ACP Countries: UK Aid (Hansard, 19 July 1995)

§ The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)
My Lords, the ACP will have no need to take such measures. The total size of EDF VIII is broadly the same in real terms as the last.

§ Viscount Waverley
My Lords, I thank the Minister of course for that reply. Is she concerned that EDF VII failed to meet its spending objectives? Is it not a fact that UK bilateral aid to the sub-Sahara is set to fall by 16 per cent. in real terms over the next three years? As important, what is the current UK and European Union vision towards a successor agreement to Lomé IV?

§ Baroness Chalker of Wallasey
My Lords, the noble Viscount is right that in terms of amounts spent to 30th June 1995, EDF VII had reached about a third of its total size. There are a couple more years to go on it, of course. The noble Viscount is right that there will be a reduction in overall bilateral aid, but it would have been much greater if we had not restricted the amount going through the European Union so as to safeguard bilateral aid so far as possible.
I have a totally open mind as regards what will go on after the year 2000, which will be European Development Fund IX, if it takes place. Our main concern is to ensure that European Union aid resources are directed efficiently where they are most needed and where they can be most effective. It is for that reason that we now have agreed measures to improve the effectiveness and we intend to go on pushing at the European Union to improve the effectiveness still further.

§ Lord Judd
My Lords, is the Minister aware that we are all agreed that we want effectiveness in our aid programme? However, there is widespread concern about the mean response of the United Kingdom Government to the EDF because the EDF is targeted on some of those in greatest need in the world. Does the Minister agree that between 1990–91 and 1993–94, while the aid programme to sub-Saharan Africa, which has great need, fell by 20 per cent., that to the former Soviet Union and eastern Europe rose by 34 per cent. in our bilateral programme? Is not the problem that the Minister has all the time to spread the butter thinly? While in the past year she has halted the fall as a proportion of GNP in the aid programme, it is destined to fall to 0.27 per cent. of GNP in the next few years, as distinct from 0.31 per cent. at present, on the figures given to the Select Committee in the other place.

§ Baroness Chalker of Wallasey
My Lords, there is no doubt in your Lordships' House and in another place that we wish to see all aid resources—which are, after 285 all, taxpayers' money—spent as effectively as possible. That means that the mechanisms must be in place to ensure that they are properly targeted and properly delivered. That is why we have looked extremely carefully at the under-spend on EDF V, EDF VI and EDF VII—none of which has spent up to the commitment made.
If we were to make a commitment as large as that for which we were first asked and then not spend it, we would be denying the bilateral aid programme the very resources that the noble Lord, Lord Judd, wants to be spent—as I do—in sub-Saharan Africa and targeted on the poorest. We cannot do both. Therefore, I shall go for effectiveness in spending, good targeting and ensuring that the poorest get the resources. We have done that by now making the European Development Fund also target the poorest, which it failed to do prior to the agreement in 1992 under the British presidency.

§ Lord Judd
My Lords, if the Minister is so determined to help the poorest, will she clarify why aid to sub-Saharan Africa in the bilateral programme has fallen by 20 per cent. in the past three years, while it has risen by 34 per cent. to the former Soviet Union and east Europe?

§ Baroness Chalker of Wallasey
My Lords, we are dealing with not just two but three separate areas. Before 1989 there was no chance of giving help to the former Soviet Union and central and eastern European countries. The European Union then decided that it wished to give help. We also decided, through our very effective know-how funds, to give help to the areas. We further decided that we must give help to those Mediterranean countries that badly need development assistance.
We must balance what we are doing. The difficulty is that the noble Lord looks at only part of the situation. The African, Caribbean and Pacific countries not only benefit from the European Development Fund, but they also benefit from food aid, aid to the NGOs and the democracy programmes which come out of EC budget spending. Furthermore, there will be up to 1.7 billion ecu of EIB loans to the ACP countries during the lifetime of European Development Fund VIII. The total European Community financial flows will be worth some 18 billion ecu over five years. The European Union will remain far and away the largest donor to Africa. It is only by restricting our funding to other less needy countries that we will able to continue the work we are doing in sub-Saharan Africa.

§ Lord Mackie of Benshie
My Lords, will the Minister tell us what specific help we give to South Africa? The most hopeful signs of development and democracy in Africa have been there. Any help we can give—for example, on housing and education—must surely be immensely profitable for this country.

§ Baroness Chalker of Wallasey
My Lords, over three years we shall give about £100 million of direct aid to South Africa, both bilaterally and through the European Union. We were helping South Africa for 10 years or more prior to the election of the Government of National Unity in 1994. Throughout all that time, we 286 have concentrated particularly on education, training the teachers of teachers so that one can spread education—a basic need—as far and wide as possible. We have given help through non-governmental organisations for a long time and now we are working with the new Government of South Africa on the reconstruction and development programme, giving training in institution building, government training, training in democracy and training in management. In addition, the Foreign Office provides from its budgets further training for the police force and the unification of the armed forces of South Africa.

§ Lord Stoddart of Swindon
My Lords, can the noble Baroness say how much, in pounds, shillings and pence, we are contributing—

§ Lord Hailsham of Saint Marylebone
No, in pounds.

§ Lord Stoddart of Swindon
My Lords, how much are we contributing in pounds to aid through the European aid budget fund? What proportion of our total aid fund does that represent? Does she also agree with Action Aid which has recently complained that the European Community is distributing money away from Africa and towards the eastern states of Europe? If I may say so, the latter are much better off than people in Africa. Does the Minister also agree with the many charities which say that often the EC distributes aid on the basis of a knee-jerk reaction to press reports?

§ Baroness Chalker of Wallasey
My Lords, I counted four questions there. We were spending about 25 per cent. of our total budget through the EC. It is now around 30 per cent. and it will increase to over 40 per cent. That is why I have sought to restrict our funding and ensure that all the money we give is properly targeted and properly spent. As regards the noble Lord's other questions, I shall reply to him separately.