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House of Lords

Tuesday, 3rd December 1996.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Coventry.

Lord Rogers of Riverside

Sir Richard George Rogers, Knight, having been created Baron Rogers of Riverside, of Chelsea in the Royal Borough of Kensington and Chelsea, for life--Was, in his robes, introduced between the Lord Rothschild and the Baroness Blackstone, and made the solemn Affirmation.

Overseas Development Assistance

2.48 p.m.

Lord Judd asked Her Majesty's Government:

    What, in the light of the provisions made in the Budget, is their policy towards overseas development co-operation.

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, the purpose of the UK development assistance programme will continue to be to improve the quality of life of people in poorer countries by contributing to sustainable development and reducing poverty and suffering.

Lord Judd: My Lords, does the Minister accept that we are sad that yet again, however the figures are juggled, she has been let down by an 8.4 per cent. cut in real terms in the aid programme after the severe cuts of last year? What now will really be the priorities? Why is only 27 per cent. of our bilateral aid programme devoted to the poorest countries? Why is only one-fifth of the programme spent on education and only 1 per cent. on primary education? What of last week's report on Indonesia by the National Audit Office? Why was not one of seven projects examined primarily for the benefit of the poor? Does the Minister accept that it is now essential to reassure taxpayers that the sadly declining aid budget is being used where it is most needed to fight poverty?

Baroness Chalker of Wallasey: My Lords, it might be helpful to everyone in your Lordships' House if we got some facts right. First of all, the reductions in the ODA budget are fully attributed to the lower forecasts of draw-down by the multilateral organisations, particularly the European Community. For some time the estimates from Brussels have been larger than the amounts paid. Secondly, our core programme has been guaranteed in this Budget for the next three years. The core programme is the part of the overseas development budget which we decide ourselves--in other words, the bilateral provision and the discretionary multilateral

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programmes. We shall deliver no less than was planned. The poorest countries, those in Africa and Asia, receive about three-quarters of the bilateral budget. That is well above the average for all donors. Eight of the 10 biggest recipients were the poor countries in sub-Saharan Africa and South Asia. Therefore, the noble Lord is not right.

The noble Lord mentioned the NAO report. That was initiated to examine contracts between the UK and Indonesian Governments. It was clearly found that the primary reasons for supporting activities were developmental. That is right because more than 14 per cent. of Indonesia's population live in absolute poverty.

Lord Judd: My Lords, does the Minister agree that she has repeatedly complained to the House that she is unable to do bilaterally what she would like to do because of commitments to the European Union? Is it not a fact that when the aid programme was cut by £124 million last year the House was assured that it would increase by £47 million this year? Instead, there has been a further cut at a time when the Minister desperately needs funds for bilateral programmes. As for Indonesia, does she agree that the NAO has said that not one single project has been in the interests of the poor?

Baroness Chalker of Wallasey: My Lords, the NAO report states that the primary reasons for supporting the activities that were examined were developmental. As far as concerns the other matter referred to by the noble Lord, no promise was made to get back the £47 million.

Lord Redesdale: My Lords, if over the next three years the core funding for bilateral projects is to drop, is the Minister guaranteeing that the bilateral budget will drop over the next three years?

Baroness Chalker of Wallasey: My Lords, no. The noble Lord, Lord Redesdale, was not listening. The Chancellor has guaranteed that if non-discretionary spending exceeds the revised forecasts, the Exchequer will meet the bill. He has further guaranteed that the core programme--which we decide ourselves--is protected for the next three years.

The Lord Bishop of Coventry: My Lords, can the Minister inform the House whether the Government's decision to cut overseas aid, which was announced in the Budget in spite of the pleas of many of us, is compatible with their decision to join the programme announced by OECD nations in May 1996 to halve the number of people living in poverty, to reduce infant mortality by two thirds and to achieve universal primary education by 2015? That has been described as a strictly quantifiable and ambitious programme but one which is achievable.

Baroness Chalker of Wallasey: My Lords, we must view our programme in the light of what happens in aid programmes generally. In 1995 we provided 0.28 per cent. of our GNP for development assistance. That was above the average for all donors. Among the G7 countries we devoted a larger share of GNP than Japan, the US or Italy. There are only four OECD

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members who meet the targets and all are countries with much smaller programmes than ours. We are doing our best to meet them, but none of the OECD countries has yet met the targets to which the right reverend Prelate has referred.

Lord Renton: My Lords, is my noble friend aware that in most of the countries that we are trying to help the overseas aid programme will fail unless they accept her splendid advice to try to do something about the problem of overpopulation?

Baroness Chalker of Wallasey: My Lords, my noble friend is right. I am pleased that since 1988 the percentage of our bilateral assistance allocable by sector which has been spent on health and population has doubled from 6 per cent. to 12 per cent. Last year the percentage spent on education was 18 per cent. We have good pipelines for health, population and education. I hope that they will increase as time goes by because they are at the heart of the problem of poverty from which far too many people in the world suffer.

The Earl of Sandwich: My Lords, is the Minister aware that at the present rate of decline next year our aid programme will be worth less than a farthing--a quarter of a penny--in the pound of our national wealth? How does she reconcile that with the OECD target that has already been mentioned? Does the Minister feel that proportionately too much aid is spent on emergency assistance at the expense of long-term development?

Baroness Chalker of Wallasey: My Lords, the emergency assistance to which the noble Earl has referred is provided for in the budgeting process, but that amount varies greatly. If there is a major call for emergency assistance, as in 1991, it is a matter that is not programmable. In that event, I can turn to the Treasury for assistance, as I did and as I received in 1991. As far as concerns the OECD targets, one of the matters on which that organisation is very keen is to increase combined private and official flows. The noble Earl may be aware that the target in that regard is 1 per cent. Britain achieved 1.15 per cent. in 1994. The attraction of private investment to these countries can do just as much as public investment, but their economies must be put in order first.

Helms-Burton Act

2.58 p.m.

Viscount Montgomery of Alamein asked Her Majesty's Government:

    Whether they are satisfied that the proposed European Union initiative to counteract the adverse effects on international trade of the Helms-Burton Act is adequate.

Baroness Miller of Hendon: My Lords, Her Majesty's Government have been working closely with their

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European partners to create a firm and effective response to the United States' Helms-Burton legislation which will protect our companies and trading interest. Her Majesty's Government believe that the current EU initiatives will provide a strong response to the US legislation and help to counteract adverse effects on international trade arising from Helms-Burton.

Viscount Montgomery of Alamein: My Lords, the Minister's Answer is quite encouraging. Can my noble friend ensure that the UK delegate and other EU colleagues who attend the WTO Summit in Singapore next week make the strongest possible objections to this extra-territorial legislation which runs totally contrary to the whole concept of improved world free trade?

Baroness Miller of Hendon: My Lords, we will be reaffirming with other countries in the WTO the primacy of the multilateral trade system and the rules on which it is based. We will be looking to ensure that the United Kingdom's objectives are reflected in the new work programme of the World Trade Organisation. The substance of the dispute settlement case will not be raised because that is subject to separate confidential procedures.

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