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House of Lords

Thursday, 19th October 1995.

The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Norwich.): The LORD CHANCELLOR on the Woolsack.

Overseas Development Administration

Lord Judd asked Her Majesty's Government:

    What are the implications for the long-term overseas development programmes of the ODA inherent in the increasing short-term demands for immediate relief assistance.

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, the short-term demands for immediate relief assistance have levelled off. While it is not possible to predict the requirement over the next few years, I am confident that we will continue to provide effective help both for these demands and for long-term development programmes.

Lord Judd: My Lords, does the Minister agree that short-term demands have made serious erosions into long-term development work? That is paradoxical because the long-term development work prevents or at least inhibits short-term disasters. Does she further agree that the real problem is that the aid programme has been steadily falling, as a percentage of GNP, to little more than 0.3 per cent. of GNP whereas it was standing at 0.51 per cent. when the Government came to office? Has she seen the recent public opinion poll which suggests that 79 per cent. of the British public are in favour of maintaining or increasing the aid programme and that only 10 per cent. favour cutting it? Can she assure us that the Chancellor is not a member of the 10 per cent.?

Baroness Chalker of Wallasey: My Lords, the noble Lord knows full well that I believe that money well spent on long-term development work can help to avert or at least to minimise short-term disasters, but it obviously cannot stop them all. Long-term development work is not suffering as a result of the short-term disaster relief we have to give. The noble Lord not unexpectedly, and slightly ingeniously, tried to tempt me into provinces on which I will not engage at the moment. He knows that I am unable to prejudge the public expenditure survey outcome. However, I have to tell him what the facts are. Over the past eight years there has been an increase in real terms of more than 20 per cent. We have actually been getting better value for money out of our spending. There is no doubt that that is why public opinion is very supportive of the aid programme; and I made perfectly sure in a room in your Lordships' House the other night that the Chancellor knew about it.

Lord Judd: My Lords, can the noble Baroness give an assurance that the aid programme will not be cut?

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Lord Shaw of Northstead: My Lords, is my noble friend aware that we hope that she will continue with the successful way in which she has sought to make the objectives of these schemes clearly definable and at the same time attach to them clear contractual obligations to ensure that the best value for money is given to those who are scheduled to receive that help? In that way the British taxpayer gets value for money.

Baroness Chalker of Wallasey: My Lords, I am most grateful to my noble friend. Our philosophy at the ODA has always been to help people in the developing countries to help themselves. We have strict controls on our spending. I certainly intend to see that our contractual obligations are fully carried out and that no one ever takes money from the British taxpayer except for very good and positive reasons.

Lord Redesdale: My Lords, in view of the fact that the aid budget is under increasing pressure from donations to the multilateral budget, can the Minister say at what point the bilateral budget will be ring-fenced to some degree, as any cuts would hit the bilateral budget?

Baroness Chalker of Wallasey: My Lords, the noble Lord has been long enough in this game to know full well that I cannot give him an answer about ring-fencing, any more than I can give the noble Lord, Lord Judd, an answer about the level of the aid budget.

Viscount Waverley: My Lords, may I draw the Minister's attention to the short-term real difficulties of the UNHCR in the Great Lakes region?

Baroness Chalker of Wallasey: My Lords, I had a meeting with the vice-president of Rwanda just before lunch today. I can assure the noble Viscount that I am probably even more aware than he is of the problems in Rwanda and Burundi. The UK assistance to Rwanda has been more than £93 million since April of last year. Although it was not one of the territories with which we were closely associated, Britain is extremely well valued there. We are constantly asked for more help. We give what we can. But it is a country which has a francophone base to all its systems and the conversion to anglophone systems will take a very long time. We do all we can to help.

Lord Ashley of Stoke: My Lords, the noble Baroness seemed confident that there has been a levelling out, as she called it, of short-term emergencies. However, does she agree that there can be no guarantee that there will be no further short-term emergencies? If some do arise, can she assure the House that there will be additional funds for the long-term projects? Can she also say why she is so sanguine about the payments made to long-term projects in view of the short-term difficulties that have been encountered in the Soviet Union and Eastern Europe? Does that mean that additional funds have been forthcoming for those things?

Baroness Chalker of Wallasey: My Lords, there can be no guarantee, particularly where one is dealing with the effects of bad weather conditions. In recent weeks we have been deeply engaged in Montserrat, in Manila in the Philippines and even in Burma. We have been

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dealing with dengue fever in Latin America and with a number of other issues which probably have not even hit the British press. But we are prepared for that. We make provision for it. Where necessary, as in the case of the fleeing of the Kurds in northern Iraq, additional funds are forthcoming. We try to prevent where we can and to be prepared to deal where we cannot prevent.

Lord Judd: My Lords, does the Minister accept that we were all impressed with what the Foreign Secretary said on 12th September? He said:

    "For ethical reasons, for reasons of enlightened self-interest, and because it is one of those things we happen to be good at, overseas aid will be a very important priority and something which I know we will all want to build on".

Having noted that, can the Minister assure us that she will halt any further decline in the aid programme as a percentage of our gross national product?

Baroness Chalker of Wallasey: My Lords, the noble Lord knows full well that I alone cannot give him that assurance. What I can do is point out to him that according to the OECD our aid is above the average for all donors. We continue to get the best reports from the OECD about our aid. My right honourable friend the Foreign Secretary was absolutely right in what he said and that has been taken note of by all my colleagues.

Lord Stoddart of Swindon: My Lords, can the noble Baroness say what proportion of our aid budget is spent through the European Community? Does she believe that that money is spent as well as if it were spent by the British Government directly?

Baroness Chalker of Wallasey: My Lords, the way in which the European Community is spending our resources is improving all the time. We have made sure that that is so by making available to the European Commission expert advisers from British stock who know exactly what they are doing and how to improve conditions. It is perfectly true to say that the amount is increasing all the time, as the noble Lord already knows, and that we are not in any way going to relax our grip on the quality we expect from the European Community for the resources that we contribute to its programmes.

Church Bells: VAT Liability

3.10 p.m.

Lord Boyd-Carpenter asked Her Majesty's Government:

    Whether they will now reverse their decision to impose VAT on church bells.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, certain work to church bells has been standard rated since 1973. The VAT liability depends on the facts and circumstances of the particular work.

Lord Boyd-Carpenter: My Lords, as this tax has not been levied on church bells for years, can my noble friend explain why quite recently it has been decided to impose it? Does my noble friend agree that the revenue obtained is absolutely trivial and that the difficulty and

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embarrassment, particularly for those who have to pay for the maintenance of small churches, is very serious indeed and giving rise to very deep feelings?

Lord Mackay of Ardbrecknish: My Lords, the rules as regards listed buildings were clarified in a change to the law effective from 1st March this year contained in a statutory instrument. Some months after that Customs HQ discovered that there was a rather over-liberal interpretation being placed on the rules concerning one particular bell foundry. Recently, Customs have met representatives of the Church and of the church bell industry. We are discussing with them and other groups concerned the whole problem of listed buildings. We are working towards a set of principles to be followed when deciding the VAT liability for work on listed buildings, which obviously includes bells in listed churches.

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