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CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 387 - i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

EUROPEAN SCRUTINY COMMITTEE

 

 

THE SPECIAL FRAMEWORK OF ASSISTANCE FOR TRADITIONAL SUPPLIERS OF BANANAS

 

 

Wednesday 7 March 2007

MR GARETH THOMAS MP, MR ROB RUDY and MS LAURA KELLY

Evidence heard in Public Questions 1 - 29

 

 

USE OF THE TRANSCRIPT

 

1. This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

 

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.


Oral Evidence

Taken before the European Scrutiny Committee

on Wednesday 7 March 2007

Members present

Michael Connarty, in the Chair

Mr David S Borrow

Mr James Clappison

Ms Katy Clark

Jim Dobbin

Nia Griffith

Mr David Heathcoat-Amory

Richard Younger-Ross

________________

Witnesses: Mr Gareth Thomas MP, Parliamentary Under-Secretary of State, Mr Rob Rudy, Head of Development Policy Section, European Union Department, and Ms Laura Kelly, Senior Trade and Agriculture Adviser, Department for International Development, gave evidence.

Q1 Chairman: Good afternoon. It is nice to see you, Minister. Would you like to introduce your team and tell us their roles so that if you need to call on them we know why you are calling on them?

Mr Thomas: Sure. On my left is Laura Kelly from our Trade Department and on my right Rob Rudy from our European Union Department.

Q2 Chairman: Excellent. I see that in the notes I have on this issue, which obviously are carried on from the previous committee, this was described as a "sorry saga". That is about as strong a condemnation as you can get from an officer of the House, I would say. That was in a report in 2004. We want you to give evidence on two matters, the Special Framework of Assistance for traditional suppliers of bananas, which I think is a matter of interest to many Members of the House, and also DFID's recent scrutiny performance. We will take them in two separate parts, if you do not mind. To begin with the Special Framework of Assistance for traditional suppliers of bananas, the Committee has been following this matter for two years. Could you outline for the Committee how the SFA came into being and what it was intended it should achieve?

Mr Thomas: Okay. The SFA came into being essentially to provide support to countries in the Caribbean and in Africa, which were large producers of bananas, which had a traditional historical relationship with Members of the European Union and which were likely to suffer significantly through increased competition from Latin American banana producers into the European market. The SFA was designed to be a programme of assistance which would help both increase the competitiveness of banana industries, where that was possible, to help with diversification, so to create other jobs potentially, and also to help in ameliorating the social impact of the increased competition and the likely job losses as a result. That is what it was designed to do. I agree with your definition that it is a "sorry saga". We have been following it obviously from the very beginning and I think we would share your definition of it as being not the European Community's finest hour. We think some lessons have been learnt along the way and there have been in more recent years some improvements in performance, but again in terms of the way in which the Commission has reported on the SFA I think it is fair to say that there could still be some improvements in the way the SFA has been handled and we are continuing to push for those further improvements. We have lobbied very hard, I should say, Chairman, both at the official level and at the ministerial level.

Chairman: Let us take it stage by stage. You will obviously expand on it, and your team, but other Members of the Committee will probably get to these points as we go along.

Q3 Mr Heathcoat-Amory: This banana assistance scheme was put in place in 1999, but it was not until six years later that your Department first wrote to us about the second report on the scheme and it was clear that there was no evaluation of the scheme until then, even though it was clear by then that it had been plagued by poorly-designed projects, over-complex procedures and poor management by the Commission, both centrally in Brussels and also on the ground in the countries concerned. This is taxpayers' money. How can your Department allow the Commission to mismanage a scheme over six years before you first alert this Committee to even the possibility of an evaluation?

Mr Thomas: I think, Mr Heathcoat-Amory, you and taxpayers more generally would have wanted us, as soon as we were aware of significant problems with the SFA, to have been pressing for changes in the way the Commission was operating. We began to be concerned about the SFA in 2002/2003, when it was quite clear at that point that disbursement rates were poor. We started to raise concerns informally with both the European Commission delegations in the Caribbean in particular and with the Commission, and in early 2004 commissioned our own independent evaluation to look at the SFA. As a result of our concerns, in particular the concerns which came out of the independent evaluation, it was at that point that ministers started to write to Commissioners, to Commissioner Paul Neilson, the last Development Commissioner, and then more recently Louis Michel, the current Development Commissioner. We have also taken a series of other steps to try and help banana-producing nations through our own staff in the Caribbean, providing technical assistance to help the Commission delegations and the countries themselves get access to both SFA resources and other EC resources, old Stabex funds, EDF funds, to both invest in helping to deal with the particular issues around banana producers but also to make sure that when the next key issue facing in particular the Caribbean came along, the issue of what to do about the sugar industries there, that assistance could be provided much quicker and lessons could be learnt much quicker. I understand why you are saying this, but I do not think it is fair to say that we have not been addressing the concerns about this particular issue; we have been addressing them for some time. I do think there have been improvements in performance, both from the SFA and more generally in the way the Commission provides aid, which have also been significant for the banana producers and the issues around them. But we continue to be concerned about how the evaluation of the SFA has been handled and we continue to push strongly for the evaluation document to be released and for further lessons to be learned, if indeed the evaluations suggest that there are further lessons to be learned.

Q4 Mr Heathcoat-Amory: So when was this evaluation of the Commission's performance carried out and published?

Mr Thomas: We initiated our own in 2004. The Commission committed themselves to carrying out an evaluation of the SFA, which they say or imply in the document which I think triggered my appearance here, the biennial report, was completed sometime in 2006. We pressed before the evaluation was commissioned to be involved in setting the terms of reference and to be able to talk to the consultants who had been appointed. We discovered that the contracts had already been let and we have continued to press over 2005 and 2006 for the evaluation to be made public. We are still pressing for it to be made public. It has not yet been made public, despite in the biennial report confirmation that that evaluation has taken place. There is one other thing I would just like to add. We have the senior official who runs AidCo coming over to see the Department and this will be, if not the top issue we raise with him, one of the top issues we raise with him.

Chairman: Are you satisfied you have an answer to the question about why the delay until 2005?

Q5 Mr Heathcoat-Amory: I think it is extraordinary that seven years should go by with a programme which was failing, obviously, at a much earlier stage before there is even a note done on the evaluation, and then a further delay took place before this Committee was informed about it. I think this is a terrible saga of mismanagement and I am very surprised that your Department did not grip it earlier.

Mr Thomas: Well, we have been pressing, with respect, very hard for changes in the way the SFA has been organised and I do not think the characterisation of it as "a complete failure" is an apt description. There is evidence that where assistance was being provided to help some industries become more competitive, not least the Belizean banana industry, there has been progress in that regard. We have certainly wanted a broader range of things to be supported by SFA resources and have continued to press for that. As I say, there have been some improvements in performance. One of the problems which we faced, Chairman, is that no other EU nation has shared the same depth of concern as we have about this issue and, to be honest, some of the Caribbean nations have not sought to raise their concerns about this issue regularly enough with the Commission. There does not appear, either, to have been significant European parliamentary interest in this issue, so we have been a lone voice, and I think the improvements we have succeeded in delivering -

Chairman: We will explore that scenario as we go on. Can we move on?

Q6 Jim Dobbin: Just to follow this line of thought, you told us that the new Development Commissioner knew there was something wrong and was determined to do something about this, but here we are sometime later, two years to be exact, and we do not seem to have seen very much improvement. Would you agree with that, or if there have been changes can you tell us what they have been?

Mr Thomas: Both the previous Commissioner and the current Commissioner acknowledged that there had been problems initially with the SFA, which we welcome. They both said in the letters to Hilary and to myself that they think improvements were made. We have noticed a speeding up in the disbursement of money to the banana-producing countries and we have noticed, for example, speedier decision making in getting resources from the Commission. We have seen, slowly, increasing support for diversification and for addressing the social impact of the changes to the banana regime, so we have seen improvements in the way the SFA has operated. We would obviously have liked more improvements more quickly.

Q7 Mr Borrow: Some of the area that I was going to raise I think has been touched on, so I will try and concentrate on some areas. If I am right in understanding, the evaluation was published in 2006, is that right - not the DFID evaluation but the EU Commission's evaluation?

Mr Thomas: No, the EU Commission's evaluation has not been published yet. We know it has been completed on the basis of what we have seen in the biennial report, but we have been pressing for it to be published and it still has not been published.

Q8 Mr Borrow: In correspondence with this Committee a couple of years ago you said that the evaluation would be completed by mid-2005. The evaluation was completed probably the following year but it had not been published and therefore we, as a Member of the EU, are not aware of the recommendations or the findings of that evaluation and you, as the responsible minister here, cannot make a proper assessment as to whether or not the findings of that evaluation tie in with the findings of DFID's own independent evaluation and whether action is being taken that is appropriate. Would that be a correct analysis?

Mr Thomas: We believe that the conclusions of the evaluation are referred to in the biennial report. We obviously have not seen the full evaluation report to be able to assess the detail behind those general conclusions. Frankly, given that we were not able to influence the terms of reference, nor our staff speak to the consultants, I am not sure what else that will be useful we will discover when we eventually see that evaluation report. I think the evaluation we commissioned ourselves in 2004 did highlight many of the key problems with the SFA and I think that, and various reforms which the Commission initiated itself, both to the SFA and more generally to how aid is dispersed, have contributed to the improved performance in the SFA and to the fact that the same mistakes are not being made to the same extent with the way sugar transition assistance is being deployed.

Q9 Mr Borrow: But it would be better if the valuation was published so that you, as the minister responsible in the UK, could make a proper assessment as to whether the recommendations which arose from that evaluation had been properly implemented?

Mr Thomas: Absolutely. As I say, we knew there had been delays to the evaluation being completed. As soon as we saw the biennial report and had confirmation it had been completed, we have been pressing again for it to be published. As I say, the senior official in charge of AidCo is shortly coming over to the Department and this is one of the top issues for discussion with him.

Q10 Mr Borrow: From the information I have got, it would appear that it was about a year after the evaluation was carried out before you contacted the Committee. Was that because you had not seen the evaluation and therefore could not make an analysis, or was it simply that your Department did not get around to informing the Committee that the evaluation had taken place and that certain things were happening?

Mr Thomas: We only were aware finally that the report had been completed when we saw the biennial report, which came to us on 20 December last year, and we obviously then wrote to the Committee, and that is presumably why I am here. We knew there had been delays, Mr Borrow, we understand through both maternity leave of key officials in AidCo and the illness of the consultants, and that is the reason for the delay.

Q11 Mr Borrow: In the correspondence you sent to us recently, having said previously that your Department would "engage strongly" with the Commission on this issue, you said, "the external evaluation of the SFA does not make substantial recommendations about how the SFA could be improved and says little about administrative problems". Given the history, is it not extraordinary that the Department has accepted those findings?

Mr Thomas: We have not accepted the performance of the SFA at any stage. We have sought to significantly improve the way in which SFA monies have been distributed. This has been a key issue for our officials in the Caribbean, for officials in our EUD Department and our Trade Department. Discussions have taken place between them and Commission officials, and we have allocated additional resources from our Caribbean budgets to try and release SFA money and help to catalyse improvements in performance of the SFA. So at no stage have we accepted the poor performance of the SFA. I come back to the point I made in answer to Mr Heathcoat-Amory, though, that we have been, frankly, the lone voice pushing on this issue and I think that is one of the reasons why the evaluation has not been published. We hope it will be published shortly.

Q12 Mr Borrow: Have any other Member States actually been obstructive rather than negligent?

Mr Thomas: I do not think any other Member State has been obstructive as such. The independent report which we commissioned ourselves we shared with other donors and with governments in the Caribbean, for example, as well with Commission officials. I think people welcomed the report and welcomed our engagement and our effort to see an improvement in performance, and I think the fact that money has started to speed up in more recent years in terms of the SFA shows the benefits of our engagement, and the fact that the same mistakes are not being made with sugar and transitional assistance also, I think, points to the success of our intervention and, I will acknowledge, other changes in the way the Commission operates as well.

Q13 Nia Griffith: Obviously, when we are talking about bananas and when we are talking about sugar, these are issues which really do have to go via the Commission because they are obviously trade issues for the whole of the EU, but you say here that it might be better to concentrate on engaging the Commission on mechanisms to improve the effectiveness of its development assistance. Are there doubts in your mind as to whether the UK should be engaging so much with the EU and are there ways in which you feel that you can actually follow that through and start asking questions and start saying, "Are we better doing joint aid projects or are we better doing our own bilateral agreements UK-wide with other countries?" Are you actually trying to progress that agenda of looking at what the Commission is actually doing and what lessons it is learning from this particular problem?

Mr Thomas: Yes, we are. I think there is a role for both our own projects and our own work in countries where we have a strong record of working and we have good relationships with governments. I think that is particularly true of the Caribbean, where we are the largest and on occasion the only European presence, and we have obviously got very strong historical links there, but I also think we should be engaging with the Commission. The Commission does have substantial resources and we want to make sure that those resources are being used to best effect in the country, and that is why we have sought for a very long time, even before I was a minister in the Department, to press for changes to the way the Commission operated. We, for example, wanted the Commission to move to a multi-year cycle for approving projects rather than every project having to be approved each year. The fact that the Commission has moved on that issue has helped to speed up disbursement of money and assistance. We wanted the Commission to provide assistance in the form of budget support because individual projects create huge administrative problems on occasion for often hard-pressed and very small civil services in the Caribbean, and we are seeing more of the Commission's willingness to provide aid through budget support. So we have seen change, but there are still more reforms that we want to see.

Q14 Chairman: Can I just press you on that? In that series of questions you were beginning to give some examples of what the UK Government has done, but really we are looking for some reassurance that the Commission is changing its procedures. Can you provide any examples of how the Commission has taken those lessons on board, particularly since it appears to have dragged its feet and it is, it seems to me, the Commission which has shown a lack of interest in progressing the changes we are looking for?

Mr Thomas: Sure. There are two reforms which I would flag up for you, Chairman, which I mentioned in passing in response to Ms Griffith. One of the things which has held up, on occasion, countries getting access to EC resources has been the need for money to be re-approved every year and for a very large number of different parts of the Commission to sign off on Commission projects. Now, there has been a series of reforms underway in which the Commission provides aid to allow the Commission to commit resources over a number of years rather than just for a twelve month period and to reduce the number of people within the Commission who have to sign off on each decision. That has helped to speed up the disbursement of resources, so we are not seeing the same degree of concerns expressed to us about the way the sugar transitional assistance is likely to operate as we did at the beginning with the SFA for bananas, for example. We are seeing the Commission commit to projects over a number of years, rather than just saying, "We can only do this for twelve months and then we've got to come back and have a look at it."

Q15 Mr Heathcoat-Amory: You said just now, Minister, that the Commission has substantial resources, but of course it only has resources given to it by Member States. I am puzzled by your comment on the last biennial report on this scheme when you said that it has no financial implications. This is a scheme of nearly £200 million of taxpayers' money, so how on earth can it be said not to have financial implications? This is taxpayers' money which is not being spent by us but is being spent by the Commission under some sort of political control and you have an input, and in fact you said you were "engaging strongly" with the Commission. That was your phrase in March 2005. So you are engaging strongly with the Commission, spending a great deal of money, but you say it has no financial implications? I do not understand it.

Mr Thomas: The reference to "no financial implications" is essentially a reference to the implications for whether there would need to be further UK contributions to the European budget. The SFA was fully funded and therefore there were no further financial contributions likely to be required to the European Union. That is what that is a reference to there. It is not a comment on the effectiveness of the financial spending, it simply relates to the question of whether or not more resources would need to be handed over from the UK to the European Union.

Q16 Mr Heathcoat-Amory: Can I suggest, therefore, that in future you say, "The money has been spent, therefore there is nothing we can do about it," rather than the rather ambiguous phrase that "there are no financial implications," because of course for taxpayers there are implications if their money is being wasted?

Mr Thomas: With respect, Mr Heathcoat-Amory, I do not think money has been wasted. I think we could have improved the way it was spent, and I will certainly make sure that we are clearer in the phraseology that we use in future. As I think I have made clear, there was a lot we thought we could do to improve still further the effectiveness of the spending and I hope I am demonstrating that we have put a lot of time and effort, with some success, into improving the quality of the way the SFA has worked.

Q17 Mr Heathcoat-Amory: Well, it was described earlier as "poorly designed," "over-complex," with "poor management". I call that wasteful, but let us not dispute the meaning of words, let us try and get to the substance. I just want to press you a little bit further about your response to Nia Griffith about whether you are happy that the British aid effort is being filtered through a system which you acknowledge is not very efficient. We seem to have subcontracted our work with the very important small countries with very historic and important links with this country, but you cannot control it. You say you engaged strongly with the Commission, but you then say there has been no proper evaluation and it is clear that you do not control this money. Is this not rather tragic, that we raise money from the taxpayers here, we pass it over to Brussels and then that seems to be the end of it? You say you are "a lone voice", which is rather pathetic. Would it not be better if your Department spent the money directly in these countries, and then we could make sure on the ground that it gets through to the very poor people whose livelihoods are at stake?

Mr Thomas: We have been a lone voice on this one issue. I think we have had impact, despite being a lone voice. There has been a whole series of other Members of the European family who have wanted to see improvements in the quality of European aid more generally and there has been a whole series of reforms since 2000 to the quality of European aid, and the OECD's Development Assistance Committee, which looks at the performance and quality of donors' performance across the piece, has charted the continuing improvement in the EC's performance, and indeed, Mr Heathcoat-Amory, the House of Lords European Affairs Committee also has noted a significant improvement in the quality of the performance of the EC as a donor. That does not mean there are not further reforms that we would want to see, there are, and I am happy to describe to the Committee what some of them are, but you suggest, sir, that we might want to think about, in a sense, every country taking its money back from the Commission and each of us spending that money ourselves in the Caribbean, and I would simply suggest to you that having 27 different Member States spending resources themselves in the Commission would create huge problems for the small civil services that there are in each of the islands. Therefore, it is more efficient and more helpful to those countries to have just one donor or a small number of donors whom they engage with. The challenge for us has got to be to make sure that our aid is disbursed in an effective way and, as I say, we have been working extremely hard to get the Commission to improve the quality of its performance more generally, with success, and specifically on the question of support to the banana-producing nations.

Q18 Ms Clark: As long ago as 2005 you said that the answer to the situation was to switch the European Community focus in the Caribbean to direct budget support to governments. Is that endorsement of budget support to do with a lack of confidence in the Commission delegations? What makes you think that small, overstretched government bureaucracies are going to be able to spend money more effectively?

Mr Thomas: I think the worry would be, Ms Clark, if we saw the Commission continuing to ask each country to have to provide separate documentation all the time, to engage with separate groups of officials for each different project that it wanted support for. That is why we have advocated budget support, because it is recognised as being the most efficient form of donor assistance where you have confidence that a country is committed to using those resources effectively. It is not that we do not have confidence in the Commission delegations as such, although we have argued for further changes to the way delegations are organised. We have wanted the Commission to give, in a sense, greater incentives to get its best people into delegations around the world, and that is one of the very positive changes we have seen since 2000 and there has been a real step up in the capacity of the EC delegations around the world. That does not mean to say that they always do everything that we would like or that they are perfect and that is why we have continued to engage with them, in particular in the Caribbean, on this issue.

Q19 Ms Clark: Do you have different views with different countries or do you propose the same approach to every Caribbean country, if that is the rationale? Do you have confidence in every country?

Mr Thomas: I have confidence in most countries, particularly in the countries we were engaging with in the context of the SFA. More generally, I certainly would not want to see budget support given to a country like Zimbabwe or a country like Burma, you have to operate through different mechanisms in those countries, but in the Caribbean, yes, we have confidence in the commitment of the government, generally speaking.

Q20 Mr Clappison: Minister, you accepted at the beginning that this had not been the Community's finest hour and we have heard the catalogue of problems which have taken place. Your defence to this question seems to be, if I can summarise it, "We did our best. Things are getting a bit better now, albeit late in the day, but all along we were a lone voice"? That is an expression which you have used on a number of occasions to the Committee and the impression which it creates is that there was, if not obstruction then indifference on the part of the Commission and other Member States, and that this was a problem for the UK all along. Taxpayers and people who are concerned about developing countries, African and Caribbean countries with whom we have a link, will be concerned to hear this. Do you think you have overcome this problem of indifference now on the part of other Members, because the way you have presented this to us today is that this money has been spent, the UK has been interested but we have not been able to get the result that we wanted?

Mr Thomas: As I have said, Mr Clappison, I think we have seen a substantial improvement in the way the EC allocates its aid, both in general terms and in the case specifically of the SFA, and there is no doubt in my mind that if there had been a larger number of countries sharing our concerns and agitating in the way that we were, some of the changes which did take place might have happened quicker. Certainly I think countries have shared with us an effort to make sure that the sugar transitional assistance which is being offered does not have the same problems at the outset as the banana assistance did, and in fact the Caribbean countries, albeit they would like more assistance from the Commission, nevertheless are not complaining about the way that assistance is likely to be provided. They welcome the fact that in many cases it is likely to be provided as budget support, and that does suggest that the lessons have been learned and we have succeeded in getting more engagement on this question from other Member States.

Q21 Mr Clappison: Can you be confident that these problems which you describe, which to me seem to derive from a flawed system, are not going to occur again?

Mr Thomas: I think there was a flawed system in the way the EC was allocating aid. It was a very centralised system. There has been a whole series of reforms. We welcomed those reforms and they contributed to the improvement in the way the SFA is operating. There are still changes we want to see in the way the EC operates, but the next key example on which this Committee and taxpayers more generally will be able to judge the improvement or not in the way the EC operates is the package of assistance for the sugar protocol countries, and I am confident that we are seeing significant improvements in the way that is being offered.

Q22 Jim Dobbin: It is one thing to encourage countries to form a plan, but it is an underestimation really not to accept that they may not have the capacity to fulfil the necessary criteria to know how to do this. Do you think that is something really which should have been thought of beforehand, and is that not one of the real lessons in this whole process?

Mr Thomas: Yes, I think it is. We have argued, not only in the context of the SFA but in the context of how the EC provides aid more generally, that it needed to strengthen the capacity of its own delegations in-country so that they could provide support to countries more effectively. That is certainly one of the lessons. In recent times we have seen, as I said in response to Ms Clark, a significant improvement in the willingness of the Commission to prioritise improving the capacity of delegations, and that is a very welcome thing. I think if it had been in place earlier we might not have had to provide the technical assistance which we did through our own Caribbean programme to help both EC delegations and the countries concerned to get access to the resources, to design their countries' strategies and start to deal with the issues.

Q23 Richard Younger-Ross: Can I just follow on from that? I am slightly puzzled by the response you made to Mr Dobbin, but also comments you made earlier regarding the fact that the Caribbean do not seem to be speaking about this subject. I visited the Caribbean 15 months ago, Jamaica, and it was made very clear to us the problems they were facing at the time, and I cannot think of any Member of this House who has not been to a reception and spoken to someone from the Caribbean who has not heard of the difficulties they face over the sugar regime or over bananas, so to hear that this is not being raised in Brussels and that Brussels does not appear to be aware of this I find quite staggering, to be honest, Minister. There is an EU delegation out there. Do they go out there with the view that they see these adverts for holidays in Jamaica and it is a great Caribbean idyll, or do they actually go out there and talk to the real farmers and find out what the difficulties are?

Mr Thomas: Well, I do not think that is a fair characterisation of EC staff, or indeed of any donor staff who operate in the Caribbean. I think the staff who have been there have sought to do the best job that they could do. I think they faced a number of constraints. Those are constraints that Member States had imposed upon the Commission, such as the financial regulations which required, each year, expenditure to be approved for the following year and required multi-signatures on each new aid project. We have managed to achieve reforms to the financial regulation which have helped to speed up disbursement and make progress, and it is certainly true that the capacity of delegations is improving, as I said in answer to Mr Dobbin and Ms Clark, and we have sought to help the delegations where it was needed and to help countries have their voices heard. I think you are right on sugar. Precisely because of the concerns about the way the SFA had operated, the Caribbean and a number of other countries have been very clear in their comments to the Commission to make sure that the lessons have been learnt and, as I say, I think lessons have been learnt for the delivery of sugar transitional systems.

Q24 Richard Younger-Ross: You say lessons have been learnt, but we still do not have the report published. How can we know lessons have been learnt if the document is not there which shows us that they actually understand what they are doing? But we have covered that before. Moving on, this sorry saga seems to be symptomatic of the European Commission's overall capacity to manage what is a very large development fund effectively. Much of the development spending, doubling of aid, is to be spent through the EU. What assurances can you give us that that is going to be well-placed by being put through the SFA?

Mr Thomas: I think there is a significant number of projects which are supported by the EC which have delivered on their results. Let me give you one example. It is not from the Caribbean, it is from India, where a programme which the EC is helping to finance with us and with the government of India has helped to make sure an extra 15 million children are in primary school. It is a very effective programme, it is well-regarded both by the government of India and by those who monitor these things. So I do not think it is fair to say that EC assistance has continued to be poor. There have been very substantial reforms and the evidence, if you like, of the improvement in the EC's performance is captured both in terms of the House of Lords' EU Committees' detailed investigation of the performance of EC aid and also by the OECD's Development Assistance Committee, which looks at the performance of a whole variety of donors, including the EC, and they have commented positively on the improved quality of EC aid.

Chairman: Thank you, Minister. On that subject, I am conscious of the fact that this is the 200th anniversary of the abolition of the Atlantic slave trade, which in fact deposited many of the people in the Caribbean Islands against their will and they are, in a sense, suffering from that and have suffered from that for many, many years. So I think there is a heightened interest in how we repay our debt to many of the people who are in these communities. It is clear, from the media attention and the reports and television programmes about the banana regime, that we have a very, very long way to go to make people believe that we are actually treating them fairly, and that the EU is helping us to treat, the people who rely on these products, or helping them reach a different economic situation. Let us move on from that topic and turn to a sad topic upon which we should have to call your Department to this Committee, because at one time we were writing letters of commendation to DFID about its adherence to proper scrutiny processes. So we are going to move on to look at the question of the Department's scrutiny performance, which I think I did tell you is statistically the worst department. Although it is not necessarily comparable with other departments which deal with much more business, statistically its percentage failures are higher than any other department of government at this moment.

Q25 Mr Heathcoat-Amory: Minister, if I could ask you about a particular scrutiny episode which worries us, this Committee has taken an interest in the EU Africa strategy, and indeed the Government has given a lot of emphasis to its relations with Africa, and we made it clear that we wanted to scrutinise the review of that strategy at the December 2006 European Council but we received nothing, instead of which we received a letter in January 2007 not even from your Department but from the Minister for Europe containing a brief description about what had gone on. This is a major scrutiny breakdown. We do not scrutinise these things for our own amusement, we do it because we are asked to do it by the House of Commons on behalf of the public. How can your Department overlook this important procedure, particularly when we had made it clear that we wanted an explanatory memorandum and a sight of the documents before the European Council, rather than a brief letter from another department after it was all over?

Mr Thomas: Perhaps, Mr Heathcoat-Amory, before I reply to your specific question I could comment very generally on a more overarching point. I acknowledge that there has been a dip in performance by the Department and I apologise to the Committee for that. I welcome the fact that there has been significantly more interest from the Committee in the work of the Department and I recognise we need to raise our game on this issue. I have asked, as an urgent priority, the new recently appointed head of our European Union Department to look at this as a matter of some urgency, to make sure that we do improve our performance to you. I also asked for a thorough check on whether or not we owed the Committee any further information at this stage, and there is one further letter which we do owe the Committee and which we will issue shortly as a result. On the specifics, Mr Heathcoat-Amory, of your question, in terms of the EU Africa document I am very happy to provide further information to the Committee, given the Committee's interest. The EU Africa document is a document which does not just refer to development assistance, it refers to a whole variety of political engagement with the African Continent, and therefore it is appropriate, on occasion, for the Foreign Office to respond to the Committee on those issues, but I will very happily provide, through the Chairman, the Committee with more information about our view of that document.

Q26 Chairman: Can I be quite clear, what you are saying as an excuse is that though we expected a response and assessment from your Department, really it should have been the Foreign Office all along? That is what you seem to be inferring.

Mr Thomas: Well, I will check on that issue. My understanding is that if Mr Hoon replied - and there is a clear expectation that the Foreign Office would reply, but I am very happy to, as I say, respond to the Committee on the development dimension of the EU Africa report separately.

Q27 Chairman: I think that is what we did expect, and we made that plain at the time. I do not know where the misinterpretation of our communication came from.

Mr Thomas: If we are at fault, Chairman, then I apologise and I will put that right.

Q28 Chairman: I want to raise a further breach. It did seem at the end of last year that your processes did collapse. The Department certainly seemed to take its eye off the ball, as we said. There might be an internal explanation for that, and we would certainly like to hear it. There were two simultaneous scrutiny overrides caused by what you described as internal administrative errors, and the word used was "oversight", and then an important letter to us of late December, which we received only in February, and only then after we had enquired as to its whereabouts. Was all this the fault of your private office or of the scrutiny processes within your Department at a lower level? If you could maybe explain to us what caused it, and then what action have you taken to ensure that these administrative failings do not reoccur?

Mr Thomas: Chairman, ultimately it is my responsibility, regardless of where the particular problem lies. I take that responsibility extremely seriously and that is why I would be very willing to offer an apology to the Committee for the drop in our performance to you. I have asked, as I say, the recently appointed head of our European Union Department to look at this issue as a matter of some urgency to make sure that we do get back to where we were before, which I think was very good in the way in which we responded to your Committee.

Q29 Chairman: Are you indicating, because it does seem that if there is a new head of section that there was a post missing, or a member of staff missing, or the structures were never there?

Mr Thomas: I am admitting to you that the structures clearly were not operating effectively enough, and that is my responsibility and I have taken action to try and make sure that it does not happen again.

Chairman: Some people might comment that it is a refreshing matter to hear a minister take ministerial responsibility. It is not offered on the floor of the House as often as people would like to see it offered, so I thank you for that and I am sure our Committee thank you for it. Hopefully it will lead to us sending future letters, as we used to do, saying that your Department was to be commended for its adherence to proper scrutiny processes. Thank you for attending and for your frankness.