§ 9.10 p.m.
§ Lord Judd rose to ask Her Majesty's Government what level of resources they consider necessary to meet the growing global demands on Britain's overseas aid programme.
§ The noble Lord said: My Lords, for many millions the world remains a wretched place. Somewhere, every 276 2.4 seconds of every day, a small child dies of poverty. Across the world, one in five people lives on less than £175 a year; 1.5 billion people are without health care; 1.75 million people have no access to safe water; a woman giving birth in the third world is 12 times more likely to die than a woman in a country like ours; her children, even if they do survive, can expect to live 12 years less than we do here in Europe. More than 1 billion people live in absolute poverty.
The last decade was, by most standards, an unmitigated disaster for the majority of third world countries: a time when poverty levels reached unprecedented and almost unimaginable depths. All that has been compounded by the tragedies of Somalia, Yugoslavia, Albania, Liberia, Sudan, Ethiopia, Mozambique, Angola and the rest. It was nearly 20 years ago that the United Nations, with British support, proposed an official aid target of 0.7 per cent. of GNP. Twelve years ago the Brandt Commission of which Sir Edward Heath was a prominent member called for,
a massive transfer of resources",
from North to South.
Barely five months ago, at the Rio summit, John Major, the Prime Minister, publicly pledged British support for Agenda 21, the new global programme to meet the inextricably interwoven challenges of environment and development. He said, I believe—the Minister will no doubt correct me if I am wrong—
All of us will have to meet the cost of commitments undertaken to tackle our common global problems".
He went on:
The British Government is ready to commit new"—
I emphasise the next word—
Indeed, in Chapter 33 to Agenda 21 the signatories, including the United Kingdom, agreed to augment their aid programmes in order to reach the UN 0.7 per cent. target as soon as possible. In that respect, we were heartened by the reports from Rio that the noble Baroness, Lady Chalker, had herself made clear that she would do everything within her power to persuade the Government to honour their commitments.
§ The Agenda 21 master plan reckoned the total cost of preserving the world's environment—lest a terminal crisis develops—together with the cost of effective action to eradicate world poverty, to be more than 600 billion US dollars per year. Maurice Strong, the indefatigable organiser of Rio, calculated that this would require the transfer of 125 billion US dollars per year from North to South, leaving a staggering 475 billion US dollars to be found by the impoverished South itself. At present, the OECD countries of the North are transferring little more than 55 billion US dollars per year to the South.
§ Of course, the response of some developed countries to the challenge of global poverty has been more shameful than that of others. Since 1979, British development assistance has fallen dramatically in real terms, some calculate by as much as 24 per cent. It is down from the 0.51 per cent. of GNP at which it stood when the Conservative Government came into office 131 years ago to 0.32 per cent. in 1991, having fallen as low as 0.27 per cent. in 1990.277
§ At first in the 1980s we were repeatedly told by the Government that Britain would reach the 0.7 per cent. of GNP UN target when economic circumstances permitted. However, when the economy did grow, we were then told that the aid ratio was declining because our gross national product was growing so fast. Subsequently, when the economy declined, predictably we were told that there were other spending priorities and commitments.
§ The truth is, I fear, that the sincerity of purpose and the very genuine commitment of the noble Baroness which all of us who have had dealings with her have come deeply to respect, indeed with some affection, has never been reflected in the firm resolve of the Government as a whole. Despite her firm resolve, they have dragged their feet or, worse, disastrously undermined what she herself wanted to achieve.
§ Now surely is the time for this House to send an unequivocal message to the Prime Minister and to the noble Baroness's other colleagues, demanding that they support her and stand by the solemn undertaking given less than six months ago in Rio by the Prime Minister. It was an undertaking reflected as recently as the end of last month in the words of David Maclean, Minister of State for the Environment, at the General Assembly of the UN. On behalf of the European Community he spoke of member states reaffirming their commitment to reach the accepted UN target of 0.7 per cent. of GNP for overseas development assistance as soon as possible and of their determination to ensure prompt and effective implementation of Agenda 21.
§ Such a message from this House becomes all the more urgent because of the warning signals. First, with the United Kingdom holding the European Community presidency, there has been a disgraceful proposal by the Council of Ministers that there should be a cut of more than £190 million in the European Community's aid and development budget for 1993. That is a cut more than seven times the size of the United Kingdom's relief programme to Somalia alone. To its great credit, the European Parliament has voted against the proposal and instead voted for a modest increase of £15 million. I hope that the noble Baroness will tell us that that will stand firm.
§ Secondly, there have been rumours of a possible 10 to 15 per cent. cut to be announced tomorrow in our own UK aid and development budget. Cuts of that magnitude could be equivalent to cutting out the entire aid programme to 10 of Africa's poorest countries; to cutting twice as much as the UK spends within the overall aid budget on emergency aid; to cutting two-and-a-half times more than the total aid to India; to cutting several times more than the United Kingdom Government grant to the overseas voluntary agencies. That is a sad betrayal of the immense generosity spontaneously and repeatedly demonstrated by the British public when, by their voluntary giving, they have tried to close the gap between what the Government provide and what is needed. We ask the noble Baroness, even on the eve of 278 the Autumn Statement, to leave her colleagues in no doubt that she will not accept any reversal whatever in the United Kingdom's battle against world poverty.
§ Were the rumours and leaks to prove well founded, and were the Government to trim aid expenditure at all, this would represent a savage blow not only to those in extreme poverty but to the fledgling democracies emerging at last in different parts of the world. Most of them have been urged by the United Kingdom to take the road of reform. Reducing development assistance would be in sad contrast to last year's spending commitment of a 15 per cent. increase in cash terms, 3 per cent. in real terms, in development assistance. That is a commitment which at all costs must surely be protected. Aid cuts would re-establish the downward trend in overseas development expenditure witnessed since 1979. It would mean that the Government were once again moving further from the UN target they continue to accept but always fail to honour. When she answers my Question tonight, it is conceivable that the noble Baroness may argue that the concept of a UN target is out of date. If so, with what would she replace it?
§ Of course, any target is something of an arbitrary figure. Of course, no target can accurately reflect the real needs of third world countries for development assistance. Of course, quality of aid matters at least as much as quantity of aid. But the noble Baroness knows, as all of us who have held her office know, that in crude Whitehall battles for resources all would be lost with no such measurable yardstick.
§ I believe there are eight good reasons why aid should not be cut. First, it would be disastrous both for the millions on the knife edge of poverty—the desperate people we see on our television screens in Somalia—and also, potentially, for the cause of democracy where many are for the first time able to cast their votes in free and democratic elections. Secondly, the United Kingdom of the Falklands and the Gulf remains a powerful nation with strong influence in the UN, in the EC, in the international finance institutions and throughout the Commonwealth. This is a position in which firm and consistent leadership in the fight against world poverty is demanded, rather than a retreat from the challenge when times are hard.
§ Thirdly, aid cuts would be particularly damaging because almost certainly it would be the longer term bilateral assistance that would bear the brunt. That is precisely the type of aid, as I know from my own experience at VSO and Oxfam, and as is the experience of other non-governmental organisations, that is most effective in alleviating poverty and which helps to prevent the kind of crisis we are still encountering throughout much of Africa. Investing in long-term assistance now will mean that there is less demand for emergency help from donors in the future.
§ Fourthly, aid to poor countries is in the UK's own direct interests. It can boost our own employment and industry and do so in a less inflationary way than directly stimulating demand at home. It has been calculated that our bilateral aid programme generates £750 million of orders here at home and that— 279 according to the Public Accounts Committee—for every £1 contributed to multilateral programmes £1.70 comes back to the UK in orders.
§ Fifthly, it is obviously in the UK's own long-term interests to enable poor countries to develop in a secure and sustainable way both for the sake of the global environment and to help mitigate global security problems.
§ Sixthly, the public have overwhelmingly demonstrated that they would not favour any cuts in the aid budget. The generous voluntary giving speaks for itself. However, three-quarters of those questioned in a national opinion poll for ACTION AID as recently as 7th October said they would not like to see any reductions in this budget. The public response to the prospect of cuts, in terms of the volume of letters to Members of Parliament and the press, has overwhelmingly rejected aid cuts. Over 200 Members of the other place, through an open letter to the Chancellor and two Early Day Motions, have called on the Government not to reduce development expenditure.
§ Seventhly, cutting development aid will be a serious setback for the Overseas Development Administration, rendering any claims about its targeting aid effectively depressingly hollow. Eighthly, overwhelmingly, there is the moral imperative. In the name of civilisation we cannot turn our backs on the poor of the world without undermining the moral fabric of our own nation.
§ We know that the battle against world poverty is not just a question of increased aid. Priority must also be given to the issues of armed conflict, neglect of the environment, lack of democracy and accountability in government, unpayable debt, restrictive international terms of trade, extravagant consumption by the industrialised world of finite resources and, indeed, effectiveness in the use of aid itself. The challenge to GATT is huge while 80 per cent. of the world's population still has only 18 per cent. of the world's trade. As for conflict, it is no coincidence that every major famine in recent years has taken place in a war zone. It is frequently no exaggeration to argue that if we could stop the fighting and ensure distribution, for example in Somalia and Bosnia, we could end the famine.
§ As I have argued before in this House, success in the fight for humanity necessitates massive debt relief based on the ability to pay principle; a new and fairer world trading system centred on basic needs, food security, employment for the poor, fair and stable prices, and concern for the environment; fairer investment patterns which bring training, appropriate modern technology, good employment practice, and engagement with sustainable development; and aid which empowers the poor rather than the rich. It also necessitates urgent control of the sinister and destabilising international arms trade and greatly enhanced resources for early warning and conflict resolution. The lack of priority and sustained drive by the United Kingdom on all those issues during the God-given opportunity of our presidency of the European Community has been lamentable.
§ Meanwhile, a certain amount can be achieved by the re-direction of aid. Above all there must be a 280 sufficient flow of aid. The noble Baroness will gain nothing but respect if she refuses to yield to the blinkered heavy brigade in the Treasury. Let the axe men ponder. There is no country in the world more dependent than our own on a peaceful, stable and prosperous world economy. To invest in global human progress is to invest in our children's future. It is not a matter of poverty overseas versus poverty at home. Poverty is poverty wherever it occurs. At a time when the rich have been getting richer and the poor have been getting relatively, and too often absolutely, poorer it would be obscene to penalise the poor still further.
§ In and immediately after the Second World War, times of acute crisis, solidarity was the order of the day. Victory was rooted in a nation in which a priority was social justice and the protection of the vulnerable. We pulled together. It is precisely because of the gravity of the economic challenge which confronts us that we should now draw a line and determine that whatever the stringencies demanded they will not aggravate existing injustices.
§ I have quoted the Prime Minister at Rio. He also said during the election that his Government would never forget those with their foot on the first rung of the ladder of opportunity or those who have been knocked off by misfortune. The Government he led, he assured us, would always protect their interests. Words, my Lords, or genuine commitment'?
§ That is the crisis of credibility which this Government repeatedly face. In the past decade there has been too much pandering to short-term myopic greed and selfishness. A healthy, dynamic United Kingdom, as in the 1940s, would be one in which we take second place to nobody in our fight for justice and humanity throughout the world, in Merseyside as much as in Mozambique, in Somalia as much as in Clydeside. I hope that the noble Baroness will convincingly put our minds at rest tonight.
§ 9.26 p.m.
§ Lord Prentice
My Lords, I congratulate the noble Lord, Lord Judd, on instigating the debate tonight with a speech of great conviction. That is always a feature of his speeches, and of his whole life's work —in VSO, in Oxfam, in another place, and throughout all his activities on behalf of the developing world.
I agree with nearly everything that the noble Lord said, but I should like to add a cautious addendum just in case at one point he was a little partisan, in the party sense. He said that the commitment of my noble friend Lady Chalker was not matched by that of her colleagues. Perhaps I may say that, in a Labour Government, nor was his. Nor was mine when I worked in this field in a Labour Government. He and I are two of the five former Ministers for Overseas Development sitting in this House. It is true that our commitment, and that of some of our colleagues who agreed with us, has never been matched by the practical commitment of British governments as a whole.
The target of 0.7 per cent. of GDP has been accepted in principle by Labour and Conservative governments, none of which have ever got anywhere 281 near it. Indeed, the first of my two resignations from a Labour Government in 1969 was on that issue and due to the fact that during the 1960s the proportion of our gross domestic product spent in this direction had steadily, year by year, fallen below the figure which the then Labour Government had inherited from the Conservative Government in 1964. I am not making a party point; I merely say that a point can be made at any time about the failure of British governments of both parties and of most governments in the Western world to live up to their pledges in this field.
If there is one thing wrong with the debate it is that in a sense we are playing Hamlet without the prince. The Chancellor will make a vital statement tomorrow on this matter, as on so many other matters. The noble Lord reminded us that the programme announced last year provided for a modest increase, over the three-year period then in question, in the value of the aid programme in real as well as in cash terms. Tomorrow we will see whether that continues, improves as we would both like to happen, or some of the rumours about reductions turn out to be right. All of us will have vigorous comments to make afterwards. None of us knows except perhaps the Minister and she cannot tell us, but we all know that in recent months she will have fought her corner with great clarity and vigour.
I put the problem in the context of the public spending round as a whole. I support a tough spending round and believe that the Government should stick to their overall strategy. But within that I suggest that this year and in the years immediately ahead we need a radical rethink of priorities in public spending, which will mean some painful reductions in some programmes and improvements in others. I should like to think that in your Lordships' House and in the other place there will be debates in depth about priorities. That is a new parliamentary habit that we ought to develop. It is too easy to have debates on specific programmes such as we are having now when their supporters say that more resources are needed.
§ The Earl of Longford
My Lords, for clarification perhaps I may ask the noble Lord whether he is saying that he favours a reduction in overseas aid.
§ Lord Prentice
My Lords, I favour an increase. I believe that in some spending programmes (using that expression in the broad sense of departments) there is scope for reductions. I should not develop that at this hour in a debate of this kind, but I merely suggest in passing that there ought to be more debate in depth in both Houses of Parliament and throughout the country about the priorities we would like to see in different forms of expenditure.
I ventured to add to the volume of paper going across Ministers' desks a few weeks ago by writing a personal memorandum on this subject to the Prime Minister and every member of the Cabinet. I wrote as an ex-Minister for Overseas Development and as a supporter of the aid programme as to why the aid programme should be treated as a greater priority than might happen in the current situation.
282 I will not weary the House with all of the reasons I put forward, but some were stronger in the context of the recession and the fiscal problems facing the Government than they normally were. It seemed to me that some of the familiar reasons were given added strength. I give three examples. The first is the moral imperative as the noble Lord described it. To me it is and always has been a moral imperative. The basic reasons for that do not need restating tonight. In a situation where Ministers will have to make difficult choices there may be a temptation to trot out old cliches such as "charity begins at home", that the recipients of our aid programme have no vote in our elections and the first duty of the Government is to the people who elect them and so on. I say that the very existence of those sentiments—that some of the general public would share—places upon us and colleagues in Government a duty not to yield to those temptations. It would be mean and unworthy to break our commitments to people in sub-Saharan Africa or Bangladesh. We have made medium and long-term commitments to them. They may be more modest than some of us would like but nevertheless they are real commitments. To break them now would be a betrayal of what this country should stand for.
Another familiar argument is the "mutual benefit" argument based on the fact that development in poorer countries creates trade opportunities from which the world economy will benefit, including the aid donors. I see nothing wrong in saying that our self-interest marches in step with our moral duty. Surely, that is all the more the case at a time when the world is in recession and we want to stimulate development in as many parts of it as possible, particularly the poorest. In continuing to stimulate that development, we shall be creating opportunities for ourselves and other developed nations also. Incidentally, I agree very much with what the noble Lord said about GATT. But in addition to the trading opportunities that they should have, they should receive help with their development projects, thereby stimulating the growth that the whole world economy needs.
My third and last point is that it seems to be in the national interest, particularly in difficult times, to identify things that this country does well and to continue to do them, perpetuate them and, if possible, expand them. From my own experience in this field —I believe others share this view, including the noble Lord—I know that the effectiveness of our aid programme has improved steadily over the years. Many people have contributed to that, but in particular there has been a degree of improvement during the stewardship of my noble friend Lady Chalker.
I understand that the Development Assistance Committee of the OECD, having had a study made of the efficiency and effectiveness of all the main aid programmes in the world, has identified our programme as the most effective of them all. We should take pride in that. It reflects credit upon the Minister and her department. It also reflects credit upon the hundreds of British people working in the field, men and women of many talents, skills and types 283 of experience who are working alongside people in developing countries, helping them to help themselves. Some of them work directly under the umbrella of the official aid programme or work for developing countries under arrangements made under the aid programme. I understand from something said in the earlier debate (I did not know it before) that a large number, almost half the total, are people recruited through the non-governmental organisations.
Those people deserve the encouragement of the Government and Parliament. Their work should be better known. It is not only good for the people among whom they work; it is good for this country. They are supported by the voluntary bodies and in that sense this debate overlaps with the previous debate today. Up and down the country there are many thousands of people working in this field, fund raising and organising—voluntary workers and the staff of those bodies.
In the past—I have seen it happen under both Labour and Conservative governments—a stroke of the Treasury pen has wiped out a year's fund raising by such people. I profoundly hope that that will not happen. I profoundly hope that our programme will continue to expand further in quality and quantity in the years ahead.
§ 9.37 p.m.
§ The Lord Bishop of Worcester
My Lords, I too am grateful to the noble Lord, Lord Judd, for asking this Question tonight. It will enable us to put down a very firm marker for Her Majesty's Government; namely, that it will not do for overseas aid to be cut. It is too easy to do, but in the last resort it is against the will of the people of this nation.
I understand that when he uses the word "global", the noble Lord is also thinking of the needs of Eastern Europe. Six weeks ago I was privileged to visit the headquarters of the allied powers in Europe and to spend some time at NATO headquarters. Two things were borne in on me. They must have been obvious to noble Lords in this House, who must have realised them long ago and must forgive my lack of sophistication.
The first was the realisation that a large factor in bringing the Cold War to an end was an economic one. We succeeded in beggaring the economy of the Soviet empire by the continual stockpiling of massively expensive weapons. The effect was not one-sided. We may not have had a nuclear exchange but our own economies were strangulated. We refused through fear to invest in the future in long-term aid to countries overseas. We were too preoccupied with our own defence. As a result, we have no productive relationship between the industrialised countries of the northern hemisphere and the developing countries of the South. Furthermore, among the developing or, perhaps more accurately, the poorer countries, we must now include the countries of Eastern Europe. Europe is now probably one of the most unstable continents of the world. As has been implied by the noble Lord, Lord Judd, with poverty comes political 284 instability. That has occurred not only in the countries of the southern hemisphere but now in the countries of Eastern Europe.
My second insight from my visit was that Eastern Europe is also in need of massive aid. As we were told in your Lordships' House about six weeks ago, at present only one-fifth of 1 per cent. of the gross national product of the seven most wealthy nations goes in aid to the countries of Eastern Europe. After the Second World War, when in a far less advantageous position than it is now, America gave six times as much as that to us in Marshall Aid to reactivate our economy. I say that to indicate, as noble Lords know well, that we are not concerned only with charity: we are concerned with the reactivation of the economies of the poorer nations. As has already been pointed out, there is not only a moral imperative for the rich to help the poor and the strong to help the weak, but it is also in our own interests to improve their economies.
However, let me stress that I do not equate the plight of the former Yugoslavia to that of sub-Saharan Africa. In the Horn of Africa it is not a matter of tightening belts but of survival. As has already been said, every two seconds a child dies of hunger or disease. No statistic can express what it feels to see even one child die—to see an uncomprehending panic in eyes that were made to see the living world as the natural habitat for those born into it.
It is a time not for retrenching but for generous, far-seeing statesmanship. It is no time to diminish our programme of official aid, and certainly not to cut our grants to the International Development Association. The private investment in developing countries is drying up. In 1990 it was no more than 0.36 per cent. and it is decreasing. It is well known that, as a nation, we have never reached more than 0.32 per cent. in official aid, yet the Pearson Commission long ago set the target of 0.7 per cent. Furthermore, the United Nations' target for both official aid and private investment is 1 per cent. of gross national product; and we give nowhere near that.
We have consistently fallen below those targets. I was told only this evening by one who has researched into these matters that 20 years ago we were giving twice as much as we give today in official aid. In 1990 we were one of three countries to register a decline. I am told that, in real terms, between 1979 and 1990 our aid to sub-Saharan Africa fell by 22 per cent. Other donors from the northern hemisphere managed to increase their aid by 65 per cent. during that time. The extraordinary paradox is, as I am sure noble Lords are aware, that in repaying debt the seven poorest countries in drought-stricken sub-Saharan Africa pay £225 million back to the United Kingdom, which is far above the aid that we give. In summing up, will the Minister reassure us that the hopeful terms which the Prime Minister put forward in Trinidad can be implemented to the full so that repayment of debt does not outstrip the aid that is given?
I know that statistics are notoriously difficult to handle and are open to misquotation. However, it is plain for all to see that this is no time to reduce our aid to a world in need; rather it is a time to increase it. I 285 do not want to give percentages but a cut of, say, 15 per cent. would mean a reduction of £285 million per year in aid. That equals all the United Kingdom's bilateral aid to Asia in 1990. The average man and woman in the street knows that that is wrong. MPs tell me that daily they have a large postbag of letters begging them to stand against parsimony and letters asking them to stand for generosity. Twenty-four Anglican bishops have written to record their opposition to any diminishment in aid. Other Church leaders, Roman Catholic bishops and Christian councils from all over the country, have expressed a similar opposition.
I would like the Minister to address the question of whether there is a peace dividend from which aid can go to the poorest nations. In other words, in a period when defence budgets must be smaller would it not be far-sighted to take a new and hopeful initiative for the very poor whose development budgets grow less by the year?
Secondly, I wish to make the point that the noble Baroness, Lady Chalker, is held in high regard by the aid agencies. She is known by governments of developing nations as one who travels unceasingly to espouse their causes and see the unprecedented human 286 tragedies for herself. Should we not beg Her Majesty's Government not to take the ground from under her feet? She should be strengthened and not disabled in her work.
Finally, although the Unstarred Question is about aid, we cannot avoid at this time reference to the Uruguay Round of GATT. We all know that if no solution is found the poorest nations will go deeper into recession and we shall follow them. In the last resort, it is trade and not aid which the world needs. We must look to the further horizons; short-term solutions are not enough. We must resist all short-sightedness and narrow-minded caution. The times are ripe for generous, courageous statesmanship. We have the presidency of the European Community. If we cut our aid other countries will follow. We need to give a lead and to set an example. If we do not we shall live to regret it.
I repeat a saying which I have used in this House before—self-interest so often dictates that which justice demands. It is not just a matter of charity; it is a matter of realpolitik. Therefore, on behalf of many workers in the field, in Christian Aid and in the parishes of our land, I express the hope that official aid is not cut when the time comes to make the Autumn Statement.
§ 9.50 p.m.
§ The Earl of Longford
My Lords, the marvellous speeches of the right reverend Prelate and the noble Lord, Lord Judd, were so full of passion and knowledge that my mind goes back to a story which I have ventured to tell before in this House. After Edmund Burke made a great oration, the next speaker could not think of anything to say except to say, "I say ditto". In a sense, I cannot improve on the contributions of previous speakers.
This debate is vested with a great deal of unreality. We are begging the Minister of State, who is admired by all, to increase the aid budget. Everybody assumes that the aid budget will be cut tomorrow. That is a general assumption made by the newspapers. We are expecting the noble Baroness, who is not in the Cabinet, to alter the whole situation at the last minute. That is ludicrous. I remember the situation well when I was Minister with responsibility for Germany 45 years ago. I was pro-German and told the children of Dusseldorf that they were right to be proud of being German. The Germans expected me to do all sorts of wonderful things; of course, I did not achieve them. Therefore, we understand that the noble Baroness cannot achieve an increase although we go on record as begging her to make that tremendous last minute change, and no doubt she would wish to do that.
I hope that I can still call the noble Lord, Lord Prentice, an old friend. I have some things in common with him. We both changed our parties in the course of our lives. I changed my party when I was young and callow. Whether or not that is more or less credible than changing it with the wisdom of later years, I do not know. The noble Lord has been a Minister in two totally opposing governments. Only Sir Winston Churchill has achieved that in this century. Of course, I respect the noble Lord for his total integrity.
Unfortunately, I could not make head nor tail of his speech. I ventured to interrupt because I could not follow his line. I thought that he was going to say that there was some justification for reducing aid but he said that he is in favour of increasing it. Let us suppose that it is announced tomorrow that it is to be reduced. Will the noble Lord denounce the Government? He is a free agent and he is under no obligation to the Government so I hope that he will speak out boldly. The noble Baroness must defend whatever is decided if she wishes to remain in the Government; and we all wish her well. I was kicked upstairs all those years ago and perhaps that is what happened to her, to remove her from the firing line. It is a peculiar situation. We are attacking the Government's record and it seems to be defended by two people who do not believe in it.
I turn now to the figures. The noble Lord, Lord Prentice, may correct me on these, as he is more expert than I am, as is the noble Baroness. However, the figures that I have are not inconsistent with those given by the right Reverend Prelate. In 1979 overseas development assistance, as a percentage of the GNP, was 0.51 per cent. That is a poor figure, compared with 0.7 per cent. In 1991 the figure was 0.32 per cent. That being so, there was a steady reduction throughout the Thatcher years in the percentage of our national income going to overseas aid.
288 The noble Lord, Lord Prentice, cannot be proud of that record. I thought he might feel ashamed of it. It is fairly lamentable in an area which he has made his own. Therefore, the starting point is that there has been a lamentable reduction in the percentage of our overseas aid during the Thatcher period.
What is the justification for that? I have heard none other than it has been said that it means sacrifice. With enormous diffidence, I venture to say that I was rather unhappy to hear the right reverend Prelate talk about realpolitik. I know he mentioned justice, but he said it is not a question of charity. I believe that this is a question of charity in the Christian sense: faith, hope and charity. One hears the figures read out by the noble Lord, Lord Prentice. This country is still a rich country. In The Times today I see that the basic income requirement of the average family is £21,000 per year. If anyone doubts my figures, they should look at The Times today. This is a rich country and we are talking about starving people. I do not believe that we need to go into realpolitik to say that Christian duty, whether one calls it charity or love is very different from the one pursued down the ages.
§ The Lord Bishop of Worcester
My Lords, if one is a Church leader, one has to offer the teachings of Christ in such a way that people in the marketplace can pick them up and not just regard them as something which is said from the pulpit by those with Christian ideals. The quotation with which I ended my contribution came from Archbishop William Temple who was very keen on what he called little axioms. That is if we are going to offer to the secular world of everyday the wisdom of the teaching of Christ, we must do so in such a way that the world can pick it up. Self-interest so often dictates what justice demands. That means, by interpretation, that Christian love is not just a stratospheric idealism; it is a very practical way of living.
§ The Earl of Longford
My Lords, I disagree totally with the right reverend Prelate. The idea that Christianity is involved, above all things, in adjustment of principles to suit presentation is a very unhappy one. I shall not put it as crudely as I could. I do not believe that the founder of the Christian religion pursued that policy at all. I am very sorry to say, as a lapsed Anglican of 50 years' standing, that I am shocked by the utterances of the right reverend Prelate.
§ 9.57 p.m.
§ Lord Taylor of Gryfe
My Lords, like other noble Lords tonight I would like first to express my thanks and appreciation to the noble Lord, Lord Judd, for introducing this subject with such eloquence and conviction. It is a great pity that there is not a larger attendance because the noble Lord's contribution was certainly moving and effective.
While most of the speakers are on this side of the House, I do not pretend for one moment that these Benches have a monopoly of compassion. I would like the noble Baroness to understand that the issues which we are discussing are not party issues at all. There is 289 a response in our nation to this moral challenge, which has been presented in the Unstarred Question before the House.
Perhaps I may also say that I am sure that the noble Baroness will appreciate that we understand her difficulties at this moment when public expenditure cuts are the order of the day. It may be of some encouragement to her to feel that she has unanimous backing in the obvious defence of her particular concerns.
§ The Earl of Longford
My Lords, perhaps I may interrupt the noble Lord. I do not believe that it is at least likely that the message that the noble Baroness will deliver will have unanimous backing. I believe that most of us will object.
§ Lord Taylor of Gryfe
My Lords, I am talking about the House tonight. I believe that her concerns have the backing of the majority of the people of this nation. I hope that she will feel that she speaks for the moral majority when she defends her corner. I echo what was said by the noble Lord, Lord Prentice, about the vast improvement in the quality of our overseas aid provision. I have worked for overseas aid for some years. I know that after the war, in the first flush of aid, it was more abundant and people were more responsive. A great number of mistakes were made in the supply of aid.
I like to feel that in the last few years this nation has got value for money from our overseas aid programme. I like to feel that some of the more sophisticated arrangements we are making for relief in the third world—for example, in reducing debt through debt-equity switches and that kind of thing —have contributed to improving the situation in largely administrative arrangements.
I wish to mention two aspects. One has already been mentioned: the aid-trade provisions. I have worked for a number of years with a leading merchant bank in the City of London. It was involved in project finance. When Britain was trying to secure large contracts overseas for turbines, boilers, sugar machinery and so on, we were competing with other countries. The Germans, the French and others were putting in their bids. It was not only the price of the actual plant that we were selling but the financial package that had to be produced in order to get the order.
Most of these countries had substantially larger aid programmes than we had. Last year British exporters had no money for 11 months of the year because our entire aid assistance had been taken up in the month of April, the first month of the new year of contributions. As a result we were frequently disadvantaged when competing with France, Germany and other countries because we could not add an element of aid into the bids that we were making for the sale of British plant and machinery. The so-called credit mix, which involves an element not only of credit but an element of aid, is always built into international bids. To the extent that you might be tempted to cut the aid budget, then consequently you would diminish the capacity of our heavy 290 engineering industry to compete in overseas markets. As the right reverend Prelate said, we are frequently talking about matters of self-interest when we talk about aid.
Aid programmes have often been used as a device, as a tool, to secure greater respect for human rights in many countries. Not so long ago I visited Sri Lanka where there was massive abuse of human rights. What happened? The aid agencies—not only the British, although the British took the initiative—got together and said to the Government of Sri Lanka, "We will cut off aid if you continue to suppress human rights." In so far as you reduce your aid budget you are diminishing your capacity to influence these kinds of things which are important in the developing world.
§ The Earl of Onslow
My Lords, may I interrupt the noble Lord? In fact we gave to Sri Lanka in 1990–91 £10,289,000 in development aid and £3,611,000 in other aid programmes.
§ Lord Taylor of Gryfe
My Lords, I did not say that we cut off aid. I said that the aid agencies—the British, Canadian, Dutch and other agencies—got together and said that we would withdraw aid. A good deal of the figures the noble Earl has just quoted are military figures, but it does not matter. The point is that assistance of this kind is frequently used, and can be used, in securing greater respect for human rights. If we diminish our aid programmes, we shall diminish our influence.
The right reverend Prelate raised the important question of how we might pay for increased aid. I share his concern that some of the peace dividend might be directed to these peaceful purposes. I do not know whether all noble Lords listened yesterday to the very moving speech of President Yeltsin, in which he talked about reducing his arms budget by 38 per cent. in order to meet domestic commitments. We should get our priorities right. The Germans recently cancelled their interest in the European fighter aircraft. It may be revived; I do not know. The Germans indicated that they could not afford the European fighter aircraft. Their priorities were directed towards improving the situation in Eastern Germany and therefore they could not afford this sophisticated aircraft.
We have to look at our programmes and at the amount of money we are spending on armaments. On Trident alone we are spending £33 billion, and that is before devaluation of the pound is taken into account. The cost may rise still further. Our total overseas aid budget is £1.8 billion. I do not regard those as the priorities of a civilised community. We have to look at what is important in our lives and what is important in our community. I regard that kind of expenditure on armaments compared with our expenditure on aid as not being a reflection of a moral society. The people who wish to spend large sums of money on armaments of this kind say, "We have to do it in order to maintain security in the world." However, the insecurity frequently arises from the conflict between rich and poor. That is what basically causes insecurity. 291 Consequently, I believe that it would be a wise investment to transfer some of the resources we are spending on military equipment into aid.
After the war I worked in the field for the United Nations in relief and reconstruction. At that time we in this country spent 1 per cent. of our GDP on aid to countries that were less fortunate than we were. I ask noble Lords to consider the position of Britain at the end of the war. Factories and houses had been destroyed, communities were devastated and we had all the problems of soldiers returning to Britain to look for better lives. At that time this nation gave 1 per cent. of its GDP to the relief of suffering of other nations less fortunate than we were. I sincerely believe that we were better people at that time. We felt that we were making a moral judgment. The noble Lord, Lord Judd, said that it would be a blow to the recipient countries if we were to reduce our overseas aid. But it would also be a blow to ourselves if we were to reduce the amount of money we give to overseas aid. Therefore, I hope that this country and the Government will be convinced that a moral judgment has to be made and that the Government will respond by increasing rather than decreasing the amount of the aid budget.
§ 10.10 p.m.
§ Lord Bridges
My Lords, I must begin by declaring an interest in the subject as I am chairman of the United Nations children's fund in this country. As we receive substantial contributions from the Government, I have a personal interest in the Question tabled by the noble Lord, Lord Judd, in the level of the overseas aid programme. At the same time, I should also record my gratitude for the fact that in the past decade between 1981 and 1991 government funding of UNICEF has increased by 67 per cent. We are very grateful for that. I just note that some of our neighbours in Europe have managed to be even more generous. That should be an encouragement for us keep up the good work.
Before turning to the substantive questions raised by the noble Lord's Question, I should like to say something on a personal note. I very much miss the presence from the House this evening of the late Lady Ewart-Biggs. She was the president of UNICEF's National Committee for eight years. She spoke in this Chamber on the subject with great dedication. Although I have no doubt that she will be succeeded by others who can speak as eloquently and as authoritatively as she did, she had special qualities of commitment, human sympathy and clarity of vision which will, I believe, be much missed from our future debates on development subjects.
The noble Lord, Lord Judd, phrased his Question in his own very special tones of conviction and dedication. The question is a difficult one at the best of times. But tonight, on the eve of the Government's announcement of their Autumn Statement, it must be almost unanswerable. The noble Baroness cannot be expected to disclose to us the nature of the decisions which have already been taken. But, of course, they will determine the answer to the noble Lord's Question for, perhaps, some years to come. Therefore, 292 the approach that I suggest it is most useful to adopt is to look at some of the general considerations which bear on the issue. I shall attempt to do so.
First, there is the problem of how we define the level of aid expenditure. For the purposes of our Government, that must be done in our own currency and included in the annual Budget. But, of course, most of the money which is voted will, by definition, be spent abroad in other currencies. That is a matter of particular relevance this year, given the recent devaluation of sterling. To maintain the value of the ODA vote next year—that is, just maintaining the budget for another year—even if there is a modest increase to take account of domestic inflation in this country, will in fact decrease its spending power abroad by, I suppose, 10 per cent. or more. So there is some difficulty about defining the level of expenditure in our currency, although we have to do so.
The international method of comparing different nations' expenditure on development aid, to which many speakers referred, is by the percentage of GNP. That is a worthy target. I am sure that all of us present tonight regret the fact that our progress towards it has been slow and indeed, in recent years, in the wrong direction. However, I believe that one should add a word of caution before reaching too many conclusions about the GNP base. From living in various countries around the world, my own impression is that GNP calculations are by no means infallible, even in the developed world where they are more reliable than elsewhere. In the case of our own statistical series, we have only to look at the embarrassingly large balancing item which appears in our external payments account to realise that we should not expect accuracy to one or two decimal points of GNP when we are calculating our aid budget.
There is one other problem when dealing with those broad comparisons as percentages of GNP. There are, understandably, different priorities in different societies, some of which find it necessary to spend rather more on defence and social programmes than others. Others may decide that an overall reduction in government expenditure (and taxation) is a necessary stimulus or medicine for the national economy. While we should not be mesmerised by the figure, we should regard the GNP target of 0.7 per cent. as a reasonable, approximate guide.
Looking at our recent performance over past decades, it seems to me to be an inescapable conclusion that every effort should be made to raise the level in sterling and foreign currency terms, as soon as possible. If that is not done, the constraints on the aid programme will be severe, given the devaluation of sterling this year and that the large proportion of our aid budget which is already absorbed by contribution to international bodies such as the European Community Development Fund and the United Nations agencies will grow further. Also, and perhaps more seriously, the excellent bilateral programmes that we undertake will be bound to suffer severely.
Another significant factor in addition to the question of level is quality, about which a number of 293 your Lordships have spoken. It is rightly claimed that the quality of the British aid programme is high. I hold that opinion. I also suggest—this is something which has not been said in these terms in the debate—that our programmes are well targeted. A recent survey of aid programmes to sub-Saharan Africa shows that British aid was suitably concentrated upon that geographical area and was also targeted upon the right social needs within that area. Even conceding that the quality of our aid is high, and that its priorities are well selected, we still cannot escape from the problem of volume which is the aspect that occupies most of our minds.
Perhaps I may give one current example: the conference which is to be held at Dakar later this month organised by the OAU is designed to look at the assistance needed for African children. It is a carefully prepared meeting to be addressed by the presidents of the African nations and it is designed to illustrate to the developed countries the problems facing the children of Africa who are, after all, the poorest people in the poorest continent. It is not a fund-raising meeting. It is intended to explain to the developed countries the nature of the problem and the strategies which the African countries intend to adopt. I understand that the Minister cannot attend the meeting, but I hope that it will be possible for authoritative representatives to be sent from this country to make their contributions, to listen to what is being said and to bring back their impressions for us to act upon here.
I conclude that there are three criteria which determine the effectiveness of an aid programme: level, quality and targeting. One other factor needs to be added: national interest. We normally approach aid policy primarily as a humanitarian matter or, as others have put it this evening, as a moral obligation. It is right to see it in those terms, but we cannot escape the fact that short-term political questions are inevitably involved. That includes the issue of human rights. I am glad that the Government have recently been paying more attention to that matter. We must also recognise that the amount of aid which we can contribute to international organisations will influence what we can do within them. I have to say that in some international organisations which I am acquainted with and involved in, it seems to me that if we reduce the contribution that we are now making, we shall diminish the influence which we can exercise within them. I should personally find that a matter of great regret.
However, our national interests range more widely perhaps even than that. We have an interest—a very strong one—in the future stability and political orientation of the developing world. If we look back on the post-war history of the developing world, it is remarkable that they escaped the contagion of the Marxist/Leninist totalitarianism as lightly as they did. It left terrible damage for us to see in Africa today, but it might have been a great deal worse. We need to provide more than sympathy; we need to provide more positive encouragement to help these nations 294 make the right political choices in the future. That, I believe, means a substantial, well directed aid programme.
I should like to give one other example of the way in which the contribution we make by way of aid could have a powerful effect on our future national interest. I refer to the ultimate effect of the AIDS epidemic which is now raging in Africa. I do not think it is fanciful to suppose that the fate of the African continent in the next century may be largely determined by the children now aged between five and 15, living in Africa. These are the children who are too old to have acquired the disease from their mothers and too young to have been infected by others yet. Very many of these children are already orphans or will shortly become so. Many in turn will, I fear, fall victims to the disease themselves. But those who do not die, the minority who survive, will have the heavy burden of supporting the rest of the population among whom they live. They will have grown up in conditions of great insecurity, loneliness, privation and, perhaps most important of all, psychological disturbance.
It is not hard to imagine the political dangers of Africa led by men and women who have grown up in circumstances such as these. I do not wish to exaggerate something we cannot exactly foresee, but I fear the danger of turmoil in Africa in the next century, if events take their course unaided from outside. It is, I submit, very much in our interests to help these societies to tend their orphaned children by providing local communities with the resources they need to sustain them as best they can. Although our aid contribution is also coping with this problem as best it may, I doubt whether it will be large enough to make the commitment which I would like to see.
Of course, the AIDS pandemic is not the only illustration I could give to make my general point. A substantial, well-funded aid budget is not only a worthy humanitarian cause, excellent though that is, but it is also common sense, as I think the right reverend Prelate said, to the mutual advantage of both donor and recipient. I hope that the current levels of the aid programme may be steadily increased to meet these broad objectives.
§ 10.24 p.m.
§ Lord Monkswell
My Lords, I am glad to be able to add my little voice to the other voices in the debate which was introduced so well by my noble friend Lord Judd on the subject of the need to maintain and effectively increase our overseas aid programme. The debate itself is timely when tomorrow we shall hear the results of the Government's latest deliberations on the future of the economy and how to deal with the problems that the Government have brought us to so far.
Having said that I wished to add my voice to those other voices that have made a plea for our overseas aid programme not to be cut—as the whispers seem to suggest it might be —I thought it might be useful to expand a little bit and to look at the whole situation in an historical perspective. One of the things that has worried me is the way we tend to look on aid as charity 295 rather than as a responsibility of what I would describe as good government, linking the ability to pay and the equity of our world together.
In 1798—noble Lords may wonder why I have mentioned that year—William Pitt introduced income tax. That income tax was introduced to pay for the fight against Napoleon—that is, the Napoleonic wars we were engaged in at that time. It is interesting to reflect that that levy of tax was set at 2 pence in the pound. I have just worked out that is a figure of 0.83 per cent. and that is higher than the 0.7 per cent. figure we are asked, internationally, to contribute now.
Noble Lords may ask why we should compare the contribution of 0.7 per cent. now with the income tax of William Pitt of 1798. At that time this nation was engaged in a war. I would suggest that the whole world is now engaged in a war against the Four Horsemen of the Apocalypse—a war on want.
If we do not succeed in winning that war, we shall all be diminished. The noble Lord, Lord Bridges, has just mentioned the subject of AIDS, which is the plague of the 20th century. It is probably the equivalent of the Black Death in the Middle Ages. Unless we take effective steps to deal with AIDS, it will have an enormous and unforeseen effect on the world's population.
There is a large degree of famine, ignorance and loss of life due to natural disasters, all of which contribute to the instability of our world. That instability in our world affects us all. Last Sunday, only a few days ago, we all stood for two minutes' silence to commemorate the sacrifices that have been made on a worldwide scale twice this century. Those sacrifices came out of the instability of the world as it was then. Two major instabilities have resulted in two major catastrophes for this world of ours that impinged on us very directly.
If we do not take action to prevent those sorts of instabilities recurring, we and our children will be subjected to the horrors of world conflict. Given the technology we have nowadays, that conflict will be even more horrendous than those other two conflicts that have taken place this century.
Why should we not think of aid in terms of an income tax? Perhaps one way of looking at the issue is to make up for the system which we operate at present. In effect we make the poor of this world poorer by buying their products cheaply. We get rich at their expense. It is not equitable to make the poor poorer and become richer ourselves. That creates instability. One way to counteract that is to levy an income tax on the rich and distribute the benefits to those who are not rich.
In practice, when we deliver aid to the third world and other countries we receive more in the demand for our products than we give in cash terms. Surely, we could devise a system whereby we give cash—rather like child benefit in this country—and not tokens to be spent in the company store, which is one of the horrors of the way in which we deliver aid nowadays.
Unless we look sensibly at the future and the way we organise world affairs and unless we are prepared as a country to play our part in those world affairs on an equitable basis, providing something like a world 296 child benefit paid for by progressive taxation in the form of a global income tax, I fear for the very future of human existence and this world of ours.
§ 10.32 p.m.
§ Lord Ponsonby of Shulbrede
My Lords, it is my understanding that we now give less aid as a proportion of our national wealth than all our European partners bar Ireland. This evening we are debating the prospect of a further reduction in that aid. I regard that as a shameful position for us to be in.
Britain remains a powerful and leading nation in the world, with tremendous influence in international institutions such as the UN, the European Community and the Commonwealth. I believe that we should be leading the way in meeting the target of 0.7 per cent. of which so many noble Lords have spoken. It is my personal belief that that target is too modest, but that is another matter.
Over the past few years we have seen the break-up of the Soviet Union. That has led to even greater demands on our resources. Over the summer I was fortunate enough to visit Siberia. Yes, my Lords, I was literally sent to Siberia—in a professional capacity, as an engineer. While I was there I saw a well-developed technical infrastructure. There was a great deal of expertise and specialism in the realm of oil exploration and development, which is my own profession. I also encountered a great sense of bewilderment among the Russian people. They are bewildered about the rampant inflation they are experiencing and their loss of status—in their own eyes—and they are frightened of being "ripped off" by predatory Western oil companies.
The Russians have a great deal of excellent environmental legislation, but I saw precious little evidence of their implementing any of their own environmental standards. When I pressed the environmental and engineering experts I met they shrugged their shoulders and said that it was too expensive.
When one talks to the Russians about how they believe they can solve their own problems their answers are usually quite simple. They think they need more investment, more money and a greater input of technology. I believe that they underestimate their problems. From my experience, their managerial and bureaucratic system beggars description. I know that the Government have set up the "know how" fund. From what I understand, that is a good start, but I think there is scope for extending its realm of influence to more ground level managerial advice, particularly auditing. There is also scope to help the Russians strengthen their civil society by the setting up of free trades unions, and particularly the voluntary sector about which we have heard so eloquently this evening. Those extra elements would help the Russians defend their own quite high standards in the realms of social care.
Russia has tremendous mineral wealth. It is almost the richest country in the world in that respect. Its educational standards are arguably the equal of almost any country in the world. There is absolutely 297 no excuse or reason for the creation of any dependency in that country. All aid must be practical. I wonder whether the Government can look at more imaginative measures, like adjusting the fiscal regime, to encourage companies to invest in Eastern European countries.
I am not arguing that it is a better investment of our aid to give it to the East than the South. I am arguing for more resources because there is a greater need. At the Rio conference the Prime Minister, Mr Major, said that developing countries would need our help to meet the cost of development and environmental protection. He was right. We should give that help, and give it gladly.
§ 10.37 p.m.
§ The Earl of Onslow
My Lords, it is interesting that the noble Lord, Lord Ponsonby, has just returned from Russia. He is aware that Russia was the first country to develop an oil industry round Baku and in the Caucuses at the turn of the century. He may be aware that in 1914, Russia had the largest grain exporting port in the world (Odessa), and that between 1880 and 1914 it had the highest industrial growth record of the industrialised world. It is interesting to note that the German general staff begged the Kaiser to make sure that they went to war with Russia before 1917; otherwise, they were terrified that Russia's industrial might would be enough to swamp Germany instantly. Between 1922 and 1992 Russia by incompetent and ruthless government has managed to fritter away all those advantages.
Everybody in the debate this evening has said it is essential that aid should be increased. I suspect that in this debate I am going to be in a minority of one. I am going to ask your Lordships to ponder the question: does aid do any good at all? I shall try to demonstrate the point like Henry Fonda who, in the film Twelve Angry Men, persuaded a jury that wanted to hang somebody to find him innocent.
First, we have to establish what aid means. Aid is not aid to poor people; it is a government to government transfer. It is money raised by the poor from the poor, the middling and the better-off people in this country by general taxation, and it is paid over to the governments of those countries. I have in front of me a list of the various countries which have been in receipt of British Government aid. The figures come from my noble friend's department. In due course, I shall go through some of them.
The noble Lord, Lord Judd, waxed lyrical and compassionate about the poverty and horror found in this world. I do not in any way underestimate our anxiety for those poor people. I do not argue for a reduction in the aid budget because of meanness or lack of charity. I argue for a reduction in the aid budget because, as I shall try to show your Lordships, it does harm. The money does not reach the people for whom it is designed. It provides import substitution, so that more money can be spent on arms. A sum of £80,000 million was given by western aid to Ethiopia in the decade 1979–1989. Where did that money go? It did not go to the poor; it did not go to the starving; 298 it did not go to those people whose plants had been crushed by tanks. It went for the tanks which ran over the plants. It went to the factories in Kiev and Murmansk which build those tanks. That is where all that money went.
For instance, why do we give India a vast amount of aid? India has three times the number of soldiers that we needed in 1939 to police the whole region from Aden to Hong Kong. India has two aircraft carriers-admittedly what could be classed as clapped out second-hand British ships, but nonetheless two aircraft carriers. It has an ocean-going navy and an atomic weapons programme. And India receives a large subvention from the British taxpayer. That means that the British taxpayer subsidises and makes it possible for India to buy those things because the Indian Government does not then have the necessity of providing the wells and proper development of its own infrastructure. The Indian Government does not run a proper trade policy. It makes exporting and importing difficult and restricts wealth.
I shall now skip delicately over the border into Bangladesh, where there was a gentleman who, at the expense of the American taxpayer, learned how to make jeans. He set up a jeans factory and prospered mightily. He set up another jeans factory and another jeans factory. And soon he was a very rich Bengali gentleman. He made a lot of his money by sending good quality jeans to the United States of America. That should have been the ideal answer to development aid. What did the United States of America do? Because the South Carolina jeans manufacturers complained, they put on anti-dumping duty. The net result was expensive jeans in South Carolina, one bankrupt Bengali businessman and no more jeans manufactured in Bengal. That is what I say is wrong.
We do not buy the product of the poorer countries. There is a Multi-Fibre Arrangement which puts a whacking great tariff on the things that poorer countries can make. Our children, or we whose children seem to want trainers at vast expense all the time, have to buy expensive trainers because there is a tariff on them to keep out the cheap ones which poorer people can make. That is what impoverishes countries. It is aid that harms, not trade.
I shall read out from my list because it will be interesting to hear. We give a total of £312,000 in development aid to Hong Kong. We give China £5 million-worth of development aid. Why do we give China development aid? We give oil rich Indonesia £10 million. We give India lots of money: £85 million. My figures are right. I have them from the Overseas Development Office. We give Sri Lanka £30 million. I refer only to British aid. We give Zaire—it used to be called the Belgian Congo—£312,000. Mr. Mobutu has a hairdresser flown over from New York to do his wife's hair once a week on the presidential yacht which is anchored in the River Congo. He is terrified of going ashore because some other gentleman will shoot him. That country receives aid. What does that aid do? It keeps President Mobutu in power. Is that what we want to do? Does that help the poor? No, it hinders them. It is interesting to note that we give Nigeria vast 299 quantities of money. Nigeria has oil coming out of its ears. It has ships lying off the port of Lagos with cement hardening in the holds.
We are wasting our money and we are helping to keep corrupt governments in power. I yield to no man my concern or compassion for the people whom the noble Lord, Lord Judd, and the right reverend Prelate, described. I should like people to ask: is aid going where it is needed? Does it do anything other than harm? If anyone says to me, "Look at the success of Marshall Aid," I shall reply to them, "Marshall Aid lasted only four years. The vast majority of it went to us; and it did not get us out of our economic difficulties. Some of it went to Germany. Germany got out of her economic difficulties by the currency reforms of 1949 and manufacturing goods that people wanted".
Did Venice start the spice trade with the whole of the world with start-up aid from Justinian? Of course it did not. It did so from what is between the Venetians' ears. It is not development aid that is required because that keeps rotten, corrupt and useless governments in power.
The people in Somalia and Ethiopia have no government. Of course one's heart bleeds for those people. Young men are going around in Toyota trucks with triple-mounted 500 Brownings on the back. There is chaos and anarchy. Somalia could easily feed itself if there were any form of civilised and sensible government. Any country will starve if conditions of barbaric civil war take place. In the Hundred Years War the Jacquerie rose and France starved; and France has the richest European agriculture in the world.
Please can we question the ethos of development aid? I am as sure as I stand in this Chamber that it is actively harmful and does no good whatsoever. It keeps tyrants in power and impoverishes the poor. Let us buy what those countries produce; and then they will become richer, just as Venice did. After all, Venice would have been considered part of the third world by the cognoscenti of Antioch and Constantinople in the sixth century AD.
§ 10.48 p.m.
§ Lord Desai
My Lords, it is late in the day. Many points have been raised and I wish to take a new direction. There is obviously no point in urging the Government to increase aid or not to cut aid. If they are still deciding their Autumn Statement, they are in more trouble than I think. Let us assume that the figures were decided some time ago with some deliberation. I have no doubt that the noble Baroness has fought a good fight. Whatever the outcome will be, it will be so.
As the noble Lord, Lord Prentice, said, in general there is a certain apathy in all political parties about international aid. One has to flog Labour Party general management committees to devote five minutes to a discussion on aid. I have done so. It is a thankless task. However, given all those considerations, let us remember that this is a rich country. Our GDP in nominal terms is over £600 billion. That is not a small sum of money. We give away £1.8 billion in aid 300 and if it were to be 0.7 per cent. that figure would be about £4 billion. That is not a bad sum of money to have. I also agree with the noble Earl, Lord Onslow —he may be surprised—that it is correct to ask searching questions about who gets the aid and whether it reaches the right people.
I believe that the ending of the Cold War gives us a chance to think afresh about the whole issue of international aid, not only aid from Britain but from the entire world. While the Cold War lasted our dictators were better than their dictators and therefore we had to keep our dictators in power while some of them bought arms from their dictators, which is another matter. The so-called new world order, for what it is worth, presents a historic opportunity for us to think in a different way not only about the amount of money we give but how we give it and who receives it.
Furthermore, we must look critically at whether government to government aid is a proper instrument. That depends on good governance. There is no reason why we should not insist on good governance as a way of utilising money properly. I believe that in the emerging new world order, we are in a strong and unique position through our Commonwealth connections, our place in the European Community and the Lome Convention. One finds that in all the United Nations bodies a great deal of British expertise has been involved for a long time. If you are a British citizen you have no chance of obtaining a United Nations job because the place is full of Brits. Therefore, the international aid scene has been very much a British achievement.
I shall speak on that issue rather than the question of more or less money. While the Cold War lasted, while many hangovers of the old Empire lasted, aid was an embattled field. There was a great deal of blackmail and cajolery on both sides. There were many base motives for which aid was given but it was dressed up as humanitarian aid. It is ironic that now a whole new vista has opened up. Soon after I arrived in this House I was requested by a radical group from Gujarat to ask Her Majesty's Government to insist that the World Bank asks the Government of India to meet their commitment to the Narmada River project. Several poor tribes are being displaced by the building of the new dam and their only recourse is not to the Government of Gujarat and not to the Government of India but to the World Bank and the British Government.
That is indeed a great irony because still residing on the left I was struck by the fact that we were using previously derided international institutions such as the World Bank to insist that there are poor people in the poor countries of the world whose governments are not a good guarantee when it comes to the question of human rights. I have had personal experience of to what extent many third world governments resent judgments on their human rights.
It may be—not this evening but on another occasion—we shall have to think about the morality of conditionality. Until recently, people have resisted conditionality, saying that it is an invasion of the sovereignty of many nations. We must ask ourselves: 301 what is national sovereignty about? Is national sovereignty being used in the interests of the people of those countries or not? Why should a government be allowed to torture their people? While that may be done because we cannot prevent it, should we not stand up and say that we do not like it? There are certain moral values which we should stand up for.
We are all in sympathy with attempts to improve the lot of the poor. I believe that, very often, aid works. I take on board the many examples which the noble Earl, Lord Onslow, gave. However, I should say to him that my former colleague and friend the noble Lord, Lord Bauer, had been telling me that for many years. It is an extremely important point. But now is the time to ask ourselves about notions such as human rights conditionality. Should we not insist that certain human rights standards are maintained by countries which receive aid?
§ The Earl of Onslow
My Lords, is not the noble Lord going down the road of that splendid character in the Jungle Book called Peter Sahib, Protector of the Poor? He is going down the road of the honourable Indian civil servant and saying, "We must govern to make sure that those people carry out their human rights obligations." If we are not very careful, that is the end of the road at which he is looking.
§ Lord Desai
My Lords, that may be so. I am not worried about that. I am saying that those questions have not been thought about. I have a weakness for mathematically constructing indexes and I have done that in regard to the human rights performance of different countries. At one United Nations meeting I was accused of being Eurocentric, which amused me no end. I said, "Yes, of course I am being Eurocentric because I do not think that a country has a right to torture its people." The countries which complain about Eurocentric human rights buy Eurocentric guns. As regards the technology of weapons, they espouse European values, so why do they do not do so when it is a question of humanitarianism?
We must not be complacent or arrogant but we must be tough. When the new world order is constructed, I hope that it is more democratic than the old world order. I hope that we shall look after the poorest of the third world as well as the poor of the first world. However, in a long-term way on another occasion we must ask ourselves what are the best forms of giving aid. Let us give more aid. Let us fulfil the criteria of 0.7 per cent. although I should like the figure of 1 per cent. to be given in aid. However, I believe also that issues like conditionality will not be escaped. The whole notion of national sovereignty, on which we have a battle in another sphere of our current politics —subsidiarity and so on—will be open, because we live in a very global world. In that global order in which we live, it may turn out that through the United Nations or other government agencies, we may have to think seriously about what are the various forms of giving aid and what is the best way in which to help the poorest people.
As regards GATT and the Uruguay Round, although for a long time the third world was 302 suspicious of GATT, if not hostile to it, through the 1980s third world countries have moved to a position in which they want freer trade. They want GATT to succeed. It is not succeeding. That is not because of the third world's attitude to protectionism but because of the subsidies given to very rich farmers. It has been a great loss that in its long membership of the EC, Britain, as the one country which does not have a strong farming lobby—in spite of what one may think listening to debates in your Lordships' Chamber—should have long ago set our mind very firmly against the common agricultural policy, which is an abomination. There is no other word for it. It is a vast waste of resources. Apart from what it costs us it costs the third world quite a lot. The idea is that the GATT process should be held up because of a small number of farmers in another country which shall remain nameless. We should have said long ago that freer trade is important. We have preached to the third world about trade and not aid. As the noble Earl, Lord Onslow, said, we have to protect the Carolina jean makers and our own inefficient manufacturers.
As part of the new world order we shall have to say that if it is to be trade it has to be done in such a way that the third world can benefit from it. Ultimately, while aid will be good for the many poor of this world, in the long run they will have to produce things which they can sell and which somebody will buy. That will give them income. There is no other way of doing it. In a sense the sum involved is £6 billion at one per cent. That will be equivalent to £1 per person in the third world—not very much money in either relative or absolute terms.
Eventually, the problem of rural poverty in the third world is going to be solved when the world poor have the skills and assets to produce things which others will buy either in their country or abroad. That is the only factor which economics can contribute to the problem. If that happens we shall have to have an economic order which genuinely frees trade. It helps countries to relocate industry in their backyards. Let them innovate and thrust forward in these various directions. I know that this is a political minefield. Thank God I am not speaking from the Front Bench.
There are a number of these problems which we shall all have to think about. I hope that this opportunity which my noble friend Lord Judd has given us is the first of many which we shall have in this House to think in new ways about not only British aid but in a multilateral and global sense. Let us think of new ways of solving the problems which have not been solved properly for a long time. A great deal of money has gone down the drain.
§ 11.2 p.m.
§ Lord Rea
My Lords, as the penultimate speaker before the noble Baroness replies, it is obvious that many of the points which I was going to make have already been made far more eloquently by other noble Lords. The drift of my remarks has been summarised very well by the right reverend Prelate in the words of Archbishop Temple. I remind noble Lords that they were: self-interest dictates that which justice demands.
303 Many speakers have outlined the kind of gains that we might get in this country, but not so many have outlined the dangers which are lurking if we do not alter the present gross discrepancies in wealth which exist between North and South. As the noble Earl, Lord Onslow, said, not all overseas aid is necessarily helpful. The developing world is littered with schemes which have ground to a halt, from the groundnuts scheme onwards. Luckily, as many speakers have pointed out, I believe that the ODA has learnt from this kind of experience and is now running pretty well targeted bilateral programmes. That is more than can be said for some of the activities of the multilateral organisations, however laudable their aims.
The World Bank has been mentioned. It is always being shot at. It has a very mixed reputation in developing countries. An article in last Friday's Guardian headed,How to waste 5 billion dollars a year",described the findings of a high-level internal World Bank inquiry called Effective Implementation: key to development impact. One of the saddest findings was that 43 per cent. of water supply and sanitation projects had met with problems. These are developments that are basic to public health improvements.
Overall, about one-third of projects failed, mainly because they were insufficiently tailored to local conditions. I quote from the article:Bank staff appeared more driven by pressure to lend than a desire for successful project implementation. They often insisted on international consultants to prepare projects resulting in poor quality suggestions because the consultants 'from New York or London'"—I am sure they were not from London—had no experience of the country.That mistake is largely avoided by the ODA, and its strong support of non-governmental organisations who are in touch with local needs is one guarantee of that. But of course large-scale projects such as could be financed by the World Bank are very much needed. I am just thinking particularly about a new sewerage system for Lagos or Jakarta—vast projects which no one who has not got a lot of money could think of launching. I do not know whether there are enough experts in the world to think about a proper sanitation system for Calcutta.
I hope that the ODAs expertise can influence the next round of World Bank projects so that they are more wisely chosen and better implemented. As we are a major donor we should be able to insist on that. Even today or tomorrow the next round of funding of the International Development Association, as the right reverend Prelate pointed out, is being decided. As many other speakers said, I am sure that the best way to help a poor nation to get on its feet is not through prestigious visible projects but in less visible ways through a multitude of small projects.
Here I would just mention the International Fund for Agricultural Development, which has a good record of success in the way of helping small farmers. Sadly, it is much less well funded than the World Bank. I should like to ask the noble Baroness whether it can be resurrected. It is now languishing. What are the current obstacles?
304 In health, of which I have personal experience in the third world, I know that I can count on the noble Baroness to be a strong supporter of the concept of primary health care. I was present at the annual general meeting of Health Unlimited, at which the noble Baroness spoke. It was a good speech, giving an informed overview of the health-care needs of the South. In particular, I appreciated her emphasis on the need for appropriate technology. If I may quote her words back to her:Children and adults need low-cost technology to tackle those health problems that have the greatest social and economic consequences.That was music to my ears, and here, like the noble Lord, Lord Bridges, I have to declare an interest in that I am chairman of a non-governmental organisation called AHRTAG—the Appropriate Health Resources and Technology Action Group. I know that the noble Baroness puts some of her money where her mouth is because the ODA is a major contributor to my organisation, which aims at providing educational resources for health workers in primary health care in the developing world.
To return to the benefits that we receive through well-targeted aid, as my noble friend and others have pointed out, we get orders for British industry. Overseas aid can be part of the mechanism for promoting growth, which is at last in fashion, in our industrial output. In the longer term, good trading relationships flow from the contacts made during the implementation of aid projects and especially technical assistance and training programmes. We probably lost millions, if not billions, of orders as a result of cutting grants to overseas students during the 1970s. I know that that was done by a Labour Government—all the worse, I say.
Bilateral and multilateral project aid is one way of opening up markets for our goods. A much quicker way would be to tackle, as other noble Lords have pointed out, the vast amount of commercial and official debt which is crippling the poorer countries of the third world. The servicing of that debt swallows up as much as, and in some countries more than, is given as aid, which is surely a ludicrous situation.
There are several real dangers in allowing the present situation of economic stagnation and often contraction to continue in the countries of the South. In the first place, as other speakers have pointed out, poverty leads to unrest and civil and international conflict is more likely, with consequent flows of refugees from the actual military conflict or from the famine which almost inevitably follows. Poverty itself will result in the movement of economic refugees to developed countries because there they will be prepared to work for lower wages than other workers. That encourages racism and the political movements that go with it. We are already seeing that in several European countries—France and Germany are particular examples. A better and more prosperous Vietnam would have led to fewer boat people coming out of Vietnam or would have made it more acceptable for them to return home.
Rapid population growth—I am surprised that no one has mentioned population—is associated with poverty and underdevelopment. Even before modern 305 contraceptives were available in Europe, population growth rates decreased in parallel with economic and social development. The same will occur, and is occurring, in the South. Immediate help with family planning is needed which will help women in the developing world. But the greatest long-term falls in fertility come when couples see that smaller families lead to greater prosperity and better opportunities for their children. This stage can be achieved only when development reaches a take-off point with high levels of literacy, particularly female literacy, and better job opportunities.
We need a generous overseas aid budget not simply to eliminate the degrading poverty of the nations of the South but for our own economic health and the survival of democratic values in the world.
§ 11.13 p.m.
§ Lord Bonham-Carter
My Lords, this has been a long debate and it is now very late. Like the noble Lord, Lord Rea, most of what I was going to say has already been said. I shall try to do my best therefore to avoid repeating what noble Lords have already said and confine myself to the very few things which have not been said or which I think should be said with more vehemence perhaps than heretofore.
I must confess that I think that the date of the debate is particularly unfortunate. If it had been three weeks ago, we might have thought that we could influence, although that might be thought to be an optimistic idea, the Government's decisions which will be announced tomorrow. If it had been three weeks hence, we might have been able to discuss how we could best deal with whatever the Government's decisions turn out to be. Three weeks ago we might have thought that we could help the noble Baroness in her uphill task. Three weeks hence we might have guided her in the priorities which she should pursue. However, we are unable to do that and therefore we must do our best to express our views on this vexed and familiar subject which we have discussed many times before.
It is the case—I shall be trying to answer some of the points made by the noble Earl, Lord Onslow—that the need has scarcely been more urgent. I believe that most people are agreed that in the Horn of Africa 23 million people are at risk and that in southern Africa 18 million are at risk. The fear that has been expressed again and again in tonight's debate is that our present economic troubles will be used as an excuse for reducing the part that we can play in dealing with this crisis of humanity.
The noble Earl, Lord Onslow, made a very interesting speech which I, like the noble Lord, Lord Desai, thought derived something from a reading of the works of the noble Lord, Lord Bauer. However, it seems to me that he did not distinguish between different types of aid. Aid is not just something which can be treated in a totally homogenous way; there are different forms of aid which are given in different ways and which have different impacts. For example, there is emergency aid—
§ The Earl of Onslow
My Lords, I feel that I must interrupt the noble Lord. His criticism is completely accurate. In my notes, I had a reference to "ambulance aid". That is something which is fundamentally different from development aid. My criticism is of the latter which I genuinely believe to be actively harmful and something which does no one any good at all—except keep corrupt governments in power.
§ Lord Bonham-Carter
My Lords, that was not altogether apparent from the noble Earl's speech. I just make the point that emergency aid is a concept which is actually at the top of the present agenda. What is happening in Bosnia? Well, we are using troops to transport food to people who would otherwise not get it. That aid is crucial and is the kind of aid which we need to give both in the Horn of Africa and in southern Africa. To just talk about aid as though it is counter-productive is, in my view, extremely misleading.
There is also tied aid, by which I mean aid that is tied to buying products from the country which provides the aid. That practice is often extremely damaging; for example, airlines and steel works are sometimes tied in such arrangements and have often been mis-used. There is also political aid upon which the noble Earl spent a great deal of time. That was most manifest in the cold war and led to the supply of arms to extremely unattractive characters on the Left and on the Right and was totally contrary to the spirit of aid about which the noble Lord, Lord Judd, was talking.
To say that all development aid has been a waste of time is contrary to the facts. I believe that the "Green Revolution" in India—I am ready to be corrected on this —had something to do with aid. What is remarkable about that revolution is the fact that India with a population which is growing at a vertiginous rate is now feeding itself and, indeed, is even exporting some food. It would not have been able to do so without the Green Revolution. Therefore, to pretend that that had nothing to do with aid is, quite honestly, contrary to the facts.
However, the noble Earl made an interesting point when he started to question—although he did not pursue it—what makes some countries take off. We do not know quite as much as we should about that, but it is a matter to which I shall return shortly. Of course he and other people are right to say that trade is as important as aid; but they are not mutually exclusive. You can have a proper and decent trading policy and, at the same time, provide aid which is well adjusted to the needs of the country to which it is directed.
There are two other points that I should like to make before I sit down. I see that the noble Lord, Lord Monkswell, wishes to intervene. I give way.
§ Lord Monkswell
My Lords, I am obliged to the noble Lord. When he talked about the green revolution and about India feeding itself, the noble Lord wondered whether he would be contradicted. I am afraid that I have to put forward a small point of contradiction. As I understand it, the green revolution in India hinged upon two factors: one was the technological change in the development of new 307 strains of rice which enabled there to be higher productivity; and the other, which is rather curious, was Jimmy Carter's decision not to give the aid that had been given in the past. One of the effects of that was a major reduction in agricultural machinery manufacture in the western world which threw many workers in the western world out of work.
§ Lord Bonham-Carter
My Lords, technological aid is important. It is one of the most important kinds of aid that can be offered. So far as concerns the green revolution and the result of technological aid, in the sense of passing on better ways of doing things, that justifies the point that I was trying to make.
I want to touch upon just one other important point which I believe was mentioned by the noble Lord, Lord Bridges, alone, although I do not know whether it was mentioned while I was out of the Chamber. It is the consequence of devaluation. It is difficult to assess what the result of devaluation will be. It is not good enough to say, as Mr. Lennox-Boyd said earlier this week or last week, that it will be slight, because only 4 per cent. of goods used in our aid programmes are paid for in dollars or other currencies. Devaluation must affect the quantity of goods and services which a given number of pounds will purchase. The effect will be fed through into our economic system in due course.
That means that it is crucial that aid is indexed. Unless it is indexed, there will be an automatic cut. Although people will differ about what it will be, let us say that it will be between 7 per cent. and 10 per cent. Without being indiscreet about what will be in the Statement tomorrow, I hope that the Minister will assure us that that is something that has been taken into account, otherwise there will be a severe cut at current prices in the aid that we give.
The third issue is one that was raised by several noble Lords: priorities. What are our priorities in giving aid? In development aid, I have a special obsession. The highest priority is literacy. If we look at the countries that have taken off, we will find that literacy in South-East Asia is in the order of 70 per cent. while that in Africa is about 40 per cent. The inheritance from the British Empire in education lies in higher education not primary education: five universities in Nigeria, X universities in Central Africa, but inadequate primary education.
I was talking the other day to an Indian Member of Parliament who was over here. He said that India was now exporting graduates to the west, but that it was difficult to persuade the Indian Government to engage in a massive programme of primary education, and what is almost impossible is to persuade them to engage in a programme of primary education for women. Unless women are educated, there will be no progress in the matter of population, a point rightly raised by one noble Lord. I am afraid to say that education does not appear to have any effect upon the sexual activities of males. The only way to achieve birth control is through the education of women. That will not merely help to deal with population growth, but in third world countries agriculture is primarily a female occupation. If there is to be an advance in agriculture, female literacy is important. If there is a 308 literate female population, the women will see that their children are educated. So I put as a priority in aid, literacy and, above all, literacy among women. I hope that the Minister, as a literate lady, agrees with me. I greatly look forward to hearing her response to the debate.
§ 11.25 p.m.
§ The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)
My Lords, I should like to begin by thanking the noble Lord, Lord Judd, my noble friend Lord Prentice, the right reverend Prelate and many others for the kind remarks that they have made during the course of the debate. It has been a wide-ranging debate and at twenty-five past eleven at night, there is no way in which I can answer every question that was posed. I hope that your Lordships will understand, because you need your beds just as I need mine. I would like to respond in general terms and then on specific issues —if there is a specific answer—to write.
One of the interesting factors in our debate tonight has been the concern of your Lordships to get these issues right. It has been heart-warming to hear it, but I must say right at the outset to my noble friend Lord Onslow that we must do something about the facts and figures that he has been fed. I do not know who has been feeding them to him—I can guess, but I do not know for certain. What I want to do is to make sure that every pound of British aid is spent in the interests of proper development and trade.
§ Baroness Chalker of Wallasey
No, my Lords, I am afraid that my noble friend misinterpreted some of the ones that he read out because I did not recognise them. I am sure that I would have done, had they been in context.
Your Lordships might hope that tonight I should —but I do not think noble Lords really expect me to —anticipate the outcome of the public expenditure survey which will be announced by my right honourable friend the Chancellor of the Exchequer tomorrow.
Like Mark Twain, reports of the demise of the aid programme and its Minister have been greatly exaggerated. The Government are fully aware of and appreciate the many concerns that have been expressed in your Lordships' House and in another place and by our excellent non-governmental organisations about the future level of aid. Government nevertheless have to face economic realities and my noble friend Lord Prentice put this well when he explained what had happened, not just in the time of Conservative governments but of Labour governments too, of which the noble Lord, Lord Judd, was even a member.
There are many important claims on the public purse. The Government's overriding economic objective must be to keep public expenditure under firm control and build for economic recovery.
309 Nevertheless, I assure your Lordships that the Government remain firmly committed to maintaining a substantial and effective aid programme.
Our record is sound. 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. The noble Lord, Lord Ponsonby, made a very interesting speech and I shall come back to one or two of his points later. May I remind him that in 1991 we had the fifth largest aid programme in the world? This financial year it will exceed the £1,835 million planned. Perhaps I may also say to my noble friend Lord Onslow that we have been making sure year by year not only that it is better targeted, as many of your Lordships have kindly commented tonight, but that none of it is wasted. We have those checks and balances; we do not pay money to despot dictators, as I sometimes read in the British press.
As my noble friend Lord Prentice and the noble Lord, Lord Bridges, intimated, it is important at all times to look not only at how much we spend, but at how we spend it. It is neither logical nor sensible to separate the quantity of aid from its quality. Donors and recipients alike all agree on that. The Development Assistance Committee of the OECD, as was said a couple of times this evening, has repeatedly recognised the effectiveness of the British aid programme. One reason for that is our focus on the poorest countries. About 80 per cent. of our bilateral aid goes to countries with an annual per capita income of 700 United States dollars or less. The programme is highly concessional. All our new aid to the poorest countries is on grant terms which avoids adding to their debt burden. That is an absolutely crucial feature of it.
We have rigorous criteria—economic, technical, environmental—and we shall continue applying them to ensure the quality of all the programmes and projects we support with official funds. Another reason why the British aid programme is effective is because it is well targeted. It is targeted on areas of key relevance to the aim of promoting long-term sustainable development; the sort of development that enables developing countries to produce, to trade, to earn their own livings. I remind your Lordships that three-quarters of the income of developing countries comes from trade not from aid. I wish that it was seven-eighths, nine-tenths and even higher proportions.
We have six key areas—economic reform, good government, the reduction of poverty, the promotion of human development, the environment and the development of the private sector. Let me say briefly a little about each of those areas.
I shall start with economic reform. Sustainable development needs sound economic policies including sensible prices and exchange rates, controls on public expenditure in the developing countries and efficient public services. We do our best through technical co-operation to make sure that that happens in country after country. It is very interesting to look at 310 the countries that have pursued sensible economic reform over a number of years. It is quite clear that they are getting better growth rates and they are stopping the nonsenses of the past. I accept there were nonsenses in the past, but we have at long last got the donor community acting together to bring about sensible economic reform.
The second area is the promotion of good government which involves issues such as the competence of government; its legitimacy and its accountability to its people; broad participation of the people in the development process; and respect for human rights and the rule of law. That has been mentioned by many noble Lords tonight.
The third area is the reduction of poverty—appalling grinding poverty which, for all the scientific brains in a few countries, still exists among a mass of the people in those very same nations. We achieve that both indirectly through promoting economic growth and by direct action among the poorest in projects such as slum improvements, and particularly in education projects at primary level and education projects for women's literacy. The noble Lord, Lord Bonham-Carter, referred to that matter. If one makes women literate, one achieves so much more for the long-term than one seems to be able to achieve through the education of men. So be it!
The fourth area is the promotion of human development, including better education and health, and the promotion of childbirth by choice not chance. I agree very much with the words of the noble Lord, Lord Rea, on that subject. Here is an area where the provision of good primary health care convinces women their children will live longer. One therefore encourages them to follow sensible family planning policies. That is obviously another key part of our work.
The fifth area is helping developing countries to tackle environmental problems. The noble Lord, Lord Ponsonby, mentioned his recent visit to Siberia. The situation in some parts of Eastern Europe and the former Soviet Union, in terms of environmental problems, is chronic. The task there is so mammoth that we all have jobs for lifetimes to come. Through technical co-operation and our know-how funds we are seeking to help those countries to tackle their problems for themselves. We are not tackling their problems for them but giving them the knowledge and the know-how to do it for themselves. We are working alongside them so they develop the ability to control their own pollution as time passes.
The sixth area is the promotion of the development of the private sector as a crucial contributor to economic growth. Sustainable development has long been at the core of the aid programme. The UNCED conference in Rio explicitly recognised that we cannot separate sustainable development from the environment. I know how much the noble Lord, Lord Judd, and others care about that. In Agenda 21 we set out a blueprint for sustainable development into the next century. I can assure your Lordships that we shall mobilise the aid programme in support of those goals of Agenda 21. In fact, we are already doing so to a large extent.
311 The process of promoting development is important for us all. Improvements in the prosperity of developing countries helps their economic growth, encourages world economic growth and will provide a better environment for British companies to trade and invest. Much of the work of our aid programme provides that very employment for British companies which we so much want and for the individuals who do such a splendid job working in the developing countries.
A number of comments were made by the noble Lord, Lord Judd, my noble friend Lord Prentice and the right reverend Prelate concerning the targeting of aid. We accept the internationally agreed target but, like most other donors, we are not in a position to set down a timetable for reaching it, if we have not already achieved it or exceeded it. Future levels of aid will continue to depend on the economic circumstances of individual national governments and on other calls on public expenditure. I know, and regretted, that for the calendar year 1990 the ODA figure fell to 0.27 per cent. of GNP, but in 1991 it was 0.32 per cent. Over the five years we have maintained the average at 0.30 per cent. or a little above. It is significant that we have maintained that average over a period when our programme has grown substantially in real terms. As I have said many times, it is also important that we look at how we have spent the money.
As we went through the debate I noticed some comments about a possible reduction in money for development assistance in the EC budget. I can assure your Lordships that wherever those figures came from in the first place, they were not correct. The figure which is being considered for development assistance under the budget for 1993, including food and emergency aid, represents an increase of about 5 per cent. on the original commitment for 1992. I shall consider again what the noble Lord, Lord Judd, said, but I can assure him that he need have no fears on that score.
While I am on the subject of the European Community development budget, which the noble Lord mentioned, I should point out to the House that the 1992 aid budget was nearly 20 per cent. higher than in 1991 and the 1993 preliminary draft budget is more than 2 billion ecus, which represents a 15 per cent. increase over 1992. Therefore, with the latest amendments, that will rise by 0.1 billion ecus to 2.1 billion ecus. That is in addition to the EC budget. We have the Community aid to ATP countries through the Lome Convention, which so far this year is over 1.6 billion ecus. Your Lordships probably already know that all the aid to Eastern and Central Europe is separate from and additional to that for developing countries; so in both areas we are raising the amount that is being spent.
It would be easy to talk for some time about the follow-up to UNCED. The Rio conference was a fascinating one, as I made clear in your Lordships' House on our return. We shall contribute our share of the 3 billion ecus pledged by the European Community at Rio for specific projects and programmes in key Agenda 21 sectors. We made it clear in our Community statement there that the 312 member states could only announce individual contributions in accordance with their national budgetary procedures. In common with a number of other member states, although there may be some announcement tomorrow, we are by no means yet able to complete the process and we shall still have to decide the details of our contributions in the weeks ahead.
The right reverend Prelate, in his very interesting speech, commented particularly on debt. With the Trinidad terms promoted by my right honourable friend the Prime Minister, the story in relation to debt is very much better than it used to be, but there is still a long way to go. We have led the way in promoting measures to relieve the burden of debt but, as I said, there is more to be done. The Trinidad terms currently reduce the eligible payment due to governments by as much as 50 per cent. Your Lordships will recall that my right honourable friend the Prime Minister wanted that to be two-thirds of the outstanding debt. We have not reached that agreement with all other donors, but we shall press for even greater debt relief to be made available to the low income, heavily indebted countries which need it. We want them to be able to stand on their own feet, run sensible economic policies and get growth in their economies.
The noble Lord, Lord Monkswell, made reference to net resource transfers. Net transfers to the poorest countries have become strongly positive throughout the 'eighties and now the 'nineties. Some middle-income countries in Latin America have made net transfers to industrialised countries; but that is due largely to a fall in net bank lending which arises when countries are in a position to repay their debts. The official flows have increased considerably. Recent figures from OECD, which are much more comprehensive than those from other sources, show that developing countries received £23.5 billion more in 1991 than they paid out.
We have also been looking at net private flows. The figure relating to 1990, which was interpreted by some as showing that developing countries had paid £6.1 billion to United Kingdom banks, was certainly not a true reflection of net bank lending. During the past year the Bank of England has undertaken work to make sure that all financial transactions are taken into account. The revised figures for total flows from the private sector to developing countries in 1990 amount to £1.7 billion. The preliminary estimates for 1991 again show repayments of claims to United Kingdom banks but they decrease to £680 million, and there is an increased total net flow from the private sector to developing countries of £2.3 billion. The situation is gradually improving. It is those kinds of big financial movements that will help those countries to invest of their own accord in the infrastructure they need if they are to establish their own industries.
The right reverend Prelate spoke about private investment going down. The one thing that private foreign investors need more than anything is confidence before they invest in developing countries. They want to be sure they can repatriate their profits and dividends, operate in a liberal and transparent economic environment and that host governments will 313 not do U-turns in economic policies. In supporting economic reform programmes, our aid is helping to create the right conditions for foreign private investment. That too is critical to getting growth in developing countries. Your Lordships know that confidence takes time to build. Where countries persist in the right economic path we are beginning to see real returns. Mauritius, Botswana and Ghana all show how it can be followed through and are now attracting foreign investors.
Some comments were made about tied aid. We will try to get as much untying of aid as possible because we believe it right that the money made available by donors should be used in the most effective way for the recipients. That means having the freedom to buy in region and in country and not to have the aid tied. I wish a few of our partners in the Community could go along that path with us as fast as we wish to go, but we will continue to push it for the good of the recipients of the aid programme as well as better value to the taxpayer who gives the money in the first place.
The noble Lord, Lord Taylor, mentioned the future of the aid and trade provision. I am afraid that I cannot give him any information about that until we have concluded the public expenditure decisions. What I will say is that I am well aware of how valued this is by industry but it should not be seen as a subsidy to industry; it should be there to get economic regeneration in developing countries started as well. That is always something that we must have in the forefront of our minds.
A number of noble Lords have spoken about respect for human rights. We are seeking to make sure that that, as part of our good government policies, is pursued in all our aid giving. We seek to proceed by offering incentives—handing out carrots, not sticks-but we are quite prepared to stop new aid. Indeed, we have done so. We are quite prepared not to pursue projects, if we believe that the government of the country is going down the wrong path and not a path of good government.
My noble friend Lord Onslow made a speech which, I hope the right reverend Prelate will forgive me for saying, was very much like the curate's egg, because there were parts as regards which I agreed with him. Of course we want to see trade and money properly used. But where it is being properly used-and it is largely British aid-we watch for growth and sensible developments. Studies on the effects of aid show that on balance increases in investment contribute to growth. The benefits of aid are confirmed by the record of our own aid projects, and on evaluation—all our projects are evaluated. Some 80 per cent. of them seem to have been partially or wholly successful. There are examples of benefits from well planned and executed projects. I shall not detail them tonight, but there are many to be seen. One of the new departures in recent years has been the stimulation of small and medium-sized industries in the developing countries. That is exactly what they want and how they will progress.
It is very tempting to keep noble Lords in the Chamber for a good hour further, but I promised not 314 to do so. My noble friend Lady Trumpington pulls a bigger punch than I do. But let me just say that we have had a quite exceptional year in respect of people in real need overseas. The needs in southern Africa have probably been the worst ever known as a result of drought. There are the needs in the Horn, the needs in Yugoslavia, the needs of people in Iraq and the needs of people in eastern Europe and the former Soviet Union. We have played a very significant part as a nation and in our presidency of the EC in making sure that the right kind of technical co-operation is given, and the right donations to the United Nations agencies which have been seeking to do so much—I mention in particular UNICEF, of which the noble Lord, Lord Bridges, is such a prominent member—to give help where and when it is needed.
But we are not only concerned with emergency aid. As the noble Lord, Lord Rea, said, the need for long-term development aid exists in order to prevent the emergency aid being required at some future time. I know that the noble Lord, Lord Judd, believes that.
While I cannot answer all the questions of noble Lords in the debate tonight, and certainly cannot put every mind at rest, I can say that we seek to fit the assistance that we offer to the real assessed need of the country. We seek to do that in a way which is both cost effective and as simple as possible, so that it cannot go wrong. Simple is beautiful in many places. That is why we back bodies such as the Intermediate Technology Development Group and many others who are bringing new ways of doing things to the developing world. We do it with remarkably little funds sometimes.
Like any spender, if I had more, I could use it. But I promise your Lordships' House that whether it be with the know-how funds that the Prime Minister announced just two days ago to President Yeltsin doubled, with another £50 million going to the Soviet Union; or whether it be through our work in multilateral organisations, we seek to get value for money.
Like the noble Lord, Lord Desai, I am not satisfied with everything that goes on, be it in the World Bank, the EC or other multilateral institutions. But I give noble Lords this assurance. We shall do all we can in the Overseas Development Administration to make sure that the faith in my department which has been very clearly demonstrated by the debate tonight is not misplaced.
On the subject of GATT, a healthy global economy and an open trading environment are vital for the developing world just as they are for us. The GATT Uruguay Round is the top trade priority in our presidency of the Community. We have gone back, and back again, when it looked as though the negotiations were breaking down. My right honourable friend the Prime Minister has been unceasing in dragging people back to the negotiating table. We shall continue to support the Commission in its efforts to reach agreement with the United States. The President of the Commission assured my right honourable friend the Prime Minister on Monday that it was his wish that negotiations should resume, as they have done this week. The United States has 315 expressed the same wish. We shall go on working for a solution to avoid the use of punitive tariffs which would do nobody any good.
Finally, we are in the middle of transition to a new international order. It is not easy. The UN faces new challenges. The EC faces new challenges. We do too. But we have to make sure that we measure up to the needs of the developing world in which there are many people who literally cannot help themselves. We also need to be tough and fair with leaders of countries who could do a great deal better with their own 316 resources let alone with what they receive from donors. I assure my noble friend Lord Onslow and the remainder of your Lordships' House that we shall not only play our full part in the international effort to bring about a better world, but we shall do so with a very firm eye on the British taxpayers' money and on value for money for all the people in the developing countries.
§ House adjourned at eight minutes before midnight.