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Viscount Waverley: My Lords, before the noble Lord sits down, perhaps I may point out that the delivery plan that I propose would allow for publications to be delivered in as timely a fashion as under the current ELBS.

9.35 p.m.

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, I am grateful to the noble Lord, Lord Thomson of Monifieth, for initiating this debate and to your Lordships for making some useful points. I listened carefully to the contributions, but it is clear that many concerns over the issue are based on a misconception of our intentions and of the operation of the scheme. Therefore, I am glad to have this opportunity to respond.

First, the educational low-priced books scheme has not yet been phased out. We have said that it will be phased out in two years because we want to replace it with something better. We believe it essential that we do the very best for the students, particularly those poor students who cannot afford books. I can assure my noble friend Lord Soulsby of Swaffham Prior that the existing scheme will continue for a further two years.

I was extremely surprised by the contribution of the noble Baroness, Lady David. She made a quite unfair and disproportionate criticism of my officials and the reviewers of the scheme. I shall return to the review in a moment. The noble Baroness will know, as I know the noble Lord, Lord Rea, knows, that it is my job and the task of my officials to get the very best value for money for student recipients in line with ODA policy laid down in the 1980 Overseas Development and Cooperation Act. I have no other remit than to do that. My concern is the students and that those students will turn to the UK when

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they are qualified and will bring trade for the UK in the longer term. Therefore, neither I nor my officials have any of the negative aspirations which were accorded to us.

First, perhaps I may explain how the scheme operates. The ELBS provides a subsidy from the aid programme to British publishers. That subsidy helps them to produce cheaper versions of standard texts which they have already published. As the noble Lord, Lord Thomson of Monifieth, said, we want the best kind of contribution, but at the least cost. The misconception in many of the letters sent to me, many of them stimulated by people outside your Lordships' House, has been that the ELBS supplies free textbooks to students or libraries. That is not so. These books are sold on the commercial market.

It is a fact that a number of publishers have chosen not to submit books to the ELBS, preferring to work through the commercial system. I mentioned the Overseas Development and Cooperation Act. The British aid programme is defined in that Act as:

    "promoting the development or maintaining the economy of a country or territory outside the United Kingdom, or the welfare of its people".

Those are important words. The primary purpose of British aid is development. As I told many of your Lordships before, we seek, as we are required to do, the most cost-effective and best targeted way of delivering aid. That is exactly what the noble Lord, Lord Thomson of Monifieth, asked.

The aid programme funds the supply of books and other teaching materials but in a number of different ways, because we wish to be flexible and efficient in helping students in developing countries. The ELBS is just one of those ways.

It is perfectly true that we spent £1.5 million on this scheme last year, over £200,000 of which was the administrative cost of the scheme. But in the last financial year we also spent some £7.3 million to provide books through other schemes; so it is not the ELBS alone. There is the regional engineering centres project in India which focuses not only on books but on other information inputs in design, energy, information technology and materials engineering. There is the secondary schools textbook project in Jamaica. There is the supplementary readers for primary schools project in Zambia. There is the construction of a library and a Faculty of Information in Moi University in Kenya. There is the English language teaching project in Ethiopia. There is the English language teaching support system in Tanzania. There is the independent development trust school book project in South Africa. There are many other schemes. There is help through Book Aid International (formerly known as the Ranfurly Library Service) which provides free books to developing countries and does a first-class job.

There is an annual books allowance for all ODA supported scholars and trainees. Under the British Council there are project related books and information aid worth over £2 million. There are the heads of mission gifts and small project schemes. There is the Commonwealth of Learning information database and books. There are the low priced book schemes in Eastern Europe.

Your Lordships will understand that the educational low-priced book scheme is but one of a number of projects. That is why in each case I must ensure that the scheme is value for money and reaches the very students

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about whom the noble Lord, Lord Rea, spoke. We all know that the original objective of the ELBS was to sell information books overseas and to provide a limited pump-priming subsidy to publishers. The policy aims for ELBS were to spread British influence—a matter with which we cannot disagree and never will—and to further the growth of the English language—again a matter on which there is total agreement. It was to provide a form of aid—it is a form of aid, but it mainly goes to the publishers—to assist exports and to forestall similar action by the Communist world. Perhaps that aim is now a little out of date.

The scheme has had a fine reputation. No one disputes that. Over the years it has had some notable successes. A number of noble Lords have had their own works published as ELBS books. There is nothing against that and I am not critical of it because I am in favour of extending information.

Let me say a few words about the review of ELBS. As a number of noble Lords have said, there was a review in 1988. It concluded that the scheme lacked developmental focus. In some subjects the books did not correspond with the ODA's priorities. However, the scheme was permitted to continue subject to revised guidelines. One of those was that to qualify the country should have an average per capita GNP of less than 1,000 dollars per annum. It should be in receipt of British aid or multilateral aid towards which the UK contributes and where the publishers consider there is a market for UK books.

Since that time we have looked carefully at whether the scheme is meeting all those objectives. I have to tell your Lordships that the review undertaken last year showed little improvement since ELBS was last reviewed in 1988. There was marginal improvement, but overall not enough to give value for money.

Perhaps I may respond to the noble Baroness, Lady David, and what she said about the consultation on the review. It is not true that no questionnaires or letters were sent out. Our advisers in each and every development division were required to find out what was going on. It is not true that no visits were made. Ethiopia, Zambia, Kenya and Zimbabwe were visited. We had reports in from Asia after we had specifically requested countries to give us information about how the scheme was running. No decision was made on the matter until all the information had been received and the review was complete. Once the review was complete, I was not prepared to stop the scheme immediately because it takes time to adjust to such matters. That is why I gave notice that we would phase it out after a period of two years.

In addition, not only was the second review based on overseas visits, but so was the 1988 review. We also had discussions with the Publishers Association, the ELBS steering committee and the ELBS administrators. So the matter was thoroughly investigated. It was of great concern because I wished to extend the help we give but to ensure that it is properly targeted, as the rest of our aid is targeted.

I mentioned that one of the criteria laid down after the 1988 review was that the scheme should apply to countries with a per capita GNP below 1,000 dollars. In the latest review we found that 22 of the 54 countries

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within the scheme no longer came within that category. Between them those more prosperous countries accounted not for one-fifth, as the noble Baroness said, but for one-third of the number of books actually sold under the ELBS scheme.

Since the mid-1980s there has been an increase in the share of titles sold in South Asia as against a decrease in the predominantly poorer African countries. We all realise that there is a positive aspect to ELBS but—as has been said in correspondence and by a number of noble Lords in this debate—the scheme is not reaching the poorest students in the poorest countries. They were the people for whom it was intended. Therefore, it does not meet our developmental objectives. That is something which I must always keep in mind. I cannot allow a continuation of aid funds to subsidise students in more prosperous countries while students in the poorest countries cannot benefit. I must find ways of enabling the poorer students to benefit.

In the scheme, there is no way to guarantee who actually buys the books or that the benefit of the subsidy reaches the ultimate purchasers. So there is no way of ensuring that the subsidy benefits the poorer students. We know that the publishers make a profit. I have nothing against publishers making a profit, but I do not believe they should be subsidised when it is the students' needs that we seek to address. It is at a marginal extra cost to the publishers, but I gather that on a book costing £7.68, the gross return to the publisher is £1.96. I am sure that that is a variable figure because it will vary from some types of text books to others. But it is one example which we know for certain.

There are even instances which should worry us all where professional people from developed countries visiting developing countries purchase ELBS books for their own use. They then use them back in their own country. That cannot be a proper use of aid funds, but I cannot stop it happening with the scheme as it now is. That is one of the problems.

There are some subjects where the demand is greatest which gain precedence over other subject areas which are equally important in development terms. It is perfectly true, as the noble Lord, Lord Rea, said, that about 60 per cent. of the books distributed under ELBS are medical books. We have nothing against that. But books on engineering, education, agriculture and environment form only a small part of the ELBS sales. They are still important, even if good health is fundamentally important to all.

The situation is this. The nature of the scheme is such that it is not possible to target individual students, institutions or even disciplines. It does not distribute free books. And I am sad to say that it has developed into a scheme that is overly influenced by commercial considerations, when I am required under the 1980 Act to put developmental considerations before everything else.

In order for a country to be included, we have to have in that country a potential market in the eyes of the publishers. That is how the scheme runs at the moment. It would be possible to change that and change the countries. But that would still not answer the earlier points that I made.

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One of the other problems that we have is the lack of available foreign exchange. That makes it difficult for poorer countries to import British books. ELBS does not meet those very real needs either. More generally, it is impossible to control the local selling price. Local booksellers apply a local mark-up which makes ELBS titles in certain countries more expensive than expected, despite the subsidy to publishers. Although the subsidy in many cases reaches its objective of providing key textbooks to poorer students, a disproportionate benefit is gained by others—by wealthier students in better-off countries and particularly by those who engineer to use the scheme for their benefit.

I am well aware that the publishers appreciate the ELBS. It gives them a foothold in countries where there is either unrealised potential for an expansion in the book trade or economic forecasts predict a rapid increase in demand for books of all kinds. So what ELBS does is allow publishers to underwrite the risks of establishing or maintaining a presence in countries where the potential is in the future. That is what worries me about the scheme. It is not following the objectives of which I spoke.

The noble Lord, Lord Rea, asked whether other countries might step in to fill the void left by ELBS. Other countries already have markets in the developing world. For instance, US publishers have developed a large licensing and reprinting business in India. They provide US texts at local prices equivalent to 10 per cent. of the standard edition price. They do that without any United States Government subsidy. So these sorts of reprinting—of, I accept, not such good quality books—go on all the time. It is not our job to try to work out a scheme which necessarily competes with another scheme like that. It is our job to get the low-priced books to the students who need them.

That is why I find there to be flaws in the ELBS. In view of that, I should be totally negligent not to seek to set those flaws right. I repeat that I am firmly committed to providing books in support of our aid objectives. I hope that publishers will be dynamic enough to seek to retain their position in developing countries without a subsidy from the ODA. I certainly know that there are some very forward-looking publishers around. I received a letter from the chairman of the export booksellers' group, the Booksellers Association. He welcomes the opportunity to look more widely at the role of books and information as part of our general aid effort,

    "rather than concentrating narrowly on ELBS and on possible replacements".

He understands that,

    "global schemes of this type are not nowadays felt to be the most effective way of targeting aid".

He also says that he is not entering a plea in favour of ELBS, although he says that the scheme has been well managed. We, too, believe that to be the case. We know that it has been relatively inexpensive but we also know the other factors which I explained earlier to your Lordships.

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We are not phasing out ELBS without looking at all the alternatives. Indeed, my aim, as I hinted and as the noble Viscount, Lord Waverley, suggested, is to replace ELBS with something better. We are currently examining more effective ways of ensuring that poor students in poor countries who cannot afford to purchase books at full cost have access to the books that they need. We have a working group which will include the ODA's education advisers and publishers. Together they will examine all aspects of books provision under the aid programme. The aim is to develop well before the old scheme ceases in two years' time new arrangements that will fulfil the objectives to which we are committed.

One means of targeting may be to increase our direct support to libraries and educational institutions in the poorer countries, particularly those in need. But we shall look at all possibilities. They might include licensing arrangements with local publishers or cheap student editions, funded by UK publishers with an eye to business. For example, one notable publisher in this country has already approached me to discuss cheap student editions.

We shall continue our support too for Book Aid International that I mentioned earlier. It is really expert at getting the right books to the right places, where they are most needed.

I also want to encourage countries which can now do so to develop their own publishing resources rather than rely on imports. But I believe that the whole question of getting this right means that we should give notice that we are considering, indeed have decided upon, a change in order to fulfil our developmental objectives.

We live in a very changing world. ELBS has dealt in books, but only in books, for 35 years. We face an explosion in information technology and access. It is our job to look forward and consider all aspects of information needs in developing countries, not only for the rest of this century but into the next. I am particularly looking at that as the costs of new technology continue to fall. Universities and colleges are now acquiring access to Internet on their computer systems. Whole textbooks and encyclopaedias are now being made available, particularly in scientific subjects, on CD-ROM. Journals, multimedia distance education and a whole range of new applications are becoming available. That is why I have asked my professional advisers to discuss all those issues over the next few months with all the interested parties, including the publishers.

I can assure your Lordships, including my noble friend Lord Stewartby, that we do wish and intend to get the educational low-priced books to those who need them. But this is not the scheme by which to do it. There has been a great deal of special pleading in recent weeks. I understand why; but I also understand that I have a responsibility to make sure not only that I fulfil the law but also that our aid to education, as our aid in all other sectors, is the most effectively targeted that we can achieve to ensure that it benefits those who need our help most.

        House adjourned at two minutes before ten o'clock.

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