

§ Lord Brabazon of Tara
My Lords, I am afraid that I am not in a position to reply to the noble Lord's quest ion at this moment. I have examined the issue in the past but I cannot remember the exact answer. I shall write to the noble Lord.