Overseas Aid: Single Budget (Hansard, 24 November 1993)

§ The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)
My Lords, as I have already announced, from next year we plan to consolidate our external assistance programmes, including those for eastern Europe and the former Soviet Union, into a single budget line. This does not mean any lessening of our commitment to the poorer developing countries. They are, and will continue to be, by far the main recipients of our concessional financial assistance.

§ Lord Judd
My Lords, does the Minister accept that that is taking money from the poorer countries to give to the former Soviet Union? Does she also accept that she has presided over a disastrous decline in the aid programme, which is down from 0.51 per cent. of GNP in 1979 to a projected 0.28 per cent. next year? Will she give the House a categorical undertaking that she personally will accept nothing less in next week's 256 Budget than a reversal of that trend and a significant move towards the 0.7 per cent. of GNP to which she and the Prime Minister are committed?

§ Baroness Chalker of Wallasey
My Lords, the noble Lord should not expect me to say anything about next week's Budget. Putting up the budget for 1993–94 to more than £2,200 million from £1,900 million shows exactly what we have done in adding the two sums together. That is how it now looks. It is perfectly sensible to manage our external assistance programmes as a whole because in that way we can make better use of our resources and therefore spend more effectively in response to countries' individual needs. There are many lessons which we have learnt from developing country assistance which we have put into the Know-How Funds and vice versa. What we have done in the Know-How Funds is becoming increasingly used in the development assistance programmes in the third world countries.

Lord Bruce of Donington
My Lords, will the Minister give the assurance that in examining the budget it will still be possible to distinguish between the two sums? If one consolidates them in a single budget line, which is what I understood her to say, it will no longer be possible to do that. Surely, there can be no reason why a separate, if necessary, sub-budget line cannot be created in relation to the different types of aid?

§ Baroness Chalker of Wallasey
My Lords, the noble Lord, Lord Bruce of Donington, need have no fear. Expenditure will be shown in our annual British aid statistics by country and by region so that comparisons can continue to be made. I would not have it otherwise.

§ Lord Stoddart of Swindon
My Lords, does not the Minister think it obnoxious that we are spending far less on aid to third world and poor countries while at the same time, through our net contribution to the EC, we are spending more subsidising the comparatively rich countries of western Europe?

§ Baroness Chalker of Wallasey
My Lords, from the figures that my department gave to the Select Committees the House already knows that we are spending more through the EC in the aid programme. But that does not mean that it is not being spent on the poorest countries. More than 80 per cent. of our total budget in 1992–93 went to the poorest countries; that is, those with incomes of less than 700 dollars per capita per annum. We shall continue to concentrate our bilateral aid on the poorest countries.

§ Baroness Robson of Kiddington
My Lords, as the Minister is aware, I have a particular interest in population matters. Will the noble Baroness assure the House that the percentage of aid at present devoted to population services and family planning, even after those peculiar alterations to the sums of money, will remain at least the same and preferably will be increased?

§ Baroness Chalker of Wallasey
My Lords, they are not peculiar changes. However, I assure the noble 257 Baroness that not only are we already doing more to increase our spending on population and family planning-focused activities and mother and child health care but also that we intend to see that that continues.

§ Lord Rea
My Lords, does not the first Answer which the noble Baroness gave to my noble friend conflict with evidence given by the Foreign and Commonwealth Office to the Foreign Affairs Committee of another place earlier this year? The evidence showed that over the next three years assistance to the former Soviet Union countries will rise by 85 per cent.—I admit that that is from a low base—whereas the aid for overseas development will stay steady at £1,900 million and bilateral aid to those countries will fall by 12 per cent. How does the Minister explain that?

§ Baroness Chalker of Wallasey
My Lords, there is nothing contradictory in what I said. What is important is not only the amount of money to be spent but how it is spent. We are finding that from a very low base we can do a very great deal by investing a little more money in the former Soviet Union and some eastern European countries. Even so, that money does not compare with what we spend in the developing world. We need to do both. For my part, I should like to see a steadily growing bilateral programme. However, because of the way in which our affairs are organised, I cannot achieve that at present. I intend to see that we get even better value from all the money that we put through the multilateral channels.

§ Lord Judd
My Lords, does the Minister accept that she will be judged not by her sentiments, which nobody in this House questions, but by what she delivers on the aid programme? Does she appreciate that the House is deeply disturbed that today we have heard that, at the expense of programmes for the third world, as we understand it, funds will go to the former Soviet Union, and that in place of the Prime Minister's commitment in Rio to 0.7 per cent. we continue to move towards a declining proportion of our GNP on aid?

§ Baroness Chalker of Wallasey
My Lords, we still maintain that we should work towards a target of 0.7 per cent. of GNP, but it is perfectly clear that the resources of this country are not there to achieve that in the next year or two. I believe that what is important is what we deliver in the developing countries and in the emerging countries of eastern Europe and the former Soviet Union. I intend to go on making sure that that is the best targeted and best quality of any aid programme.

§ Lord Annan
My Lords, in the light of the melancholy account which the noble Lord, Lord Cockfield, gave last Monday of our economic standing in Europe and after the castigation which the Minister's right honourable friend Mr. Heseltine gave to the management of industry in this country about its low level of productivity, is it not a miracle that we can give aid to anybody?

§ Baroness Chalker of Wallasey
My Lords, I hope that I do not describe spending taxpayers' money wisely as a miracle. It takes an enormous amount of ingenuity 258 to make sure that we get the very best value for money. I am grateful to the noble Lord for what he said. I assure him that the quality of what we are delivering in different countries and sectors is still second to none. That is what we have reason to be proud of, even if the sums are not as large as my noble friends on this side of the House and certainly noble Lords opposite would like them to be.