Examination of Witnesses (Questions 260
- 274)
TUESDAY 5 FEBRUARY 2002
RT HON
CLARE SHORT,
MP AND MR
ANTHONY SMITH
Hugh Bayley
260. There are really two final points. You
have covered the field well. You said that you do not have a strong
view one way or the other on whether the EDF should be brought
within the budget. A cynic might say, that's because you are on
the Council of Ministers so you can have a say over it, but the
Parliament does not. Now, do you see the Parliament as an ally,
generally speaking, with regard to getting a tougher, sharper
poverty focus for the developing world and, if so, would it not
be a good idea to give the Parliament the ability to scrutinise
the EDF?
(Clare Short) On the first question, it is not a cynical
position about excluding the Parliament. People argue about it
very passionately and when Rosemary Stevenson was doing Anthony's
job, I asked her to do an assessment and I think we could share
that note with you, so there are both, "Is it desirable?"
and "Is it politically going to happen?" questions.
If the UK changes its view, if others will not, then it is worth
debating, but it is not going to lead to any change. I think there
is an argument about desirability and it is very unlikely in the
short term. I think Germany is adamantly against, though I am
speaking from memory. I think we should share the note with you
because also it is a complex issue and what is this funny phrase?
You will know, Ann, because of your time in the Parliament. There
is some funny word. "Comitology" comes into this.
Ann Clwyd: It was not there when I was
there.
Chris McCafferty
261. What does it mean?
(Clare Short) It is in this note. People have passionate
arguments about comitology which is all part of this, but the
short answer to your question is that the Parliament has not been
an ally. The Parliament has got geographical blocs that tend to
speak to the geographical bloc pressures of the Commission and
the progressives within the Parliament have tended to go for a
budget line for NGOs, for HIV/AIDS, and of course one understands
that, but that is just even more complexity of little amounts
of money and not getting any reform in the fundamental money.
So we are working on it. It is not sort of bad faith so much as
the debate has never been deep enough and there has not been an
alliance of Members of the European Parliament who have attended
to this argument in depth and got behind a reform agenda. That
is what we need and we have been trying to work on it, but we
are not there yet by any means.
Hugh Bayley
262. Can I just add one thing. I think we would
find it very helpful to see the note to understand the pros and
cons from a variety of perspectives[4].
We have been told that the ACP countries themselves are concerned
about the prospect of budgetisation. I do not know if your note
covers that, but if it does not, could we have a further note
on that? I suppose the question that that poses would be a fear
that if all the EU development spend was put into a single pool,
maybe even more money would be robbed from programmes in poor
countries, so is that a danger?
(Clare Short) I think there is no imminent
proposal that it will be, so it is not a danger to which I have
addressed myself. On the ACP countries, you will know that Cotonou
also has a sort of political layer and there are big meetings
of ACP ambassadors in Brussels and you have periodic meetings—we
went to that one in Barbados—and it is said that this makes
the development relationship more equal and it is good to have
a political process and I think in theory that is true. In practice,
I do not think the processes are very impressive or lead to better
deployment of aid, but many ACP countries are very attached to
those political processes and I think would be hostile to a suggestion
of budgetising that took away their political input. Certainly,
to be fair to the political process, when we were renegotiating
the Lomé into Cotonou and trying to get some reform and
commitments on trade, it was important that the ACP countries
were at the table. They were part of the negotiation and we could
not change the agreement without their agreement, so that cuts
across the budgetisation argument, but let me let you have the
note and then you will be able to decide for yourselves how you
think that argument flows, but I think change is not imminent,
so we need to have a reform agenda in the meantime.
Ann Clwyd
263. We have been told about the central role
of the Commission delegations in making reforms of development
assistance work and other people have raised some question marks
over this, whether they are adequately staffed and whether they
have the skill and the expertise to carry out this role. I wonder
what is your view of that.
(Clare Short) I think my sort of anecdotal view, because
deconcentration is taking time to roll through, as you know, but
where there has been more discretion given to the people operating
in developing countries, there has been some improvement. Obviously
you get variable quality of people across the world, but in the
past they could not do anything anyway. Everything was so controlled
by a bureaucracy flowing back to Brussels that even when you got
someone who was really progressive and wanted to deploy the money
well, they just had to keep sending messages back to Brussels,
which was enormously frustrating, so obviously deconcentration
means that they can operate with other countries, representing
their country and negotiating directly with the governments. There
has been some improvement, that is my anecdotal sense of it and
the feedback from our officials around the world. I do think here
we need to pause and be careful. We should not make every development
agency a replica of each other, but we should have some degree
of specialisation between us. The EC has traditionally done lots
on roads. Does everyone want them to sack all the engineers and
do only health and education or if we are doing health and education
and if the Scandinavians are doing health and education, could
not the deconcentrated staff with some discretion, where the UK
or Sweden or whatever had done a lot of work on education, put
some money in, and you do not need another heap of specialists
going all over it to see if it works, and then decide a bit more
where the EC will concentrate its effort? I personally think they
should stick with roads and improve roads. Rural roads are fantastically
important to the livelihoods of rural people. Subsistence farmers
will not grow more than they can eat if they cannot get everything
to market. There are really good studies which show that good
rural roads, and you can employ people building them, can lead
to people growing more, getting their produce to market, increasing
their family income, being able to get their children to school
and so on. So I think it is fair to say that the EC is now employing
more people because it has been enabled as part of the reforms
to pay for some specialists out of the funds for development itself,
but I think what we must do is decide where the niche and the
expertise should be so that we have complementary bundles of skills
rather than all replicating each other. There is this piggy-backing,
they call it, do they not, the possibility of the discretion being
at the local level and the EC delegation being able to decide
to put some of the money into other reform efforts that Member
States are helping to drive and know that the money will be well
spent. I think we should do that too.
264. I know your views on increasing staff numbers
in the EU and that your response was, "Over my dead body!"
(Clare Short) Because my worry then was that everything
was appalling and then they say, "We need more staff to spend
it better", so we were going to throw an even bigger resource
away. "My dead body" has sort of emerged to life a bit
behind the reform agenda and improving its ability to employ some
specialists out of the funds in order to get reform because obviously
you need to redeploy staff behind a reform agenda. My fear was
that it was an excuse for no reform agenda and then there was
just going to be a whole bunch of new staff, so it was even more
having good money thrown after bad, good staff thrown after bad
money.
Mr Robathan
265. I have to say that I am delighted about
the deconcentration to delegations because it is obviously sensible
and the co-ordination one is also a very valuable one. What concerns
me, and it comes back to what you refer to as the system being
bad and, if I might put it a different way, the culture being
bad in the delegations. We have seen it around the world, though
I do not want to condemn every one because of course they vary,
but there is a rather sleepy feeling in the offices I have been
to that it is all rather difficult and actually very often people
have been put there to retire comfortably. Now, this was borne
out when we saw EuropeAid in Brussels two weeks ago when the chap
we saw there, whose name for the moment escapes me, said that
they had a lot of trouble, and I paraphrase, turfing comfortable
bureaucrats out of their comfortable offices in Brussels and getting
them out into the field. Do you believe that the culture will
change with the system?
(Clare Short) We talked a little bit about better
management of public finances and more focus on outputs which
is a challenge across the world. I think the motivation and morale
of people who work in the public services is also part of quality
services and it is not surprising there has been a lot of demoralised
people running this poor programme with very rigid bureaucratic
systems, being criticised quite reasonably because it is such
a bad system, and then people who are out in country offices,
when they have really tried, having no discretion, and endlessly
sending messages back to Brussels and not being able to produce
any effect. That is likely to demoralise the staff who work for
reorganisation and I think that has been the case, and then reorganisation
is always threatening, though necessary, and I am told, and I
will ask Anthony to come in, that there is quite a demoralised
atmosphere, but I repeat, and this is just dependent on where
I travel and when I ask, that some of the deconcentrated offices
are getting some live sparks who are really starting to use the
discretion that they have been given and to join up with others,
so I see signs of improvement. Would you comment on the broader
picture?
(Mr Smith) I think that is right. Our offices overseas
have told us that of course there is variable quality and there
are real problems in some countries, but there are also some very
good examples of committed people out in Commission offices. I
think that what they are doing with deconcentration by giving
people more responsibility and discretion should encourage people,
plus they are doing two other things on staffing for deconcentration.
One is recruiting more development experts, and people who are
committed to development and that is their career and who have
not really been able to join the Commission to work with them
properly before because of limitations on contracts now should
be able to be employed for five years or so in a country and that
will bring fresh blood. Finally, they are getting more local staff,
not just drivers, but policy analysts, specialists and advisers
as well, and that should also increase levels of activity and
commitment.
Tony Worthington
266. When we were in Brussels, we saw the list
of offices to which there had been deconcentration. There did
not seem to be a strategy about it in terms of where they said,
"It's important that we do that first". For example,
if I was looking at Africa, I would start with Nigeria as a big
programme, big country, key to the area, but there was no sign
of an office there, and yet there are a few small Francophone
countries that have offices in them. Have you a view about that?
(Clare Short) I do not know how the decisions were
made. Do you?
(Mr Smith) It was an internal Commission decision
based on, I think, some assessment of where, if their programmes
were employed, they could make a difference, but Kenya is one
of the countries.
267. I said Nigeria.
(Mr Smith) I am sorry, I thought you said Nairobi.
Their programme in Nigeria has actually been rather smaller, though
it is growing, but—
(Clare Short) And in danger because of course Nigeria
is not reforming. We have got a democracy in Nigeria, but no reform
and no improvement in the life of the poor which is partly why
we are getting all this tension and conflict, so I think they
are talking about budgetary aid and we need to be a bit careful
that the EC money is deployed in a way which will help reform
rather than prop up bad systems, so we have got that one in Nigeria.
I think we should ask Poul Nielson how the countries were chosen.
Pound to a penny, there were politics in it, but I cannot see
the politics in that decision.
Ann Clwyd
268. We have heard, not for the first time,
that DG Development is going to disappear in a subsequent round
of reforms. If it does disappear, what do you think will happen
to its functions? Will they be amalgamated with DG External or
what do you see happening?
(Clare Short) I think it would be a disaster if DG
Development disappeared in a round of reforms. There are also
questions about councils because of course as the Union widens
and we get more and more Member States, the existing structures
are not going to work and there is going to have to be a lot of
reform, otherwise the whole organisation will be just so blocked
up, it will not be capable of making decisions, so it is quite
right to look at the structures and see how they can be made more
efficient. Certainly the Development Council, because it meets
only twice a year, tends to have good generalised policy debates,
but then the General Affairs Council meets monthly and ends up
deploying the money and it is part of the problem, so there is
room for a debate about whether the Development Council and the
General Affairs Council ought to merge or whatever. I am not saying
they should, but how can we get the development perspective more
thoroughly into the month-by-month decision-making? This argument
has gone on in many countries of whether you do development out
of a foreign ministry or whether you have a stand-alone development
department and lots of countries have experimented with different
structures. My view is that it is better to be stand-alone as
we are because it is not only the foreign ministry that you need
to influence; it is also the trade ministry, it is also the view
of your country on sustainable development, thinking about poor
countries, it is also your treasury and their influence on the
IMF and the World Bank, unlike in our case, so I think to get
coherence and to get the development perspective into all areas
of policy, you need a unit whose job it is to look at the world
from the perspective of the developing countries and how you can
get more equitable rules into the system. If the proposal is,
and again I do not think we currently think that this is decided
by any means, to get rid of DG Development and to see it all as
part of broadly foreign policy, I think we would be going further
down the road that we are on at the moment and getting less effective
development.
Mr Colman
269. We were very interested to see how EuropeAid
was shaping up and particularly this board structure with conceptually
Chris Patten as the Chair and the Chief Secretary being Poul Neilson,
but then the other members of the board, you have got DG Trade,
DG Monetary Affairs, Agriculture. They meet, we were told by Poul,
once a week and they discuss the overall approach of the European
Union in terms of poverty-focused assistance and this was a very
positive way forward for assistance. Do you see a situation where
this is really bearing fruit in terms of how Pascal Lamy, the
Chef de Cabinet, who reaffirmed what Poul said, how Pascal
Lamy is looking through, if you like, a poverty focus? Do you
think this is happening with, say, DG Agriculture and is it a
situation where you—
(Clare Short) Certainly not.
270.—are getting a move forward? Well,
let's talk about the one maybe that is there which is in fact
DG Trade having a very strong poverty focus. This is one of the
very positive things that is coming out of setting up EuropeAid.
(Clare Short) We did not particularly favour EuropeAid
because we integrate the management of our programmes in the UK,
but many others, the Scandinavians and so on, have an agency to
deliver after the policy decisions are made separately, but given
that it is in place, I think we strongly think we should go with
it. You cannot stop in the middle of a reform effort and change
your mind or you waste another couple of years. I think it is
too early to say whether the fact is that all those Commissioners
sit on the board percolating a development perspective through
the Commission. I think it is too early to say and I do not think
the evidence is strong that it is. Pascal Lamy had an interest
in development before he went to the Commission when I first met
him at IDS in Sussex when he was at one of the events there, so
I know it was not just a theoretical interest, but he was engaged,
and of course the truth is on Doha that there would not have been
agreement on the Round without developing countries getting involved.
That is the beauty of the WTO, that they are there now at the
table and they get something or they would not agree to another
trade round, so Pascal Lamy does have a commitment to development
personally and that is very welcome. I do not see any signs or
hints that DG Agriculture has thought about an interest in developing
countries, and they have got complicated things to think about,
so we will see whether it has the optimistic effect, but I think
we should stick with the structure and drive it forward and try
and make it work and not suddenly change it all again.
271. Are there areas of budget lines within,
say, DG Trade and other ones where in fact help is being given
to developing countries where in a sense that is something which
we know nothing of? For instance, it does surprise me in a sense
that help for developing countries who were working at the WTO
is coming out of our budget in a sense perhaps and not out of
the DTI. Is there a situation within DG Trade that they are actually
helping developing countries deal with, if you like, the real
possibilities of globalisation working on their behalf.
(Clare Short) No. When we moved with others, which
cost a fortune, to get advice about whether the WTO Rules were
being breached in their regard, we had a fantastic fight, and
this was before Lamy's time, with DG Trade who said, "You
can't fund developing countries to take action against us",
to which we said, "We have legal aid for murderers in our
country". It was a very passionate argument and they tried
to block us, so you can see how far DG Trade has moved. They were
absolutely opposed to the funding of the legal advisory service
so that the poorest countries would have the capacity to use the
WTO Rules just to get their entitlements under the rules of the
system. There has been change both because there had to be change
post-Seattle to get a deal at Doha and Pascal Lamy's interest
and the decision that the trade part of DG Development was taken
over into DG Trade. That was argued about at the time, but obviously
you need the trade department to think about development and maybe
it was desirable. There was agreement at Doha that there should
be more commitment to capacity-building on trade and we have done
quite a lot in our Department, but there has been not much of
it across the world and I think there is now a commitment to put
more resources into it so that countries both can negotiate their
interests in the Doha Round and apply the rules to their own country
and get the benefits because some of the trade rules are very
complicated rules of origin and phyto-sanitary conditions. You
could think you have got trade access and then you cannot get
through some of those rules, so I believe it was agreed at Doha
that the EC would put considerably more resources into this, but
they have not been a leading player up to now.
(Mr Smith) It goes back to the Cotonou negotiations
as well where it was agreed that for ACP countries there should
be a capacity-building programme, though it was a bit slow to
get going.
272. Is there any budget line within DG Trade
or their budget which would actually be over and above what is
available within DG Development, particularly, as you point out,
there has been this transfer across to DG Trade?
(Mr Smith) The budget lines do not belong to particular
DGs.
273. You misunderstand what I am saying. Is
there new money on the horizon?
(Mr Smith) I think that for the trade capacity-building
activities which are focused on ACP countries, they come out of
the European Development Fund. I think in effect the management
of the programmes is conducted jointly by DG Development and DG
Trade.
(Clare Short) Under the Cotonou Agreement it was agreed
that regional free trade agreements would be negotiated. I saw
the pain of the negotiations of South Africa with the EU, and
that is a sophisticated country with lots of capacity, so imagine
some of the poorer regions of the world negotiating a trade deal
with the EU and we have yet to enjoy that experience.
Chairman
274. Secretary of State, thank you very much
for all your help. I think the most alarming information that
you have shared with us today is the 70, 52, 38 and 70 per cent
and, as you rightly say, that is actually, I must say, a naked
political argument, as it were. As you have also explained, there
are obviously various people within the European Union, and we
heard Chris Patten yesterday and we can understand where he was
coming from within his own terms of reference and you have made
clear why Member States like Spain have their own agenda and indeed
the complexities of the European Parliament's agenda. I think
what we probably need to have is a better understanding, and I
can see this cannot be done in public, of who our allies are on
this, who we need to win over, what the process is for that and
how we get there. We in the not too distant future are going to
be doing an inquiry into the financing of the development in the
run-up to Monterrey and so on and I just wonder whether in the
context of that maybe at some time you could spare us some time
privately in an private, informal session. I think one of the
things that struck us when we went to Brussels is that it is not
just a question of my getting in touch firstly with the chairmen
of various committees, but I think we were very conscious that
we needed to do a lot more to get in touch with colleagues in
the European Parliament who often have access to other people
both in the development and co-operation committees and budgetary
committees, but between all of us we actually have a good range
of contacts with political parties elsewhere in the European Union
and so on and so forth and there may well often be opportunities
which may be missed because we just do now know that we should
be taking them. You do go to the councils and you know what is
happening on the General Affairs Council and so on and so forth,
so if we could just request some of your time privately some time,
and I can see it is not something one can say publicly as to who
is unco-operative, difficult and so on, so thank you for that
in anticipation and thank you for introducing us to the joys of
comitology which I think is a new source of potential study for
this Committee.
(Clare Short) Thank you. Could I just
say I would be delighted to have that meeting, but I think in
financing for development, finance ministers become potential
allies and they would come at it differently. The study said that
EC spending could be 50 per cent more effective in poverty reduction
affairs if it was deployed differently, so they should be our
allies.
Chairman: And we are hoping to get the
Chancellor to give evidence to us, but it just seemed an absolutely
convenient opportunity of taking some of your time. Thank you
very much.
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