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“Community aid...sits in the middle of the Union’s wider external policy aims, with sometimes competing agendas”.
Furthermore, the respected OECD development assistance committee has found a risk that the ambitious multiple objectives of the consensus, including expanded political ones, could diffuse a focus on development and undermine longer-term strategic priorities. Members will note that we have tabled amendments on that point. It is surely inconceivable that Ministers will not support them, especially when the Government were, not so long ago, so very keen to ensure that the specific identity of development objectives was not undermined in the EU’s external action. We want to ensure that development retains a strong profile within the EU’s external action programme.
We are strongly supportive of an independent DFID. Why, then, do the Government support a treaty that seeks to move Europe the other way, subsuming development within the common external action programme? There is also an important point about leadership. Many observers are concerned that a reduction in the number of Commissioners could mean that there would be no Commissioner for development. BOND has made it clear that having a separate Commissioner for development is highly important, particularly in closing the gap between EU development policy and its implementation. BOND has said:
“We must ensure that there is a strong and independent voice for development.”
However, the principle of independence is missing from the treaty’s section on humanitarian aid.
Fifthly, the Minister will note that we have tabled an amendment addressing the question of shared competency over matters of international development. We seek clarification from the Secretary of State on what that will mean. We hope that he will be able to reassure us that there is no danger of the EU’s overruling Britain’s decisions on aid policy.
More generally, the treaty fails to address the many things that must be done to reform and improve the delivery of European Union aid. Such aid has been criticised for involving heavy bureaucracy and slow disbursal. In its oral evidence to the July 2006 House of Lords report on EU-Africa relations, BOND castigated the EU’s record of
“slow disbursement of funds, bureaucratic procedures and lack of capacity”,
“continue to hinder the effectiveness of European Community aid”.
A report by DFID suggested that delays were due to
“the inner workings of a byzantine bureaucracy with a procedure-driven ethos.”
Ironically, a study by the Commission found that 40 per cent. of delays to aid projects were the result of the administrative processes of the European Union, while only 25 per cent. were due to administrative problems in the developing countries receiving aid. A survey of aid recipient countries by Oxfam suggests that a fifth of EU aid arrives more than a year late, compared with just 3 per cent. of that from other aid donors.
The highly respected think-tank Open Europe has highlighted that one particularly wasteful administrative activity is the EU’s funding of other multilateral institutions, particularly the World Bank’s International Development Association. Over the past four years, the EU has passed on $2.1 billion of its budget to other multilateral organisations. That means a wasteful chain of transfers: national agencies administer a transfer to the EU, which then administers a transfer to another multilateral organisation, which then eventually administers aid to the recipient country, with administrative costs and delay at each stage. There are also serious concerns about fraud and waste in the European aid programme. Open Europe explains that just over 7 per cent. of the EU budget is spent on overseas aid, while aid programmes account for 21 per cent. of fraud investigations by OLAF, the European anti-fraud office. Fraud in this area is far higher than the Brussels average.
Despite attempts at reform, serious cases of fraud and waste are still coming to light. For example, in 2006, a report by the EU’s Court of Auditors found that aid for Russia had been misspent. It noted that one project had involved inventing a region on paper to meet the criteria for receiving EU funds, and fitness equipment that was supposed to help children ended up being used by Russian soldiers. I have read with great interest the multilateral development effectiveness summaries that have been posted recently on the DFID website. There is a lack of clarity about exactly how DFID assesses which multilateral agencies do the best job of tackling poverty. What we really need is much stronger impact evaluation of global aid so that we can make informed decisions about which channels will spend our aid most effectively.
The treaty calls for coherence in EU policies that affect poor countries. At the moment, there is manifestly a lack of coherence. There is a clear need to take action on that. In particular, the treaty fails to underline the importance of development assistance in
tackling physical and psychological barriers to trade in poor countries. That is one of the most important aspects of all development. If our aid money is not to be wasted, poor countries must ultimately be able to trade their way out of poverty. Aid is a means to an end and not an end in itself.
Rob Marris: Does the hon. Gentleman welcome, like me, article 209 on page 135 of the consolidated text, which states:
“The Union may conclude with third countries and competent international organisations any agreement helping to achieve the objectives referred to in Article 21”,
and so on? Paragraph (e) of article 21 refers to encouraging
“the integration of all countries into the world economy, including through the progressive abolition of restrictions on international trade”.
Taken as a whole, the provisions do link aid and trade and the development of countries. I welcome that; does the hon. Gentleman?
Mr. Mitchell: I hesitate to give the hon. Gentleman a straight answer, because he is a distinguished lawyer, but on the face of it there is much that we support in there. My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) has tabled an amendment that might probe that very matter.
The treaty strengthens the EU power over trade policy, which, incidentally, the Government were concerned about during negotiations. Unfortunately, that means that protectionist lobbies in Brussels could well hinder prospects for developing countries’ economies. As DFID says:
“The impact of EU on developing countries is a result of all its external policies. Not all of them are coherent with a poverty reduction agenda, most notable the CAP.”
The treaty postulates no significant reform of the common agricultural policy. The Government failed to get real reform when this country held the presidency in 2005.
The treaty makes no mention of much needed reforms to the EU’s “Everything but Arms” scheme. We certainly welcome preferential trade schemes that help the poorest countries, but “Everything but Arms” can and must do better. As the respected development economist Paul Collier writes on “Everything but Arms”:
“The devil is in the details and the details are wrong, probably deliberately”.
Over-complex, unclear and restrictive rules of origin are particularly stifling the scheme’s effectiveness. A similar scheme, the US’s African Growth and Opportunity Act 2000, which has included special waivers on complex rules of origin, has performed much better. AGOA has been able to effect a 50 per cent. increase in African apparel exports, whereas the “Everything but Arms” scheme has had little such success.
As we have heard, today marks the beginning of Fairtrade fortnight. We on the Conservative Benches strongly support allowing producers in poor countries the chance to set themselves free from the shackles of poverty by ensuring that they are paid a decent wage for their labours. We must also see Fairtrade fortnight
as an opportunity to highlight the injustices of EU trade policy. All over the UK, as well as in many other countries, non-governmental organisations, local authorities, trading associations, producers and vast numbers of the public will voice their support for ethical economics.
The Parliamentary Under-Secretary of State for International Development (Mr. Gareth Thomas): Will the hon. Gentleman at least acknowledge the work that we and a number of member states have been doing in the course of the negotiations to push for significant reform of the rules of origin, precisely because of the point that he makes? Indeed, one of the reasons why Lesotho welcomed the economic partnership agreement discussions is that it will benefit significantly from liberalised rules of origin.
Mr. Mitchell: I acknowledge that many have argued passionately for the reform of the rules of origin. My point is that nothing in the treaty gives us any courage or hope that that might take place.
Disappointingly, the EU’s trade policies remain manifestly unfair. The “Everything but Arms” scheme is woefully far from fulfilling its potential and many have argued that it is even having negative effects. The EU’s direct export subsidies entrench impoverishment in developing countries and drain European taxpayers’ pockets. I hope that the Secretary of State will join me during Fairtrade fortnight in calling for the EU to listen to its citizens and make earnest reform of its trade policy.
Mr. Thomas: Reform of rules of origin does not require the EC treaty; it simply requires agreement with the Commission and across member states. The reformed rules of origin available to Lesotho have been in place since 1 January.
Mr. Mitchell: The Under-Secretary underlines the point that we do not need a treaty to make progress. That is at the heart of the arguments that Conservative Members have presented for some days. However, if we are to have a treaty, it might at least deal with the important aspect that I mentioned.
Our central concerns remain that the European Union should first get right what it is supposed to be doing before trying to accrue yet more powers from national Governments. The European Union could do much better. It could tackle the key issue for development: dismantling European Union protectionism. Instead, the treaty gives the European Union more power over trade, which may make further necessary reform of the common agricultural policy even harder.
For the Government’s failure to honour their promise of a referendum, and for the reasons in our amendment, which clearly lists all those matters in which the Government failed to achieve their negotiating objectives, I urge the House to support our amendment and send a clear message about European Union complacency on a vital aspect of our national interest.
Several hon. Members
rose —
Mr. Deputy Speaker: Order. I remind hon. Members that Mr. Speaker has placed a 12-minute limit on Back Benchers’ speeches, which operates from now.
4.56 pm
Hugh Bayley (City of York) (Lab): One of the Labour Government’s great achievements has been to make poverty alleviation the primary goal of our international development policy. We have won widespread public support for that policy and now even the Conservative party endorses it. It was not always so.
In the dogdays of the Conservative Government, I introduced an overseas development and co-operation amendment Bill, which sought to make poverty alleviation the primary purpose of British aid. Perhaps unsurprisingly, under the Conservative Government, it never reached the statute book. It is worth remembering the state of British development policy at that time.
During the 1992-97 Parliament, aid contributions fell as a proportion of Britain’s gross domestic product. Given that all parties now support focusing on poverty as the primary purpose of aid, it is significant that, during that time, the percentage of British aid to poor countries fell from 80 to 69 per cent. Aid to India fell by 23 per cent., whereas aid to Indonesia, which at that time had a per capita gross domestic product three times that of India, increased by 79 per cent. Singapore and Hong Kong then had a per capita gross domestic product higher than that of the United Kingdom; nevertheless they received more aid per person than Vietnam, one of the poorest countries in Asia.
I congratulate the Conservative party on catching up. Conservative Members, who now say that they support relieving poverty as a primary goal for British aid, tonight have the opportunity to show that they mean it. By supporting the Lisbon treaty, they will require the European Union to adopt a similar policy to the British Government’s.
“The Union’s development cooperation policy shall have as its primary objective the reduction and, in the long term, the eradication of poverty.”
If Conservative Members genuinely believe what they have been telling the House for the past year or two—that it is important for Britain and the European Union to make poverty alleviation the primary purpose of aid—they should support the treaty. We will watch tonight to see whether they do that.
Mr. Andrew Mitchell: There is a fundamental flaw at the heart of the hon. Gentleman’s argument. We embrace his points about poverty alleviation and the fight against poverty, but we do not need a treaty for that.
Hugh Bayley:
The hon. Gentleman says that no treaty is needed to fight poverty, but there was no treaty requirement to do that when his party was in power and it did not happen. There was no treaty requirement to do it over the past 10 years, when it has been British policy, and there has been only a slight movement in that direction—the proportion of EU aid going to least developed countries has increased in recent years from
about 40 to 46 per cent. Not having a treaty does not lead to the implementation of a poverty reduction policy, but now we have the opportunity to provide, within the European Union, a treaty requirement for a poverty focus to aid. That can surely do nothing but help.
Tony Baldry: The hon. Gentleman and I are of one mind on this issue, but what I do not understand about that argument is why the treaty removes the phrase “the most disadvantaged”. My concern about EU aid increasing is that money is being given to middle income states, such as Morocco and Tunisia, for perfectly understandable reasons—Spain, Italy and others want to use it to prevent migration—and that less money is going to very poor countries. Perhaps the hon. Gentleman could give some thought to why that is. Also, the Government opposed the removal of the phrase “the most disadvantaged” in negotiations, but the Secretary of State made practically no reference to that, and I do not understand why not.
Hugh Bayley: The current situation is as the hon. Gentleman outlined. Some of the biggest recipients of aid from Europe include the Maghreb countries, Egypt, Sudan and Morocco. It is because of the large amounts of aid that those countries receive that relatively less, as a proportion of European aid as a whole, goes to the poorest countries. The status quo permits a greater proportion of European Community development assistance to go to countries that are not the least developed. With the change in the treaty, we now have a lever to use in the European Union to ensure that that policy changes and that a greater proportion of aid goes to the least developed countries, which need it most.
Mr. Cash: The hon. Gentleman and I have worked together on a number of matters relating to the eradication of poverty in the third world. Does he not agree that provisions for the eradication of corruption would be worthy of inclusion in any arrangement? It is precisely because of the defensive nature of the European Union about questions of that kind that there is no such provision. Such a provision would really help to eradicate poverty, and I say that without prejudice to the fact that I do not believe that the treaty route is the right way to achieve the objectives that he and I share.
Hugh Bayley: I share with the hon. Gentleman a firm belief that reducing corruption in developing countries would greatly help them to develop economically. He and I have both introduced measures in the House to change the law to help achieve that aim. Nothing whatever in the treaty would undermine that kind of legislation on a national or Europe-wide basis, but the treaty does contain something that might help it happen, which is the provision requiring greater policy coherence. The treaty stipulates:
“The Union shall take account of the objectives of development cooperation in the policies that it implements which are likely to affect developing countries.”
That is a signal to the Union that it ought to have coherent policy across the piece. I would like that to include Europe-wide action to criminalise transnational bribery and to ensure that cases of it are brought before the courts.
This is not just an academic debate about whether we like the European Union or not. EU aid is immensely important in the fight against global poverty. In 2006, the European Union’s own aid budget was about US$10 billion—roughly one tenth of all global aid. A quarter of all the UK’s aid—about £1.2 billion of the total for 2006 of £4.2 billion—is channelled through the European Union. I fundamentally disagree with the Conservative party’s proposal that our EU aid should be repatriated to the United Kingdom. If we did that, it would send a signal to many other countries with far less a commitment to aid that they could withdraw their contributions to the European Union, with the result that less aid could end up going to developing countries. There is a measure of agreement in the House that EU aid needs further reform, but we would be less likely to achieve that reform if we were to take our bat and ball home and repatriate our resources.
The International Development Committee, under the chairmanship of the hon. Member for Banbury (Tony Baldry) in the last Parliament and since, has long taken the view that European Union aid should be guided by the same poverty alleviation principles as are required for UK aid under British law. In 2001-02, the Committee produced a report on European Union development assistance, in which it called for such a commitment to poverty alleviation. In 2006-07, the Committee produced a further report, which acknowledged that some progress had been made. However, it also stated:
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