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Overseas Governments (Assistance)

Volume 982: debated on Monday 31 March 1980

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43.

asked the Lord Privy Seal what are the basic principles upon which assistance is given to overseas Governments by his Department.

The Under-Secretary of State for Foreign and Commonwealth Affairs
(Mr. Richard Luce)

I refer my hon. Friend to the statement made by my hon. Friend the Minister for Overseas Development on 20 February.

Does my hon. Friend agree that trade can bring a lasting benefit and can, therefore, be more helpful than individual acts of generosity and aid? Does he agree, on this basis, that protectionism, wherever practised, can be more damaging than heartlessness?

First, I should perhaps say that my hon. Friend the Minister for Overseas Development—the hon. Member for Banbury (Mr. Marten)—is on an overseas visit which was planned before the new arrangements for ODA questions were known. I am, therefore, answering questions on his behalf.

The point made by my hon. Friend the Member for Gosport (Mr. Viggers) was borne out in the Brandt report. When looking at the relationship between the industrialised world and developing countries, one should consider not simply matters of economic assistance but also the important role that can be played by trade and investment as vital engines for development. For those who are concerned about improving the standard of living of developing countries, the policy of protectionism would be totally inhibiting to prospects of developing their standard of living.

Does not the Minister agree that his answer is totally hypocritical in the light of further savage cuts of £114 million between now and 1982–83? Will not the hon. Gentleman be honest with the House and say that the countries that have received, or are receiving, increased aid, such as Turkey and Pakistan, are receiving that aid only because of a defence posture that is agreeable to the Government?

To describe our present economic assistance policy as undergoing "savage cuts" is an emotional overstatement of the situation. It is surely known that we as a country are able to provide effective assistance to the developing countries only if we have a strong economic base ourselves. We shall have a strong economic base only if we start by cutting public expenditure at the present time. Departments, such as those dealing with aid administration, cannot be exempted without making the situation exceedingly unfair for other Departments that have to take their share. We must create wealth before we can contribute in a major way to the Third World.

I agree that a weak Britain is a great hindrance to trade and the development of overseas countries. I believe that my hon. Friend said that the Minister for Overseas Development was reviewing the overseas development programme. Presumably, he is still reviewing the overseas development programme. Why therefore, have allocations within overseas development administration already been made, particularly a reduction in the amount of money invested by the Commonwealth Development Corporation over the next four years?

I said earlier that on 20 February the Minister for Overseas Development made a full statement about our policy with regard to aid over the next few years. Our total policy is contained in that statement. He stressed strongly that we would give greater weight in the allocation of our aid to political, industrial and commercial considerations.

When the Minister receives requests, as in the recent case of Turkey, for aid for what are basically strategic and defence purposes, will he in future, pass the buck to the Ministry of Defence which has an expanding budget and can well afford such tasks?

I hope very much that the hon. Gentleman is not under-estimating the serious threat posed by the Soviet Union in the pursuit of our policies. If we are to counteract that effect, it is the Western world that gives economic assistance to underveloped countries not the Soviet Union.