HL Deb 30 November 1995 vol 567 cc694-8

3.20 p.m.

Lord Judd asked Her Majesty's Government:

What are now their priorities for their overseas aid and development co-operation programme.

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, the UK aid programme will remain the fifth largest in the world. Its overriding priority will continue to be poverty reduction through sustainable development, focused on the poorest countries in Africa and Asia.

Lord Judd

My Lords, does the noble Baroness recall that only a year ago she gave an undertaking in this House that by 1997–98 the aid programme would have increased by £146 million? What has happened to that undertaking, and why? The noble Baroness says that ours is the fifth largest aid programme in the world. Does she not agree that of greater significance is the fact that in terms of our aid programme as a proportion of our national wealth—our GNP—we stand 13th rather than fifth in the international league? Does she agree that that is a sorry position for one of only five permanent members of the Security Council?

Baroness Chalker of Wallasey

My Lords, when we speak about forward plans the only year that is probably safe is the following year. The fifth largest aid programme in the world will be £2,150 million next year. That is extremely good value for money. One of the reasons for a reduction in the figure next year is that we have lower forecasts for the draw-down by multilateral agencies, namely the regional banks and the European development funds, of funds already pledged.

We are the third largest source of private capital to the developing world. Private capital is playing an increasingly important role. We give 1.5 per cent. of our GNP, which is 50 per cent. above the UN target for private capital. Development assistance is not only about giving aid; it is about developing the private sector. We stand at 0.31 per cent. compared with the average of the DAC countries of 0.29 per cent., so we are above the average.

Lord Judd

My Lords, does the noble Baroness agree that all the changes and reductions in the aid programme are related to the issue of cutting taxation? Does she also agree that however taxation is cut there is no case ever for cutting it at the expense of the poorest people in the world?

Baroness Chalker of Wallasey

My Lords, the answer to the noble Lord's first question is no. The answer to his second question is that we have to have a steadily growing economy in order to be in a position to give development assistance overseas. It is not the absolute amount of money which is important but what we and the multilateral agencies do with that money. We are seeking improvements all the time.

Lord Thomson of Monifieth

My Lords, is the Minister not aware that whatever gloss she puts on the figures the fact is that next year, in real terms, there will be a 6.7 per cent. cut in our aid to the poorest countries in the world? Is that not a pretty mean proposal from the Government?

Baroness Chalker of Wallasey

My Lords, it is time for reality. I said in answer to the first question from the noble Lord, Lord Judd, that it is not only a matter of development assistance but also a question of a substantial transfer of resources concentrated on the poorest countries. By common consent, the United Kingdom makes one of the most significant contributions to the alleviation of poverty in the developing world. If the Chancellor of the Exchequer decides, as he did in a very wise Budget on Tuesday, that some sacrifice has to be made, then in the short term we make that sacrifice in order that in the long term the economy will be much more sound. Then we shall be able to give more.

Lord Ashley of Stoke

My Lords, obviously the aim of our aid programme is to help the poorest people in the poorest countries. However, the noble Baroness calls for reality. If that is the case, does she recall Douglas Hurd, when he was Foreign Secretary, saying in February this year that in the longer term aid is in our self interest? Does she agree with that statement? If she does, how does she square that with this squalid cut in the Budget?

Baroness Chalker of Wallasey

My Lords, no one in your Lordships' House will be surprised to know that I agree with my right honourable friend in another place, Douglas Hurd. I have said similar things many times. The critical point is that we, and other donors, must channel our resources and devote them to the poorest countries. We have a better record of achieving that than almost any other donor country in the world.

Lord Eden of Winton

My Lords, if British taxpayers' money is still going in the form of aid to countries where corruption and the official abuse of minorities is widespread, will she review that policy?

Baroness Chalker of Wallasey

Yes, my Lords. I can tell my noble friend that not only have we put down very firm markers on good governance but that we have also given, and will be giving, notice to those countries which are now doing well economically as a result of having put their economies in order that they will graduate out of development aid.

Baroness Robson of Kiddington

My Lords, the Minister says that where we put our money is the most important issue. Will she confirm that the best way to help the developing world is by maintaining, and not reducing, the amount of money we give in aid for family planning and the health of mother and child? Can she assure the House that that sum will not be reduced next year?

Baroness Chalker of Wallasey

My Lords, I am grateful to the noble Baroness. At the Cairo conference I thought that I would be able to spend £100 million on family planning. I can now tell her that for the same period we have managed to allocate to family planning and mother and child health—but mainly to family planning—150 per cent. of what I indicated then.

Lord Boardman

My Lords, can my noble friend say whether the Opposition have given her any indication of how many additional hundreds of millions of pounds they wish to devote to this heading?

Baroness Chalker of Wallasey

My Lords, my noble friend asks a very apt question. I have asked both privately and publicly on a few occasions. It seems to be coming out of thin air, like most of the spending plans of the party opposite.

Lord Stoddart of Swindon

My Lords, does the noble Baroness believe that it is morally defensible that this country's taxpayers should spend £500 million more on subsidising countries like Greece, Portugal, Spain, Belgium and the Irish Republic, whose income per capita is fairly high, than on under-developed countries where the income per capita is pitifully low?

Baroness Chalker of Wallasey

My Lords, the noble Lord knows full well that the two issues do not compare. We stand by our treaty obligations on EC matters. If it were not for the increasing take of the development assistance budget to the EC we might be able to do even better. However, I am glad to say that those estimates have been revised downwards. That is why we can take some of the pain that has to be taken this year.

Baroness David

My Lords, what is the effect of the public spending round on Britain's bilateral aid programme and, in particular, has the Minister yet come to any decision on how to replace the education library book scheme with, as she said, a more cost-effective scheme meeting ODA aid objectives?

Baroness Chalker of Wallasey

My Lords, I congratulate the noble Baroness on a very clever question. The noble Baroness refers to the ELB scheme. We had a meeting with the Publishers Association only last week. I hope that before long we shall be able to announce a good substitute scheme. I shall of course inform her. As regards the bilateral aid programme, we are at present discussing resource allocation. I do not believe that we shall see—certainly not in the next year—much change, if any, in our previous plans. There are major reductions in the level of multilateral aid from the previous forecasts. That has enabled me to change the figures in the way I have.

The Earl of Sandwich

My Lords, is the Minister aware that the so-called near cuts—they have not actually occurred—would have fallen heavily on the work of the non-governmental organisations which are important to the aid programme? Does she recognise that there is also concern about the multilateral aid programmes being, as she says, drawn down, possibly at the expense of the poor whom they serve?

Baroness Chalker of Wallasey

My Lords, every year for the past six years the money that has been put through the non-governmental organisations, and given to them in core grants, has been increased very substantially. I do not have the exact percentages with me but each year there has been an increase. We may not be able to continue doing that. There may have to be some change, in particular because a number of smaller NGOs now do specific work in countries which were not in need six years ago. We are encouraging the multilateral aid donors to concentrate their aid much more effectively. It is by concentration of the aid, in particular in the health and primary education sectors, that we can do so much more to enable people to help themselves.

Viscount Waverley

My Lords, does the Minister agree with the German development minister when he suggested that, "Poor countries should ensure that non-social spending, including military spending, be examined critically and put in relation to social spending"?

Baroness Chalker of Wallasey

My Lords, yes, indeed we do, for the simple reason that that kind of spending by some of the countries is entirely negatory. Every year we consider what those countries are spending in different parts of their budgets before we agree our forward plans with them.