International Development Bill

[back to previous text]

Dr. Tonge: I beg to move amendment No. 21, in page 3, line 9, at end insert—

    `(5) Financial assistance may not be provided now or in the future for the purposes of `tied aid'.'.

Welcome back, Mr. Butterfill. I want to ensure that clauses 1, 2 and 3 remain paramount. During discussion of the previous amendment, the Minister referred to untying aid, but there is no reference to that in the Bill. If I were someone other than myself, I would spend the next 45 minutes giving countless examples of tied aid and how it went wrong in the past, but I shall not do so. I shall say only that the globalisation White Paper contains a commitment to untying aid, as does the Conservative paper on international development, and my party has always been committed to that objective. The Bill should therefore include a clear, unambiguous statement to prevent any manipulation of aid in future.

Mr. Robathan: I, too, am pleased to see you back, Mr. Butterfill. I hope that you were not indisposed.

I am pleased that the Liberal Democrats are taking part and playing a positive role in the debate, although it is a pity that the other Liberal Democrat Member who should have been here seems to have escaped back to Winchester—perhaps he is concentrating on electioneering.

Mr. Mullin: He does not need to.

Mr. Robathan: I hope that he does.

The amendment is sensible. I recognise that there are sometimes perfectly reasonable arguments for tying aid, but it is right that we should aim to untie it and Conservatives support the Government's action to do so. However, if that is their aim, the Bill should say so. It is bizarre that the Bill contains no clear statement to the effect that ``This Bill will untie aid and trade.''

Last Tuesday, the Secretary of State said:

    ``Without change, a future Minister or Administration could reinstate the use of the aid budget to soften the terms of commercial contracts through mixed credits, as under the old aid-and-trade provision. An Administration could re-tie aid, thus distorting its use and decreasing its efficiency, as the previous Government, or use that aid budget to serve the short-term political or commercial purposes of the UK.''—[Official Report, 6 March 2001; Vol. 364, c. 158.]

I do not accept all the right hon. Lady's criticisms of the previous Government, because I have often heard her praise the ODA. That is not surprising, because the same civil servants who are now implementing her policies both at home and overseas did a pretty good job before the previous election and are generally continuing to do so.

On Tuesday, at the beginning of the Committee's first sitting, the Minister said:

    ``We believe that the Bill will prevent a future Administration using development funds to serve short-term political or commercial ends, and, in particular, that it will prevent the tying of aid.''—[Official Report, Standing Committee B, 13 March 2001; c. 3.]

As closely as I study the Bill, I cannot see that it anywhere prevents the tying of aid. It says that the focus must be on the alleviation of poverty: that is helpful, and we all support it. It says that that must be the overriding aim, which we also support. However, it does not specifically exclude the tying of aid to trade. Given his grandiose statements, the Minister must explain how the Bill will prevent the tying of aid to trade—which is, after all, what he wants.

Mrs. Gillan: We had an extraordinary flash of agreement in a previous sitting, when the hon. Member for Richmond Park actually voted for one of our amendments. However, I feel obliged to tell that if she presses her amendment to a vote, I shall not vote for it—not because I do not agree with it, but because it has not gone too far.

Like my hon. Friend the Member for Blaby (Mr. Robathan), I appreciate the reasons behind the amendment. Essentially, it would enshrine in the Bill its main purpose. Let us not beat about the bush: we have frequently been told that the purpose of the Bill is to make this country's overseas aid programme whiter than white, although I am unsure how that will sit alongside the aid programmes of our European partners and the influence that they bring to bear on the European fund. This small amendment would remove the tied aid provision.

However, I would prefer the amendment to include a definition that took tied aid from the realms of possibility and probability into those of surety and security. If the hon. Member for Richmond Park presses it to a vote, I shall not support it simply because I feel that it should have gone further. However, I hope that the Minister will consider the matter and amendments in the same vein that might be made to the Bill. Thus far, our efforts have been unsuccessful but my hope is that a door might be opening. Even if he cannot accept the amendment, I hope that the Minister will give its subject matter further consideration.

3.15 pm

Mr. Mullin: As I explained previously, our aim is to keep the Bill simple, to avoid getting bogged down in definitions that would become a playground for lawyers, and to underpin in clauses 1 to 3—especially in clause 1—the primary purpose of overseas aid, which is to contribute to a reduction in poverty, to further sustainable development and to improve the welfare of the population concerned. When judged by those criteria, no reasonable person would imagine that we could go back to the days when aid was tied to commercial or foreign policy objectives. In saying so, I am not suggesting that the hon. Member for Richmond Park is an unreasonable person. Her contributions thus far suggest that she is extremely reasonable and we agree entirely with her intentions; we simply see one or two practical difficulties, which I shall touch on.

The Government have stated their position clearly. Under the Bill, a policy of tying aid would not be sustainable. The inefficiency and mixed motives inherent in tying aid would so impair the Secretary of State in the proper exercise of the core power that the policy would be open to serious challenge in the courts. As I said, we believe that any future Administration who wished to re-establish tying the UK development programme should first consult Parliament. We did not expressly prohibit such a policy because of the difficulty of drafting definitions. We know what we mean by tied aid, but writing it down in prescriptive form would run the risk of falling between two stools. On the one hand, we might not catch all that we intended to catch. By establishing the meaning of tied aid and ruling it out, we would by implication allow anything that is not brought within that definition, which would leave room to argue that some tied aid is permissible. On the other hand, by attempting to catch all that is pernicious about tied aid, we might catch some practices that are, or in certain circumstances might be, perfectly acceptable or even useful.

For example, we have been advised that, were we to accept the amendment, we would jeopardise the provision of assistance to some international institutions that limit the provision of assistance to their members. That is true of the main international financial institutions, of the United Nations—of which countries such as Switzerland are not members—of the regional development banks and of the European Development Fund. I am not a lawyer—all I can do is pass on that advice to the hon. Member for Richmond Park. I doubt whether she would want to jeopardise our relationship with those institutions, but we are advised that that might happen if her amendment is accepted.

By opting instead to let the principles and purposes of clause 1 direct the thinking of the Secretary of State, we retain the flexibility to use means compatible with those principles and purposes while effectively preventing the pursuit of opposing policies. That is why we have not chosen to make a specific prohibition on tied aid in the Bill.

Mr. Robathan: The hon. Member for Richmond Park has raised an important and sensible point. If the Minister is saying that legal advice has been taken and that therefore the Government cannot refine the definition, that rather negates the purpose of the Bill. As we know, most of our European partners and most other countries often tie aid to trade. There is no reason why, as far as I can judge from the Bill, under a future Administration, or indeed, under this Administration, one might not, in giving money to NGOs, give the money only to British NGOs, or indeed why, in giving money for some particular development purpose such as construction—I know that we are not keen on dams at present and I am glad of it—one might not give the money specifically to a British company, which is tying aid with trade. The Minister has left the situation open.

Mr. Mullin: No, we believe that clause 1 is adequate for that purpose. We have made the situation clear and I am told that ministerial pronouncements are taken into account when courts are interpreting legislation. The hon. Gentleman raised an important issue in mentioning NGOs. I should like the hon. Member for Richmond Park to hear that I have been advised that there are one or two grey areas, one of which relates to the civil society challenge funds, which are open only to British-based NGOs. There is a danger that her amendment would make those impossible. I have considered the matter carefully and I am sympathetic. I know exactly what the hon. Lady is trying to achieve. I approve, as I expect do all members of the Committee, with the possible exception of the hon. Member for Chesham and Amersham, who believes that it does not go far enough.

Mrs. Gillan: That is not fair.

Mr. Mullin: I do not believe that that is unfair; that is what the hon. Lady said.

Mr. Andrew Rowe (Faversham and Mid-Kent): To row back to a point that we discussed the other day, is the Minister satisfied that his Department is making sufficient efforts to ensure that UK NGOs, to which the Department gives money, are energetic enough in ensuring that as high as possible a percentage of their employees come from the relevant countries and are not expatriates? In many cases, the effect of our policies and those of other northern countries, even where the money given out is not intended as tied aid, seems to be that a huge proportion is taken as salaries for, if one would like to put it this way, white Anglo-Saxon Protestant workers rather than people from the intended countries?

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 15 March 2001