§ 3.2 p.m.
§ The Earl of Onslow rose to call attention to overseas development aid; and to move for Papers.
§ The noble Earl said: My Lords, I can promise that I shall not keep your Lordships for up to 15 minutes, which will allow others to bang on a little longer than they had intended. I can also promise that I did not arrange for my noble friend Lord Archer to make his maiden speech in my debate solely so as to gain publicity for myself. But I am absolutely delighted that he is making his maiden speech on this important subject. Unlike him, I did not circulate my speech beforehand. I rather wish I had done. But I certainly look forward to listening to what he has to say.
I raise the matter again for debate today with some hesitation as we had an Unstarred Question on the subject on 11th November. The reason I come back to it is that the Unstarred Question of the noble Lord, Lord Judd, was not the Question that needed answering. He asked her Majesty's Government,
what level of resources they consider necessary to meet the growing global demands on Britain's overseas aid programme".
Of course the immediate satisfaction of any demand will inevitably lead to further demands which by their very nature cannot be satisfied. The question that has to be asked and thought about is how long development aid should continue. Does it work, or is it counter-productive? Does it support and encourage bad government and allow the continuation of policies of impoverishment?
§ After all, development aid was invented by the developed countries in 1948. They had gone from Stone-Age to atomic bomb without a single penny of development aid. As was recognised on 11th November last, both by the noble Lord, Lord Bonham-Carter, and by the noble Lord, Lord Desai, these questions come from my reading of the noble Lord, Lord Bauer. He pointed out in his book, Development Frontier, that aid only saves the interest costs of a project and furthermore is better described as government to government transfers. Described thus, it can be removed and discussed without the overtones of sentimentality, charity and guilt.
§ When we began to talk about the subject, the noble Lord and I, I reacted as I think most of us would: that aid was good for starving children and was equivalent to Christian charity; that it was our duty to help; and that we had benefited from Marshall Aid—all the standard answers that are given. The questions I am trying to raise now are not raised on the grounds that we cannot afford it or that we should not do it. I raise them because I am beginning to be convinced that overseas development aid is actively harmful and impoverishes the people whom it is meant to help.
§ Perhaps I may explain some of my thinking on the matter. In 1850 GDP per head in the United Kingdom was £25. By 1875 it had gone up to £75 per head. There was no development aid from the United Nations. It came from the Scots' hard work, Irish navvies and English labouring and finance. These things came from what was from our brains and from our ability to continue. Venice did not get development aid from Justinian or Theodoric. Why has a barren island off the South China coast, with no water or natural resources, become Hong Kong? It is interesting to note that when Karl Marx saw a screw made by Mr. Guest of Birmingham, he said, "Ah, but our German people could never make a piece of engineering as good as that". Apart from the fact that he was wrong on that, as he was on practically everything else, Essen did not get development aid or subventions from the United Nations Development Fund. Could it be that the poorer parts of the world remain poor because of culture, history, government, popular attitudes or just straightforward tyranny?
§ When I listened to the noble Baroness, Lady Chalker, answering the debate last November she gave no indication that it entered the minds of her department to query or question all these 40 year-old assumptions. We must think why countries develop. It is worth looking at the economic performance of various societies around the world. Tanzania, Uganda, Zambia, Ethiopia, Sudan and Somalia are all basket cases of the worst kind. They have all had large 563 amounts of Western donatives, both multilaterally and unilaterally. They are all on the African continent, but are racially and culturally different. Egypt has received, and is receiving, large amounts of aid. Some of its economy works beautifully. The private sector, from Galabeer sellers in the souks to travel agents in Luxor hotels, is competent, keen and efficient. The service is so good that it makes Jeeves look like a galumphing heavyweight. They are, above all, charming. But the difference in attitude of state employees whose jobs are safe but who have no inclination to perform is quite marked.
§ Singapore, Taiwan and South Korea have all had development aid. Did that development aid help, hinder or have no effect on their progress? To bring our focus nearer home, in Italy, the Mezzogiorno has had large sums pumped into it but it is a Mafia-ridden, corrupt, if charming, sink. In the days of its Norman rulers Sicily was a prosperous, well-ordered and peaceful country. Spain and Portugal discovered large parts of the New World. Did Henry the Navigator get development aid from the Hanseatic ports to allow Albuquerque to become Captain General of the Atlantic, Indian and Pacific Oceans? Of course not. But the Hanseatic ports are now having to give large amounts of aid to Spain and Portugal under a provision in the Maastricht Treaty. Money and capital are generated by development. Neither Japan nor Hong Kong has raw materials. The region around Shanghai grows without aid. It grows by hard work and sound money. We must take account of this history and these developments and ask new questions.
§ Of course there are interests in the continuation of aid programmes. They range from the aidocrats of the UN to the civil servants in our own ODA. Swiss hankers, corrupt third world politicians and honourable men who have been pushing a policy all their working lives will find it hard to question their life's purpose and even harder to accept that it may not just have been unnecessary but actively harmful to the people whom they intended to help. It goes without saying that when someone else pays for something that is necessary, that releases money for other projects. As I have shown in the case of government-to-government transfers, the savings are only the interest payments; the addition to the GNP is marginal and tiny, but the addition to the tax revenues is large and the addition to foreign currency reserves considerable. So it can be seen that aid can be used, and undoubtedly has been, to make it easy for governments to carry out incompetent, tyrannical and economically counter-productive policies.
§ Sudan has been an enormous net receiver of aid. It persecutes its animist and Christian fellow citizens and its non-Arabic-speaking subjects in a way that brother Boer would never have dreamt of treating the South African blacks. It has pursued economic policies of criminal counter-productivity while being subsidised by English taxpayers.
§ Tanzania has not been so cruel, but it managed to halve clove production and consequential exports from Zanzibar. It reduced its agricultural output and has received vast sums of Western aid which has been 564 of no benefit to its people. Julius Nyerere, despite his air of sanctimonious and holy socialism, managed to spend a large amount of rich countries' poor taxpayers' money while at the same time impoverishing his own country.
§ Unquestioning attitudes have led to silly anomalies. For instance, during the Falkland Islands conflict the British taxpayer was subsidising the Argentine Government through the UN development programme and so giving aid to the Argentine. That is the same Argentina which during the 19th century developed and expanded at more or less the same rate as that of the US and Canada and whose living standard in the early part of the century was what we would now call first world but who beggared itself by useless governments from the 1920s onwards. They confiscated assets and impoverished their citizens and their profligacy was rewarded by money from outside.
§ I do not know whether it is recognised that Iraq was in receipt of Western aid until at least 1987. It is unnecessary when someone can run a large army, buy large amounts of guns and have massive amounts of oil revenues for them to be in receipt of English taxpayers' money.
§ In the previous debate the noble Lord, Lord Desai, said that we should demand and insist on human rights standards by the aid recipients. What happens if no attention is paid to that? Either we then say that we will cut off the aid—and the consequences of that, according to the aid people who want to give aid, is that people become impoverished—or we have to enforce the demand. If we enforce it we are slap, bang back down the road of Peterson Sahib, protector of the poor, of government and imperium, again.
§ That has already begun in Somalia where US and French troops are beginning to become involved in law enforcement. Some of us might say that that is a jolly good thing and the Somali should be jolly pleased at having a French foreign legionnaire who was probably born somewhere east of the Carpathians and who speaks bad French but does at least stop them being shot at by some rogue Somalis. Mr. Boutros Boutros Ghali is pushing for a UN administration of Somalia. Without law and order and the means to enforce it, even humanitarian or ambulance aid can become harmful.
§ The thuggery and brutality of the Somali war lords has prospered and thrived upon the bravery, generosity and compassion of the Red Cross, the Save the Children Fund and other humanitarian agencies. Those people have been forced to pay over foreign exchange money to protectionist gangs. What do protectionist gangs do with foreign exchange money? They buy a new Toyota and stick another second-hand anti-tank rifle or a twin-mounted Browning on top of it. The consequences of that are more thuggery, more protection and more horror.
§ Aid to Bosnia, it could be argued, prolongs the agony by postponing the inevitable collapse, defeat and subsequent ceasefire. For humanitarian aid to work in Yugoslavia, the fighting has to be stopped. Sanctions are obviously not working and could be classed as fatuous. The Serbs do not seem to have broken the habit of a lifetime with their barbaric 565 behaviour. We must face up to our choice, which is either to force a ceasefire and Serb withdrawal or to arrange a population transfer, as was done after the Balkan War of 1913. Aid is wasted at the moment.
§ Your Lordships have heard me previously wax irritated at subsidising Indian navies and atomic bomb programmes. You have listed in patience to my querying £75,000 of aid to Singapore. I hope that your Lordships agree with me that governments the world over—not just Her Majesty's Government—should have the political courage and intellectual vigour to challenge and rethink a 40 year-old dogma. I am not asking that out of a hard heart but out of a soft heart. I care about the state of the world. I do not like seeing the subsidising of rotten governments by Western taxpayers' money to enable them to continue forcing cruelty upon their own people.
§ I hope that the rethink will concentrate on the sound money maxim of free trade—free trade, above all, in agriculture. When we come to think about aid the answer should be not a penny more and, above all, no pennies less. I beg to move for Papers.
§ 3.16 p.m.
§ Lord John-Mackie
My Lords, I have at the top of my notes the words, "to be sure to congratulate the noble Earl on raising the subject", but I did not appreciate the sophisticated attitude that he would take and that he would be almost asking us to stop aid altogether. I must admit that his researches were good, and I congratulate him upon that. I also had down in my notes to say what I have said many times before: that well over a billion people are starving. Although I agree with some of the points the noble Earl made about governments not being helpful, those people are still starving. Small children represent a huge percentage of those people. We must overcome the difficulties he has mentioned to get food and aid to those people. I cannot stress that point too strongly.
I believe that the idea that we have enough surplus food in the world to achieve that is wrong. I have been told that there is enough food, but I do not believe that for a moment. I am very much against the fact that we are taking a couple of million arable acres out of production in this country when the situation is as I have just described it.
The debate is about development aid. I am especially interested in development aid. We should first get food aid to the people and then help them so that they do not require it again. Those are long-term objectives. It is important to help people develop their own countries. The noble Earl mentioned the small island in the Pacific that turned out to be Hong Kong. But Hong Kong does not produce a great deal. It deals in a lot of money but it does not produce much wealth in the accepted sense of the word.
I should like to put in a word for the Intermediate Technology development group, which I have been supporting for many years. It does a tremendous job of work all over the world although it concentrates upon Latin America, Northern and Eastern Africa and some other places. The group has a tremendous job to do. It has 250 staff, and the total money received 566 which it has available to spend is about £6.5 million. One-third of that is a grant from the Government, another third comes from various trusts and the final third is raised purely by charitable means. That is just over £2 million from each source.
I was talking to the chairman of the group, Mr. Frank Almond, who is quite worried about the money obtained from the Government. It is given every three years. Inflation has decreased, but he is worried as to whether there will be an increase to match inflation in the Government's grant for next year, because it is very much needed. The group relies on trusts and charities to do a little better as well.
Going to these countries is a big task. I have a friend who works for the group. He has been to Venezuela, Peru and other places in Latin America. He said—and I totally agree with the noble Earl, Lord Onslow, on this—that the tyranny of those governments is appalling. He blamed the USA who are taking food from the starving people in those countries and sending back arms to the governments to keep the people down. He thought that that was disgraceful.
I do not wish to say much more except to mention some of the group's activities. It is starting to teach or develop veterinary services and stock feeding in breeding areas of the countries where at the moment there are no veterinary services and many animals die for lack of them. That is one activity. The group assists in developing food production. It is time to find and to encourage people to start and develop new industries in those countries. It is amazing how many people, given a little encouragement and know-how, as well as grants, can develop industry.
I appeal to the Government to ensure that the Intermediate Technology development group receives more money next year.
§ 3.22 p.m.
§ Lord Beaumont of Whitley
My Lords, we are all grateful to the noble Earl, Lord Onslow, for having raised this important matter today. We look forward to the maiden speech of the noble Lord, Lord Archer.
The noble Earl said that he was basing much of what he had to say—as became apparent—on the analysis of the noble Lord, Lord Bauer. Together with a number of your Lordships, I have devoted quite a lot of time to reading what the noble Lord, Lord Bauer, had to say on these matters. I usually find that his analysis is absolutely spot on. What he says is wrong is wrong, but he then goes on to deduce, as the noble Earl went on to deduce, that there should be virtually no aid at all. The proper solution is that there should be aid but that it should be applied in a different way. It is not that we should abandon helping the poor but that we should learn how to do it rather better than we do at the moment.
I shall attempt, in the few minutes at my disposal, to chart some of the new directions in which I think aid should be applied. I see that I occupy the third slot in the list of speakers and some of what I have to say will be Liberal Democratic policy. I hope that what I say which is not yet Liberal Democratic policy may prove to be so in the future.
§ Lord Beaumont of Whitley
My Lords, the noble Lord, Lord Bonham-Carter, will no doubt correct what I have to say in his winding up speech.
The basic problem is summed up in the aphorism that aid is money taken from the taxation of the poor of the rich world and given to the rich of the poor world who then repay it to the rich of the rich world. We must try to see that that does not happen.
The first point I wish to raise is the subject of debt. We must take great pains to see that our aid does not pile up the debt of poor countries to the rich countries. That is clearly wrong and it has bad effects. The British Government have been good in putting forward the so-called Trinidad terms. These should be applied in full and there should be no more building up of debt. That means that although we can use the mechanism of loans to encourage efficiency, nevertheless all aid should be seen eventually as being a gift. The Good Samaritan did not ask the mugged man to repay with interest the money given to the innkeeper.
The second point I wish to make is that aid must be channelled to the poor. It must be channelled in such a way that it does not stick in the hands of the rich. That point was made by the noble Earl, Lord Onslow. It must not, for example, as in a certain well-known case, be used to buy flour for bread for the middle classes when the working classes of a country do not have enough of their staple, rice.
Non-governmental organisations can apply this kind of aid better than governments. I agree entirely with the noble Earl, Lord Onslow, about the trouble one runs into with aid from governments to governments. It should be furnished and channelled through NGOs and aimed at the poor. It is said that less than 10 per cent. of official aid can at the moment be said to be poverty-focused. But the need is great to help the poor. There has been a 25 per cent. decrease in the average standard of living in parts of Africa over the past few years. That is a 25 per cent. decrease from a standard which was not at all high to start with.
Above all, it is important that aid should encourage the trend to ecological economics—economics which are sustainable and which encourage sustainability. These are coming anyway, but if we start the transition early we shall spare both ourselves and the countries which we are trying to help much hardship on the way.
The aid will start by encouraging the growing of food for the native population and not cash crops for hard currency —growing food to feed the people of East Africa, for example, rather than growing carnations to fly out to the Riviera to earn hard currency for things which are probably needed for the middle classes. Aid should be aimed to encourage a drift back to the countryside from the cities and to tie together, both in developed and undeveloped countries, the population of the country and its basic food producing base. It should tie rural populations together. That is something which we in this country need to learn. Since the beginning of the agricultural revolution in this country, we have not had a countryside which is tied to its productive sources, 568 unlike the countries of Europe which we often rather sneer at for their less efficient agricultural production, but which, because it is peasant, is rather more tied together.
Above all, there should be an emphasis on primary environmental care; meeting basic human needs; protecting the local environment (for the first class reason among others that we need to protect future production); defending non-renewable resources; and a determination to renew renewable resources. It is no use using renewable resources if one does not, in effect, renew them. There must also be an emphasis on empowering local communities to get together to work out their own salvation on a small scale. Diversity should be, and is, linked to social stability and environmental sustainability. We need to achieve those aims all over the world and particularly in those countries we help.
Finally, I come to a matter which is very controversial, not least among the members of my own party. We are all agreed that dumping should be discouraged, but in my view the whole of the agricultural side of GATT needs to be re-thought. Not only are the French farmers right but the tradition of my party, which was understandable in the days of classical economics, must be re-thought. Free trade like capitalism is only a good thing if carefully controlled. Unbridled, it will destroy the earth, and it will start by destroying the agricultural industries of the undeveloped countries which we are trying to help.
§ 3.31 p.m.
§ Lord Thurlow
My Lords, I am grateful to the noble Earl, Lord Onslow, for giving us this opportunity to return to the subject of overseas aid. Your Lordships have discussed this matter on several occasions in the past. I would say with respect that the noble Earl is quite right to raise the fundamental questions which underlie the great structure of the administration of aid. He mentioned the seminal work of the noble Lord, Lord Bauer. Some 40 or 50 years ago I was much impressed by the arguments of the noble Lord, Lord Bauer. I was in India at the time and it seemed to me that the efforts of all those engaged in aid administration could be compared to Sisyphus rolling a stone up a hill—it just fell down—or trying to drain an ocean of poverty by dipping an occasional bucket into it. It seemed impossible to me at that time that the race between resources and population could be won.
Since then a long period of time has elapsed and things have changed very much. As the noble Earl, Lord Onslow, said, in many ways they have changed for the worse. There have been terrible examples of appalling government. However, I believe it is a mistake to confuse the economic aspects of aid with the political problems of bad government. To any of us who were involved in the process of the transfer of power from the old imperial days to independence it was inevitable that a great many mistakes would be made and a great deal of sheer villainous government would take the place of colonial administration. However, that does not mean that that is part of the horizon forever. There are grounds for hope, and I for 569 my part now firmly believe, that there is a distinct possibility, perhaps even a prospect, that the race between resources and population may be won.
Other noble Lords will speak on the enormous overshadowing problem of population which provides the parameters for the efforts that are being made. However, research, science and technology have in fact now identified the means by which the agricultural and forestry races can be won. They have ascertained that output can be increased far beyond even the appalling rate of increase of population that is predicted.
We are dealing, of course, with method and that brings us to the fact of the enormous gap in knowledge and skills between the developed world and the less developed world. It is surely clear that it is incumbent on the developed world to continue to do all it can to reduce the gap by the transfer of skills. That is the most important single sector of overseas aid. It is a sector that our own government have rightly always placed at the top of their priorities. It is not an easy process of transfer. Finding the right people and giving them the right opportunities is an arduous task which requires a greater input of effort than any of the other more spectacular areas of overseas aid. However, it is enormously worthwhile and it has the greatest long-term results.
As other noble Lords have said, the main question concerns the management of aid. Nothing is perfect but experience is continuously being obtained. The Overseas Development Administration in this country is to my mind the best practitioner of the kind of methods that have proved themselves. Those methods are not set for all time. They are continuously being reviewed and refined. We are fortunate in having the noble Baroness, Lady Chalker, in charge of that department as she has unrivalled experience and wisdom in this field.
I welcome the increased resources that are being given to non-governmental organisations as instruments of our own aid. The amount of money that has been given so far does not amount to a tremendous sum. I believe about £30 million is being given to the NGOs as ammunition. Their absorptive capacity is limited, but I hope and believe that the NGOs will increasingly be able to undertake more tasks as vehicles in the aid process.
The Commonwealth Development Corporation has carried out wonderful work at no cost at all to the taxpayer. The Government lend a certain amount of money for entirely economic projects. It all comes back to the Government and in the past it has done. It is recycled and the corporation gears up anything that is given as loans and multiplies the impact of it enormously. That is an important instrument of aid.
The British Council is, of course, the main instrument, the main agency, entrusted with the administration of our technical assistance. It does wonderful work. I congratulate the Government on succeeding, despite the very difficult budgetary circumstances, in maintaining the resources of the British Council and the Overseas Development Administration this year. Like other noble Lords, I 570 hope that we shall get nearer to the target, which the Edinburgh declaration recapitulated, of 0.7 per cent. of GNP for our aid effort. We are a long way from that, and we have nothing to be proud of in this country in respect of the proportion of our resources which we devote to aid. I hope that it will be possible, despite budgetary stringencies, progressively to increase the figure.
One question which concerns me, in our efforts to help with the transfer of skills to eastern Europe and the CIS, is the impact that may have on the aid to developing countries. It is wrong that that new aid should be at the expense of the areas of the world which need aid most. I hope that some means may be found to separate those two quite distinct sectors, which involve totally different objectives.
In short, I hope that the efforts of this country in the field of overseas aid will be maintained and increased.
§ 3.41 p.m.
§ Lord Archer of Weston-Super-Mare
My Lords, I begin by paying tribute to my noble friend Lord Onslow for initiating this short debate which enables me to address your Lordships on a subject which has been close to my heart since my university days. I wish also to express my thanks to your Lordships for the warmth of your welcome to me in this House and your kindness to my wife and family.
I should like to explain why I have attached the name of Weston-Super-Mare to my title. I spent the first 18 years of my life in that seaside resort. My mother, who was a local councillor, still lives there. Weston-Super-Mare has much to commend it. In particular, I bring to your Lordships' attention an extract from the Lancet of March 1886, which some of your Lordships may have missed:The climate in Weston-Super-Mare is equable, with a mean winter temperature above that of London. In fact it is only two degrees below that of Torquay, while it is decidedly more bracing and less humid than the latter place and therefore suits a different class of invalid".The subject of this debate allows me the opportunity to pay tribute to my noble friend Lady Chalker. The work she does for overseas development is universally respected and her name has become synonymous with the achievements of the department over the past few years.
I believe that our responsibility as a nation to those in genuine need cannot be questioned. For, as every school child knows, at the beginning of this century we ruled almost half the land mass of the world. The cliché that the sun never set on the British Empire was accepted by politicians from Vancouver to Christchurch. I became aware of how that responsibility has changed during the last century when, some time ago, I met a Nigerian chief who told me with considerable pride that his grandfather had eaten an Englishman. He had himself been butler to our High Commissioner in Lagos and his grandson had gained a first-class honours degree from Imperial College.
We are aware that the United Nations has requested the leading industrial nations to invest— and I choose the word advisedly—0.7 per cent. of their gross national product in what is sometimes still 571 ineptly referred to as the third world. Although we have not achieved that target we now have the fifth largest aid programme in the world and we shall be spending nearly £2 billion in 1993.
My noble friend Lord Onslow seems to doubt that the money is well spent, but I suggest to the noble Baroness, who is to reply on behalf of the Government, that even during a period of recession there can be no excuse for neglecting our responsibility to the developing world. For as we approach the end of a century we can be certain of one fact. There will continue to be cyclones, earthquakes, droughts and epidemics where aid in various forms will be desperately needed. There will be civil strife, rebellions and wars where our influence and authority will still be called upon, although I accept that however much money is spent and however much political influence we bring to bear we shall never be able to supplant the dedicated nurse who tends the wounded on the borders of Somalia, the surgeon who performs miracles in the shanty towns of Uganda, the Oxfam worker who drives through impossible terrain to ensure that food reaches a tiny village facing famine in Bosnia, and the Red Cross officer who injects new-born children in Ethiopia to protect them from the ravages of polio and tuberculosis.
That was brought home to me vividly by my elder son, who spent last summer working in Calcutta with the Missionaries of Charity under the direction of Mother Teresa, and this summer in the mountains of northern Iraq with Kurds who were still cut off from their villages which had been devastated by Saddam Hussein.
The young so often have the ability to confront us with something that is staring us in the face. My son returned from northern Iraq to tell me that all the Kurds really wanted was the chance to vote for those who ruled them and how they envied the British that simple privilege of democracy. It should not be a privilege. The Mother of Parliaments may be a casual phrase in the corridors of your Lordships' House, but it is appalling that democracy remains unattainable to the shopkeepers of Shanghai, the coffee growers of Kenya and the gauchos of Argentina.
At last, from Kazakhstan and Armenia to Moldavia, the once-enslaved peoples of the old Soviet Union are tasting the first fruits of democracy. Across South America, the small farmers of El Salvador are trying to build that democracy from the ravages of war, the Nicaraguans are groping forwards after a decade of Marxism, and the largest countries on that continent—Brazil and Argentina—are shaking off the legacies of dictatorship. Even in Africa the Nigerians are grappling with a new constitution, the Kenyans are poised for a multi-party election, while South Africans of all colours are edging hopefully towards a democratic state. In Asia the budding entrepreneurs of Shanghai and Canton are yearning to shed the communist yoke. Even the last grim trio of old-style pro-Soviet communist dictatorships—Cuba, Vietnam and North Korea—are beginning to buckle under the advance of freedom.
We are told that we live in a dull age. I shall have none of it. To have witnessed the collapse of 572 communism in the Soviet Union, the dismantling of the Berlin wall in eastern Germany and the emergence of electoral reform in Hungary and Poland convinces me that the next generation will see democracy flourish in many countries that we must have considered beyond hope. Certainly, that is the belief of my elder son. On his bedroom wall is a photograph of a young Chinese student standing courageously in front of three tanks where, in my university days, there would have been a picture of Martin Luther King leading a civil rights march into Alabama.
Lest your Lordships should imagine that the Archers are a family dedicated only to service, I feel that I should point out that while my elder son spent the last two summers in Calcutta and Kurdistan my younger son spent the same holidays in Monte Carlo —with a blonde from California with very long legs.
I conclude on what I hope will not be considered a controversial note. I have been told that your Lordships' House prefers the more courteous and sedate approach when stating one's case. I shall attempt, however unnatural this may be for me, not to disappoint your Lordships. However, should I come across any cause that I believe warrants your Lordships' support, any injustice that demands your Lordships' redress, or any unfairness that requires your Lordships' wisdom, I will not hesitate to bring it to the attention of the whole House. I will at all times try to live up to the reputation of your Lordships' House as expressed so eloquently by the Scottish bard, Robbie Burns:Princes and Lords are but the breath of kings,An honest man the noblest work of God".
§ 3.51 p.m.
§ The Earl of Longford
My Lords, it is a genuine pleasure to follow the noble Lord, Lord Archer. When I was in publishing, I once asked a famous literary agent which author he would prefer on his books more than any other. He said he would prefer the noble Lord, Lord Archer. I said, "What has he got that most of our other authors haven't?" He said, "He makes you turn over the page." That is obviously a great asset in a writer. I look round the House, which has many writers. I believe that here the noble Lord will have the capacity to make people listen to him. It is a convention that no one should leave the Chamber during a maiden speech. I am sure no one would have wished to leave during the maiden speech of the noble Lord.
The noble Lord paid this House the great compliment, as reported in The Times, of making nine drafts of his speech. I do not know whether, had he made only eight drafts, the speech would have been shorter or longer. But it could not have been any better. Having been a student of his books, I realise that his aim is to be the first among equals. He will understand the allusion. But he will no doubt be well aware of the instruction in the Gospels: if you want to be first, you have to be like him who serves. I am sure he will serve this House most effectively in the years to come.
The noble Earl, Lord Onslow, is the kind of Peer of whom we need more in this House. In a sense, if he 573 had not existed, it would have been necessary to invent him. It is what people imagine the House of Lords to be made up of. His views are undoubtedly those which the popular press associates with your Lordships' House. He takes the view, as I understand it, that if you hand out money to a poor man you almost certainly do him harm. It is a convenient doctrine. We all know how difficult it is, when you see someone in the street and he wants your money, to say frankly, "In your own interest, my dear fellow, I'm afraid I must keep my wallet in my pocket." The noble Lord has a philosophy about all this which is quite profound and needs stating. Most of us are so shocked compared with the noble Lord. I am afraid I do not agree with him.
§ The Earl of Onslow
I did not say that at all. I asked: is it a good idea to give money to the rich man who is oppressing the poor man, because none of it is going to get to the poor man? That is where the noble Earl, Lord Longford, has totally misunderstood what I was saying.
§ The Earl of Longford
The noble Earl can interpret his own speech in his own way. I have heard him twice and I am afraid I regard him as standing for a point of view that went out in the 19th century. We need more of that kind of thing here if only to make us think a little harder about why we believe what we believe.
If we take the noble Earl's point of view about aid, I do not know, but probably he is very pleased with the record of the Government. He is not the only one who is perhaps pleased. I am sorry that the noble Baroness, Lady Chalker, is not here—although in a sense I am not sorry that we are to be addressed by her much admired substitute, the noble Baroness, Lady Trumpington—because I wanted to quote something that she said on a previous occasion. She would not say anything that she did not believe, and she said, at col. 309 on 11th November, "Our record is sound." That is the record on overseas aid. I do not know whether it goes back to 1979, or to 1991.
Does any Christian in this audience really believe that the record of the Government has been a Christian record since 1979? I shall not bother noble Lords with facts quoted at the time. The proportion of overseas aid has fallen since 1979 from 0.51 per cent. to 0.32 per cent. Is anyone proud of that? Is that a sound record? I am ready to give way to anyone who rises and says, "That is a good show. That is just the way we want it. Bring it down a bit further, if we can set about it along the principles of the noble Earl, Lord Onslow." I say it is a disgrace.
The record since 1979 is a disgrace. That is my point of view, and one which I think is widely shared now. In the last debate all sorts of grave forebodings were uttered about the cuts to come. On the whole, I suppose, a sigh of relief has gone up, as it might from a man who has been condemned to be hanged and is then told that his sentence has been commuted to life. It is that sort of relief. It is difficult to know, but the noble Baroness, Lady Trumpington, will tell us whether it is true that in the next two or three years 574 real development aid will be cut. It would appear to be so, but everybody can play about with the figures. That would appear to be the case. It is not so bad as it might have been, but it is very bad. That is the way I would approach the subject.
I have had most of my time already, so I shall say just a few more words.
§ The Earl of Longford
I have had half of that. The longer we go on talking, the less remains. I shall just say one word from the point of view of CAFOD. The Church of England is not speaking here today, I am sorry to say, as it is very strongly represented in all these areas. Perhaps some Roman Catholic dissident, or some Anglican defector for about 50 years can say just a word about CAFOD. I realise that CAFOD works in relief with all the Christian bodies.
I am not clear whether the noble Earl, Lord Onslow, will refuse to admit the full implication of his words but the general implication is that overseas aid does more harm than good. That is his general implication. I say only that no one can prove that in a few minutes. I take just one particular example from CAFOD; there are many other examples. The conservation based rural development project for the Adami Tulu district in Ethiopia commenced in January 1988. The situation there was absolutely hopeless. It suffered five years of failed harvest and everything went wrong; now it is exporting food. Perhaps we may take just that one example. Of course it does not prove that all aid is being well spent. But I think the noble Earl, Lord Onslow, has done his bit. He has outraged us; he has outraged everybody with any conscience. But he has done a good job in making us think for ourselves. Let us thank him and go on with the Christian task of increasing overseas aid.
§ 4 p.m.
§ Lord Selsdon
My Lords, the debate has not gone quite the way I thought that it would. In a provocative way my noble friend Lord Onslow advised us that the title of the debate was unjustified. Other noble Lords made comments which made me think again about what I should say today.
This morning I had the privilege of being in Westminster Abbey at a service for the children of courage, who came later to the Palace of Westminster. They were received by Miss McWilliam at a grand children's party downstairs. During the service there were a few prayers and we thought of the afflicted children present. The prayers were for people with even greater afflictions in other countries. I tried to recall an old psalm:Hungry and thirsty their soul fainted in them and they cried unto the Lord in their trouble and he delivered them from their distress".That psalm is for distress at sea. It is the origin of the cry for aid in distress—"mayday, mayday, mayday" —adopted as the international call. In almost every newspaper, almost every day, one sees a picture of a thin impoverished child threatened in whichever country. To say that there is no need for aid is almost as bad as saying that there is no need for man.
575 My noble friend Lord Archer has great power with the written word and today he demonstrated that he has even greater power with the spoken word. He and his speech have something in common. We expected him a long time before he arrived and we were advised that his speech would be made long before today. But in 10 brief minutes he encompassed the world and reminded us that there are several kinds of aid. One refers most frequently to humanitarian or genuine aid. Why is such aid necessary? Whether derived from the sea, or not, it is based historically on natural disaster; for instance, flood, famine and pestilence. They have recently been replaced by a new form of disaster which one might call simply "political disaster".
The changes in politics around the world have caused a great deal of disruption to many countries, some of which had historic stable positions. However, today incitement, internal distress and internal war leads one to ask what has happened in the aid world. When we had East facing West and a Cold War we were faced with examples of another type of aid called "military aid". For whatever reason East and West reinforced countries in the second and third worlds with arms. That military aid was suddenly switched to humanitarian aid in a way that I find difficult to absorb or to understand. It seems that today we spend more money on sending troops to ensure that aid gets through than we do on the aid itself. Perhaps, therefore, the distribution of aid has caused the greatest problem.
I believe that in future we need to rethink the situation. Humanitarian aid, or aid for distress, can never he forgotten and must always be needed with regret. However, thereafter we are talking of a new kind of aid—indeed, I would drop the word "aid" and use the phrase "development assistance". In that respect the United Kingdom appears to be taking a lead based on its past and on its recent rethinking. One of our first aims and ambitions is to try to eliminate political disaster by assisting, through our own know-how and the strength of our institutions, those countries which are in distressed and disturbed situations to regain stability and productivity.
That calls not so much for humanitarian aid but for development assistance. First, it calls for assistance in the organisation and structure of institutions that within the framework of democracy, however defined, will permit a nation to develop its own national resources, whether mineral, agricultural or human. Thereafter it can generate foreign exchange and reserves, which is easy once that productivity is put in place.
I refer now to the Know-How Fund which was created in 1989 in order to assist Poland as it moved towards democracy. Some £25 million was first committed to the fund and that was increased to £50 million. It was then extended to cover all eastern and central Europe and more recently Albania. That fund is not lively reported upon but I draw your Lordships' attention to its recent annual report, which comes under the Foreign Office. The fund has done a great deal of good in a relatively short period of time. It has made available large amounts of money and in terms of investment studies and so forth its budget has 576 supported some 250 applications from British companies, mostly in the private sector, to start new ventures in those countries. Investment, together with political stability, will help to reduce the need for aid world wide.
Another instrument, which has been referred to in previous debates, is the Commonwealth Development Corporation. That body was set up originally for the Commonwealth. Indeed, some 70 per cent of UK aid still goes to Commonwealth countries. Without any real drain on the public purse that corporation accounts for an expenditure which is equivalent to 20 per cent. of the total bilateral aid budget. Your Lordships may not realise that it pays interest to the tune of some £25 million per year and corporation tax of some £15 million per year. The Commonwealth Development Corporation and the Know-How Fund could, if they were allowed to operate in broader fields, be instrumental in encouraging increased development and investment world wide. Will my noble friend consider broadening the concept of the Know-How Fund to include countries outside eastern Europe? At the same time, will she consider broadening the brief and the mandate of the Commonwealth Development Corporation in order that it may operate in a wider range of countries?
With those two suggestions comes the possibility of private sector investment. That is a real possibility because we are not talking about the third world; we are talking about the second world and countries with enormous natural resources. They have a real demand for manufactures and the ability, with trained and potentially trainable labour, to make a real contribution to the redevelopment of world trade.
One of the Government's policies—indeed, it is that of any government—is to say that trade will encourage development almost more than anything else; hence the importance of GATT. But trade without the investment which follows it will create a weak base because development through investment is vital.
I return to a situation that we face at home. We have a recession yet there is a demand for our goods and manufactures in many parts of the world. There are instruments of government which can encourage the development of that trade. There is the Export Credits Guarantee Department, which needs reinforcing and strengthening. I understand that approximately £100 million is to be committed to the aid trade provision about which my noble friend may comment. I should like to know where and why. At the same time, our contributions to multilateral agencies have been growing. We are still short of the perceived target of 0.7 per cent. I commend to your Lordships a document which I tried to obtain earlier and which should have been available in this House a week ago. It is a copy of the latest British aid statistics and is worth while thumbing through. It demonstrates the breadth of our aid programme world wide.
I tried to find a quotation which was appropriate to more than distress. I found a verse by a Mr. Banks which reads: 577For the cause that lacks assistance,For the wrong that needs resistance,For the future in the distanceAnd the good that we can do".
§ 4.9 p.m.
§ Lord Alport
My Lords, I thank my noble friend Lord Onslow for initiating the debate. Perhaps your Lordships will forgive me if I recall that the motive of the United Kingdom in providing overseas aid derived originally from our sense of responsibility for our colonial empire. As colonies became independent and as their need for development increased, so our aid effort was extended.
Aid was originally the responsibility of two departments of state: the Commonwealth Relations Office on the one hand and the Colonial Office on the other. At the same time the CDC—the Commonwealth Development Corporation—to which reference has been made in previous speeches, was set up to initiate and invest in projects which would contribute to improving the standard of living and economic viability of newly-independent, undeveloped countries of the Commonwealth. Great care was taken in those days to ensure that aid and investment had no political strings attached, and was seen by the recipient countries for what it was intended to be, only a direct contribution to their development and improved standards of living.
It was to give added emphasis to this that the Department of Overseas Development was set up in the late 1950s, separate from the Foreign Office, the Commonwealth Relations Office, and the Colonial Office. In recent years, however, the fact that overseas development has become part of the Foreign and Commonwealth Office has meant that the provision of aid has become increasingly a means for supporting British foreign policy overseas. Aid is given, or perhaps tends to be withheld, partly to the extent to which Her Majesty's Government approve or disapprove of the policies of the recipient governments, as opposed to the extent to which the aid is needed to improve the lives of the people over whom they rule. Partly it is given in order to support British commercial interests in the country concerned.
Aid is no longer directed solely towards the development of the under-developed countries of the Commonwealth, and so we find that the Commonwealth Development Corporation cheerfully invests, for instance, in the prawn industry in Thailand and in the telecommunications system in Ecuador. I totally disagree with my noble friend Lord Selsdon, who wished that process to be extended.
It is worth drawing your Lordships' attention to the extent to which British overseas aid policy has changed, because it has two results. First, it weakens an important element in the relations between the United Kingdom and the third world countries of the Commonwealth. Secondly, by linking aid to political influence it will increasingly be seen by those who receive it as a new form of colonialism.
As we know, the road to Hell is paved with good intentions, and there is today a very good example of the connection between aid and politics in Somalia. 578 Thousands are dying of starvation. To help them to get the food they need 30,000 American troops have been sent to take control of the country and in the hope of enabling food to get to the starving, to disarm the gunmen, to restore some sort of law and order. It is clear from what the Secretary General of the United Nations has said that it is hoped that thereafter Somalia will have established indigenous representative institutions acceptable to the world—that is, of course, to Western opinion—as seen through the eyes of the United Nations.
Anyone who knows the clan system and character of the Somalis knows that unless Somalia becomes a sort of United States or United Nations mandate, to use an unfashionable term, if the American troops withdraw in a month or even in six months' time the warlords will be back in business and the gunmen back on the streets in a matter of days. I am not in any way decrying the American effort. It is the sort of thing we might have done in the last century. After all, British penetration of East and West Africa was largely the result of a great humanitarian effort to end the slave trade.
If, as some noble Lords have argued, aid should be used to promote human rights in a country—that is, the release of political prisoners, or the institution of political forms along lines acceptable to foreign eyes —then, to insecure and suspicious governments in the third world, and particularly in Africa, a new form of colonialism will seem to be starting. The United Kingdom should be extremely careful how far it allows itself to become involved in using aid as a means of achieving political objectives, whether under the auspices of the United Nations or of the European Community. After all, we have had a long and successful experience of being an imperial and colonial power, but the world today is not the world in which our empire was created. We can still try to provide aid where it is needed. We can still use our very real influence through diplomatic means to ensure human rights and ordered government. We can stop the supply of arms. But if we allow our aid effort to drag us into situations which require military action and the assumption of political responsibilities in overseas countries, our whole aid policy will become discredited. If there is to be a new era of humanitarian colonialism, I believe strongly that Great Britain of all countries should ensure that it does not become involved.
§ 4.16 p.m.
§ Lord Reay
My Lords, like other noble Lords I feel and regret the absence of my noble friend Lord Bauer from this debate. As my noble friend Lord Onslow acknowledged in his audacious and provocative speech, he derives the core of his ideas from the brilliant and illuminating writings of my noble friend Lord Bauer. I have often wanted to ask my noble friend Lord Bauer why he thought it was that a radical Conservative Prime Minister like Mrs. Thatcher, as she then was, should have sent him here yet never sought to put into practice the only possible policy that could have followed an acceptance of his ideas; namely, the abolition of the aid programme.
579 Perhaps the answer lies in politics. We want to give aid like we want to give to charity. We feel it our duty. It clears our consciences. We do not want to achieve anything by it. So when my noble friend Lord Bauer, or my noble friend Lord Onslow, can demonstrate that we achieve nothing, or that what we achieve is actually harmful, we are perhaps not as concerned as we might be. If that is the case, then the Government should assume, as rightly they have assumed, responsibility for doing all they can to ensure that the money spent on aid is well spent.
Speaking for myself, I was delighted and relieved that the overseas aid budget was left intact in the recent public expenditure round. I would congratulate my noble friend the Minister on that. The modest financial saving that might have been made would surely not have been worth the outcry that would have followed. The record of this Government on aid, I would suggest, has been excellent. Although the aid budget had, of necessity, to suffer when across-the-board cuts in government expenditure were made in the early 1980s, subsequently it was allowed to resume its increase, adding 8 per cent. in real terms since 1987–88. Today, our aid programme runs at well over £2 billion a year. We can be proud of the fact that it is the fifth largest programme in the world. It is also widely praised for its quality, for being well targeted, and its expenditure well controlled.
We are lucky that we have, or the developing countries are lucky that we have, outstandingly efficient voluntary organisations. The Government have done well to introduce considerable conditionality into the distribution of aid, and here I cannot follow my noble friend Lord Alport. Pressure is now put on aid recipients with unimpressive records to open up their countries to foreign investment, to liberalise their trade, and to clean up their administrations. Indeed, an increasing part of our aid rightly goes on helping countries in those areas.
The idea of attaching political conditions to aid was once indignantly rejected as imperialist by most developing countries. But with the collapse of the Soviet Union has collapsed also any credible alternative to the capitalist system in the eyes of developing countries. The ways of the West are not repudiated as they once were. Many elements in developing countries approve of the fact that conditions should be attached to aid, seeing it as a means to help them secure better government.
In pursuing this line the Government have been in tune with the development of opinion within the European Community and OECD. Indeed, I believe they have given a lead.
Nevertheless we must remain clear in our minds about which of our policies bring the most benefit to the developing countries. It is the expansion of trade which brings the greatest benefit to developing countries and indeed it is they which, above all, benefit most from the growth of trade. To take an example from United Nations figures, world trade in manufactures multiplied by a factor of seven in the years between 1970 and 1986. At the same time the share of the developing countries in that rapidly expanding trade grew from 3½ per cent. to 13 per cent. 580 It was that phenomenon which produced the NICs in Asia; in our lifetime they have been low-income developing countries. It is the observation of that phenomenon which has helped to make developing countries more favourable to the process of trade liberalisation.
The story of the liberalisation of trade will not end with the Uruguay Round, whenever that is completed. Plenty of trade barriers will still remain on agricultural products and textiles, for example, although progress is being made. The fight for free trade—of such crucial importance for the countries of central and eastern Europe—must be maintained. I know the Government will maintain it, and I hope they will continue to enjoy the support of the parties opposite. In my view, however, little service is done for developing countries by harping on the degree to which donor countries have failed to reach the United Nations target of 0.7 per cent. of GNP. Personally, I regret that we ever subscribed to that target. It simply encourages an attitude of dependency in developing countries and gives currency to the belief that our generosity, and not their efforts, holds the key to their future development. It is also a particularly misleading target, since a country could progress towards it by shrinking its economy, without of course any benefit to the developing countries.
Our appearance in this league table, however meretricious it is, on a level with Switzerland, Japan and way above the United States, nevertheless seems to me eminently respectable and generous. Our aid programme began as a post-colonial phenomenon, as money which we spent largely, to the tune of 70 per cent. or so, on Commonwealth countries because we were loath to say goodbye altogether to empire and its obligations and ties. Today our feelings towards the Commonwealth have changed, they are less intense. But meanwhile, as the world has integrated and the spread of information has been revolutionised, the British public is daily reminded of the extent of suffering in aid-receiving countries. I doubt whether the public would welcome—certainly it does not seem to demand—a major cut in our aid budget.
Meanwhile, a new horizon is rapidly opening up closer to our own doorstep. The needs of the countries of eastern Europe and of the former Soviet Union are pressing themselves ever more urgently on our attention. We cannot ignore them. We must do everything we possibly can to give them access to open markets and help with the building of those institutions, skills and habits which are necessary for the proper operation of a democratic capitalist system.
They, the countries of central and eastern Europe, must come to play a more important role in, and receive a greater share of, our total overseas assistance programme. We must help them help themselves. We cannot do it for them—a lesson which to this day we probably have not fully learnt so far as Commonwealth countries are concerned. But in the future they too, and we in our relationship with them, will have to take aboard that truth.
§ 4.24 p.m.
§ Viscount Craigavon
My Lords, obviously I am grateful to the noble Earl, Lord Onslow, for introducing this debate. If I may say so, I think he was slightly ambitious in introducing such a controversial thesis—almost a philosophical thesis—into such a short debate. I had the chance, some years ago, of taking part in a debate with the noble Lord, Lord Bauer, on population. That is the subject I am mainly going to speak about today. The noble Lord, Lord Bauer, decided that he had not got the better of the debate on the Floor of the House and he continued a correspondence with the Minister for the following six months, which the Minister then circulated to the speakers. So I had a very good idea of how controversial is the thesis which the noble Earl, Lord Onslow, is now advancing.
As the noble Lord, Lord Beaumont, has pointed out, I think there are definitely two sides to this argument. However, I certainly would not criticise him for raising it in this way although the actual circumstances do not give the chance for a proper debate on this subject. I should like particularly to focus on one area, which is the responsibility of the ODA: that is its Health and Population Division. I believe that area underpins much of the work of the ODA generally, especially for the long term. I should like to advocate to the House in general and to the noble Earl, Lord Onslow, in particular, that money spent in this area is money well spent. I believe progress can be made on this. The noble Lord, Lord Thurlow, used a rather graphic phrase referring to the overshadowing problem of population. I do not personally think of it like that, but there is a considerable problem to be addressed and I believe that the ODA is attempting to do so.
May I first express a welcome to the noble Lord, Lord Rea, on the Opposition Front Bench. He has been a very considerable and well-informed supporter of population in the area in which I have been involved over the last few years. I know that he is not an uncritical supporter, but it is very welcome to see him on Labour's Front Bench.
I should like to refer to a quotation from a United Nations agency, to be found in the excellent and highly readable booklet produced by the ODA last September, entitled Action on Health and Population. Significantly, the quotation does not come from the United Nations Population Fund but from UNICEF and it says:The responsible planning of births is one of the most effective and least expensive ways of improving the quality of life on earth".The commitment of the Minister, the noble Baroness, Lady Chalker, in this field is widely acknowledged. To me she seemed to be taking the lead in Europe, both in the preparations for the Rio Summit and in the recent excellent resolution under her chairmanship of the EC Development Council on Family Planning in population policies in developing countries. This resolution was a considerable achievement in focusing the thoughts and maybe the actions of our European partners in this particular area.
582 In this resolution it is useful to see that while recording the progress that has been made in making family planning more widely available, it has been noted and accepted by our European partners that:It has been estimated that 300 million women and men worldwide would like but do not have access to the means freely to plan the number and spacing of their children".That is reflected in the frequently used but nevertheless effective slogan of the ODA: "Children by choice, not chance."
The second part of this Development Council resolution is entitled "Framework for Action" and it acknowledges the pressing need for increased activity in this field. It says:Resources are relatively scarce in relation to needs".The various initiatives and priorities mentioned will be followed up both before and during the next Development Council meeting under Danish chairmanship. It is reasonable to hope that this resolution will help in galvanising at least some of our European partners in this field.
In trying to set an example, how do we and the ODA fare? Our level of funding for population activities has recently improved slightly and is now just over 1 per cent. of the ODA budget. It would be difficult at this time to ask for more new money, but I would hope that within the existing ODA budget a significantly greater proportion could be directed to population activities.
I welcome the considerably increased support for the United Nations Population Fund, UNFPA. The increase has been of about 50 per cent. over the past two years. It is very likely that both the UNFPA and the IPPF, which is the International Planned Parenthood Federation, will benefit significantly from the change of American attitude following the change in American leadership. The prospect of the re-entry of the United States wholeheartedly into this field gives some small grounds for optimism. I say that not just because of the prospect of further dollars being devoted to this field but because the United States have considerable influence in certain parts of the world, and their guidance and moral leadership in this area—to the extent people agree with that phrase—is needed at the world population conference to be held in Egypt in 1994.
In this country some significant figures can be seen in the Answer to my Question for Written Answer on 26th November asking about the level of ODA grants to United Kingdom NGOs in the past three years. The ODA has rightly given encouragement to the excellent work of Marie Stopes International with a substantially increased grant. The ODA has also tried to encourage some of the larger development NGOs to consider the incorporation of population elements in their existing and future programmes. That practice is becoming much more common and acceptable. One of the major international development agencies of which I have particular knowledge is CARE. That body is currently making population one of its priority areas. The increasing importance of the role of NGOs, which was touched on by the noble Lords, Lord Beaumont and Lord Thurlow, was stressed by the move of the Prime Minister at the Rio Summit to call a follow-up international meeting of NGOs next year 583 in Manchester. It is recognised that the commitment and involvement of all the independent sectors is critical to the effective implementation of the agreement signed at the Rio Earth Summit.
Despite the considerable efforts and plain speaking of the Minister, the noble Baroness, Lady Chalker, at Rio the role of population was unfortunately downgraded. I know that the lead ministry in the follow-up conference as at Rio is the Department of the Environment, but I hope that the Minister will convey to her colleagues the very strong feeling of just about everyone involved with population organisations that it is essential that population is put back firmly and formally onto the agenda at the Manchester conference.
As my earlier UNICEF quotation implied, those of us who talk about the urgency of population are not just talking about numbers but about quality of life —for example the spacing of wanted children with a chance of proper nutrition and care. To those who were prepared to listen at Rio that message and its connection with the environment got through. The enormous unmet need for family planning has been agreed. The existing money allocated to this area by the ODA is well spent. We are most fortunate in our Minister. I hope that she will be able to keep up the recent momentum by allocating a higher proportion of the existing ODA budget to population activities. Population aid necessarily has its main benefits in the long term, and in this particular field we cannot afford the short-term option.
§ 4.33 p.m.
§ Lord Bonham-Carter
My Lords, I should like to join others in thanking the noble Earl, Lord Onslow, for introducing the debate, even though I find myself in disagreement with almost every sentiment he uttered. Equally, I have great pleasure in following the noble Viscount, Lord Craigavon, with whom I find myself in very general agreement.
One thing the debate demonstrates is that debates change nobody's opinion whatsoever. We debated this subject on 11th November and a large number of the people who are speaking today spoke then. They all spoke in exactly the same spirit and used the same arguments that have been used this evening. I propose to follow in those admirable footsteps.
I must admit it is a very odd time to be discussing the theoretical pros and cons of aid, for however seriously one may take the arguments developed by the noble Lord, Lord Bauer, in the 1970s it was in the 1970s that he developed them. As I tried to point out at the last debate—with which I think the noble Earl, Lord Onslow, agreed at that time—emergency aid is different from long-term development aid; it falls into a different category from long-term development aid. Thus, the Bauer doctrine does not apply to it.
What seemed to me to be wrong about the speech of the noble Earl, Lord Onslow, was that he failed to establish the link between aid and the evils which he deplored. Aid may have been given to governments guilty of many sins of commission and omission, but it does not follow that aid caused those sins to be committed. The fact that Britain got rich in the 1850s 584 without overseas aid does not mean that the absence of overseas aid made Britain rich. The fact that people survive without doctors and medicine—as I am sure the noble Lord, Lord Rea, will agree—does not mean that doctors and medicine have not helped some people to survive. The fact that many people under medical care die does not mean that doctors are always responsible for their deaths. It was that logical gap in the noble Earl's speech which made me find his arguments intellectually unconvincing, even if they might also have been emotionally unconvincing—as they were.
To be discussing this matter is very peculiar when the world is awash with areas that require overseas emergency aid quickly and on a massive scale. The three main areas in question are: Somalia, Bosnia and Southern Africa. In the case of Somalia and Bosnia the situation has deteriorated in the past year. In the case of Southern Africa there has been rain, but whether it is enough nobody knows. Even if the rain is enough Southern Africa still suffers from the consequences of the most appalling drought in living memory, the conflicts that have wracked that region of the world, AIDS and the impact of world recession. For all those reasons we must look at aid to Southern Africa with great care because it remains very high on the agenda. We must ask whether government policy measures up to the very serious demands which have been made by those three areas—not to speak of Bosnia and eastern Europe—all of which require substantial investment from this country, much of which goes under the name of aid.
The plans revealed in the Statement in November show a nominal increase in overseas development aid to the south in 1993–94 but a freeze in 1994–95 and 1995–96. I do not think that those concerned deserve the praise which the noble Lord, Lord Reay, gave them. The freeze means that there will be a fall in real terms by the amount of inflation and because of the consequences of devaluation, as explained vividly and compellingly by the noble Lord, Lord Bridges, in the last debate. I conclude that it cannot be right to freeze aid in 1994–95 and 1995–96 but that at the very minimum the level of aid should be maintained in real terms, not only for humanitarian reasons.
Here we come to the very interesting point made by the noble Lord, Lord Alport. It is undoubtedly the case that the aid we are giving now and have given for the past few years is not only for humanitarian purposes but for political purposes. The fact of the matter is that in many countries of Africa there are signs of moves towards more open and democratic government, which I think all of us applaud.
It is true also that to introduce the political reforms which those countries are trying to do, is an extremely difficult operation—perhaps one of the most difficult upon which society can embark. What is certain is that it is almost impossible to make those changes at a time of economic crisis with standards of living falling and enormous economic pressures present. Therefore it seems to me to be right and proper that at such a time we should be aware of the strains and pressures with which the leaders of those African countries are faced. We should give aid to ameliorate them.
585 That does not seem unwise, even though it may be called neo-colonial. We are pursuing precisely the same policy in central and eastern Europe. The reason we are giving large sums of money through the Know-How Fund—substantial amounts, though perhaps not enough—is precisely because we want to support the changes that they are making to their political and economic arrangements. We recognise that that is difficult and believe that those changes are more likely to be made if we help to alleviate some of the economic pressures which confront them.
I support that policy and believe that we should be open about it. We should not pretend that we are doing it for different reasons. It is valuable that that point was brought out in the debate by the noble Lord, Lord Alport. What is true also is that we are increasing the aid we are giving to central and eastern Europe and decreasing our aid to Southern Africa. The Government assert that there is no link between the two. I agree with the noble Lord, Lord Thurlow, that it is difficult to argue that increasing aid to central Europe and decreasing aid to Southern Africa are not linked. The aid is political and should not be decreased at this juncture for the reasons given.
There is a clear distinction between long-term political development aid and the emergency aid we are sending to, say, Bosnia or Somalia. The argument for long-term development aid is more difficult. It can only be justified if it is seen as an investment. If it is seen in that light there is no doubt that it is justified. In the last debate we held on this subject I pointed out that the building of roads throughout Europe by the Roman Empire significantly diminished starvation through famine, simply by making the distribution of food more easy. Similarly, the building of railways and roads in India in the 19th century by the British Empire had the same effect. That was aid that demonstrably paid off.
That kind of aid may be called investment. Every government —except, oddly enough, this Government—believe in investing in the infrastructure. Infrastructural aid which cannot be financed from within poor countries is something in which one should invest. A second form of aid which is undeniably valuable is education. Again I agree with the noble Lord, Lord Thurlow, that the most effective aid is the transfer of skills. That is what aid in education and literacy brings, and it also has an effect in helping to control the populations, for reasons we discussed in the last debate.
The case put forward by the noble Earl, Lord Onslow, has not been made out. The connection between aid and the evils which we and he deplore is not one that can be established. For that reason and other reasons put forward in the debate I feel that the aid we give now is justified. The aid we give to the South should at least be maintained at the level it has been in the past (and if possible increased) and the aid to central and eastern Europe is given for political reasons, about which the noble Lord, Lord Alport, has reservations, which I understand but do not share.
§ 4.45 p.m.
§ Lord Rea
My Lords, this physician has failed to heal himself and I am afraid therefore that your Lordships will have to tolerate my rather husky voice.
I was delighted when the noble Earl, Lord Onslow, won the ballot for this debate, although we discussed the topic only last month. Any discussion on improving the lot of the poor majority of this world is important—it is probably the most important of all issues. If we get it wrong, in the end we shall be dragged down through environmental degradation, migratory pressure and war. If we get it right the result could be steadily increasing trade, wellbeing and peace for both the South and the North.
My noble friend Lord Judd set out the need for overseas development in the last debate. He put it under eight headings. In seven of those this country would actually benefit directly as well as the less developed countries concerned. It was only the eighth heading which emphasised the moral imperative of redressing the gross imbalance between our wealth and their poverty.
The noble Earl often surprises the House. He is rather like a spin bowler. One is never quite sure where the ball is going to come from. But just as a googly can take wickets, so does the noble Earl from time to time. He certainly made some valid points, although I do not follow his whole thesis. Of course it is right to monitor the effect of aid carefully, especially when it is given to governments of developing countries. Too many projects, especially those channelled through multilateral agencies such as the World Bank and the International Monetary Fund, have only benefited the ruling elite—in Africa sometimes called the "Wabenzi" because of their taste in expensive German motorcars—and failed to help the majority of ordinary, poor people.
I do not need to convince most of your Lordships that well-targeted aid is useful; many examples have been given this afternoon. But I should like to point to the subject on the Order Paper, which mentions "development aid". That is not emergency aid. As was pointed out by the noble Lord, Lord Bonham-Carter, they are not the same thing. I much enjoyed the maiden speech of the noble Lord, Lord Archer, but he seemed to confuse the two. Well-targeted development aid will tend to reduce the number of disasters in the future which require emergency aid.
I should like to point out to the noble Earl that most developing countries would rather not need to accept aid. They would prefer to pay their own way in the world and heave themselves up through trade and hard work, as we did in the last century, though we took a lot longer than is necessary now. Unfortunately, the cards are stacked against developing countries, as has been pointed out by a number of noble Lords—and here I mix a metaphor: the playing field on which they have to trade is pitched so far against them that it is almost like a football pitch on the north face of the Eiger with a howling gale blowing down it. Prices for traditional commodities have hit rock bottom; international debt is an onerous burden and merely servicing it absorbs most, if not all, of the earnings of some of the poorer countries, let 587 alone allowing them to pay the debt back. The value of allowing aid to flow back to developing countries is critical to allow many of them to remain solvent and keep going existing essential institutions such as education. Even that is not enough for many poorer countries, especially in Africa, whose standards of living are falling dangerously at the moment.
To make matters worse, the less-developed countries have difficulty selling their own products which are value added —that is manufactured or semi-manufactured products—because of the import tariffs imposed by the industrial countries. The noble Earl gave a marvellous example of that last month; namely, the Bengali jeans manufacturer whose business went bust because of the raising of tariffs in North America. The World Bank has calculated that sub-Saharan Africa will need development aid to increase at 4 per cent. per annum during the 1990s to meet modest development targets. But the best aid that we can give would be to get an economic bulldozer to level out that precipitously adverse playing field in trade.
When I spoke to the noble Baroness, Lady Chalker, last week she spoke enthusiastically about the benefits which will come to the developing world from GATT when the final arrangements are agreed. She did not seem to realise that GATT is very much a double-edged weapon for the nations of the South and probably for us as well. When the noble Baroness replies (I have given her notice) can she say whether tariffs in the industrial countries really will come tumbling down and, if so, how soon after the new GATT regime starts? Equally important for food production in the less developed countries will be the GATT position on the export of subsidised food by the countries of the North. Will the subsidies be reduced or completely eliminated? The impact of imported subsidised food is highly damaging to small farmers in the South who cannot compete and who may thus give up and migrate to the already overcrowded cities of the third world. One recent study has estimated that a million of Mexico's 3 million peasants will be displaced by US big farming undercutting maize production as part of the North American Free Trade Agreement. I keep wanting to refer to the noble Lord, Lord Bonham-Carter, because I so much agreed with all his speech. As he said, free trade has a very damaging effect on food production.
§ The Earl of Onslow
My Lords, I am grateful to the noble Lord for giving way. I so agree with what he says. When he reached the point about United States maize production, it is damaging because it is so subsidised. That is the evil of it.
§ Lord Bonham-Carter
My Lords, I am very grateful to the noble Lord for giving way. The sentiment about free trade with which he agreed was in fact expressed by my noble friend Lord Beaumont.
§ Lord Rea
My Lords, what is worrying about GATT to all the major NGOs operating in developing countries is the proposed multilateral trade organisation (MTO) proposed in the final draft to run the GATT arrangement. That will be a new bureaucratic world power alongside the World Bank and the IMF, with very little democratic control apart from a biennial meeting of heads of state. It is necessary that the aims, structure and control of that body be subject to parliamentary scrutiny. I hope that sometime in the new year we shall have an opportunity of debating the whole GATT agreement in full because there are some very important issues which affect us and the developing world.
Perhaps I may now ask the noble Baroness to answer some detailed questions about our overseas aid budget. Again, I have given her some notice of this matter. What proportion of the budget of approximately £2 billion will go to bilateral aid; how much to multilateral agencies; how much is going to NGOs to assist with their work and how much is going in the coming year to the population-related activities referred to by the noble Viscount, Lord Craigavon? I appreciate very much his kind words. How do all the different proportions of aid relate to the figures for previous years? As regards the multilateral agencies, can the noble Baroness tell us the result of the recent replenishment, last month, of the International Development Association, which is part of the World Bank? How does that relate to previous replenishments, and what influence have we had in the decisions about how the money should be disbursed? It has been the subject of major criticism in the past, particularly concerning the possible damage which the World Bank's projects may have on the environment.
Can the noble Baroness also say what is the current status of the International Fund for Agriculture Development? In the minds of many of us it is a very effective United Nations agency in relieving poverty through its assistance to small farmers in the poorest countries. What will the actual effect be of the devaluation last September on our aid budget? That is a matter which has been mentioned by other speakers.
I turn briefly to debt. Can the noble Baroness say how near the Trinidad terms are to achievement? I have two very brief final points. We have discussed the "conditionality" of aid in Question Time in recent weeks. The noble Lord, Lord Alport, has raised the matter, as have other speakers, as to how we might influence the type of regimes to which we give aid. As regards Indonesia and other countries, the Government stand accused of selling arms to repressive regimes. In answer they claim that these countries have a legitimate right to defend themselves. Those countries buy arms while receiving a great deal of aid from us. As we know, Iraq used the arms which were sold to it while we were giving it aid against its own people and eventually against us.
The Government claim that selling arms to these countries is legitimate because they have a right to defend themselves. Perhaps I may here quote from General Hartono, of the East Java military command. After a recent army exercise in Java he said: 589Present threats are different from 20 years ago. From our analysis of events and incoming information, the most likely scenario in the next 5 - 10 years will be domestic security disturbances".I need not say anymore after that.
Finally, as regards the points made by the noble Viscount, Lord Craigavon, I can only add to his remarks that a small expenditure now will pay big dividends in helping the world's population to level off in the next century at a lower level.
Our efforts in the field of overseas development aid are woefully inadequate. We are tantalisingly close to being able to achieve the target of 0.7 per cent. when we consider the peace dividend—which is still there and actually growing. Only then will we be starting to make a serious impact on the world's most pressing problem, which is the gross and intolerable discrepancy between the health and wealth of the nations of the North and the nations of the South.
§ 4.58 p.m.
§ Baroness Trumpington
My Lords, here I stand before you conscious that I am very much in my usual role as second-hand Rose in the absence of my noble friend Lady Chalker. I am sure that we all listened attentively to the initiator of this debate, my noble friend Lord Onslow, with his quaint speech, to which I shall return. Beyond reasonable doubt the maiden speech of my noble friend Lord Archer was as original in concept as we expected from his fertile brain. I add my congratulations to those which he has already received.
When my noble friend Lady Chalker of Wallasey spoke to this House on 11th November on the eve of the Chancellor's Autumn Statement, she was unable to reveal the Government's plans for aid spending. Despite some of the gloomy speculation, the aid budget is to continue to grow. The noble Earl, Lord Longford, may be heartened to hear that our external assistance programmes, as a whole, are set to rise in cash terms by more than £200 million to £2,362 million by 1995–96 over this financial year. Planned provision for aid to developing countries for next year will rise by 3.5 per cent. in cash terms—an increase of 1 per cent. in real terms—to £1,900 million. These sums are a clear demonstration of the Government's commitment to a substantial and effective aid programme for developing countries.
The noble Earl, Lord Longford, quoted my noble friend Lady Chalker when she said, "our record is sound". In fact, he repeated that once or twice. Perhaps I may continue the quote. After saying that our record is sound my noble friend said:Since 1987–88, the Government have increased their aid to developing countries substantially—by 8 per cent. in real terms. Our expenditure last year—1991–92—at nearly £1,800 million, was 3 per cent. higher in real terms than the previous year".—[Official Report, 11/12/92; col. 309.]Again, I submit that my noble friend had every reason to state that our record is sound.
§ Baroness Trumpington
My Lords, I have only a limited time; let us have a little chat afterwards.
590 I return to my noble friend Lord Onslow. He is quite right to remind us to question the basis on which we give aid. Only by a continuous process of questioning and adjustment will we ensure that our aid is used most effectively to meet the needs of the world's poorest people. But he is quite wrong to imply, as he has in the past, that aid is a force for harm.
In the minds of many, aid has become associated with crisis and despair. Images of suffering fill our television screens. But we should not let those images —vitally important though they are—obscure the progress there has been.
§ The Earl of Longford
My Lords, will the noble Lady allow me to intervene now, or is she not accepting any interventions at all?
§ Baroness Trumpington
My Lords, no.
Developing countries as a whole have significantly improved their living standards over the past three decades. Between 1965 and 1990, low and middle income countries saw an unprecedented rise of 85 per cent.
§ Baroness Seear
My Lords, why the hurry? Cannot this debate continue until half past five? Is the Minister really proposing to go on, uninterrupted, for another half an hour?
§ Baroness Trumpington
My Lords, that is very probable if I am to answer, I hope sufficiently, all of your Lordships' questions and leave time for the instigator of this debate to reply.
I have lost my place, so I shall repeat that between 1965 and 1990, low and middle income countries saw an unprecedented rise of 85 per cent.—that is, 2.5 per cent. a year—in per capita incomes. Over those years life expectancy rose from 51 years to 63, and the rate of adult literacy from 42 per cent. to 64 per cent. Those represent substantial and very real changes for the better for millions of people in developing countries.
The countries of east and south-east Asia have taken the lead. Their rate of economic growth over the past 25 years has approached 8 per cent. a year. But they were not the only countries to do well. The poor countries of south Asia —including Bangladesh and India—and Latin America increased their per capita incomes by almost 2 per cent.
The other side of the coin is, of course, less encouraging. Sub-Saharan Africa is a particular cause for concern, with its rapid population growth and frequent affliction of natural and man made disasters. The development hopes of many African countries have not been realised. But, even here, there is progress.
Many countries are pressing ahead with political and economic reform. In the debate in this House on 14th December my noble friend Lady Chalker described the encouraging changes in a number of countries in Southern Africa. Elsewhere, Mauritius, which undertook difficult economic reforms in the early 1980s, has performed well in recent years; and Ghana has transformed its policies and managed a 5 per cent. per annum growth rate.
The right domestic policies are vital. But other factors also contribute to successful development. 591 Trade and market access have been key ingredients. That is why the breakthrough in the GATT negotiations on agriculture is so heartening. Poorer countries could gain up to 90 million dollars from a successful GATT agreement: the livelihoods of hundreds of millions of people in developing countries could benefit. I am most grateful to the noble Lord, Lord Rea, for giving me advance notice of his questions. If I may, I shall return to GATT later.
Aid has also made an important contribution. The key to a country's success is its people. Long-term development aid has helped developing countries improve their health and education services so that people are better equipped to contribute to development. In addition, aid has helped produce the right climate for development and economic growth by providing the incentive and support for reform.
Close targeting of aid is a key to its effectiveness. That is why our aid is focused on areas central to promoting sustainable development. These include the promotion of economic reform, of better standards of government, the reduction of poverty, better education and health, improving the status of women, and help with tackling environmental problems.
Our aid is effective, but we are most certainly not complacent. We strive continually to ensure that taxpayers' money is used for the purposes intended. I fully share your Lordships' concern that aid should not be used to keep corrupt regimes in power. That is why our aid programmes put such a high priority on good government. Good government means more efficient and effective administration, ensuring respect for human rights, popular participation in the decision-making process, upholding the rule of law and curbing excessive military expenditure. Those are all vital in themselves, but they are also prerequisites for sustainable development and for the effective use of aid funds. Where countries flout the principles of good government we act accordingly, as we showed, for example, in suspending bilateral aid to Sudan, Somalia and Burma.
In reply to a point raised by my noble friend Lord Onslow, there have been numerous conflicting reports of how much aid is being looted. However, it is important to understand that the risk of looting is inherent in the delivery of humanitarian aid in any crisis situation. We need to weigh the amount which may be lost against that which will reach those in extreme need.
On the subject of corruption, which, again, was mentioned by my noble friend Lord Onslow, I can advise him that the Government and other donors have a duty to ensure that aid goes only to those in real need and not to corrupt or unethical political elites. We owe this duty both to our own taxpayers, who have a right to know that their money is being well spent, and to the people of the countries to which we give aid, who have the right to know that our aid will help the poorest and not line the pockets of the well-off. Given the sums involved in the international aid effort, there is inevitably a risk that money will end up in the wrong hands or be used for the wrong purposes.
592 We take this risk seriously. Our attack on potential corruption is two-pronged. The first prong is the emphasis that we put on good government. Central to good government is accountability: financial accountability, so that people can clearly see and understand how funds are allocated; and electoral accountability, so that that country's people have a real say in who forms their government. Good administration and respect for human rights are also crucial. By focusing our aid programme on those countries which practice good government we significantly reduce the risks of corruption and, by helping to promote good government elsewhere, we are helping to develop better-run administrations which will be less prone to corruption.
The second prong of our attack on corruption is our procedural safeguards. The Overseas Development Administration has rigorous criteria—economical, technical and environmental—to ensure the quality of its projects. Projects are subject to detailed and extensive financial reporting. We check that the money is being spent on what it is supposed to be spent on. We also check that what is bought is still what is needed. When British firms supply equipment for a project, we pay the firm direct. We monitor the implementation of our projects on the ground to guard against any misuse of aid funds.
Britain's humanitarian assistance has no political strings attached. Nowhere is this more seriously tested than in Sudan, and we had a moving debate on that this week. Our emergency aid is channelled to the needy through UN agencies and NGOs regardless of religious or political affiliations. Indeed, 80 per cent. of our aid is targeted on the poorest countries of the world; not to the rich, as implied by my noble friend Lord Onslow. A strongly worded resolution on human rights, in which we played a major role, was passed in the UN Third Committee recently. It attracted significant African support, an indication that concern is not confined to donors.
The noble Lord, Lord Alport, spoke about Somalia. The key problem in bringing relief to the suffering in Somalia has not been the availability of food and medicine but ensuring the security of supplies. Recent attacks on food convoys and the shelling of the UN ship as it approached Mogadishu port clearly demonstrated that the security situation was worsening. This could not be allowed to continue. We therefore fully accepted the recommendation of the UN Secretary General to the Security Council that new measures would be needed to secure the relief operation. That is why we co-sponsored SCR 794, adopted on 3rd December, authorising UN member states to establish as soon as possible a secure environment for humanitarian relief. We are contributing RAF transport planes to the operation. The operation is proceeding well with the airport and port in Mogadishu made secure and bases established at Mogadishu and Gailalassi. United States and French troops today reached Baidoa. Overall, the operation has encountered minimal opposition and the Secretary General will report on the progress of the operation on 18th December. We hope that its objectives will be achieved quickly.
593 The noble Lord, Lord John-Mackie, spoke about the Intermediate Technology development group. This is a very effective organisation which delivers aid precisely where it is needed. The noble Lord may have seen a television programme on 23rd May which featured ITDG's project on Kenya, part funded by the ODA, through which the technology to make fuel-efficient stoves is passed on to women's marketing organisations. This stimulates the rural private sector directly as well as saving scarce fuel.
The noble Lord, Lord Thurlow, referred to aid targeting. The Government accept internationally agreed targets but, in common with many other donors, we are not in a position to set down a timetable for reaching them. Future levels of our aid will continue to depend on our economic circumstances and on other calls on public expenditure. Our average aid/GNP ratio over the past five years is 0.30 per cent. It is significant that we have maintained this average during a period when our programme has grown substantially in real terms. It is important, too, to look at not only how much we have spent but how we have spent it. The OECD has commended us for the effectiveness of our aid programme, including our poverty focus.
Government aid is not Britain's only contribution to the international development effort. I specifically mention the many British voluntary agencies which do excellent work in developing countries, both in providing humanitarian relief and in long-term development work. I should like to tell my noble friend Lord Selsdon that less than 10 per cent. of our aid to developing countries consists of humanitarian aid. The overwhelming majority of our aid is for long-term development aid.
My noble friend Lord Selsdon referred to extending the Know-How Fund outside Eastern Europe. The transfer of skills and technology fundamental to the Know-How Fund is also at the heart of our aid to developing countries. British experts employed by the ODA, British NGOs and British consultants are all part of the progress. What we call the Know-How Fund in Eastern Europe does extend throughout our aid programme. It is called technical co-operation.
The noble Lord, Lord Alport, implied that commitments to the Commonwealth in our aid programme had diminished. That is not so. Around 70 per cent. of our bilateral aid goes to Commonwealth countries.
The noble Viscount, Lord Craigavon, spoke about population. Population planning was one of the key sectors identified by the Prime Minister at Rio on which we would concentrate our activities and resources. The Department of the Environment recently issued a consultation paper on the NGO conference to be held in Manchester next September. Its theme will be sustainable development, in which population has a crucial role. The Government warmly welcome responses to the consultation paper from CARE and others on all aspects of sustainable development.
I now arrive at the points raised by the noble Lord, Lord Rea, of which he gave me notice. The noble 594 Lord, Lord Beaumont of Whitley, will not be surprised that I cannot at all agree with his words concerning the French farmers and GATT. With regard to GATT, existing provisions for tariff-free or reduced tariff entry into developed countries for developed country manufactured goods will continue to apply under the general system of preferences. Exports to developing countries of subsidised agricultural produce will continue but the Uruguay Round will introduce the first restrictions on subsidies. This will be a major step forward for which the UK fought hard. Subsidised exports would be reduced by 36 per cent. in budget terms and by 21 per cent. in volume terms. Domestic subsidies will be cut by 20 per cent. Food aid is not covered by the Uruguay Round. There is no intention to restrict the ability to deliver food aid. Reduction in agriculture subsidies in developed countries should promote food production in developing countries. As at present, developing countries will be able to raise tariffs to protect infant industries or as temporary safeguard measures.
With regard to the breakdown of the type of aid, Ministers are now looking at aid priorities in the light of new planning figures. It is too early to say what the breakdown will be. I should like to point out to the noble Lord, Lord Bonham-Carter, that exchange rates move up as well as down. It is not possible at this time to say what precise impact the change in the value of sterling will have. But, in any event, spending under the aid programme is very largely in sterling.
The noble Lord, Lord Rea, asked whether developing country debt is increasing. Developing country debt is continuing to increase slowly but debt to commercial creditors has been decreasing. A growing share of the overall debt burden is made up of official debt, which is often on highly concessional terms. As a result of this and several other factors, including continued debt rescheduling, OECD figures show that the amount developing countries have been paying to service their debts has been decreasing since 1989.
With regard to government policy on debt conversions, the Government believe that it is generally more effective to use aid directly to support development activities than for financing debt swaps. But we welcome debt conversion schemes which benefit debtors by reducing the resources needed for debt servicing. In September ECGD announced that it would offer a portion of its developing country debt for sale. Sales will normally involve cancelling the debtor's foreign currency obligation with the purchaser acquiring the right to local currency. The local currency can then be used by purchasers to fund debt equity swaps. For example, sales will benefit debtor countries by facilitating investment and reducing the amount of foreign currency needed for debt servicing.
We live in difficult and turbulent times. The scene appears to change with frightening rapidity. The increases in wealth in developing countries are not just a set of statistics. They mean that people live longer and in better health, are better educated, have increasing opportunities to improve their livelihoods.
595 Aid helps to improve the quality of life for millions of people in the poorest countries. That is a goal worth striving for, and that is why I am glad to assure my noble friend Lord Archer that the Government are dedicated to continuing that vital work.
§ 5.20 p.m.
§ The Earl of Onslow
My Lords, I thank all noble Lords for taking part in the debate. It is quite fun being in a minority of one. Some of the questions I posed were brushed aside and not answered. I found it interesting that the noble Lord, Lord Bonham-Carter, said that in the Roman Empire, the construction of roads put down famine and that in the Indian Empire the railways produced more trade. That is the point I am making. Sensible development does not need outside aid. It generates its own tax base. The Aswan dam in Egypt was built without one penny of outside aid. It increased the Egyptian Government's revenues by double the amount of money—
§ Baroness Seear
My Lords, the noble Earl is not suggesting that it was the Britons who financed the Roman roads, is he?
§ The Earl of Onslow
My Lords, that is what I do not suggest. It was the Roman government. It was a unitary state with a unitary currency, all minted at Lyon, if I am not wrong. They were built by legions, although that is neither here nor there.
The point I am making is that development produces its own wealth creation. If that development does not produce wealth creation, it is a waste of money. The other important point is the realisation that dumped agricultural produce is a menace. That was mentioned by the noble Lord, Lord Rea. The noble Lord, Lord John-Mackie, said the opposite. He said that it was an awful pity to have set-aside. We have set-aside because we have a distorted CAP. It produces seriously cheap food that we dump on the world market, and that impoverishes third world countries. No one thinks that that is anything other than crassly idiotic.
It is impossible to differentiate between the economy and politics. They are one and the same thing. The point raised on ambulance aid is important. It sometimes gets out of hand. I do not know what the answer is. I wish I did. The dilemma is posed brutally in Somalia. Do we drag in people? Do we allow the money raised by honest and good people and distributed by brave people to be diverted from its target? I should not like to be unarmed in the middle of Baidoa, surrounded by a collection of warring Somali gangsters in Toyotas with anti-tank guns mounted on them, thank you very much! They then have to pay for protection, and we know what protection does. I am merely posing the questions. The noble Earl, Lord Longford, failed totally to understand that. I want to emphasise strongly that I am not saying that we should not give to the poor. I am saying that if we are not careful we shall give to the poor in such a way that it impoverishes them. What we must do is buy anything they can produce. Buy, buy, buy and—
§ The Earl of Onslow
Yes, I am winding up. We must buy anything they produce. With that I submit myself to the glare of my noble friend Lady Trumpington. I thank your Lordships for taking part in the debate. I hope that it has been a valuable debate. Before I sit down, I must congratulate my noble friend Lord Archer for keeping his speech so uncontroversial. He concentrated on Californian blondes, Weston-Super-Mare and his children and managed to avoid most of the subject. I must congratulate him. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.