HL Deb 09 April 1998 vol 588 cc847-50

Lord Judd asked Her Majesty's Government:

What progress they have made in reversing the reduction of public expenditure on overseas aid and development as a proportion of gross national product (GNP).

Lord Whitty

My Lords, the Government will begin to reverse the decline in the aid budget during the current Parliament and have made clear their commitment to the UN 0.7 per cent. official development assistance/GNP ratio target. Decisions on future levels of aid spending will not be announced until the conclusion of the comprehensive spending review in the summer.

Lord Judd

My Lords, I thank my noble friend for that Answer. Does he agree that if the battle against poverty is to be won, if effective international strategies on the environment are to be introduced around the globe, and if a success is to be made of all that the multilateral agreement on, for example, investment is endeavouring to achieve, it will be essential to mobilise additional resources in order to bring the poorest developing countries to the point at which they can play their part in the international economy? Does my noble friend further agree that the Government's specific undertaking—their mandate—to reverse the trend has been taken seriously around the globe and the sooner tangible steps can be taken in that respect the better?

Lord Whitty

My Lords, I agree with the general strategy outlined by my noble friend. We hope to reverse the decline in the aid budget that has taken place during the past few years. However, the precise figure and the degree of that turn-round will not be clear until after completion of the comprehensive spending review.

Lord Redesdale

My Lords, is the Minister aware that we on these Benches thoroughly support the objectives of the White Paper and look forward to a reversal of the cuts made by the previous government? Is it part of this Government's plans to pay for expenditure by the Department for International Development through the sale of the Commonwealth Development Corporation?

Lord Whitty

My Lords, we had a full debate on that subject a few weeks ago. Clearly, the sale of the CDC will bring some revenues into the aid budget. However, the main purpose of changes in the status of the CDC will be to mobilise other private funds in order to facilitate our aid programme throughout the world.

Lord Davies of Oldham

My Lords, does my noble friend agree that it would be an entirely reasonable target if, within this Parliament, we at least returned to the percentage of the national product spent on aid when Labour was last in power in 1979?

Lord Whitty

My Lords, I am sure that the House will recognise that I may well agree with my noble friend's assessment, as may my right honourable friend the Secretary of State. These are matters for discussion and negotiation within the comprehensive spending review. I have no doubt that my right honourable friend will reflect similar sentiments in her discussions with my other right honourable friend, the Chancellor of the Exchequer.

The Earl of Sandwich

My Lords, following up the previous question, does the Minister agree that the British public expect proper consideration of the restoration of the aid budget, which has been severely cut over so many years, and that many people are waiting for an answer? Does he further agree that moneys expended on debt relief should rightly come out of Treasury funds and not out of the aid budget?

Lord Whitty

My Lords, the House will recognise that I am not in a position to agree with the noble Earl's second point. However, I agree that public opinion is very much in favour of our being prepared to devote more of our resources to help the poorest countries. It is not simply a matter of money and aid, but of our total relationship with the developing countries during the next decades.

Lord Alton of Liverpool

My Lords, I welcome the Minister's comment about the Government's continuing commitment to Resolution 2626. However, does he agree that by the millennium the highest priority for aid expenditure should be the remission of debt? Does he accept that many countries are crippled by phenomenal debts—a staggeringly high level of £2.2 trillion throughout the world? Should not the chief objective of giving aid be the remission of debt?

Lord Whitty

My Lords, the noble Lord will know that these matters are at present under substantial multilateral discussion. My right honourable friends the Secretary of State for International Development and the Chancellor of the Exchequer have indicated their sympathy for some remission of debt. However, that is a matter which the British Government cannot themselves resolve. The figures we have discussed today relate to our own aid programme.

Lord Ewing of Kirkford

My Lords, will my noble friend accept that while it seems as though the Labour Party was last in power in 1969 that was a slip of the tongue because it was last in power in 1979?

Lord Whitty

My Lords, I agree with my noble friend's historical recollection. It was a long time ago. We are now taking serious steps to reverse what happened in the interim.

Lord Wade of Chorlton

My Lords, does the Minister agree that the new director general of the United Nations Industrial Development Organisation is taking enormous strides towards improved efficiency and making the organisation more directly involved in stimulating business and economic activities in undeveloped countries? Does he further agree that the Government could assist by ensuring that British companies have the right opportunities to invest in the major projects being developed in those countries?

Lord Whitty

My Lords, I agree that steps being taken within the United Nations are improving the situation. I agree also—this fits in with my earlier answer—that the flow of private funds and of trade are as important as the flow of public bilateral or multilateral funds. We need a total approach to help developing countries break out of the poverty cycle.

Lord Paul

My Lords, can the Minister confirm that the Government will discourage companies from investing in technology and plant which are not environmentally friendly to developing countries and which create a new problem for them for the future?

Lord Whitty

My Lords, I agree that that is a serious problem. Some of the tensions revealed at the Kyoto conference show that there are sometimes differing priorities as regards potentially environmentally damaging investments. The view of this Government and of the European Union and other multilateral organisations with which we are involved is that the environmental factor must be taken into account in any provision of public aid and the encouragement of private investment.

Lord Lucas

My Lords, I congratulate the noble Lord on taking over the DfID portfolio from his colleague. He is making an excellent job of promising much while promising nothing at all. I hope that he will soon no longer be able to keep up the pretence that the Government will put a lot more money into overseas aid. It is clear from what he said that no promises whatever are being made. Does he agree that the level of public and private investment in the developing world—1.86 per cent. of GNP—is the crucial figure which must be maintained? Will he promise that the Government will pay as much attention to that as they do to their own relatively small contribution?

Lord Whitty

My Lords, I agree—as I have said three times during the course of answering this Question—that the flow of private investment is vitally important. We must take all these matters together. The Government are clearly and unequivocally committed to reversing the trend perpetrated by the previous government. We are also committed to the ultimate target being set by the United Nations. As to the precise figures for the next two years, noble Lords will have to wait until the summer when the comprehensive spending review is complete.

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