Overseas Aid: GNP Target (Hansard, 2 June 1992)

§ The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)
My Lords, while we accept the target of 0.7 per cent. of GNP, we have not set a timetable for achieving it.

§ Lord Hatch of Lusby
My Lords, while paying due tribute to the noble Baroness's efforts in getting more money for overseas aid during her tenure of office, may I ask her two questions?

Noble Lords
One!

§ Lord Hatch of Lusby
My Lords, may I ask the noble Baroness one question in two parts? As we have had the same answer for 13 years now, how can the Government expect to be considered sincere when during those 13 years they have halved the percentage of GNP allocated to overseas aid despite the fact that the period has coincided with what is called the "economic miracle"? Secondly, can the noble Baroness tell the House what discussions took place in Strasbourg last month, after the Dutch Government had given a lead, with a view to asking members of the EC to pledge themselves to the 0.7 per cent. objective and so make the Rio conference a reality for the developing world?

§ Baroness Chalker of Wallasey
My Lords, my answer will certainly be in two parts after that series of questions. Perhaps I may advise the noble Lord that the policy has been consistent—and not only for the past 13 years. The last Labour Government, dim perhaps in our memories, accepted the 0.7 per cent. objective but did not manage to reach it. And that would have remained the position had the Labour Party been elected. During the past 13 years we have improved both the quality and the targeting of our aid. We now do more with the same amount of money. In addition, the programme is growing in real terms—by about 8 per cent. since 1987–88. Furthermore, the discussions that the Dutch Government sought to have in Strasbourg have not so far involved me. Our general discussion has been to the effect that we shall put forward the resources to help environmental programmes, as we are doing already. I cite but one 814 example—200 forestry projects costing well over £160 million. That is evidence of what we are doing towards UNCED before the Rio conference. And there will be more.

§ Lord Boyd-Carpenter
My Lords, is my noble friend aware that the greatest help for the third world would be steps to restrict the growth in population?

§ Baroness Chalker of Wallasey
My Lords, my noble friend makes exactly the right point: we discussed it on a Question some days ago. We shall do our very best to help to give choice to the parents of today about the size of family that they will have in the future.

§ Lord Barnett
My Lords, I agree with the noble Baroness that successive governments have not moved towards the target of 0.7 per cent. However, given that she has told us that our provision has increased since 1987–88, can we at least be assured that that will be maintained in the next public expenditure round?

§ Baroness Chalker of Wallasey
My Lords, the noble Lord should know better than to ask a former fellow commoner a question of that sort, given the office that he held in another place. We have averaged 0.3 per cent. over the past five years. I expect that ratio to continue. I do not expect it to worsen. Indeed, in some years, the proportion must have been higher than 0.3 per cent. because we know that it has been lower in other years.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that she is well supported by all reasonable people in recognising that this is not a matter of sympathy but of common sense? It is all right to agree to a principle, but it is common sense to recognise when obstacles in the way of achieving it are insuperable, as they are at this moment.

§ Baroness Chalker of Wallasey
My Lords, my noble friend is right. It is not just a question of the will and the money. Often it is a question of the ability of developing nations to utilise profitably the resources that are made available by donors. We seek to help them to do that by giving technical co-operation—to a greater extent than any other country.

§ Lord Stoddart of Swindon
My Lords, to help those of us who prefer to deal in money terms, will the noble Baroness say how much money is represented by 0.7 per cent. of GNP and how much is represented by 0.3 per cent.?

§ Baroness Chalker of Wallasey
My Lords, it depends on which year we are in and on the GNP in that year. All I can say to the noble Lord is this: I shall do my best to make sure that we do even better with aid in the future. I shall not throw around figures but I shall make sure that the aid is properly targeted and properly delivered.

§ Lord Renton
My Lords, is it not a fact that, in addition to the financial help given by Her Majesty's Government to third world countries, especially in the Commonwealth, private capital investment and massive loans by United Kingdom banks have also been of great assistance and in many cases have been a somewhat altruistic exercise?

§ Baroness Chalker of Wallasey
My Lords, my noble friend makes a very valuable point. It is quite right that loans on commercial terms should also be dealt with in a commercial way, but this Government have done their very best to relieve many of the countries which have had great debt burdens in the past. My right honourable friend the Prime Minister was to the fore in producing the Trinidad terms which will eventually relieve so many countries of even greater sums of debt. Perhaps I may say to the noble Lord, Lord Stoddart, that I omitted to tell him that 0.27 per cent. was £1,780 million.

§ Lord Taylor of Gryfe
My Lords, I pay tribute to the Minister for improving the quality of our overseas aid. Quite apart from the humanitarian impact, has she considered the effect of an increased aid budget on the competitive position of many of our exporters? Many countries are able to draw on the provisions of our larger aid budget in order to subsidise exports.

§ Baroness Chalker of Wallasey
My Lords, the noble Lord will know that where countries are following a sensible economic reform programme we give balance of payments support. That helps those countries to purchase from British companies where British is best and where it represents the best value for money. But one of the areas we also have to work at, and the reason I shall not simply indulge in numbers, is trade. Most developing countries need trade much more than aid. We should never forget that three-quarters of the income of the developing world already comes from trade and not aid. They want more of their income to come from trade.

§ Lord Judd
My Lords, does the noble Baroness accept that on this side of the House we have nothing but respect for her personal commitment and dedication to the cause? Does she understand, however, that there is a credibility problem? The noble Baroness says that she accepts a 0.7 per cent. target. But when the evidence over the past 10 years is that we have gone down from 0.7 per cent. to 0.27 per cent. it is difficult to understand the reality of this commitment. Does she agree that, with 29 million people facing starvation in southern Africa and with £125 billion needed in transfers from north to south if there is to be any hope of success in managing the international environmental crisis, this is precisely the time for her to start moving convincingly to 0.7 per cent. of GNP?

§ Baroness Chalker of Wallasey
My Lords, even under a Labour Government we did not reach 0.7 per cent. I realise that it grieves everyone who is concerned to help the developing world help itself that various governments—not just the British Government—believe that we have to make sure that our aid programme is not only properly targeted but that it is an amount which our own economy can afford. I am well aware that there are varying views on the matter in this House and in another place. However, as regards southern Africa, this country was the first to announce £30 million of help for the drought and yesterday, at the conference in Geneva, we were the only donor country, first, to be present at ministerial 816 level and, secondly, to plan for the future and urge others to make similar bilateral donations of £30 million or more. We shall make sure that what is needed is decided in a sensible and practical way. But there is no way in which the Agenda 21 bill is going to be met. It could not even be utilised properly were that sum to be available from the world at large.

§ Lord Hatch of Lusby
My Lords, will the noble Baroness answer the first part of my question? She knows that we have been told in this House since 1980 that it is the Government's object to reach 0.7 per cent. We have seen the figure fall from 0.3 per cent. in 1979 to 0.27 per cent. now. Why should we believe a Government who say that they are aiming at one figure when they are moving steadily downward away from it?

§ Baroness Chalker of Wallasey
My Lords, the noble Lord is not quite right. The 1990 figure may have been 0.27 per cent. However, I have already explained that that was low because it reflected a large element of the 1991 financial year expenditure falling in the first quarter of 1991. Given that the average over five years is 0.30 per cent., then, in other years, I can confidently tell the House that I expect it to be higher (including 1991) when the Development Assistance Committee figures become available.