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Column 284the aid budget be immediately restored. The restoration of credibility to the United Kingdom's aid programme is badly needed to remedy what has become one of the most sickening examples of the susceptibility of this discredited Government.
The only thing that will satisfy the House, non-governmental organisations and the law is that the future payments earmarked for the Pergau project be targeted on the poorest people in the poorest countries--in other words, not only the £24 million that has previously been wasted on the project.
The Minister must say how the Government intend fully to implement the decision of the High Court. If not, it will be open to the World Development Movement, as the right hon. Member for Westmorland and Lonsdale rightly said, to return to the High Court to seek legal redress. The Opposition would encourage the WDM to take that action, to ensure that the Foreign Secretary is made to obey the law of the land.
Mr. Jim Lester (Broxtowe): The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) spoke from the Opposition Front Bench in his usual colourful, florid and inaccurate way to try to build up a case that was out of all proportion. I have spent 20 years in the House using my energy to improve the transfer of resources from this country and other developed countries to developing countries, for the relief of poverty and for the integration of the world economy, and I speak from that background.
The Select Committee on Foreign Affairs took an enormous amount of evidence on this controversial issue, made recommendations and identified areas of concern. There is no point in a Select Committee taking that course if Opposition Front-Bench spokesmen repeat assertions that have been disproved, including links between arms and aid, and continually repeat charges that have been clearly demonstrated by others, including Opposition Members who sat on the Select Committee, to be untrue. The Select Committee examined the matter with considerable concern, including aid and trade provision. It is interesting that Malaysia, which was a very poor country and qualified for ATP when the Pergau dam was authorised, no longer qualifies for such provision. That is a tribute to the success of aid programme development. Countries such as Malaysia have succeeded in getting themselves into the world economy, much to the benefit of the majority of their peoples.
We recognise that ATP has always been an extremely difficult horse to ride. It is difficult to qualify what is developmental aid and what is assistance to business men who make quotations for major projects. To my recollection, the Select Committee has considered the issue on at least three occasions and has made various
recommendations. It must be recognised that, in an imperfect world, it is an extremely difficult issue.
The United Kingdom is one of the few countries that has a limit on ATP. We have limited it to a maximum of 9 per cent. of our aid budget of £2 billion. Other countries use most of their aid budget to assist their own commercial development. The United Kingdom is more restricted because we have much tighter rules than other countries.
Column 285It is a misconception that the money spent on the Pergau dam should be available for the bilateral aid programme. The hon. Member for Leicester, South (Mr. Marshall) did not make that mistake. Instead, he said that the money should be used within ATP. The changed rules limit ATP to countries with low per capita incomes and countries with much smaller projects.
My principal concern is that the concept of the dam has been much undermined by what has happened in this country. I feel that strongly. The evidence shows that there is a narrow technical argument in the Overseas Development Administration not about whether the dam should be built but about when it should have been built in terms of the Malaysian electricity cycle. It was a question whether it should be built immediately or in 10 years' time. In the end, the argument turned on who had the most interest in and knowledge of what should happen in Malaysia--in other words, whether the Malaysians should go ahead or whether ODA officials, who took an interested but narrow view, should decide when or whether it should proceed. The hon. Member for Leicester, South talked about targeting poverty. I have seen various projects throughout the world and it is my experience that the provision of electricity in areas where hitherto there was none, such as the townships of South Africa, can do far more to target poverty--in the sense that it brings an area to life, enables factories to be built and provides a basis for jobs to be created--than projects which bring clean water, education and social services, although I do not seek to undermine those. It is a great mistake to imagine that the provision of essential infrastructure does not relieve poverty in a positive way. It is understandable that the Malaysians wanted to develop an area of their country that had no electricity. It is understandable also that they wanted to develop a regional project. It has been a successful project. Nobody has ever suggested that the price that was eventually arrived at when the design work was done was unfair. Nobody has suggested that the dam is a white elephant. It has not been suggested that the dam will be anything but a successful project within the Malaysian electricity cycle.
Harping on, moralising and repeating assertions undermine precisely what I, my hon. Friends and Opposition Members who form the all-party group seek to do. Disinformation about sleaze, linkage with arms and corruption, which is not borne out by the facts, only reinforces those who seek to oppose the transfer of resources from the United Kingdom to developing countries. and to close down the aid programme as an easy way to save public expenditure. It damages all that one seeks to do.
In the real world, one must negotiate resources with the Treasury. Our current Foreign Secretary--one of the most capable and committed Foreign Secretaries that we have had for a long time--succeeded, despite all the difficulties, in getting an increase in the aid budget. We all know about the 0.3 per cent. and the 0.7 per cent., but to get an increase in the aid budget out of a difficult public expenditure round is a matter for congratulation, not castigation. I understand that the £24 million already spent
Column 286was a matter of considerable negotiation with the Treasury and the Foreign Office came out with a reasonable deal. We can all argue for perfection, but we should also argue from reality and from accurate information. I hope that I have at least tried to put the balance right in terms of the argument.
Mr. Mike Watson (Glasgow, Central): I welcome the opportunity to participate in this first ever Wednesday morning debate under the new arrangements, and I join my colleagues in congratulating the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) on the part that he played in getting us to where we are.
In a way, I am glad that my hon. Friend the Member for Jarrow (Mr. Dixon) is not with us, as I know that he was not an enthusiastic advocate of the new arrangements and is even less enthusiastic about my urging that we should go yet further. I would like the House to sit on Tuesday, Wednesday and Thursday mornings and for Mondays and Fridays to be entirely constituency days. If anybody tried to suggest that I or any other hon. Member would be working only a three-day week as a result, I should have no problem in refuting that. None the less, we have taken the first steps towards more sensible hours and I am glad that we have the opportunity--
Mr. Watson: I am happy to do so, Madam Deputy Speaker. The aid community and, for that matter, the developing world, owes a twofold debt of gratitude as a result of the recent developments in the Pergau dam affair: first, to the World Development Movement for having the foresight to challenge the Government on spending on the Pergau dam and on the wider question of the methods by which the Government operate their aid policy, and for having the determination to see the case through to its successful conclusion; secondly, to Lord Justice Rose for his judgment of 10 November last.
Historic though that judgment was in reining in the Government's increasing tendency to act with impunity, it confirmed the trend of the courts in being prepared to dive in and swim around in those murky waters which not much more than a decade ago were regarded as the exclusive domain of the Executive. The willingness of the judiciary to allow an organisation such as the World Development Movement to pursue a judicial review must be welcomed.
If the wider result of the judgment is that it succeeds in curbing Executive power, that will meet with widespread acclaim from every direction but Whitehall as it fits into the unpleasant pattern of Cabinet Ministers having to be told by the courts that they were acting illegally-- a previous Home Secretary on a deportation case and the current Home Secretary in relation to compensation for victims of crime.
My pleasure at Lord Justice Rose's judgment was tempered by the Foreign Secretary's grudging acceptance on 13 December 1994 when he addressed the House on the Government's response to the judgment. There was no contrition whatever. There was no admission of guilt and no apology. No regret was shown, except at the fact
Column 287that they had been found out, which these days seems to be the only crime to which they are ever prepared to admit.
Despite failing to hold his hands up and say, as it were, "It's a fair cop, guv," in true Dixon of Dock Green style, the Foreign Secretary asked for three other offences to be taken into account, which was interesting to say the least. They were the Ankara metro project in Turkey, a television studio project in Indonesia--we could ask all sorts of questions about whether we should have relationships with countries with such human rights records--and the flight information project in Botswana. The latter two have been completed and the first will be completed in 1997.
In total, they amount to some £35 million worth of aid--relatively small beer in terms of the £234 million earmarked for the Pergau dam project, but again they form a pattern: a culture of deception, of disguised intentions with regard to aid funding, of hidden agendas and the end being held to justify the means. That is not a philosophy to which I and my hon. Friends would subscribe, particularly in regard to such an important area as overseas development aid. In his statement on 13 December, the Foreign Secretary refused to reinstate the £24 million already taken--illegally, it emerges--from the already depleted ODA funds. In effect, as my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) said, money was effectively stolen from the poor in the developing word. Attempting to justify that, the Foreign Secretary said:
"But the aid and trade provision of the aid programme for previous and future years was set on the assumption that the cost of Pergau and the other three projects would be met from within it . . . It is not self- evident to me or to the Government that the Government should in consequence ask the taxpayer for additional money to allow the ODA to expand its aid activities."--[ Official Report , 13 December 1994; Vol. 251, c. 774.]
In other words, those who never had it will never miss it. Let the Government tell that to the starving millions of sub-Saharan Africa, where on the ODA's own calculations the percentage of total British aid will fall from 14.4 per cent. in 1994-95 to 12.1 per cent. in 1997. If there is not a need to make up that deficit now, I do not know when there ever will be. We shall not convince the Government of the need if they can claim that the books are closed while at the same time aid to that deserving part of the world is decreased in terms of our overall aid budget.
A modest increase in aid was announced by the Chancellor of the Exchequer to take place, I believe, in 1996-97 and 1997-98. Unlike most other European Union member states, however, the Government refused to promise extra funding for the overall aid budget to take account of the need to increase European aid by 60 per cent. by the end of the century. That decision was taken at the Edinburgh summit in December 1992 and it leaves us in a disadvantageous position compared with our fellow members of the European Union.
The Organisation for Economic Co-operation and Development, which sets aid guidelines for 25 of the richest nations, recently reported that Britain was the only member among the top 12 donors whose aid budget had declined over the past 10 years. It warned that bilateral
Column 288aid to poor countries--the main purpose of the total aid programme--of some £2.3 billion will be severely cut if Britain is to meet the 60 per cent. increase in EU aid without coming up with any other funding.
That target would absorb up to one third of British aid, compared with the current figure of one fifth. It is in that context that Opposition Members demand that the funding earmarked for Pergau and the other projects to which I referred, which must be reinstated, should be set. Even if the full outstanding part of the £234 million over the next decade is not reinstated, at the very least the £24 million already illegally diverted must be restored.
As my hon. Friend the Member for Leicester, South (Mr. Marshall) so eloquently put it in opening the debate, why should the books be closed for those years when it is admitted not just that a mistake was made but that the Government acted illegally? If I broke into the office of a colleague, stole something and was found guilty, I do not believe that it would be right for me to be told, "You don't have to give it back--all you have to do is to ensure that you don't do it again in the future." There is something bizarre in the Government's saying, "Well, yes, we were caught out, but we'll close the book on it," effectively pretending that it did not happen.
I was not convinced by the argument made by the right hon. Member for Westmorland and Lonsdale, who said that one cannot expect the Government to look into the future, and I agree--particularly for a Government who do not have a future. None the less, they have announced figures for increases in aid for 1996-97 and 1997-98, so they are at least willing to look that far ahead. I am not sure where they find the confidence, but they are prepared to do that although they have not been prepared to give a commitment in respect of the Pergau dam aid funding.
That has been only for this year and next year. If the Minister will not accept the Opposition's pleas, he should remember that the High Court judgment instructed the Foreign Secretary to replenish the ODA funds which had been diverted for that ill-starred project. I hope that the World Development Movement will consider returning to the courts if the Minister confirms, as I expect that he will, the Government's refusal to reopen the books and to make good the deficit that has been identified.
The retrospective rearrangement of funds, which was mentioned in court, is well merited in its own right. The arguments have been eloquently put. Under Lord Justice Rose's judgment it is obligatory, but most of all it is needed by the poor of the world, who have consistently been sold short by the Government in their aid programme despite the rises for the next two years to which I have referred. Money was stolen from the poor of the world despite the Government's stated intention that their aid budget was to deal first and foremost with poverty. The Government must not be allowed to get away with their ill-gotten gains. Those funds should be reinstated and I urge the Minister to announce the intention to do so today. 11.10 am
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tony Baldry): First, I congratulate the hon. Member for Leicester, South (Mr. Marshall) on introducing the debate and providing the Government with a further opportunity to state their position on the aid and trade programme and on the particular event in question. We welcome that.
Column 289I also welcome the fact that my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) was able to take part in the debate. It is due to the initiatives of the Committee that he chaired that we are able to have Wednesday morning sittings, which will be much welcomed by hon. Members. As a senior member of the Foreign Affairs Select Committee, his contribution was valid and valuable. It should be noted that he and my hon. Friend the Member for Broxtowe (Mr. Lester), also a member of the Foreign Affairs Select Committee, endorsed and supported the Government's approach to the matter. I am delighted to see the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on the Opposition Front Bench. I believe that this is the first time he has spoken at the Dispatch Box since taking on his new brief. I was not entirely sure who would be the Opposition's Foreign Affairs spokesman this morning as I noted that the shadow Foreign Secretary was making a speech today on clause IV. Everyone in the Labour party now has to make speeches on clause IV, even those who supposedly have responsibility for foreign affairs. The shadow Foreign Secretary may be able to explain to the Labour party that it is now the only democratic party left in Europe which--
Mr. Baldry: I was simply welcoming the hon. Gentleman to the Dispatch Box and pointing out why it was that only he appeared to be free this morning to take part in the debate. However, I appreciate the sensitivities in the Labour party about the debate on clause IV. The United Kingdom has a substantial aid programme of some £2.28 billion this year, praised for its quality and focused on helping the poorest in the world. Nine of the 10 biggest aid recipients last year were poor countries in Africa and Asia. Former Yugoslavia--Bosnia in particular--was the other main recipient.
Our purpose is to help people in countries poorer than our own to improve their lives. In doing this of course we are keen to link with British companies and British consultants wherever it makes sense to do so, as we do with British non-governmental organisations such as Oxfam and Save the Children.We link with them because they can provide the advice, know-how, products, experience and expertise which can be of benefit to the development of the countries that we help. We should be proud that British money, British talent and British expertise is being devoted to help many of the poorest in the world.
The aid and trade provision was established in 1977 by a Labour Government, as has already been commented on and acknowledged. It has enabled the UK to promote development in areas where British companies have much to offer.
ATP is a successful scheme. It is successful in helping poorer countries in that the approximately £1.4 billion which has been committed to support development projects overseas has led to nearly £4 billion of British exports. My right hon. Friend the Member for Westmorland and Lonsdale asked whether we had the figure and that is it. It has led to substantial exports for the UK. That is good news for Britain, good news for UK jobs and good news for exports. It is particularly good
Column 290news for those countries which have benefited from these projects. Not surprisingly, the Foreign Affairs Select Committee concluded that ATP should continue.
As the House will know, my predecessor, the hon. Member for Morecambe and Lunesdale (Sir M. Lennox-Boyd), announced in June 1993 new procedures for ATP projects. All ATP projects approved since the new procedures were introduced fully meet the criteria laid down in the Overseas Development and Co-operation Act 1980, as now interpreted by the divisional court. Following the judgment of the divisional court in co-operation with the National Audit Office, there was a review of all projects receiving finance under the aid and trade provision to see whether any of the projects approved under our previous understanding of the Act might fall outside the interpretation of the legislation given by the divisional court.Three projects raised concerns, so following the judgment it was made clear to the House that arrangements would be made for the outstanding commitments to Pergau and the other three projects to be met from funds voted by Parliament outside the scope of the Act.
As to the past, the aid and trade provision of the aid programme was set on the assumption that the cost of Pergau and the other three projects would be met from within it. The books for those years are now closed. Therefore, as the House will know, we concluded that in respect of spending on those projects in previous years no adjustment would be made to ODA's future budget. The planned aid programme for the present and future years again contains provision for all four projects. Spending on the four projects is expected to be £32 million this financial year and £32.7 million next year.
Mr. Hugh Bayley (York) rose --
Mr. Baldry: We have therefore decided that funding from the reserve will be provided to meet the costs of the four projects, thus making available an extra £32 million for the aid budget this year and £32.7 million next year for overseas development. I am sure that the vast majority of people will find that a fair, reasonable and equitable outcome. I am sure that the vast majority of right hon. and hon. Members consider that to be a fair, reasonable and equitable outcome.
Mr. Bayley rose --
Mr. Baldry: That is evidenced by the fact that today's debate has been attended by only a handful of Opposition Members. This does not seem to be a House in which there is considerable doubt about whether the outcome is fair, reasonable or equitable.
Sir Peter Emery (Honiton): One of the things that I note has not arisen in the debate, most of which I have heard, is that however much many of us might wish to see aid to the rest of the world which is in need increased, many of my constituents feel strongly that some charity belongs at home, and they see great difficulties with such increases when the Government are refusing to give money for the elderly and for many other projects. That must be taken into account. It is no good dismissing it. That is what is felt by many of my constituents.
Column 291make difficult decisions in the public expenditure survey. My right hon. Friend the Foreign Secretary is to be congratulated on the fact that this year, next year and the year after that, the overseas development budget will be increasing year on year so that we shall be able to devote more resources to helping the poorer nations. Mr. Bayley rose --
Mr. Bayley: I am grateful to the Minister. I am sure that he will agree that it is important to ensure that any future ATP projects are funded within the ODA's rules. Following the Pergau debacle, the ODA changed its rules: in future, ATP would be given only to countries with a per capita gross national product of less than $700. On 18 November, in answer to a parliamentary question, the Minister gave me a list of ATP projects that had been approved for funding since June 1993, when the policy changed; it included four projects worth a total of £16 million --
Mr. Baldry: Perhaps I may anticipate the hon. Gentleman's point. Before Christmas he issued a press release asserting that Ministers had approved projects in defiance of the policy announced in June 1993 that new ATP projects would be approved only for countries with an income per head not exceeding $700 in 1989. That policy has not been breached: the four projects to which the hon. Gentleman's December press statement referred were approved well before June 1993, as my right hon. and noble Friend the Minister for Overseas Development made clear to him subsequently in correspondence.
As far as I can see, the only organisation--apart from the official Opposition--that does not consider the Government's approach fair, reasonable and equitable is the World Development Movement. It does not consider the extra £65 million for the aid budget to be reasonable. So be it; the WDM may seek to return to court if it wishes, but I am confident that we shall be found to have acted properly and reasonably.
We are putting the extra money to good use, as we put all the aid budget money to good use. In the current financial year it will enable us to provide, for example, additional emergency aid for Bosnia and Rwanda, and to deal with the crisis in Chechnya. We are financing general relief supplies through the International Committee of the Red Cross, the United Nations High Commissioner for
Column 292Refugees and other non-governmental organisations that are working for the 400,000 people who have been displaced by the tragedy in Chechnya. Britain will give up to £1 million for international humanitarian efforts to help those injured or made homeless in the fighting; the money will be used to provide food as well as blankets, plastic sheeting and clothing to protect people from the extreme weather conditions in the region.
We shall also be able to respond to specific appeals from the UN and the Red Cross, and to work on joint projects with the World Health Organisation and other multilateral organisations which are intended to deal with primary health care needs in developing countries. Allocations for the next financial year are still to be decided, but aid for the poorest in Africa and Asia is our priority. I assure my right hon. Friend the Member for Westmorland and Lonsdale, and others who asked me about the money, that it is being put to very good use supporting our humanitarian work throughout the world.
Mr. Foulkes: I welcome what the Minister has said, but he has not yet told us--and he has only a few minutes left--how the Foreign Secretary will implement the court's third decision. When will he meet the World Development Movement to explain how he intends to put right the aid payments that have been made so far? That is what the court decided should be done; how will the Government fulfil its decision?
Mr. Baldry: The hon. Gentleman clearly did not listen to what my right hon. Friend the Foreign Secretary said before Christmas, or to what I have said this morning. Furthermore, he obviously was not particularly well briefed by the World Development Movement. The Treasury Solicitor wrote to the WDM on 23 January, setting out the Government's position.
Mr. Foulkes rose --
Mr. Foulkes: On a point of order, Madam Deputy Speaker. I am aware of the existence of the letter to which the Minister referred, but has it been placed in the Library of the House? It has not been circulated, but it ought to be the property of the House as well as the World Development Movement. Surely it is improper for the Minister to refer to a letter that has not previously been circulated to hon. Members, although they are aware of it and it is central and material to the important point with which we are dealing.
Mr. Baldry: I am more than happy to make the letter available, and to place it in the Library. It repeats very clearly what my right hon. Friend the Foreign Secretary said before Christmas, and what I have said today. The hon. Gentleman cannot have been listening to my speech.
As I was saying, the need for emergency aid has never been greater than in recent times. In 1993-94, we spent about £180 million on providing speedy and effective help for the victims of natural and man-made disasters. We provided help for the victims of 135 emergencies. We work together with the UN, other relief organisations, our partners in Europe and non-governmental organisations such as the British Red Cross and Oxfam. Whether it be the horn of Africa, refugees in Afghanistan or displaced
Column 293people from Azerbaijan, the ODA is there providing a continuous flow of emergency aid to help the victims of many emergencies. Nor does ODA help stop at emergency aid, vital though that is. It is, for example, running a programme to restore basic electricity supplies to central Bosnia; ODA engineers are repairing power stations and mending supply lines to provide local communities with electricity. Road engineers maintaining life-saving convoy routes, radio operators, fitters, telecommunications experts and logisticians, all paid for by British aid, are working with the UN throughout Bosnia and Croatia. That is work of which we can all be proud. During the past four months, operations in Rwanda and Bosnia have been undertaken by the UN and a wide range of British NGOs using bilateral ODA funds now totalling respectively £33 million and £94 million. Last week we announced a further £2 million to promote the recovery of Rwanda. Including our share of EC aid, we have spent more than £62 million on the Rwandan crisis since last April. Long-term programmes also continue in northern Iraq, Angola, Mozambique and the horn of Africa.
Sadly, the Opposition have used today's debate to recycle the canard that our aid is in some way linked to arms sales. That is nonsense: there is no link between our aid programme and defence sales, and there never has been. It is absurd to suggest that our aid flows are in any way determined by prospects of such sales. All the 10 highest aid recipients are low-income countries, nine of them in Africa and Asia. A recent OECD report recognises that our aid focuses on poorer countries, and acknowledges its quality.
"The United Kingdom",
says the OECD,
Column 294"has a highly concessional business-like bilateral programme largely directed towards the poorest developing countries. Its role as a major donor has been particularly important in several geographical areas, notably Sub-Saharan Africa and Asia, and in key sectors such as education, agricultural research, health and population and private enterprise. The United Kingdom has many prominent institutions in the development field and an enormous amount of expertise".
That is the reality of the UK aid programme--aid that works to reduce poverty world wide, promoting sustainable and lasting development. It has helped, and continues to help, to change the world for the better.
Fifteen years ago there was bitter war in Zimbabwe; equally unresolved was the struggle for Namibia's independence, while civil wars scarred Mozambique and Angola and, of course, South Africa lived under the shadow of apartheid. Now only Angola's future remains in doubt, and there too an end to the conflict seems in sight. In all those countries, and in some 150 developing countries around the world, UK aid has been and continues to be a catalyst for change for the better. There is nothing inevitable about countries' having to be poor, and every reason to believe that it is possible for us--and others--to make a positive contribution to change. The Economist recently forecast that by the year 2020 what are now called developing countries will account for two thirds of world output and that as many as nine of the 15 biggest economies at that time will be from today's third world.
Whether it is helping to improve the distribution of bread in Moscow, supporting sustainable agriculture in Bangladesh, helping to fight malaria in Africa or the countless other programmes and projects supported and funded by the ODA, we are determined to maintain a substantial and effective aid programme to help to reduce poverty worldwide. It is work of which we can all be proud.
Mr. John Marshall (Hendon, South): I am pleased to share this moment of history with my hon. Friend the Minister. It is perhaps appropriate that you should be in the Chair, Madam Deputy Speaker, because you are a former history teacher. It is also a pleasure to follow the debate initiated by the hon. Member for Leicester, South (Mr. Marshall). When I was elected to this place I feared that I would get his mess bills and that he would get all my dinner invitations. The hon. Gentleman has obviously gone for his coffee break. I wonder what the odds are of two Members by the name of J. Marshall initiating these first two historic debates?
This is not the first time that I have shared a moment of history with the Minister because we were both elected to the European Parliament in 1979. However, the greatest moment of history that he and I shared was on 19 August 1953, when on our respective birthdays Mr. Dennis Compton swept England to victory in the fifth test match and we regained the Ashes. I have one advantage over the Minister because not only was I at the match to see Mr. Dennis Compton do that, but he was born in my constituency; and a week or two ago I took him back to see his old home and his old school.
I pay tribute to the noble Lord Mackay, the Lord Chancellor. The dream of every American is to move from the log cabin to the White House. Lord Mackay made just as distinguished a journey, from a railwayman's cottage in Sutherland to the job of a Law Officer and then Lord Chancellor. There are two kinds of Law
Officers--distinguished politicians who happen to be lawyers and distinguished lawyers who happen to be supporters of a political party. Lord Mackay is very much a distinguished lawyer.
It was said in Scotland that, no matter which party had won the 1979 election, it would have asked him to be Lord Advocate. It is a tribute to him as an emigre Scot that when he was appointed Lord Chancellor of England in 1987 the appointment was greeted with a mere murmur of approval. One wonders how Scotland would have reacted if an Englishman had been appointed Lord Advocate in 1988. I suspect that there would not have been a murmur of approval: the Scottish advocates would have had something to say.
Mr. Charles Kennedy (Ross, Cromarty and Skye): I join in the hon. Gentleman's fulsome tribute to Lord Mackay, who is one of my constituents. However, to put the matter in another contemporary context, although he may well have been appointed by a Labour or a Conservative Government in 1979, his subsequent conversion seems to have been complete, because at the last two general elections he spoke against me at Conservative campaign meetings in the constituency.
Mr. Marshall: You might ask the hon. Gentleman who took me down that by road with his sedentary intervention, Madam Deputy Speaker. It is appropriate that the task of reforming the legal aid system should fall to Lord Mackay who has a fine legal mind, the analytical mind of a mathematician, and who has the sense of compassion to be found in those with a deep religious background.
The legal aid system was designed on the simple premise that no one should be denied justice because he is poor. That is an excellent and noble sentiment but, unfortunately, the system no longer achieves its basic objective despite being the most generous system of legal aid in the western world. Its cost has risen dramatically. In 1979-80, the system cost £99 million. In 1984-85, the cost was £263.1 million and by 1993- 94, it had risen to £1,210 million. In the current financial year, it is estimated that it will cost £1,333 million. Since 1979-80, the cost of legal aid has more than quadrupled in real terms and has gone up by 1,248 per cent. in cash terms. No wonder the noble Lord Mackay said:
"We must look to new solutions. I am open to new ideas on how we can meet our objectives more efficiently, more effectively and more cheaply."
Of course some people will cavil about the phrase "more cheaply" but I remind the House of two points. First, if we can produce a cheaper system it will be to the benefit of all litigants, not only to the benefit of the legal aid fund. Secondly, the resources devoted to legal aid could be better employed elsewhere. It is a chilling fact that the amount devoted to such aid would be sufficient to provide nursery school places for all three and four-year-olds.
Mr. Nick Hawkins (Blackpool, South): Does my hon. Friend agree that one of the most important reforms that the Lord Chancellor has said he will carry into effect is the withdrawal of legal aid which has scandalously been made available to extremely wealthy people? The only reason for those overseas nationals litigating in British courts is that our courts are convenient forums. Those people have vast assets and clearly should not qualify for British legal aid to the detriment of the British taxpayer. It is right that our noble Friend intends to correct that abuse.
Mr. Marshall: My hon. Friend anticipates my speech. Like him, I have read the consultation document "Legal Aid for the Apparently Wealthy". It is a valuable document, to which I shall turn later in the debate.