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Overseas Development

Volume 887: debated on Monday 24 February 1975

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asked the Minister of Overseas Development what are the latest figures available for British overseas aid; what proportion of this aid is in the form of loans and direct grant; what other terms and conditions are attached to aid offered; and if she will make a statement.

The provisional gross figure for 1974 is £338 million. Of this, bilateral aid and technical assistance amounted to £258 million, of which 45 per cent. was on grant terms and 55 per cent. as loans, mostly interest-free.

Repayment terms on loans vary according to the economic circumstances of the recipient country. Most of our interest-free loans have a grant element of 77 per cent. An offer of aid may specify the projects or purposes, and the extent to which funds are available for the purchase of non-British goods and services.

Does my right hon. Friend accept that the level of the loan element in our aid is far too high, irrespective of the generous conditions on which the loans are made? As we move forward to the 0·7 per cent. gross domestic figure, hopefully in the near future, will she try to reduce the loan proportion of our aid?

We want to move towards that objective. We have a very good record in this matter. The target was set by the Development Assistance Committee. We have accepted that, and our performance as between grant and loan is as good as that of almost every other donor country.

Eec Aid


asked the Minister of Overseas Development if she will make a statement about recent developments in the field of EEC aid policy.


asked the Minister of Overseas Development whether she will make a further statement on the progress of British EEC renegotiations as far as her responsibilities are concerned.

The new Convention of Lomé, to be signed on Friday, provides for aid and trade arrangements for the Commonwealth associated countries of Africa, the Caribbean and the Pacific. I regard these as satisfactorily, protecting their interests.

I am still seeking Community agreement on a firm financial programme of aid to non-associated developing countries, particularly the Commonwealth countries of Asia. This question will be further discussed in the Council of Development Ministers on 20th March.

In view of the progress which the right hon. Lady has made in providing aid, will she say whether the last point which she mentioned is the only outstanding matter among the objectives which the Government have set themselves in their so-called renegotiations? Will she say also what is the attitude of the Governments of south Asia towards progress which has been made in connection with them?

Continuing efforts are being made with regard to generalised preferences, which is a matter for my right hon. Friend the Secretary of State for Trade. On the major issue, the matter which I mentioned is the outstanding one. It is true that one has had to deal with a dual job here. One was concerned with Commonwealth countries which were associated. That has been the deal in the negotiations which have been involved in working out the new Lomé Convention. India, Bangladesh and Sri Lanka are not covered, and that has been the second aspect of my concern in this matter, which is still unresolved. These countries themselves have made some progress in their bilateral trade negotiations with the Community, but the question of a world-wide approach to aid remains to be determined.

Does the Minister agree that whilst some aspects of this matter may be for her right hon. Friend, the generalised preference scheme for 1975 is a great improvement on that which went before? Will she say what she is doing to ensure that the scheme for 1976 is even better? Will she accept that the Community has been flexible and helpful in these matters?

That question is for my right hon. Friend. I think that he would probably agree that the 1975 scheme was better than the 1974 scheme. My hon. Friend will remember the tremendous criticism of the Labour Party about the move from our own DSP scheme to that of the Community at the time of our entry to the EEC. I am certain that my right hon. Friend will press for further improvements.

Will the Minister say what is the view of the Council of Development Ministers about the resources available by way of loans through its own funds and through the IMF oil facility for the most seriously affected countries? Does she believe that the provisions made so far, and which were announced by the Chancellor on his return from Washington, are likely to be adequate for the whole of 1975?

The hon. Gentleman will recall that a few weeks ago I announced the results of our deliberations on this matter in the Council of Development Ministers. I hoped that there would be a release of the whole $500 million indicated at the Special Assembly last April. After a good deal of debate in the Council of Development Ministers over the last few months, there was in the end a release of only half that amount, plus additional food aid. On those grounds the Government decided to make a further bilateral contribution to the most seriously affected country. Something good was done, but it was not quite as much as I hoped.

Is my right hon. Friend aware that if we were not to make any progress with India, Sri Lanka and Bangladesh, a great part of the population in the developing world would not be provided for? That would not be a satisfactory basis on which to recommend to the country that the requirements of renegotiation had been met.

Clearly, judgment will have to await the eventual conclusion of this aspect of my efforts, at least. However, I have very much in mind that these are countries with the largest populations. They are the poorest countries and they demand all our efforts to ensure a satisfactory result.

Aid (United Nations Target)


asked the Minister of Overseas Development when Her Majesty's Government expects to achieve the UN target for aid of 0·7 per cent. of gross domestic product calculated on the assumptions about the growth in the national economy set out in Command Paper No. 5879.

The United Nations target relates to gross national product in cash terms. The White Paper on Public Expenditure to 1978–79 gives figures at constant prices related to gross domestic product. The problem is essentially one of forecasting GNP, which is not possible. But it is clear that we are some distance away from achieving the 0·7 per cent. target. We stand only at the halfway mark.

Does the Minister agree that the crudest of calculations and projections in Command Paper 5879 are not encouraging? Is she aware, looking at those figures, that it appears that by 1978–79 this country will be giving more net aid per capita to the wealthy countries of Western Europe than to the under-developed countries of Africa and Asia? Is not this an impossibly absurd position for a Socialist Government?

I agree that we have a long way to go to reach the 0·7 per cent. target. However, I assure my hon. Friend that not one whit of my aid programme will go to the wealthy countries in Europe. I think my hon. Friend has in mind matters which are not my concern. As he will have seen from the White Paper, there will be a considerable increase in the aid programme in the years ahead. This problem always arises when calculating aid as a proportion of GNP. This is one of the unfortunate aspects of the target. The aid may go up, but if the GNP does not rise higher, it affects the percentage. It is a very odd calculation.

With regard to the countries of south Asia referred to by the hon. Gentleman and the right hon. Lady in answers to previous questions, when does the Minister expect to make the new arrangements in those countries, to which she is looking forward?

We finally succeded in obtaining Community agreements in July 1974 on the principle of aid to non-associated countries, which bears on the matter raised. I now seek to achieve a hard financial programme. I do not know whether I shall succeed in achieving that, but that is my objective. We shall see.



asked the Minister of Overseas Development if she will make a further statement about aid for relief in Cyprus.

I told the United Nations High Commissioner for Refugees on 11th February that we would make a contribution of £250,000 in response to his recent appeal for further funds for humanitarian assistance in Cyprus, following our earlier contribution to him of £500,000.

Does the Minister expect to receive further appeals from the United Nations or from other organisations? If so, what will be the Government's response to such appeals?

I cannot be entirely specific. My hon. Friend will bear in mind that if we add all the aspects of the help we have so far given, the total will move towards £2 million. If the United Nations High Commissioner were to approach us again I think that the Government would be sympathetic in their response.

Will any part of this aid programme go to help British citizens in Cyprus, many of whom live in conditions of considerable hardship?

I think that the very large contribution of about £750,000—the cost of the relief aid provided by the Services in the two British sovereign base areas, financed by my Department—has been of immense help to British citizens in Cyprus.

Mauritius (Cyclone Damage)


asked the Minister of Overseas Development what information she has as to the extent of the cyclone damage in Mauritius; whether relief aid from Great Britain has been offered; and if she will make a statement.


asked the Minister of Overseas Development what are the Government's plans to get relief aid to Mauritius, following the recent cyclone there.


asked the Minister of Overseas Development whether aid has been requested and offered to Mauritius in connection with the recent cyclone disaster; and whether she will make a statement.

Reports that I have received show that extensive disruptions were caused to the island's water supplies, power and communications. Some damage was suffered by the sugar crop.

Personnel from the Royal Navy communications station gave immediate assistance, £10,000 has been donated to the local reconstruction fund, and my disaster unit dispatched medical supplies valued at £2,000. A Royal Navy frigate is now assisting further with relief work.

Since this is the most disastrous cyclone that has hit Mauritius since 1960 will the Minister send further financial aid, especially to help rebuild over 11,000 houses badly damaged or destroyed, and perhaps also some technical assistance to help to assess the damage and advise on the reconstruction which is now needed?

I am very anxious that we should do everything we can to help in this situation. It is relevant that within the next two or three weeks we shall be holding discussions with the Mauritions in preparation for a further aid programme to them. I hope very much to be able personally to explore what else we might be able to do within the aid programme in connection with the assistance there.

Is the damage such that the Mauritian Government will be unable to reach their sugar target, which was recently set in agreement with the United Kingdom?

I have no indication of that. The sugar harvest begins in July. I remember cutting the first cane in July 1974. It is a little too early for me to know what the effect is. I have no doubt that we shall receive reports in due course.

Are we to understand that we have not yet received a detailed assessment from the Government of Mauritius of the kind of help that Her Majesty's Government may be able to afford? Will the Minister accept that on both sides of the House there is anxiety to help this small but friendly Commonwealth country in its hour of need?

The immediate devastation has been dealt with and we have tried to help in whatever way we could. My judgment is that the Government of Mauritius are now assessing what longer-term help they will need to meet the consequences of that damage. We shall be ready to help as best we can. There is a moment, after the immediate effects of disaster, when it takes a little time to reassess what will be needed.

Can my right hon. Friend give any estimate of the damage done by this cyclone, compared to the last devastation 13 or 14 years ago? In answer to a question last week, I was told that we were giving £10,000, plus another £2,000, plus, of course, the help that the Navy was in the harbour to give. That does not seem too much to me. When we know more, I hope that hon. Members on both sides of the House will expect to see much more help given to this old ally, which many of us know so well.

I assure the House that my affections are quite as much with Mauritius as those of my hon. Friend and hon. Members opposite. Had we been asked to do more immediately, we would have done it. We must recognise that Mauritius has developed its own economy to the point at which it is more capable of dealing with its own situation than are some other disaster areas that we have known in recent months. However, when we discuss in the next few weeks how best we can help Mauritius in the next few years, there will be no lack of readiness to do so.